Company Number: 12497240

Analysis Date: 2025-07-29 14:52 UTC

1. Risk Rating: HIGH
   The company exhibits a significant solvency risk as evidenced by persistent and substantial negative shareholders’ funds exceeding £1.3 million, with current liabilities dramatically surpassing current assets and cash balances near depletion.

2. Key Concerns:

• Severe Negative Net Working Capital: Net current liabilities of approximately £1.3 million indicate a liquidity crunch, with current liabilities far exceeding current assets and cash at hand (£10,737), raising serious concerns about meeting short-term obligations.
• Erosion of Fixed Assets: The disposal of all tangible fixed assets in the latest financial year suggests potential operational disruption or asset liquidation under distress, undermining business stability.
• Heavy Reliance on Group Funding: Over £1.29 million owed to group undertakings within current liabilities points toward dependence on intercompany loans, which may not be sustainable or timely in a stressed scenario.

3. Positive Indicators:

• Compliance with Filing Requirements: The company is up to date with both accounts and confirmation statement filings, indicating regulatory compliance and governance diligence.
• Auditor’s Unqualified Report: Despite financial weaknesses, the auditor issued an unqualified report, implying no immediate concerns about the accuracy of the financial statements.
• Active Website and Communication Channels: The presence of an active website with contact information and social media suggests ongoing business operations and customer engagement.

4. Due Diligence Notes:

• Investigate the nature and terms of the amounts owed to group undertakings, including repayment schedules and the financial health of the ultimate parent, Handsale Limited.
• Clarify the reason and impact of disposing all tangible assets in 2024—whether this was a strategic decision or due to financial distress.
• Review cash flow statements and management accounts to understand operational cash generation and ability to meet upcoming liabilities.
• Examine any contingent liabilities or off-balance sheet obligations not reflected in the accounts.
• Assess the business model sustainability given the significant reduction in workforce from 45 to 17 employees and the loss of fixed assets.