The company’s struggle to maintain its stock price above $1.00 and develop Rocket 4 has persisted for a year.
Astra Space, a space launch and engine company, recently faced a default on a $12.5 million loan due to dwindling cash reserves, prompting the need for immediate funding
On October 11, Astra Space failed to meet the loan requirement of holding at least $15 million in cash and cash equivalents, leading to the default. Subsequently, an agreement was reached to waive the default if Astra could maintain a minimum of $10.5 million, which proved unattainable. With only $8 million remaining on the loan by the end of October, Astra Space was perilously close to exhausting its funds.
In response, Astra Space announced Monday that it secured interim financing from JMCM Holdings LLC and Sherpa Venture Funds II, LLP. These firms acquired the outstanding loan and extended a bridge loan of $3.05 million, due on November 17. Both firms waived the default terms to allow Astra Spacetime to secure further funding.
JMCM and Sherpa acquired warrants on Astra Space stock, granting them the right to purchase actual Astra Space stock at a predetermined price, typically below the market rate
This situation mirrors Virgin Orbit’s experience in late 2022 and early 2023 when it received interim loans from Virgin Group before ultimately filing for bankruptcy due to a lack of funding options. Astra Space has been seeking funding since August 2023 and announced JMCM’s intention to be the lead investor in October, but finding additional investors has proven challenging.
Astra Space remains optimistic about securing investors to fund them into the next year for the successful launch of Rocket 4. However, the broader market sentiment appears less supportive of this endeavor.
Earlier this year, rumors circulated about Astra Space potentially selling a portion of its satellite engine division, the company’s most lucrative segment. Recognizing this, the company has redirected resources to prioritize engine production, slowing down Rocket 4 development. Despite generating modest revenue, Astra Space’s engines represent a valuable income stream.