Company Number: 14615728

Analysis Date: 2025-07-29 19:48 UTC

1. Risk Rating: HIGH
   The company exhibits a significant solvency risk due to reported negative net current assets and net liabilities, indicating an inability to meet short-term obligations. The financial position is precarious, especially for a newly incorporated entity.

2. Key Concerns:

• Negative Net Current Assets and Net Liabilities: The balance sheet shows current liabilities (£97,264) vastly exceeding current assets (£11,995), resulting in net current liabilities of £85,269 and total net liabilities of £102,784, which is a red flag for solvency.
• High Accruals and Deferred Income: The presence of accruals and deferred income amounting to £17,515 further stresses the financial obligations not yet realized as income, indicating potential cash flow strain.
• Director Changes and Control Concentration: One director resigned within the first year; control is heavily concentrated with Mr. Ismail owning 75-100% of shares and voting rights, raising governance concerns and potential over-reliance on a single individual.

3. Positive Indicators:

• Current Filing and Compliance Status: The company is active with no overdue accounts or confirmation statements, demonstrating compliance with statutory filing requirements despite financial difficulties.
• Limited Scale and Micro-Entity Status: Being a micro-entity with three employees and modest scale may limit operational complexity and overheads.
• Industry Focus on Artistic Creation and Performing Arts: These sectors can benefit from niche markets and potential for creative funding, although this is not reflected yet in financial health.

4. Due Diligence Notes:

• Clarify Nature of Current Liabilities: Investigate the composition and maturity of the £97k current liabilities and the £17.5k accruals/deferred income to understand immediate cash flow needs.
• Review Cash Flow Statements and Funding Sources: Assess whether the company has access to external financing, shareholder loans, or other liquidity supports to cover shortfalls.
• Director and Shareholder Relationships: Explore the implications of control concentration, director resignation, and the business plan to assess operational sustainability and governance robustness.