I’ve got some interesting news for you. It seems like Astra Space, the launch vehicle and spacecraft propulsion company, is facing some financial troubles.
Defaulted Loan and Dwindling Cash Reserves
According to a recent filing with the U.S. Securities and Exchange Commission, Astra defaulted on a $12.5 million loan at the end of October due to dwindling cash reserves. The loan agreement required Astra to have at least $15 million in cash and cash equivalents, but they fell below that threshold on October 11.
Attempts to Address the Default
The investor agreed to waive the default if Astra kept at least $10.5 million on hand and made a $2.1 million payment. However, Astra fell below the lower cash threshold on October 30, leading to another default. They did manage to pay the investor $3.1 million on November 1, but the situation is still uncertain.
Seeking Additional Funding
Astra had been trying to raise additional funding and had signed a non-binding term sheet with JMCM Holdings LLC for a loan of up to $25 million. The plan was to use the funds to pay off the August loan and for general corporate purposes. However, in the recent filing, Astra mentioned that they are in continued discussions with other investors about financing, but there are no guarantees.
Previous Efforts and Challenges
In an earnings call back in August, Astra executives mentioned that they were looking for strategic investors for their spacecraft propulsion business and their Rocket 4 launch vehicle. They had even laid off a quarter of their workforce to focus on these goals. The company projected having $15 million to $20 million in cash by the end of September, but it seems like things didn’t go as planned.
Share Price Impact
As a result of these financial troubles, Astra‘s shares fell nearly 19% in aftermarket trading. They had previously performed a reverse stock split to meet Nasdaq’s requirements, but now their shares have fallen back below $1.
Upcoming Financial Results Announcement
Astra is scheduled to release its third-quarter financial results and hold an earnings call on November 13. Let’s see what they have to say about their current situation. So, that’s the latest update on Astra Space. Stay tuned for more news on this developing story!
Photo: Freepik.com
