Company Number: 14720374

Analysis Date: 2025-07-20 15:48 UTC

1. Risk Rating: HIGH

Justification: The company shows significant net liabilities (£112,179 negative net assets) despite having positive net current assets, indicating long-term solvency concerns. The development loan of £270,000, repayable after one year, represents material debt for a recently incorporated business. The company’s short operating history (incorporated in 2023) and negative equity increase risk for creditors and investors.

2. Key Concerns:

• Negative Net Assets: Despite current assets exceeding current liabilities, the overall balance sheet shows net liabilities due to substantial non-current borrowings, posing solvency risks.
• Material Long-term Debt: The £270,000 development loan, while shown as non-current, is a significant financial obligation that may pressure future cash flows.
• Limited Operating History: Being less than two years old, with limited financial data and no audit, the company’s operational and financial stability remains unproven.

3. Positive Indicators:

• Adequate Current Liquidity: Current assets (£161,719) exceed current liabilities (£3,898), yielding a strong net current asset position, supportive of short-term liquidity.
• No Filing Overdue: The company is compliant with filing deadlines for accounts and confirmation statements, indicating sound governance in regulatory matters.
• Directors’ Going Concern Statement: Directors affirm a reasonable expectation that the company will continue as a going concern, supported by cash reserves of £91,028.

4. Due Diligence Notes:

• Clarify Terms of Development Loan: Investigate repayment schedule, interest terms, and covenants of the £270,000 loan to assess refinancing or default risks.
• Examine Debtor Quality: Assess collectability of £70,691 in debtors to confirm liquidity assumptions.
• Review Related Party Transactions: Understand nature and terms of £12,500 development fees paid to a company linked to a director for potential conflicts or undue financial strain.
• Monitor Operational Progress: Obtain more detailed business plan, revenue projections, and cash flow forecasts given limited historical data.
• Confirm Director Stability: Note recent changes in director appointments, including a resignation in November 2024, to evaluate governance continuity.