Company Number: 14616009

Analysis Date: 2025-07-29 20:18 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity risks, as evidenced by substantial negative net current assets and shareholders’ funds. The rapid increase in current liabilities, largely amounts owed to group undertakings, coupled with minimal share capital, suggests financial distress and dependency on related party funding.

2. Key Concerns:

• Severe Negative Working Capital: The net current liabilities worsened from approximately £234k in 2023 to over £1 million in 2024, indicating inability to meet short-term obligations without external support.
• Dependence on Group Funding: Amounts owed to group undertakings nearly doubled to £1.13 million in 2024, highlighting reliance on related parties rather than operating cash flows.
• Negative Equity Position: Shareholders’ funds deteriorated from -£223k in 2023 to -£1.08 million in 2024, signaling accumulated losses and weakened financial stability, raising going concern doubts despite directors’ assertions.

3. Positive Indicators:

• Active Compliance: The company is current with accounts and confirmation statement filings, indicating regulatory compliance and governance discipline.
• Clear Ownership and Management: Single controlling shareholder with majority voting rights and an appointed director suggest straightforward governance structure.
• Employee Growth: Increase in average employees from 5 to 7 shows some operational expansion.

4. Due Diligence Notes:

• Review the nature and terms of the amounts owed to group undertakings to assess repayment risk and related party transactions.
• Investigate the business model’s revenue generation and cash flow projections to understand sustainability and turnaround prospects.
• Verify the assumptions supporting the directors’ going concern statement, including any financial support arrangements or planned capital injections.
• Confirm any contingent liabilities or off-balance sheet exposures that could exacerbate financial risk.