PIPEGEN INC LTD

Executive Summary

PipeGen Inc Ltd is a newly formed consultancy company with a weak financial position characterized by negative net assets and a working capital deficit. The current liquidity constraints and lack of profitability evidence indicate a high risk for credit exposure. Credit facilities are not recommended until the company demonstrates improved cash flow and capital adequacy.

PIPEGEN INC LTD - Analysis Report

Company Number: 15073139

Analysis Date: 2025-07-29 17:26 UTC

1. Credit Opinion: DECLINE
   PipeGen Inc Ltd is a recently incorporated small private limited company (incorporated August 2023) engaged in management consultancy. The latest financial statements to August 2024 show a weak financial position with net liabilities of £5,039 and negative net current assets. Current liabilities exceed current assets by over £5,000, indicating poor short-term liquidity. As a start-up, the company has yet to demonstrate profitability or positive cash flow, which combined with the negative equity and working capital deficit, poses a significant credit risk. Without evidence of secured funding or imminent cash inflows, the ability to service debt or meet financial obligations is doubtful. Additionally, the entire shareholding and control rest with a single director, which concentrates risk. Given these factors, approval for credit facilities is not recommended at this stage.

2. Financial Strength:
   The balance sheet shows total current assets of £1,682 (all cash) against current liabilities of £6,721. The company holds no fixed assets, and net assets are negative at £-5,039, reflecting accumulated losses or start-up expenses not yet offset by profits. Shareholders’ funds are negative, indicating the company is undercapitalized relative to its liabilities. The absence of tangible assets and reliance on a single source of equity capital limits financial resilience. The company appears to be in its initial operating phase and has not yet built a financial buffer to absorb adverse events.

3. Cash Flow Assessment:
   Cash at bank is minimal (£1,682) relative to the short-term liabilities due within one year (£6,721). The working capital deficit implies the company may struggle to meet immediate operational costs or creditor demands without additional capital injections or external financing. The negative net current assets highlight liquidity risk. No evidence of trade debtors or other current assets is shown that could improve short-term liquidity. Monitoring cash burn rate and securing working capital funding will be critical to avoid payment defaults.

4. Monitoring Points:

• Quarterly cash flow statements to track liquidity trends and cash burn.
• Updates on new contracts or revenue generation to assess improvement in turnover and profitability.
• Changes in working capital position, especially current liabilities relative to liquid assets.
• Any further capital injections or external financing obtained to bolster equity and liquidity.
• Management changes or evidence of strengthened governance to mitigate single-person control risks.