Company Number: 15113882

Analysis Date: 2025-07-19 13:02 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Lunar Forge Entertainment Limited is a newly incorporated private limited company operating in software development and computer games publishing. The company has incurred a loss of £6,149 in its first financial period with no revenue recorded, reflecting the typical early development phase of such businesses. The presence of related party loans (£50,874) provides some financial backing, but the overall net liabilities position (-£6,049) and lack of operating income flag elevated credit risk. Approval for credit facilities should be conditional on obtaining further clarity on the company’s business plan, expected cash flow generation, and the strength of the shareholders’ financial support. Given the director’s 75-100% ownership and control, strong governance is likely, but the absence of historical trading performance requires cautious underwriting.

2. Financial Strength:
   As at 30 September 2024, the company’s net assets are negative at -£6,049 largely due to accumulated losses and non-current liabilities (related party loan). Current assets stand at £73,159, composed mainly of work in progress stocks (£66,703) and a modest cash balance (£4,190). Current liabilities total £10,872, resulting in positive net current assets (working capital) of approximately £62,287, which supports short-term liquidity. The balance sheet shows the company relies on related party funding classified as long-term financial liabilities (£68,336). The equity base is minimal (£100 share capital), highlighting limited financial cushioning.

3. Cash Flow Assessment:
   Cash at hand is low (£4,190) relative to current liabilities, but net current assets are healthy due to significant stock and debtors, which may convert to cash as projects complete. The company’s administrative expenses of £7,590 and operating loss of £7,591 suggest ongoing cash burn without revenue inflows. Related party loans provide essential funding, but no external borrowing or significant cash reserves exist. Monitoring cash flow forecasts, burn rate, and progress in converting work in progress to revenue is critical to assess sustainability.

4. Monitoring Points:

• Revenue generation and attainment of positive operating cash flow in subsequent periods.
• Management of related party loans and potential conversion or repayment terms.
• Changes in stock valuation and realisation of work in progress into billable sales.
• Timely filing of statutory accounts and confirmation statements to ensure regulatory compliance.
• Directors’ continued financial support and governance quality given concentrated ownership.