HARK DIGITAL LTD

Executive Summary

Hark Digital Ltd is a micro private company showing persistent net liabilities and working capital deficits, indicating elevated solvency and liquidity risk. While regulatory filings are up to date and management appears stable, the negative equity and small scale raise concerns about operational sustainability. Further financial detail and business viability analysis are recommended before investment consideration.

HARK DIGITAL LTD - Analysis Report

Company Number: 12770746

Analysis Date: 2025-07-29 18:59 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns as reflected by negative net current assets and net liabilities at the latest year-end. The persistent negative equity position and working capital deficiency highlight material financial distress.

2. Key Concerns:

• Negative Working Capital: At 31 December 2023, current liabilities exceed current assets by £6,197, indicating potential difficulties meeting short-term obligations.
• Negative Net Assets and Shareholders’ Funds: The company’s net liabilities of £4,705 mark a continuation of historical losses, though an improvement from prior years. Persistent negative equity is a red flag for solvency risk.
• Small Scale and Limited Capital: Micro-entity classification with nominal share capital (£1.00) and only two employees may limit operational resilience and capacity to absorb adverse shocks.

3. Positive Indicators:

• No Overdue Filings: Accounts and confirmation statement are filed on time, suggesting regulatory compliance and governance attention.
• Stable Management Team: Leadership with consistent director appointments since incorporation, including a single controlling shareholder, may facilitate decisive management actions.
• Active Business Website: An operational website with a clear business focus on digital engineering services supports ongoing business activity.

4. Due Diligence Notes:

• Review Detailed Profit & Loss Data: The absence of P&L figures limits the ability to assess operational profitability or cash flow trends; obtain full financial statements to understand income, expenses, and cash generation capacity.
• Examine Creditors Composition and Terms: Understand whether current liabilities are trade payables, short-term loans, or accruals and their payment schedules to assess liquidity risk.
• Investigate Business Model Viability: Assess market position, client base, and revenue streams in the competitive digital services sector to judge operational sustainability.
• Confirm No Director Disqualification or Legal Issues: Verify the conduct records of directors to rule out governance risks.
• Evaluate Capital Injection Plans: Given the micro status and negative equity, ascertain if there are plans for capital infusion or restructuring.