Company Number: OC448943

Analysis Date: 2025-07-20 14:29 UTC

1. Risk Rating: MEDIUM
   Lithica Navion LLP is a recently formed entity (incorporated September 2023) with significant intangible assets contributed by members but showing a negative reserve and net current liabilities. The high intangible assets versus minimal current liabilities and no employees suggest a business in early development or asset accumulation stage. The lack of an income statement and trading history limits assessment of operational cash flow, creating uncertainty about liquidity and ongoing solvency despite reported net assets.

2. Key Concerns:

• Negative P&L reserve of £946,072 indicates accumulated losses or impairment that reduce overall equity despite high capital contributions.
• Net current liabilities of £2,100, though small, reflect a working capital deficit which could signal liquidity constraints if the business incurs operational expenses before generating income.
• Absence of turnover and employees raises questions about operational activity and sustainability; the business appears to rely heavily on intellectual property contributions without visible revenue streams yet.

3. Positive Indicators:

• Total assets less current liabilities and members’ interests stand at £17.27 million, predominantly from intangible fixed assets (IP) contributed by members, indicating strong capital backing.
• No overdue filings or compliance issues with Companies House as of the latest accounts and confirmation statement, suggesting good regulatory adherence and governance to date.
• The LLP members have declared going concern status based on forecasts and projections, implying confidence in future viability.

4. Due Diligence Notes:

• Investigate the nature and valuation of the £17.1 million intangible assets contributed as IP, including verification of ownership, valuation methodology, and impairment risk.
• Review detailed cash flow forecasts and business plan to understand how the LLP intends to generate operational income and manage working capital deficits.
• Examine related party transactions, including licence fees charged to connected companies, for potential conflicts of interest or transfer pricing concerns.
• Confirm absence of contingent liabilities or off-balance sheet obligations not disclosed in the accounts.