ONETRUST TECHNOLOGY LIMITED

1. Credit Opinion: CONDITIONAL

The company is an active UK private limited company operating as part of an international regulatory technology group. However, its standalone balance sheet is materially weakened: net assets were negative at approximately £24.8m at 31 December 2019, with total liabilities of roughly £43.9m against total assets of £21.6m. This indicates balance sheet insolvency on a book-value basis. The business has grown rapidly and is backed by a US parent that has raised substantial external equity, but the UK entity itself appears to be funded by shareholder or intercompany support rather than retained earnings. On the strength of the UK entity’s filed accounts alone, a facility would not be supportable unsecured. A conditional approval could be considered only with a parent company guarantee, a debenture or other security, and supported by more recent management information than the 2019 accounts provided.

2. Financial Strength

Balance sheet health is weak. - Shareholders funds moved from positive equity of roughly £0.3m in 2014 to negative £10.9m in 2018 and negative £24.8m in 2019, reflecting accumulated losses. - Total liabilities more than doubled from £19.4m (2018) to £43.9m (2019), while total assets increased from £9.3m to £21.6m over the same period. - The company’s share capital is nominal (£105), so there is little subscribed equity to absorb losses. - A significant portion of assets is likely intangible or related to acquisitions, including the 2019 acquisition noted in the accounts, which may have limited realizable value in a downside scenario. - The company has not paid dividends, retaining all losses within the business.

3. Cash Flow Assessment

Liquidity is constrained relative to obligations. - Cash at bank was approximately £1.2m at 31 December 2019 and £1.3m at 31 December 2018. This covers only a small fraction of total liabilities. - The business is in an investment phase, with growth funded by external equity injections from the US parent rather than operating cash generation. - Working capital is likely under pressure; negative net assets suggest current liabilities exceed current assets, though a detailed current/non-current split is not provided in the summary data. - Continued operations appear dependent on ongoing financial support from the wider group.

4. Monitoring Points

• Obtain management accounts for periods after 31 December 2019, as the latest detailed accounts provided are for the year ended 31 December 2019.
• Monitor cash burn rate and liquidity runway against the £1.2m cash position.
• Track intercompany balances and any formal parent company funding commitments.
• Review debtor concentration and ageing, given the software and consultancy business model.
• Watch for changes in company status, filings, directorship or PSC control that could indicate group restructuring.
• If a facility is advanced, require regular covenant reporting and confirmation of group support.