Company Number: 13024396

Analysis Date: 2025-07-29 20:24 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Stardio Ltd shows significant intangible assets and shareholder funding but has recurring operational losses resulting in a declining net asset position (£146k in 2023 vs £241k in 2022). The company’s current liabilities substantially exceed current assets, producing a large working capital deficit (£-257k), raising concerns about short-term liquidity and debt servicing capability. However, the strong equity base supported by shareholder capital injection (£452k total share capital and premium) provides a buffer. Lending could be considered with conditions such as regular monitoring of cash flow and working capital improvements, and possibly requiring personal guarantees or additional security given the operating losses and liquidity strain.

2. Financial Strength:
   The balance sheet reflects a heavy concentration in intangible assets (£403k), representing capitalised development costs, which are not amortised yet but could be impaired if future profitability does not materialize. Tangible assets are minimal (£800). The company has a net current liability position that has worsened significantly from £-33.6k in 2022 to £-257.2k in 2023, indicating a deterioration in liquidity and potential reliance on external funding or shareholder support to meet short-term obligations. Shareholders’ funds have decreased due to accumulated losses (£-305.9k P&L reserve). While the equity base remains positive, the decline and losses pose risks to ongoing financial stability.

3. Cash Flow Assessment:
   Cash on hand is very limited at £560, down sharply from £130.7k in the prior year, indicating significant cash burn. Current liabilities are high (£259k) relative to very low current assets (£1.9k), revealing poor liquidity and potential challenges in meeting immediate creditor demands. The company’s operating cash flow is not disclosed but the losses and working capital deficit suggest negative operating cash flow. The liquidity risk is elevated and ongoing shareholder funding or alternative financing will likely be necessary to sustain operations in the near term.

4. Monitoring Points:

• Working capital position and current ratio trends, ensuring no further deterioration.
• Cash flow forecasts and actual cash balances to assess liquidity management.
• Development expenditure capitalisation and any impairment indicators on intangible assets.
• Profitability trend to evaluate if losses are narrowing or continuing.
• Any new funding rounds or shareholder support injections.
• Director conduct and governance, given key control lies with two directors with significant shareholdings.