PATHOLOGICA LTD

Executive Summary

Pathologica Ltd faces high financial risk due to persistent negative equity and insufficient current assets to cover liabilities, raising solvency and liquidity concerns. While compliant with filing obligations and stable in governance, the company relies on director support for going concern, highlighting operational sustainability challenges. Further due diligence is required to assess business viability and management’s plans to restore financial health.

PATHOLOGICA LTD - Analysis Report

Company Number: 13100286

Analysis Date: 2025-07-20 15:28 UTC

1. Risk Rating: HIGH
   Pathologica Ltd exhibits significant solvency and liquidity concerns evidenced by increasing net liabilities, persistent negative working capital, and low cash reserves. The company’s financial position deteriorated from 2020 through 2023, with net assets declining from -£3,466 to -£10,865, indicating an ongoing erosion of equity and potential challenges in meeting obligations.

2. Key Concerns:

• Solvency Risk: The company’s net liabilities have more than tripled over four years, reaching -£10,865 as of 31 December 2023, which signals that total liabilities exceed total assets and shareholders’ funds are substantially negative.
• Liquidity Concerns: Current liabilities in 2023 stand at £13,539 against current assets of only £464 (all cash), resulting in a severely negative net current asset position (-£13,075). Absence of trade debtors or other current assets suggests limited short-term receivables to offset liabilities.
• Operational Sustainability: The company operates with only two employees (including directors), indicating a very small scale. The accounts note the company has relied on director support to continue as a going concern, which may not be sustainable long term without improvements in profitability or capital injection.

3. Positive Indicators:

• No Overdue Filings: Both accounts and confirmation statements are filed on time, indicating compliance with statutory filing requirements and no immediate regulatory concerns.
• Stable Management: Directors have been consistent since incorporation with no indications of disqualifications or changes, which supports continuity in governance.
• Exemption from audit: The company qualifies for small company exemption, reducing administrative burden and costs, consistent with its small size and scale.

4. Due Diligence Notes:

• Investigate the company’s business model viability and revenue generation, as turnover figures are not disclosed and losses appear accumulated in reserves.
• Clarify sources and extent of director support referenced in going concern note to understand dependency and any contingent liabilities.
• Review any off-balance sheet liabilities or contingent risks not disclosed in the accounts.
• Assess plans for addressing the negative equity and working capital deficits, including potential capital raising or restructuring.
• Confirm if trade receivables remain nil and understand the customer base and payment terms, given the lack of debtors.
• Evaluate fixed asset utility given their small net book value relative to liabilities.