POWERMAT EU LIMITED

Risk Rating: HIGH Justification: The company is technically insolvent, with net liabilities exceeding £634,000 and accumulated losses of over £817,000. It has no operating revenue, negligible current assets, and is entirely dependent on the continued financial support of its Israeli parent company to meet its obligations. Without this external backing, the company would be unable to continue as a going concern.

Key Concerns: - Technical Insolvency and Going Concern Dependency: The company’s net assets are deeply negative (£-634,371 as of Dec 2025). It is only able to prepare accounts on a going concern basis due to explicit reliance on the parent company's forbearance on loan repayment. If the parent company withdraws this support or faces its own financial difficulties, this entity will be unable to meet its liabilities. - Complete Lack of Operational Cash Flow: The filed accounts explicitly state that the company "does not have any trading activities." With only £391 in current assets (solely an intercompany debtor) against current liabilities of £5,316, the company generates no independent revenue to service its debts or operating costs. - Cross-Border Parent Risk: The immediate and ultimate parent is Powermat Ltd, registered in Israel. The entirety of the company's long-term debt (£629,446) is owed to this foreign parent. Cross-border intercompany dependencies introduce risk, as the UK entity has no transparency into the parent's financial health, and recovering claims in a cross-border insolvency scenario can be complex.

Positive Indicators: - Regulatory Compliance: The company is up to date with its filing requirements. The 2025 accounts were filed on time, and the confirmation statement is not currently overdue, indicating basic administrative stability. - Explicit Parent Support: The director has formally documented the parent's commitment not to demand repayment of the loan for at least 12 months from the signing of the accounts, providing a short-term contractual assurance of solvency. - Stable Corporate Structure: The company has been incorporated since 2009, suggesting it serves a long-standing, specific purpose within the Powermat corporate group, rather than being a transient or recently formed shell.

Due Diligence Notes: - Parent Company Financials: It is critical to obtain and review the financial statements of Powermat Ltd (Israel) to ensure the parent entity has the financial capacity to continue supporting the UK subsidiary and is not itself facing distress. - PSC Verification: The Persons with Significant Control (PSC) register only contains a generic statement rather than naming a specific individual or legal entity. Given the parent company is overseas, further investigation should confirm whether the Israeli parent should be registered as a PSC and ensure full compliance with UK transparency regulations. - Strategic Purpose: Clarification should be sought regarding the strategic rationale for maintaining a UK entity with no trading activity, significant accumulated losses, and a steadily increasing intercompany loan balance (which grew from £582,821 to £629,446 in the latest year). Understanding whether this loan represents actual cash injections funding ongoing administrative costs or merely accounting adjustments will clarify the true cash flow dynamics. - Accruals Review: Current liabilities include £1,572 in accruals and other creditors. Understanding what these accruals relate to in a non-trading entity will help ascertain the minimum ongoing cash burn rate.