Astra defaults on debt agreement and warns it may not

Astra defaults on debt agreement and warns it may not be able to raise needed money –

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  • Troubled space company Astra said in a securities filing late Friday that it had defaulted on a recent debt agreement and may not be able to raise the cash it needs.
  • Astra twice last month failed to meet minimum cash reserve requirements in connection with its $12.5 million debt issuance to New Jersey investment group High Trail Capital.
  • The company warned that it “can give no assurance that it will be able to complete additional transactions on a timely basis or at all.”

The company’s LV0010 rocket sits on the launch pad at Cape Canaveral in Florida ahead of NASA’s TROPICS-1 mission.

Astra

Troubled space company Astra said in a securities filing late Friday that it had defaulted on a recent debt agreement and may not be able to raise the cash it needs as funds dwindle.

Astra twice last month failed to meet minimum cash reserve requirements in connection with its $12.5 million debt issuance to New Jersey investment group High Trail Capital.

In order to raise debt, Astra was initially required to have “at least $15.0 million in cash and cash equivalents.” This liquidity requirement was adjusted after Astra failed to demonstrate compliance for the first time and now requires “at least $10.5 million in unrestricted, unencumbered cash and cash equivalents.”

After violating regulations for the second time, Astra now owes $8 million for the entire capital investment.

While the company is “in ongoing discussions with a number of other investors,” it warned that there can be “no assurance that it will be able to complete additional transactions on a timely basis or at all.”

Astra shares were little changed in after-hours trading since closing at about 92 cents per share. The company conducted a 1-for-15 reverse stock split in September to avoid delisting from the Nasdaq, temporarily pushing Astra stock above $1 per share.

The company cut 25% of its workforce in early August to shift focus from rocket development to spacecraft engine production. Third quarter results are expected to be announced after the market closes on November 13th.