Astra defaults on its debt agreement and warns that it may not be able to raise the necessary cash
The company’s LV0010 rocket sits on the launch pad at Cape Canaveral, Florida, ahead of NASA’s TROPICS-1 mission.
Star
A struggling space company Star disclosed in a deposit of securities On Friday evening, it reported a default on a recent debt deal and may not be able to raise the necessary cash as funds dwindle.
Astra twice last month failed to meet minimum cash reserve requirements associated with a $12.5 million note offering to New Jersey investment group High Trail Capital.
The debt increase first required Astra to have “at least $15.0 million in cash and cash equivalents.” This liquidity requirement was adjusted after Astra failed to demonstrate compliance the first time, to require “at least $10.5 million in unrestricted and unencumbered cash and cash equivalents.”
Having been non-compliant a second time, Astra now owes $8 million on the total principal investment.
Although the company is “in ongoing discussions with a number of other investors,” it cautioned that it “can provide no assurance that it will be able to complete an additional transaction in a timely manner, if at all.” “.
Astra shares were little changed in after-hours trading from their close of around 92 cents per share. The company carried out a 1 for 15 reverse stock split in September to avoid a delisting from Nasdaq, which temporarily lifted Astra stock above $1 per share.
The company removed 25% of its workforce at the beginning of August to concentrate the development of its rockets on the production of engines for spacecraft. The company is expected to report its third-quarter results after the market closes on November 13.
