WASHINGTON — Launch vehicle and spacecraft company Astra Space said Nov. 6 that it has secured interim funding from two investors that give the company until the end of next week to find additional financing.
In a statement issued after the close of trading, Astra said that JMCM Holdings LLC and Sherpa Venture Funds II, LLP, which it described as affiliates of two of Astra’s early investors, have agreed to provide $13.4 million in “seed financing” as part of the term sheet Astra announced. Non-binding proposal on October 23 that sought to raise between $15 million and $25 million.
As part of the agreement, investors will purchase the $8 million loan that Astra obtained from an unnamed institutional investor as of August. Astra defaulted on the terms of the loan agreement last week when its cash reserves fell below $10.5 million, resulting in it paying $3.1 million at a higher interest rate. Investors will also provide a $3.05 million bridge loan due on November 17, as well as purchase warrants for Astra shares.
Astra said on October 23 that JMCM Holdings was the planned lead investor in a funding round worth up to $25 million, with participation from Sherpa Venture Funds II. At the time, Astra said each investor intended to contribute $5 million in funding. Sherpa Venture Funds II, also known as Acme II, is affiliated with Scott Sanford, who is the lead independent director on Astra’s board.
Astra said the new investors agreed to waive the default terms for both the loan they purchased as well as the new loan until November 17. Doing so “will provide Astra time to raise additional liquidity through various capital raisings, cost-cutting initiatives and strategic transactions,” the company said.
The company said in August that it had hired an investment bank, PJT Partners, to identify “potential strategic investments in the Astra spacecraft propulsion business” that industry sources said would include selling part or all of that subsidiary, which makes electric propulsion motors. .
Astra prioritized its payments business, moving staff in in August amid layoffs elsewhere in the company, due to a backlog that at the time was worth $77 million. This means work on the new Rocket 4 launch vehicle has slowed, and Astra said it now expects the first test launch of that rocket sometime in 2024.
Astra shares closed down more than 20% in November 6 trading on the Nasdaq at $0.73, although they rebounded somewhat in aftermarket trading once Astra announced the interim financing. The company’s value fell more than 99% from its peak shortly after it went public via a special purpose acquisition company (SPAC) merger in July 2021.
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