Company Number: SC789126

Analysis Date: 2025-07-20 13:31 UTC

1. Risk Rating: HIGH
   Justification: The company exhibits significant solvency risk with current liabilities exceeding fixed assets and a negative net assets position. The micro-entity balance sheet shows total net liabilities of £18,394 despite holding fixed assets valued over £2.3 million, indicating potential overvaluation or encumbrance of those assets. The current liabilities are substantial at £2.35 million against minimal current assets and only one employee, suggesting potential liquidity and operational concerns.

2. Key Concerns:

• Negative Net Assets: The company’s net assets are negative (£-18,394), which signals insolvency risk and potential inability to cover all liabilities.
• High Current Liabilities Relative to Assets: Current liabilities of £2.35 million dwarf current assets of £4,113, raising significant liquidity concerns and possible cash flow problems.
• Asset Quality and Valuation: Fixed assets are reported at £2.33 million but net assets remain negative, implying these assets may be highly leveraged, impaired, or not readily realizable, which threatens operational stability.

3. Positive Indicators:

• No Overdue Filings or Compliance Issues: The company is up to date with both accounts and confirmation statement filings, reflecting good regulatory compliance.
• Ownership and Control Transparency: A single individual holds majority control (75-100% shares and voting rights), potentially enabling decisive governance and streamlined decision-making.
• Micro-entity Status: Micro classification implies limited scale which may reduce complexity and overhead costs.

4. Due Diligence Notes:

• Investigate the nature, ownership, and encumbrances on the fixed assets to clarify why net assets are negative despite high fixed asset values.
• Review detailed breakdown of current liabilities to assess timing, counterparties, and terms to evaluate liquidity risks more precisely.
• Assess the company’s cash flow projections and working capital management given the minimal current assets and one employee.
• Confirm that the asset valuations are accurate and whether any impairment or write-downs are anticipated.
• Understand the business model and revenue generation given the micro-entity status and limited operational scale to evaluate sustainability.