Company Number: 15363365

Analysis Date: 2025-07-29 19:27 UTC

1. Risk Rating: MEDIUM
   Justification: While the company is newly incorporated and active with no overdue filings, the financial position shows net liabilities and reliance on related party funding, which presents moderate solvency and liquidity risks at this early stage.

2. Key Concerns:

• Net Liability Position: The company shows net liabilities (£5,388 negative shareholders’ funds) indicating that total liabilities exceed assets, which may challenge solvency if not addressed promptly.
• High Current Liabilities vs. Cash: Current liabilities (£1.23m) significantly exceed cash (£12,445), suggesting potential liquidity constraints despite positive net current assets due to stock.
• Related Party Debt: A large unsecured, interest-free, repayable-on-demand balance owed to a related party (£1.05m) creates dependency risk and raises questions about financial independence and sustainability.

3. Positive Indicators:

• Positive Net Current Assets: Despite liquidity concerns, net current assets are positive (£286k), mainly due to stocks (work in progress), signaling some short-term asset coverage of liabilities.
• No Overdue Filings: The company is compliant with accounts and confirmation statement filing deadlines, indicating good governance and regulatory compliance so far.
• Director Support: The director has committed to supporting the company’s going concern assumption, which may mitigate immediate financial risk.

4. Due Diligence Notes:

• Nature and Realisability of Stock: Investigate valuation methods and marketability of the £1.47m stock (work in progress) to confirm it can be converted to cash as expected.
• Related Party Debt Terms: Clarify the related party loan arrangements, including any informal support or additional funding commitments, and assess risks if this support ceases.
• Cash Flow Projections: Review detailed cash flow forecasts to evaluate if the company can meet current and near-term liabilities without additional funding.
• Security on Bank Loans: Examine terms of the secured bank loan (£291k) and implications of the fixed and floating charge on company assets and creditor priorities.
• Director and Control Structure: Confirm director conduct history and PSC details to ensure no regulatory or governance issues.