INTEGRATED GRAPHENE LIMITED

Credit Opinion: CONDITIONAL Standalone credit quality is extremely weak due to severe balance sheet insolvency and historical reliance on external funding to cover operating losses. The company is technically insolvent with net liabilities of £5.92m as of December 2024, and its going concern status is entirely dependent on a post-balance sheet equity raise of £11.7m completed in July 2025. Any credit extension must be strictly conditional upon a formal, unconditional parent company guarantee from Rd Groupco Limited, and confirmation that inter-company liabilities are deeply subordinated. Without group backing, this is a clear DECLINE due to immediate insolvency risks.

Financial Strength: The financial position is structurally weak and reflects a classic early-stage, pre-profitability R&D business. Net liabilities have deteriorated consistently over the last seven years, growing from -£34k in 2017 to -£5.92m in 2024. Shareholders' funds are negligible (£9 share capital), with the accumulated losses reflecting deep historical cash burn. The asset base is heavily skewed towards intangibles (£6.62m of capitalised development costs). While accounting policies allow for this capitalisation (amortised over 5 years), the realisable value of these intangibles in a distress scenario is highly uncertain. Tangible assets of £2.45m offer limited collateral value. The recent £11.7m equity injection will significantly improve the net asset position, but the underlying business model remains unproven in terms of generating sustainable profitability.

Cash Flow Assessment: Liquidity is highly precarious without parent/group support. At the 2024 year-end, the company held £2.87m in cash, but this is vastly insufficient against current liabilities of £19.45m, resulting in net current liabilities of £15m. The company's ability to service debts relies entirely on the continuation of group funding. The going concern note explicitly states that the company relies on cash flow from trading and funding from shareholders, validated by the recent £11.7m equity raise. Until the newly raised capital converts into tangible revenue and positive operating cash flow, the company remains a cash-incineration risk. Working capital is entirely dependent on the timing of group capital injections versus operational cash burn.

Monitoring Points: - Equity Raise Verification: Obtain direct evidence that the £11.7m gross funds from the July 2025 equity raise have been fully received and are available to the company, not trapped at the parent level. - Inter-company Debt Subordination: The £19.45m in current liabilities likely includes significant inter-company balances. These must be formally subordinated to any bank debt to ensure the bank ranks ahead of the group in a distress scenario. - Parent Company Health: Conduct a full credit assessment on Rd Groupco Limited, as they are the ultimate source of repayment and liquidity. - Revenue & Burn Rate: Monitor quarterly revenue generation and cash burn rates closely. The current cash runway must be stress-tested against the time required to reach operational breakeven. - Capitalised Development Costs: Watch for impairment indicators. If commercialization stalls, a write-down of the £6.62m intangible asset base will instantly trigger further deterioration in net worth.