ONSECURITY TECHNOLOGY LIMITED

Executive Summary

ONSECURITY TECHNOLOGY LIMITED shows strong cash reserves and investor support, providing a solid foundation despite significant operational losses. The company must focus on cost reduction, revenue growth, and debt management to improve its financial health and ensure long-term viability. The current outlook is cautious but manageable with strategic actions.

ONSECURITY TECHNOLOGY LIMITED - Analysis Report

Company Number: 14184026

Analysis Date: 2025-07-29 19:34 UTC

Financial Health Assessment for ONSECURITY TECHNOLOGY LIMITED

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1. Financial Health Score: C

The company demonstrates a mixed financial condition. It has a strong cash position and asset base, which are positive vital signs. However, significant losses and negative retained earnings reflect symptoms of financial distress. The overall score of C indicates a company with potential but currently facing challenges that require careful management and strategic action.

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2. Key Vital Signs

Metric	2024 Figure	Interpretation
Net Assets	£2,002,990	Positive net assets show solvency; company owns more than it owes.
Cash at Bank	£4,499,431	Healthy cash flow; excellent liquidity to cover short-term needs.
Current Assets	£5,188,959	Strong short-term asset base, primarily cash and debtors.
Current Liabilities	£698,309	Manageable short-term debts; good working capital.
Long-term Liabilities	£2,500,000	Significant borrowing; requires monitoring for repayment capacity.
Profit and Loss Account	-£1,275,124	Accumulated losses indicate ongoing operational losses.
Loss for the Year	-£1,028,109	Large loss signals financial strain and operational challenges.
Share Capital & Premium	£3,250,355 (combined)	Strong equity injection, showing investor support and capitalisation.
Going Concern Status	Affirmed by directors	Directors confident company can continue, supported by investor backing.

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3. Diagnosis: What the Financial Data Reveals

The company is like a patient with a strong heart (cash reserves and net assets) but showing symptoms of a metabolic disorder (significant annual and accumulated losses). The large cash reserves reflect recent capital injections, possibly from investors, providing a vital lifeline. However, the operational losses and negative retained earnings reveal a bleeding wound that needs treatment: the company is spending more than it earns, which is not sustainable long-term.

The current liabilities are well covered by current assets, indicating no immediate liquidity crisis. But the sizeable long-term debt of £2.5 million is a more chronic condition requiring careful management to avoid future distress.

The directors' going concern statement and investor backing are positive indicators, akin to a prognosis supported by ongoing treatment and external support.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Cost Management and Revenue Growth

   • Conduct a thorough review of operational expenses to identify and reduce unnecessary costs.
   • Strengthen sales and marketing efforts to increase revenue streams and move towards profitability.

2. Debt Restructuring

   • Engage with lenders to negotiate better terms on the £2.5 million long-term borrowing, potentially extending repayment periods or reducing interest rates.

3. Cash Flow Monitoring

   • Maintain vigilant cash flow forecasting to ensure liquidity remains healthy and unexpected shortfalls are avoided.

4. Investor Relations

   • Leverage existing investor support to secure additional funding if needed, but also provide transparent updates on financial health and turnaround strategy.

5. Performance Metrics

   • Implement key performance indicators (KPIs) focused on profitability, operational efficiency, and cash conversion cycle to monitor recovery progress.

6. Strategic Review

   • Assess the business model and market positioning to ensure long-term viability and explore diversification or innovation opportunities.

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Summary

ONSECURITY TECHNOLOGY LIMITED possesses strong liquidity and capital backing, which are critical lifelines in its current state. However, the company is experiencing significant operational losses, indicating financial distress that must be addressed. With focused cost control, enhanced revenue efforts, and careful debt management, the prognosis can improve towards sustainable financial health.

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