LUNA LANGUAGE TECHNOLOGIES LTD

Executive Summary

LUNA LANGUAGE TECHNOLOGIES LTD shows financial vulnerability with negative net assets and working capital within its first full year of operation, raising liquidity and solvency concerns. However, the company complies with filing obligations and maintains a low employee count, potentially controlling costs. Further due diligence on cash flow, liabilities, and business viability is recommended to clarify operational stability.

LUNA LANGUAGE TECHNOLOGIES LTD - Analysis Report

Company Number: 14526139

Analysis Date: 2025-07-20 17:47 UTC

1. Risk Rating: HIGH
   Justification: The company reports negative net current assets and net liabilities of £2,797 as at 31 December 2023, indicating an inability to meet short-term obligations from current assets. This micro-entity, incorporated in December 2022, shows signs of financial distress within its first full year.

2. Key Concerns:

• Negative Working Capital: Current liabilities (£3,094) significantly exceed current assets (£297), suggesting liquidity challenges.
• Negative Net Assets: Total net liabilities of £2,797 imply the company’s liabilities exceed its total assets, a solvency red flag.
• Early Stage with Limited Financial History: Incorporated late 2022 with only one set of micro-entity accounts filed, limiting the ability to assess operational sustainability and financial trajectory.

3. Positive Indicators:

• Compliance with Filing: No overdue accounts or confirmation statements, indicating the company is meeting regulatory requirements on time.
• Ownership and Control: Clear identification of two directors/PSC with defined ownership and control, which may facilitate swift decision-making.
• Small Employee Base: Only 2 employees, which may keep fixed costs low during this early stage.

4. Due Diligence Notes:

• Verify cash flow and funding sources to understand how the company plans to address negative working capital and net liabilities.
• Investigate the nature of current liabilities to assess if these are trade payables, short-term borrowings, or other obligations.
• Review any subsequent financial information since 31 December 2023 for improvement or deterioration in financial position.
• Assess business model viability in the diverse SIC sectors listed (performing arts, translation, IT consultancy, sound recording) to gauge operational sustainability.
• Confirm no director disqualifications or regulatory compliance issues beyond those publicly filed.