DENICARE LIMITED

1. Risk Rating: HIGH

The company reports negative net assets and negative shareholders’ funds, with cash covering less than 1% of creditors due within one year. While statutory filings are current and the company is not in insolvency proceedings, the balance sheet indicates it cannot meet its short-term obligations from available liquid resources.

2. Key Concerns

1. Negative net assets: The statement of financial position shows net assets of negative £105,633 at 31 January 2026, compared with negative £39,276 at 31 January 2025. Shareholders’ funds are correspondingly negative, indicating a deteriorating balance sheet position over the year.
2. Severe liquidity mismatch: Cash at bank of £1,069 is insufficient to cover creditors falling due within one year of £106,702. The company is therefore heavily reliant on continued creditor forbearance or additional funding to continue operating.
3. Limited operating history and recent board change: Incorporated in January 2024, the company has a short trading record. Average employee numbers rose from zero to two over the period, and one director resigned effective 31 March 2026, suggesting limited management depth and recent governance change.

3. Positive Indicators

1. Statutory compliance: Annual accounts and confirmation statement filings are not overdue, and the company remains active with no liquidation, administration, or receivership proceedings.
2. Operational commencement: The business has moved from having no employees in the prior period to two employees, and its website describes an active residential care service.
3. Subscribed share capital: Called-up share capital of £100 remains in place.

4. Due Diligence Notes

1. Creditor composition: Establish the nature of the £106,702 due within one year—whether trade creditors, related-party loans, or other obligations—and whether any amounts are repayable on demand.
2. Going concern support: Obtain evidence of shareholder or director financial support, including any formal letters of comfort, that underpins the going concern basis of the accounts.
3. Sector regulation: Confirm whether the company holds any required registrations or licences for residential mental health support and whether regulatory conditions could affect its ability to trade.
4. Director resignation: Determine the reason for the resignation effective 31 March 2026 and assess the impact on operational control and board decision-making.
5. Limited disclosure: Recognise that abridged, unaudited accounts provide limited detail; request full management accounts, cash flow forecasts, and creditor ageing to assess near-term funding needs.