Company Number: 12924397

Analysis Date: 2025-07-29 20:08 UTC

1. Risk Rating: MEDIUM
   Hatchlet Innovations Ltd shows modest net assets and positive shareholders’ funds but exhibits a declining trend in liquidity and net assets from 2023 to 2024. The company is small, with limited capital and a narrow cash buffer, which raises concerns about its ability to absorb shocks or unexpected expenses. However, there is no indication of overdue filings or insolvency proceedings.

2. Key Concerns:

• Declining Working Capital: Current assets decreased from £5,551 in 2023 to £3,847 in 2024, while current liabilities decreased less sharply, leading to a reduction in net assets from £4,042 to £2,654. This signals potential liquidity tightening.
• Concentration of Debtors: The significant drop in trade debtors (from £3,745 in 2023 to £0 in 2024) offset by an increase in other debtors raises questions about the nature and collectability of receivables.
• Limited Share Capital and Equity Base: With only £100 in share capital and relatively low retained earnings, the company’s equity base is thin, which may limit its financial flexibility and resilience.

3. Positive Indicators:

• Positive Net Assets and Shareholders’ Funds: Despite reductions, the company maintains positive net assets and equity, indicating solvency at the balance sheet date.
• No Overdue Filings or Compliance Issues: Accounts and confirmation statements are up to date, reflecting good regulatory compliance and governance discipline.
• Stable Employment and Director Structure: The company employs four people consistently and has a stable board of four directors with no noted disqualifications or governance flags.

4. Due Diligence Notes:

• Examine Cash Flow Statements and Profit & Loss: These were not provided but are critical to understand operational cash generation, revenue trends, and profitability.
• Clarify Composition of ‘Other Debtors’: Investigate what constitutes other debtors (£1,087 in 2024) and assess collectability risk.
• Review Contractual Revenue Sources and Client Concentration: As a business software developer, dependence on a limited number of clients or contracts could pose risk.
• Assess Capital Raising or Financing Plans: Given the small equity base and declining net assets, determine if the company plans to raise additional capital or secure financing to support growth or working capital needs.