Company Number: 12708955

Analysis Date: 2025-07-29 12:09 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency issues as demonstrated by persistent negative net assets and net current liabilities over multiple years, indicating an inability to cover short-term obligations with current assets. The low cash reserves relative to current liabilities exacerbate liquidity concerns.

2. Key Concerns:

• Persistent negative net assets and shareholders’ funds (approximately -£15,000), reflecting an equity deficit and potential insolvency risk.
• Substantial current liabilities (£123,311) and total liabilities exceeding current assets, resulting in negative net current assets (~ -£121,621), indicating short-term liquidity stress.
• Dependence on a single director and ultimate controlling party with no other PSCs or employees, raising operational concentration risk and potential governance limitations.

3. Positive Indicators:

• Ownership of investment property valued at £332,373 provides a significant fixed asset base that could be leveraged or sold to improve financial stability.
• No overdue filings and the company is current with statutory compliance, suggesting reasonable governance discipline.
• Absence of employees reduces fixed overhead costs and may limit cash burn.

4. Due Diligence Notes:

• Investigate the nature and terms of the bank loan (£225,746) due after more than five years, including interest rates, covenants, and repayment schedule.
• Assess the valuation and liquidity of the investment property to determine its realistic market value and potential to support debt restructuring.
• Review the company’s cash flow forecasts and any operational plans to address ongoing losses and negative reserves.
• Confirm whether the director has plans or capital injections to rectify the negative equity position.
• Examine related party transactions or contingent liabilities that may not be disclosed in the accounts.