SPARSHDIGITAL LIMITED

1. Credit Opinion: DECLINE

Sparshdigital Limited is a pre-revenue entity incorporated in May 2024 with no demonstrated trading history. The balance sheet shows net liabilities of £3,027 and negative shareholders’ funds of £3,127. External creditor exposure is effectively nil; £71,532 of the £72,132 current liabilities consists of loans from the director, meaning the business is entirely dependent on related-party funding. Cash at bank is £3,581, there are no employees, and the principal asset is £56,971 of capitalised development costs for a Bluetooth Low Energy air-quality device that is not yet available for use and has not generated revenue. The profit and loss account has not been filed, so there is no evidence of operating profitability or debt-service capacity. On these facts, the company cannot evidence repayment capacity for bank facilities.

2. Financial Strength

• Balance sheet date: 31 October 2025 (17-month period from incorporation)
• Fixed assets: £64,864, comprising intangible development costs of £56,971 (unamortised, not yet in use) and tangible assets of £7,893
• Current assets: £4,241 (cash £3,581; VAT debtor £660)
• Current liabilities: £72,132 (director loans £71,532; accruals £600)
• Net current liabilities: £67,891
• Net liabilities: £3,027; shareholders’ funds: negative £3,127 (share capital £100; accumulated loss £3,127)
• Gearing is wholly related-party; no external debt or trade creditors disclosed
• Accounts are audit exempt under the small companies regime and have been filed on time

The balance sheet is weak. Asset value is concentrated in intangible development expenditure with no amortisation charged and no revenue stream to support recoverability. Tangible asset cover is minimal at £7,893.

3. Cash Flow Assessment

• Cash and equivalents: £3,581
• No trade debtors beyond a £660 VAT debtor, indicating no material sales ledger or revenue receipts
• All creditors fall due within one year; £71,532 is repayable to the director on demand or per loan terms
• No filed profit and loss account (filleted accounts), so operating cash flow, EBITDA, and debt-service coverage cannot be assessed
• Zero employees suggests minimal operational overhead but also no trading infrastructure
• Cash headroom is insufficient to cover even accrued liabilities, let alone any new bank debt

Liquidity is fragile and entirely dependent on the director’s continued forbearance or further capital introduction.

4. Monitoring Points

If exposure were to be considered in future, the following should be tracked: - Monthly management accounts and 13-week cash flow forecasts - Evidence of commercial launch and revenue from the Bluetooth Low Energy device - Movement in the director’s loan account; any subordination or standstill agreement - Transition of intangible assets from “not available for use” to amortising, revenue-generating assets - Recruitment of employees and build-out of operational capacity - Continued timely filing of accounts and confirmation statements - Any change in ownership or PSC control - Cash burn rate and runway to next funding event