Company Number: 13848866

Analysis Date: 2025-07-20 17:09 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency and liquidity concerns, with net current liabilities exceeding £123k and persistent net liabilities overall. Despite being a recently incorporated entity, the financial position shows a growing deficit and reliance on related party funding, raising material doubts about financial stability.

2. Key Concerns:

• Negative Working Capital: Net current liabilities stand at £123,568 as of 31 December 2023, indicating the company cannot meet short-term obligations from current assets without additional funding.
• Net Liabilities and Equity Deficit: Shareholders’ funds are negative (£5,500 deficit), reflecting accumulated losses and an erosion of capital, which is a red flag for long-term solvency.
• Dependence on Related Party Funding: Significant amounts owed to group undertakings (£72,430) and participating interests (£60,000) are unsecured and interest-free, suggesting liquidity is maintained by intra-group support rather than independent operational cash flows.

3. Positive Indicators:

• No Overdue Filings: The company is compliant with statutory filing deadlines for accounts and confirmation statements, indicating good regulatory compliance.
• Going Concern Support: Directors confirm ongoing shareholder support with undertakings to fund the company for at least 12 months, mitigating immediate going concern risk despite financial deficits.
• Asset Base: Tangible fixed assets (development costs) valued at £118,068 provide some asset backing, although these are capitalized development costs rather than liquid assets.

4. Due Diligence Notes:

• Investigate the nature and sustainability of related party loans and the likelihood/timing of repayment or write-offs.
• Assess the commercial viability of capitalized development costs and whether these projects can generate future cash flows to reverse losses.
• Review cash flow forecasts and management plans to address the working capital deficit and path to profitability.
• Confirm there are no undisclosed contingent liabilities or regulatory issues beyond the financial statements.
• Evaluate director and shareholder commitments to ongoing funding beyond the stated 12-month period.