Company Number: 12711507

Analysis Date: 2025-07-29 19:15 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, evidenced by persistent and substantial net current liability and negative shareholders' funds over multiple years. The continuing accumulation of losses and negative net assets indicates a high risk of financial distress.

2. Key Concerns:

• Severe Negative Net Assets: The net assets have deteriorated to -£142,388 as of 31 December 2024, indicating the company’s liabilities exceed its assets by a significant margin.
• Negative Working Capital: Current liabilities (£146,356) vastly exceed current assets (£3,679), resulting in a net current liability of -£142,677, reflecting an inability to meet short-term obligations from liquid assets.
• Shrinking Employee Base and Asset Base: The number of employees reduced from 2 to 1, and fixed assets have decreased sharply from £29,381 in 2020 to £289 in 2024, which may reflect downsizing or asset disposals due to financial stress.

3. Positive Indicators:

• Timely Filings: The company is current with both accounts and confirmation statement filings, demonstrating compliance with statutory requirements and good governance in this respect.
• Stable Directorship: The same director has been in place since incorporation without any public disqualifications or adverse records, suggesting stable management continuity.
• Micro-Entity Status: Being a micro-entity reduces reporting burdens and may indicate limited operational scale, which could be manageable if losses are controlled.

4. Due Diligence Notes:

• Investigate the nature and terms of the liabilities driving the large current liabilities figure to assess potential restructuring or repayment plans.
• Review cash flow statements and profit and loss accounts (not provided) to understand operational cash generation and loss drivers.
• Clarify the business model viability given the sustained losses and asset erosion, including market position in the niche retail sale of commercial art galleries (SIC 47781).
• Confirm if there are any contingent liabilities, related party transactions, or off-balance sheet obligations that may exacerbate financial risks.
• Assess whether there has been any recent capital injection or plans to recapitalise the company to improve its financial position.