ZERO POINT MOTION LTD

Executive Summary

Zero Point Motion Ltd demonstrates reasonable liquidity and shareholder backing but is experiencing increasing losses that threaten operational sustainability. The company maintains regulatory compliance and has a capable management team, yet declining cash reserves and unaudited financials suggest moderate risk. Further due diligence on profitability drivers, funding, and debtor quality is recommended to clarify the company’s financial stability.

ZERO POINT MOTION LTD - Analysis Report

Company Number: 12457899

Analysis Date: 2025-07-29 16:57 UTC

1. Risk Rating: MEDIUM

Justification: Zero Point Motion Ltd shows solid asset backing and positive net current assets, indicating an ability to meet short-term obligations. However, the company is incurring consistent and significant losses, which have materially eroded retained earnings and net assets in the latest year. This loss-making trend raises concerns about operational sustainability without additional funding or a turnaround. The absence of audit and reliance on unaudited accounts adds a moderate degree of uncertainty.

2. Key Concerns:

• Increasing accumulated losses: The retained earnings deficit nearly doubled from -£791k to -£1.76m in the latest year, indicating deteriorating profitability and potential solvency risk if this trend continues.
• Declining cash and current assets: Cash decreased significantly from £1.62m to £323k, and net current assets nearly halved, which may strain liquidity and operational cash flow.
• Lack of audit: The company qualifies for audit exemption and has unaudited accounts; this limits external assurance on financial accuracy and completeness.

3. Positive Indicators:

• Strong shareholder equity: Despite losses, shareholders’ funds remain positive at £948k, supported by a substantial share premium of £2.68m.
• Healthy working capital position: Current assets exceed current liabilities by a comfortable margin (£784k net current assets), supporting near-term financial obligations.
• Experienced board: Directors include professionals with venture capital and scientific backgrounds, which may support strategic development and access to funding.
• Compliance status: No overdue filings and active company status indicate adherence to regulatory requirements.

4. Due Diligence Notes:

• Review detailed profit and loss accounts and cash flow statements to understand the drivers of losses and the company’s burn rate.
• Investigate the nature and collectability of trade and other debtors, especially the significant increase in accrued income and longer-term receivables.
• Assess funding plans or capital injections to support ongoing operations given the loss trend and cash depletion.
• Confirm if any contingent liabilities or off-balance sheet obligations exist that could impact solvency.
• Evaluate the impact and terms of share-based payments and any dilution risks for shareholders.
• Consider obtaining audited financial statements if possible for greater assurance.