Company Number: 13272019

Analysis Date: 2025-07-20 17:57 UTC

1. Risk Rating: MEDIUM
   LN12 CIC demonstrates modest financial resources with no liabilities, but recurring operational losses and declining cash reserves over recent years moderate the risk rating. The lack of turnover growth and reliance on grant funding typical for community interest companies raise concerns about sustainability and liquidity over the medium term.

2. Key Concerns:

• Recurring Operating Losses: The company posted losses of £16,228 (2024) and £14,721 (2023) despite modest turnover, indicating challenges in covering operating costs through income generated.
• Declining Cash Reserves: Cash decreased from £54,569 in 2021 to £24,978 in 2024, which could constrain operational flexibility if funding inflows do not improve.
• Limited Revenue Generation: Turnover is very low (£400 in 2024), suggesting heavy dependence on external funding or grants rather than sustainable trading activities.

3. Positive Indicators:

• No Current Liabilities: The absence of current liabilities means the company is not currently burdened by short-term debts, reducing immediate solvency risk.
• Adequate Working Capital: Positive net current assets equal to cash balances indicate sound short-term liquidity on paper, though cash levels are declining.
• Compliance and Governance: The company is up to date with statutory filings and accounts, showing good regulatory compliance and governance discipline.

4. Due Diligence Notes:

• Review the nature and stability of funding sources, particularly grants, to assess ongoing liquidity and revenue stability.
• Examine detailed expense breakdown to identify cost drivers and potential for cost control or efficiency improvements.
• Consider the impact of the limited number of employees (average 1) on operational capacity and sustainability.
• Validate the completeness and accuracy of reported cash balances and any contingent liabilities or commitments not disclosed.
• Assess the strategic plan or outlook for revenue diversification to reduce reliance on donations or grants.