KOLECT ID LIMITED

Executive Summary

Kolect ID Limited is an early-stage software development company exhibiting significant solvency and liquidity risks, evidenced by persistent negative net assets and working capital deficits. While regulatory compliance is sound, the company’s financial position suggests reliance on director funding and raises concerns about operational sustainability without additional capital or revenue growth. Further due diligence is recommended to evaluate the business model viability and funding strategies.

KOLECT ID LIMITED - Analysis Report

Company Number: 13870633

Analysis Date: 2025-07-20 16:58 UTC

1. Risk Rating: HIGH
   Kolect ID Limited exhibits significant financial distress characterized by persistent net liabilities and negative working capital, raising concerns about its ability to meet short-term obligations and long-term solvency.

2. Key Concerns:

• Severe Negative Net Current Assets: As of 31 December 2023, net current liabilities stand at £8,726 against minimal current assets (£158), indicating liquidity strain and potential cash flow problems.
• Consistent Net Liability Position: The company has maintained net liabilities since incorporation, with shareholders' funds declining from -£1,068 in 2021 to -£8,727 in 2023, reflecting accumulated losses or undercapitalization.
• Director Loans and Related Party Balances: The company owes £1,422 to a director, highlighting reliance on director funding, which may not be sustainable or sufficient to cover operational deficits.

3. Positive Indicators:

• Timely Compliance: The company has no overdue filings for accounts or confirmation statements, demonstrating good regulatory compliance and governance adherence.
• Active Status and Incorporation Date: Incorporated in January 2022 and still active, suggesting the company is in its early stages and may be in a development phase common to tech startups.
• Clear Ownership Structure: Two identified persons with significant control owning between 25-50% shares each, indicating concentrated control which can facilitate decision-making agility.

4. Due Diligence Notes:

• Examine Operational Model and Revenue Generation: With minimal cash and significant liabilities, investigate the company’s business plan, revenue streams, and customer contracts to assess sustainability prospects.
• Director Funding and Financial Support Plans: Clarify the nature and terms of director loans and any forthcoming capital injections or financing arrangements intended to improve liquidity.
• Risk of Insolvency or Future Capital Calls: Assess whether the company has plans to restructure liabilities or raise additional equity to mitigate insolvency risks evidenced by negative net assets.
• Review Debtors’ Realisability: The £157 debtor balance is negligible; verify its collectability and timing to understand cash flow expectations.
• Analyze Cost Structure and Cash Burn Rate: Evaluate ongoing operational costs relative to limited cash resources to estimate runway and funding requirements.

Executive Summary