Company Number: 13271203

Analysis Date: 2025-07-20 17:39 UTC

1. Risk Rating: HIGH
   The company exhibits significant solvency risk marked by persistent negative net assets and shareholders’ deficit, indicating liabilities exceed assets substantially. The financials reveal large creditor balances due after more than one year, coupled with a material director’s loan, raising concerns about the company’s ability to meet long-term obligations.

2. Key Concerns:

• Negative Net Assets: The company’s net liabilities increased from approximately £329k in 2023 to £494k in 2024, demonstrating deteriorating financial health.
• High Long-Term Creditors: Over £1.27 million is owed beyond one year, significantly exceeding current assets, indicating heavy reliance on creditor financing and potential liquidity strain.
• Material Director Loan: A director’s loan of £379,566 is outstanding and repayable on demand, reflecting dependence on related party funding which could be recalled, impacting cash flow.

3. Positive Indicators:

• Current Assets vs. Current Liabilities: Despite negative net assets, the company reports positive net current assets (£774,959 in 2024), suggesting short-term liquidity may be adequate to cover immediate obligations.
• No Filing Delinquencies: Accounts and confirmation statements are up to date, indicating compliance with statutory filing requirements.
• Increasing Workforce: The average number of employees increased from 1 to 3, potentially reflecting business growth or operational expansion.

4. Due Diligence Notes:

• Clarify nature and terms of long-term creditors: Identify creditors and conditions of the £1.27 million debt to assess refinancing risk or potential covenants.
• Examine director’s loan agreement: Review terms, repayment history, and any contingent liabilities linked to director advances.
• Assess revenue generation and profitability: As income statement is not publicly filed, analyze internal management accounts or alternative data to evaluate operational sustainability.
• Review debtor balances: The large negative debtor balance (£-362,816 in 2024) requires explanation for potential accounting or recoverability issues.
• Evaluate asset valuations: Particularly stocks and tangible assets to confirm they are not overstated and impairment risks are considered.