Company Number: 12442529

Analysis Date: 2025-07-29 15:07 UTC

1. Risk Rating: MEDIUM

The company is a recently established micro-sized private limited community interest company (CIC) with limited financial disclosures showing a negative net asset position and significant long-term liabilities. The absence of recent financial accounts beyond 2021 limits a comprehensive current assessment. However, the company’s community-focused operations and active engagement with stakeholders suggest operational sustainability, albeit with financial constraints.

2. Key Concerns:

• Negative Net Assets and High Long-Term Creditors: As of February 2021, the company reported net liabilities of £22,719, driven by non-current creditors of £23,828. This weak solvency position raises questions about the company’s ability to meet long-term obligations without additional funding.

• Limited Financial Transparency and Outdated Accounts: The last available financial statements pertain to the period ending February 2021, over three years ago. The absence of more recent accounts restricts assessment of current financial health and cash flow status, posing a risk for investors.

• Minimal Share Capital and Potential Overdependence on Directors: Share capital is nominal (£1), and control is concentrated mainly with one director holding 75-100% of shares and voting rights. This concentration could pose governance risks and limit capital raising flexibility.

3. Positive Indicators:

• Active Status with No Overdue Filings: The company is active, with no overdue accounts or confirmation statements, indicating compliance with filing requirements and regulatory obligations.

• Clear Community Impact and Stakeholder Engagement: The CIC provides affordable studio space and artistic support in Leicester, with documented initiatives benefiting the community and positive collaboration with local authorities.

• Small Employee Base and Low Operating Complexity: With only two employees reported, operational overhead is low, which may help manage costs effectively in a challenging financial environment.

4. Due Diligence Notes:

• Obtain the latest filed financial statements and management accounts post-February 2021 to evaluate current solvency and liquidity.

• Review details of the long-term creditors (£23,828) to understand the nature, maturity, and repayment terms of these obligations.

• Assess cash flow forecasts and funding sources to verify the company’s ability to continue as a going concern given the negative equity position.

• Investigate governance arrangements, including decision-making processes and any connected party transactions, given the concentrated ownership.

• Confirm whether any remuneration or financial benefits have been made to directors or related parties since the last report.

• Validate the company’s business model sustainability, particularly revenue streams from studio rentals or subsidies, in the context of evolving market conditions.