INTERSTELLAR SPACE TECHNOLOGIES LTD

Executive Summary

INTERSTELLAR SPACE TECHNOLOGIES LTD is in an early-stage development phase with significant liquidity challenges and a negative net asset position. The financial health indicates distress symptoms typical of start-ups without sufficient capital backing or asset investment. Focused actions on raising capital, managing liabilities, and accelerating revenue generation are critical to stabilizing the company's financial outlook.

INTERSTELLAR SPACE TECHNOLOGIES LTD - Analysis Report

Company Number: 14026493

Analysis Date: 2025-07-20 16:39 UTC

Financial Health Assessment for INTERSTELLAR SPACE TECHNOLOGIES LTD

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1. Financial Health Score: D

Explanation:
The company shows very limited financial resources with a negative net current assets position that worsened from £(1,871) in 2023 to £(3,166) in 2024. There are no fixed assets, indicating no investment in long-term operational capacity. The company is in its early years (incorporated 2022), and the financials resemble a start-up phase with minimal activity but increasing liabilities. This score reflects significant financial distress symptoms, limited operational scale, and potential liquidity concerns.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	0	No long-term assets; may indicate no capital investment or operational infrastructure.
Current Assets	62	Extremely low liquid or short-term assets; insufficient buffer to cover liabilities.
Current Liabilities	3,228	Short-term debts or obligations significantly exceed current assets.
Net Current Assets (Working Capital)	(3,166)	Negative working capital; indicates potential liquidity crunch and inability to meet short-term obligations.
Net Assets (Equity)	(3,166)	Negative net worth; company owes more than it owns, a sign of financial weakness.
Shareholders Funds	(3,166)	Reflects accumulated losses or capital deficits.
Employees	1	Minimal headcount, typical for a micro-entity start-up.

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3. Diagnosis: Financial Symptoms and Business Health

• Symptoms of Distress:
  The company’s balance sheet reveals a worsening liquidity problem, with current liabilities far exceeding current assets. Negative net current assets signal that the company may struggle to pay its bills on time, a classic symptom of cash flow distress. The absence of fixed assets indicates the company likely operates without significant physical or capital investment, possibly relying on outsourcing or service-based research activities.

• Start-up Phase Characteristics:
  Given the company was incorporated in April 2022 and operates in highly specialized sectors (space transport, aerospace manufacturing, research), the financials suggest a very early-stage research and development entity. The small asset base and growing liabilities may reflect initial funding rounds or early-stage operational costs not yet balanced by revenues.

• Control and Governance:
  The company is tightly controlled by a single director and majority shareholder, which can be beneficial for swift decision-making but also concentrates financial risk.

• Future Viability Concerns:
  Without external capital injections, revenue growth, or reduction of liabilities, the company risks insolvency. The micro-entity reporting thresholds and limited filing requirements mean less detailed financial transparency, which can mask operational challenges.

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4. Recommendations: Steps to Improve Financial Wellness

1. Strengthen Liquidity Position:

   • Seek additional capital funding (equity injection or loans) to reduce the negative working capital gap.
   • Negotiate longer payment terms with creditors or reduce short-term liabilities where possible.

2. Asset Development and Investment:

   • Consider investing in fixed assets or intellectual property that can underpin future revenue streams and improve the balance sheet strength.

3. Revenue Generation Focus:

   • Accelerate commercialization of research activities or secure contracts in the space transport or aerospace sectors to improve cash inflows.

4. Cost Management:

   • Monitor and control operating expenses rigorously to avoid further erosion of equity and cash position.

5. Financial Monitoring and Reporting:

   • Implement more detailed internal financial monitoring beyond micro-entity thresholds as the business grows, to identify early warning signs.

6. Governance and Risk Management:

   • Diversify leadership or advisory support to bring additional financial or industry expertise.

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