NXT LABS LIMITED

Executive Summary

NXT LABS LIMITED exhibits high financial risk due to a sharp decline in liquidity and solvency in its latest financial year, with significant negative net current assets and net liabilities. Despite compliance with filing obligations and a clear governance structure, the company’s operational scale is minimal, and its financial position raises concerns about its ability to meet obligations without corrective action. Further investigation into the underlying causes of the financial deterioration and management’s recovery plans is recommended.

NXT LABS LIMITED - Analysis Report

Company Number: 13175546

Analysis Date: 2025-07-19 12:55 UTC

1. Risk Rating: HIGH
   Justification: The company shows a significant deterioration in financial position in the latest year ended 28 February 2025, with net current assets turning sharply negative (£-56,783) from positive in prior years. Total net liabilities of £56,783 indicate solvency concerns. The current liabilities far exceed current assets, suggesting liquidity stress.

2. Key Concerns:

• Severe liquidity shortfall in the latest year: Current liabilities of £65,000 exceed current assets of only £8,211, indicating potential cash flow problems.
• Negative net assets and shareholders’ funds: The company moved from positive equity in 2023 (£12,511) to a large deficit (£-56,783) in 2025, raising questions about operational sustainability.
• Micro-entity status with minimal fixed assets and only one employee: Limited scale and asset base could constrain ability to generate revenue and service liabilities.

3. Positive Indicators:

• Timely filing and compliance: Accounts and confirmation statements are up to date with no overdue filings, indicating regulatory compliance and good governance.
• Sole director with full control: Clear governance structure with one director controlling 75-100% shares and voting rights may allow swift decision-making.
• Industry sector: Business and domestic software development can offer growth opportunities if financial issues are addressed.

4. Due Diligence Notes:

• Investigate the cause of the drastic increase in current liabilities and corresponding drop in current assets in 2025.
• Review cash flow forecasts and working capital management to assess ability to meet short-term obligations.
• Understand business model and revenue streams given minimal fixed assets and only one employee.
• Confirm whether any external financing, related party transactions, or contingent liabilities exist.
• Evaluate director’s plans to restore solvency and improve liquidity.