SOLON TECHNOLOGIES LIMITED

Executive Summary

SOLON TECHNOLOGIES LIMITED displays significant financial risks stemming from high leverage, minimal capital, and liquidity concerns despite some improvement in net asset position. The company remains a micro-entity with limited operating scale, necessitating careful scrutiny of creditor terms and cash flow sustainability. Regulatory compliance is up to date, but further investigation into operational performance is recommended before investment consideration.

SOLON TECHNOLOGIES LIMITED - Analysis Report

Company Number: 14175327

Analysis Date: 2025-07-29 12:18 UTC

1. Risk Rating: HIGH
   The company demonstrates a precarious financial position with net assets just £7,750 as of June 2024, a significant improvement from a net liability position the prior year, yet still minimal. The large amount of creditors falling due after more than one year (£141,671) relative to current assets and the minimal share capital (£95.49) heightens solvency concerns.

2. Key Concerns:

• Solvency and Leverage: The company carried substantial long-term liabilities exceeding current assets by a large margin in prior years, only slightly improved in the latest accounts, indicating ongoing reliance on creditor financing.
• Liquidity Risk: Current assets dropped sharply from £403,528 to £145,020 while current liabilities reported as only £22,989 (vs. prior £15,165) plus large long-term creditors, raising questions about cash flow sufficiency to meet obligations.
• Limited Capital and Scale: Minimal share capital and being a micro-entity with few employees (5 average) suggests limited operational scale and financial buffer to absorb shocks.

3. Positive Indicators:

• Improved Net Assets: Transition from negative net assets (~-£238k) in prior years to a positive net asset position (£7,750) suggests some correction or repayments of liabilities.
• No Overdue Filings: Company is compliant with filing deadlines, indicating regulatory adherence.
• Active Status and Growth in Staff: Increase in average employees from 3 to 5 may indicate some operational scaling.

4. Due Diligence Notes:

• Investigate the nature and terms of the long-term creditors (£141,671) to assess repayment risk and covenants.
• Clarify the sharp decrease in current assets from £403k to £145k within one year and verify cash flow adequacy.
• Review detailed profit and loss information (not filed publicly) to ascertain profitability and operational sustainability.
• Confirm the basis of valuation of assets and any potential off-balance sheet liabilities.
• Examine the business model and revenue streams under SIC 58290 (Other software publishing) to evaluate market position and growth prospects.
• Review director backgrounds and any related party transactions, especially given the recent changes in directors.