WASHINGTON — Dwindling money reserves caused launch vehicle and spacecraft propulsion company Astra Space to default on a loan at the tip of October, adding to doubts concerning the company’s future.
In a filing with the U.S. Securities and Exchange Commission after the markets closed Nov. 3, Astra disclosed that it had triggered a default on a $12.5 million loan it secured in August from an unnamed institutional investor when its money available fell below minimums required by the loan agreement.
In line with the filing, that loan required the corporate to have at the least $15 million of money and money equivalents or else be in default of the agreement, but fell below that threshold on Oct. 11. The investor agreed to waive the default provide the corporate kept at the least $10.5 million in money and money equivalents available and made a $2.1 million payment. The rate of interest on the loan also went from 9% to fifteen%.
Nonetheless, Astra said it fell below that lower money threshold on Oct. 30, which led to a default. Astra paid the investor $3.1 million on Nov. 1. It didn’t disclose how much money it had remaining but said $8 million stays on the loan with that investor.
Astra had been working to lift additional funding. The corporate said in a separate Oct. 23 SEC filing that it had signed a non-binding term sheet with JMCM Holdings LLC to be the lead investor in a loan of as much as $25 million. The funds, Astra said, can be used to repay the August loan and for “general corporate purposes.”
In the brand new SEC filing, Astra said it’s in “continued discussions” with other investors about financing, but couldn’t guarantee it could close any deal, or that the terms of any funding can be the identical as what it disclosed in October.
In an Aug. 14 earnings call, Astra executives said they were working to discover strategic investors for each its Astra Spacecraft Engines spacecraft propulsion business in addition to its Rocket 4 launch vehicle in development. The corporate had laid off 1 / 4 of its workforce between the start of July and early August and shifted others from rocket to satellite propulsion work, delaying work on Rocket 4.
In that decision, the corporate projected having $15 million to $20 million of money available by the tip of the third quarter Sept. 30. Company executives said each the August loan and a planned “at-the-market” sale of stock would help buy the corporate time to secure a strategic investment.
Shares in Astra fell nearly 19% in aftermarket trading Nov. 3. The corporate performed a 1-for-15 reverse stock split in September to get the corporate’s shares above a $1 threshold required by Nasdaq, but those shares have since fallen back below $1.
Astra is scheduled to release its third quarter financial results and hold an earnings call after the markets close Nov. 13.