Company Number: 13057200

Analysis Date: 2025-07-20 13:01 UTC

1. Risk Rating: MEDIUM
   The company shows a recent improvement in net assets and working capital but also exhibits volatile cash balances and significant related party transactions. The going concern statement, unaudited accounts, and prior period adjustments warrant cautious optimism rather than a low-risk rating.

2. Key Concerns:

• Liquidity Fluctuations: Cash decreased sharply from £1.12M in 2022 to £305K in 2023, while current liabilities remain substantial at over £500K, resulting in negative net current assets in 2023. This raises concerns about short-term liquidity management.
• Reliance on Related Parties: Significant debtor and creditor balances with parent and group undertakings indicate dependency on intra-group funding, which could pose risk if group support diminishes.
• Unaudited Accounts and Prior Adjustments: The accounts are unaudited with a prior period adjustment affecting two years, which may indicate past inaccuracies or incomplete financial data.

3. Positive Indicators:

• Improved Net Assets: Shareholders’ funds increased from £-76K in 2021 to £72K in 2023, reflecting an improving equity position.
• Increasing Intangible Assets: Capitalisation of development costs and trademarks rose significantly, indicating investment in intellectual property that may support future revenue.
• Compliance and Timeliness: No overdue filings or confirmation statements, demonstrating regulatory compliance to date.

4. Due Diligence Notes:

• Review cash flow statements and forecasts to assess liquidity sustainability and timing of creditor payments.
• Investigate nature and terms of related party balances, including parent company support agreements.
• Confirm the reasons and impact of prior period adjustments and whether all material transactions are now fully captured.
• Assess management’s rationale and evidence for capitalising development costs and intangible assets for potential impairment risks.
• Consider obtaining audited accounts or further assurance to validate financial statements.