Company Number: 13441974

Analysis Date: 2025-07-20 16:18 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, with net current liabilities of approximately £1.17 million and negative shareholders’ funds of around £273k as at 31 December 2023. This deterioration from a positive net asset position in prior years indicates financial stress.

2. Key Concerns:

• Liquidity Deficit: Current liabilities (£1.79M) substantially exceed current assets (£621k), resulting in a large working capital deficit that may impair the company’s ability to meet short-term obligations.
• Negative Equity Position: Shareholders’ funds turned negative in 2023, signaling accumulated losses or impairment that erode the company’s capital base.
• Volatile Investment Valuation: Fixed asset investments increased significantly by additions but suffered a large valuation decrease (£652,965), indicating potential impairment or write-down risks impacting asset quality.

3. Positive Indicators:

• No Filing or Compliance Issues: Accounts and confirmation statements are filed on time with no overdue filings noted, suggesting sound regulatory compliance and governance.
• Revenue Generation Model: The company has a defined turnover recognition policy linked to social media marketing services, implying an operational business model with ongoing service delivery.
• Growing Workforce: Average employees increased from 13 to 20 in 2023, which may reflect business expansion or scaling efforts despite financial challenges.

4. Due Diligence Notes:

• Investigate the nature and recoverability of the large investment additions and subsequent valuation losses to understand asset quality and impairment risks.
• Review detailed cash flow statements and creditor aging to assess immediate liquidity pressures and creditor terms.
• Confirm the impact of related party transactions, particularly amounts owed by group undertakings, on liquidity and financial stability.
• Assess management plans to address the working capital deficit and negative equity, including capital raising or restructuring efforts.
• Verify the financial performance trends and profitability metrics not disclosed in the summary to better understand operational sustainability.