Company Number: SC686701

Analysis Date: 2025-07-29 16:53 UTC

1. Credit Opinion: DECLINE
   Tauprobes Ltd exhibits significant financial distress evidenced by persistent and worsening negative net current assets and shareholders’ funds over multiple years. The company’s liabilities greatly exceed its current assets, driven largely by substantial convertible loan notes (£184,911 in 2025). The high leverage and absence of sufficient liquid assets to cover short-term obligations raise serious concerns over repayment capacity and ongoing viability despite the directors’ going concern assertion. The worsening liquidity position and lack of profitability signal elevated credit risk. Without clear evidence of imminent capital injection or operational turnaround, extending credit facilities would be imprudent.

2. Financial Strength:
   The balance sheet shows net liabilities of £172,033 as of March 2025, deteriorated from £126,621 the previous year. Current liabilities (£186,188) far exceed current assets (£13,887), resulting in a negative working capital position (-£172,301). Fixed assets are minimal (£268) and largely depreciated. The company is reliant on convertible loan notes, which constitute the bulk of liabilities and create substantial financial leverage. Shareholders’ funds remain deeply negative (£-187,132), indicating accumulated losses and eroded equity. This weak financial structure provides limited buffer against operational or economic shocks.

3. Cash Flow Assessment:
   Available cash on hand has shrunk dramatically from £48,817 in 2024 to £3,780 in 2025, indicating cash burn and poor liquidity management. Debtors increased but remain insufficient to offset liabilities due within one year. The company’s working capital deficit limits its ability to meet short-term obligations without additional financing or asset sales. There is no indication of positive operating cash flows or profitability to support debt servicing. Reliance on convertible loans with deferred interest payments postpones immediate cash outflows but does not resolve fundamental liquidity risks.

4. Monitoring Points:

• Liquidity trends: monitor cash balances and debtor collections closely each quarter.
• Convertible loan note status: track any conversions or repayments, and assess impact on leverage.
• Profitability and turnover: require interim financials to confirm if any operational recovery is underway.
• Directors’ support: gauge willingness and capacity of directors or shareholders to provide further financial support.
• Compliance: ensure timely filing of accounts and confirmation statements to avoid regulatory penalties.