Company Number: SC709407

Analysis Date: 2025-07-29 15:51 UTC

1. Risk Rating: HIGH
   The company shows significant solvency concerns as of the latest accounts with net current liabilities of £47,722 and negative net assets of the same amount. This represents a material deterioration from previous periods where net assets were positive. Such a financial position indicates an inability to meet short-term obligations without additional funding or restructuring.

2. Key Concerns:

• Solvency and liquidity deterioration: The drastic swing from positive net current assets (£2,409) in 2022 to a substantial net current liabilities position (£47,722) in 2023 signals severe liquidity stress.
• Negative net assets: Total net assets declined from £2,409 to negative £46,609, implying accumulated losses or unrecorded liabilities that threaten shareholder equity.
• Director changes and control: A director resigned mid-2024 and a new director appointed; given the financial deterioration, governance stability and decision-making should be examined closely.

3. Positive Indicators:

• Timely filing compliance: Both accounts and confirmation statements are submitted on time with no overdue filings, indicating regulatory compliance.
• Growing headcount: The company increased average employees from 2 to 4 in the latest period, which may suggest operational expansion or increased business activity.
• Micro entity size: As a micro entity, reporting requirements are limited, which may reduce administrative burden.

4. Due Diligence Notes:

• Investigate reasons behind the sharp increase in current liabilities and negative net assets in 2023, including creditor composition and any contingent liabilities.
• Review cash flow statements and management accounts (not provided) to assess operational cash generation and liquidity management.
• Assess director governance changes and any related party transactions given director resignation and appointment within 2024.
• Verify whether additional funding or shareholder loans have been injected or planned to stabilize finances.
• Confirm ongoing business activity and client base to evaluate operational sustainability given financial stress.