Company Number: 14975497

Analysis Date: 2025-07-29 16:55 UTC

1. Risk Rating: HIGH

Justification: The company exhibits significant negative net assets and net current liabilities, indicating financial distress. Despite being recently incorporated, it shows a large accumulated loss relative to its equity base, raising concerns regarding its solvency and liquidity position.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The net assets stand at -£80,219 with shareholders’ funds negative at the same amount, primarily driven by a profit and loss deficit of -£280,219, signaling accumulated losses exceeding capital invested.
• Net Current Liabilities Position: Current liabilities (£331,780) exceed current assets (£244,006), producing a net current liability of -£87,774. This suggests potential liquidity issues in meeting short-term obligations.
• Rapid Accumulation of Losses in a New Entity: Being incorporated in July 2023, the company’s financials already show significant losses in its first 18 months, which may imply operational or market challenges in establishing a sustainable business.

3. Positive Indicators:

• No Overdue Filings or Compliance Issues: The company is active with no overdue accounts or confirmation statement filings, indicating sound regulatory compliance so far.
• Diversified Shareholder Control: Four directors each control 25-50% shares, suggesting distributed ownership which might provide balanced governance and resource pooling.
• Small Tangible Fixed Asset Base: Fixed assets are modest (£7,929), implying limited capital expenditure burden and flexibility in asset management.

4. Due Diligence Notes:

• Investigate Nature and Causes of Losses: Detailed review of income statement and cash flow to understand the drivers of the substantial accumulated losses and whether they are one-off or recurring.
• Examine Debtor Quality and Collection Risk: Debtors constitute a large portion of current assets (£236,746). Assess aging, collectability, and any related party transactions to gauge liquidity risk.
• Assess Business Model Viability: Given the SIC code (87900 - Other residential care activities) and rapid financial deterioration, evaluate market positioning, contracts, and operational sustainability.
• Review Share Premium Account Origin and Use: The £199,900 share premium is significant compared to nominal share capital; confirm the timing, source, and any restrictions on this reserve.
• Confirm Director and Management Background: Validate the credentials and track record of the four directors to understand their capability in turning around or scaling the business.