Company Number: 14193714

Analysis Date: 2025-07-29 14:23 UTC

1. Risk Rating: MEDIUM
   The company is relatively new (incorporated 2022), with micro-entity status and limited turnover. While it shows positive net assets and no current liabilities, it has sustained consistent losses and very low revenue, which heightens risk given the lack of profitability and uncertain cash flow generation.

2. Key Concerns:

• Sustained Operating Losses: The company recorded losses of £36,552 for the year ended June 2024 and £40,280 the previous year, despite minimal turnover (~£4,000). This indicates ongoing operational losses without clear signs of profitability.
• Low Revenue Base: Turnover is extremely low for a retail business, which questions business scale and viability. This raises concerns about the company’s capacity to generate sufficient cash flow to support operations long term.
• Provision for Liabilities in Prior Year: The 2023 accounts showed a provision for liabilities of £5,354 which disappeared in 2024. This warrants investigation to understand the nature and resolution of this liability.

3. Positive Indicators:

• No Current Liabilities: The company has no short-term creditors recorded, suggesting it is meeting immediate obligations and not relying on trade credit or short-term borrowing.
• Positive Net Assets and Shareholders’ Funds: Net assets and equity remain positive (£5,954 in 2024), indicating the company has a net positive balance sheet position.
• Timely Filings and Compliance: The company status is active with no overdue filings for accounts or confirmation statements, implying good regulatory compliance and governance.
• Sole Director Control: The director and majority shareholder is consistent and has no disqualifications noted, which reduces governance risk.

4. Due Diligence Notes:

• Review the nature of the "Other charges" (£36,402 in 2024) leading to losses to assess if these are one-off, non-cash, or operational costs.
• Investigate the cause and resolution of the prior year provision for liabilities (£5,354 in 2023) and why it no longer appears in 2024.
• Assess cash flow dynamics in detail, including any external financing or shareholder loans supporting the business given low turnover.
• Understand the business model and strategy to grow revenue beyond current minimal levels and how the company plans to achieve profitability.
• Confirm no undisclosed related party transactions or off-balance sheet liabilities exist.
• Validate that the director's address and control information matches operational reality and there are no hidden risks.