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.