Company Number: 14131243

Analysis Date: 2025-07-29 12:25 UTC

1. Risk Rating: LOW
   Nexus Bioquest Limited demonstrates strong liquidity and solvency indicators, with net current assets consistently positive and substantial shareholders’ funds relative to liabilities. The company is active, compliant with filing deadlines, and audited with unqualified opinions, suggesting good governance.

2. Key Concerns:

• Decline in net assets from £3.16M (2023) to £2.60M (2024) mainly due to increased retained losses, indicating operational losses that warrant monitoring.
• Significant increase in trade debtors (from £174k to £461k) and decrease in cash (from £1.45M to £871k) may signal a shift in cash flow timing or collection efficiency.
• Presence of deferred tax assets related to tax losses not recognized, reflecting some caution on future profitability despite director confidence.

3. Positive Indicators:

• Strong net current assets of £1.45M and cash balance of £871k as of 2024 year-end indicate good short-term liquidity to meet obligations.
• Shareholders’ funds remain robust at £2.6M, with a large share premium (£4.3M) providing a solid equity base.
• No overdue statutory filings and an unqualified audit report reflect sound compliance and governance practices.
• The company operates in a specialized biotech research sector with a growing employee base (28 in 2024 versus 10 in 2023), suggesting operational scaling.

4. Due Diligence Notes:

• Review the underlying causes of operating losses leading to increased retained deficit to assess sustainability and path to profitability.
• Assess credit control policies and debtor aging to understand the rise in trade debtors and potential impact on cash flows.
• Investigate lease obligations and landlord contributions disclosed to evaluate long-term fixed commitments.
• Clarify the ultimate controlling party given directors’ statement that it is not known, to evaluate governance and control risk.
• Confirm current business pipeline and client contracts given the company’s reliance on milestone and fixed-price contracts for revenue recognition.