Company Number: 13515985

Analysis Date: 2025-07-20 14:59 UTC

1. Risk Rating: MEDIUM

Justification: The company shows improving net assets and positive working capital in the latest year, indicating progress toward solvency. However, the high level of current liabilities relative to cash and the significant intercompany balances pose liquidity risks. The going concern depends on ongoing group support, which introduces external dependency risk.

2. Key Concerns:

• Liquidity strain: Cash at bank (£99,930) is low compared to current liabilities (£1.89 million), largely due to substantial amounts owed to group undertakings (£1.32 million), potentially limiting immediate liquidity.
• Reliance on group support: The going concern disclosure explicitly states dependence on the parent company (Super Rare Games Limited), suggesting operational sustainability may be contingent on this support.
• High debtor balances: Debtors (£2.28 million) constitute the bulk of current assets, heavily concentrated in prepayments and accrued income, which may affect cash flow realization timing and credit risk.

3. Positive Indicators:

• Net assets have increased from £272,611 in 2022 to £489,039 in 2023, reflecting improved equity position.
• Current assets have risen significantly to £2.38 million, driven by increased debtors and prepayments, indicating business growth or increased contractual activity.
• The company is compliant with filing obligations, with no overdue accounts or confirmation statements, suggesting good regulatory adherence.
• Experienced directors with relevant occupational backgrounds (director, business development director, accountant) are in place, providing stable governance.

4. Due Diligence Notes:

• Investigate the nature, aging, and collectability of debtors, particularly prepayments and accrued income, to assess timing and certainty of cash inflows.
• Review terms and conditions of intercompany balances to understand repayment expectations and impact on liquidity.
• Confirm the extent and form of support from the parent company, including any formal guarantees or funding commitments.
• Examine the company’s revenue recognition policies and contract completion stages, given the software development SIC code and reliance on accrued income.
• Assess whether the small companies regime accounting provides sufficient transparency for investment decisions or if additional management information can be obtained.