Risk Assessment: INT2MED LIMITED

1. Risk Rating: MEDIUM

The company maintains a solvent balance sheet with net assets of £200,620 and no immediate liquidity crisis, but the sustained erosion of net assets over recent years and declining total assets warrant close monitoring. The micro-entity reporting regime limits visibility into profitability and cash flow dynamics, which adds uncertainty to any forward-looking assessment.

2. Key Concerns

i) Consistent Net Asset Erosion Net assets have declined from £239,804 (2022) to £233,166 (2023) to £200,620 (2024), representing a cumulative decline of approximately £39,184 (16.3%) over two years. This implies ongoing losses being retained in the business. The 2024 decline alone is approximately £32,546, which on a company with 4 employees is material. Without a filed P&L account, it is impossible to determine whether these losses stem from operational trading, asset write-downs, or other factors.

ii) Declining Total Assets and Volatile Historical Cash Position Total assets have fallen from £359,353 (2022) to £260,877 (2024), a 27.4% decline. Historical cash data reveals significant volatility — cash fell to as low as £2,271 (2017) and £4,175 (2018) before recovering. While cash is not disclosed for 2023-2024 under the micro-entity regime, the pattern of asset contraction raises questions about whether the business is generating sufficient cash from operations or consuming reserves.

iii) Limited Financial Transparency Due to Micro-Entity Filing The company files under the micro-entity regime (FRS 105), which permits omission of the P&L account and significantly reduces disclosure requirements. This means there is no visibility into revenue, cost of sales, operating margins, or the specific drivers behind the net asset decline. The 50:50 ownership split between two PSCs (each holding 25-50%) could also create governance risks if disagreements arise, though there is no evidence of this currently.

3. Positive Indicators

i) Long Track Record and Ongoing Solvency Incorporated in 2009, the company has operated for over 15 years and has consistently maintained positive net assets throughout the available 10-year financial history. It has never entered an insolvency process. This suggests a degree of operational resilience and a business model that has sustained through multiple economic cycles.

ii) Liability Reduction and No Director Borrowings Current liabilities decreased from £65,062 (2023) to £56,796 (2024), and non-current liabilities fell from £22,695 to £12,456. The company is actively reducing its debt obligations. Additionally, the 2024 accounts confirm no outstanding director advances or credits, unlike 2023 where a small balance of £949 existed. This indicates disciplined related-party transaction management.

iii) Filing Compliance and Active Status Accounts and confirmation statements are filed on time with no overdue items. The company remains active and is not in liquidation, administration, or receivership. Both directors appear engaged, with accounts approved and authorised on 22 April 2025.

4. Due Diligence Notes

a) Profitability and Revenue Trends Request full P&L accounts from the company directly. The micro-entity filing obscures whether the net asset decline reflects trading losses, asset impairments, or dividends. Understanding revenue trajectory is critical given the SIC code (32500 — Manufacture of medical and dental instruments) operates in a sector with regulatory and supply chain pressures.

b) Cash Position and Working Capital Dynamics The 2024 balance sheet shows net current assets of £206,055, which appears healthy, but the composition of current assets (£253,856) relative to current liabilities (£56,796) should be investigated. Specifically, the proportion of debtors versus cash is unknown under micro-entity reporting. Historical cash volatility (ranging from £2,271 to £98,698) suggests the business may experience significant working capital fluctuations.

c) Ownership and Governance Structure The two PSCs (Ford and Emodi) each hold 25-50% of shares and voting rights. This near-equal split could create deadlock risk in decision-making. Clarify whether a shareholders' agreement exists and how disputes would be resolved. Also note the secretary role held by Emodi appears in two formats in the officer list ("ALEXANDER EMODI" and "Dr Alexander Emodi") — confirm this is a single individual rather than an administrative error.

d) Asset Composition and Fixed Assets Fixed assets have declined from £11,506 (2023) to £7,021 (2024). For a company in medical instrument manufacturing, this is a remarkably low fixed asset base. Investigate whether the company outsources manufacturing or holds significant intangible assets not reflected on the balance sheet under FRS 105.

e) Sector-Specific Considerations The medical devices sector (SIC 32500) is subject to regulatory requirements including UKCA marking, MHRA compliance, and potential EU MDR implications post-Brexit. Confirm the company's regulatory standing and any material compliance costs that may not be apparent from the accounts.