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WASHINGTON — Spacecraft propulsion and launch vehicle company Astra Space considered filing for bankruptcy several times in recent months as the company struggled to raise cash.
The company, which announced plans March 7 to go private in a deal with the company’s founders, released a delayed Form 10-K annual report with the U.S. Securities and Exchange Commission April 18.
In the filing, Astra reported nearly $3.9 million in revenue for 2023 and a net loss of $178.4 million. The company had $9.4 million in revenue in 2022 and a net loss of $411.4 million.
The company’s 2023 revenue came exclusively from its space products unit, which produces electric propulsion systems called Astra Spacecraft Engines. The company, which shelved its Rocket 3 small launch vehicle in 2022, reported no launch revenue in 2023.
In the filing, the company disclosed that it had produced 34 Astra Spacecraft Engines to date for eight customers, with 10 of those thrusters on spacecraft now in orbit. “We continue to attempt to scale production of our Astra Spacecraft Engines but have incurred program delays and resource constraints,” the company stated in the filing.
In the Form 10-K filing and other documents, the company revealed that it has come close several times in recent months to filing for bankruptcy. “At various points during the second half of 2023 and thus far in 2024, the Company has considered and even begun preparations to file for voluntary relief under either Chapter 11 or Chapter 7 of the Bankruptcy Code because the Company faced an inability to fund its ongoing operations,” it stated. A Chapter 11 filing would allow the company to continue operations and reorganize, while a Chapter 7 filing would result in liquidation of the company.
An April 8 filing with the SEC, describing its plans to go private, provided more details about those bankruptcy considerations. That included a Nov. 3 meeting of a special committee of the company’s board that “considered whether it should recommend immediately furloughing all employees and prepare for an emergency bankruptcy filing,” instructing company management to make those preparations while it worked to line up additional financing, which it did a few days later.
Astra continued consideration of a potential bankruptcy filing after the company’s founders, Chris Kemp and Adam London, submitted a proposal Nov. 8 to take the company private at an original price of $1.50 per share. By mid-January, the company’s board decided to simultaneously plan for a Chapter 7 bankruptcy filing while negotiating a deal to take the company private since Astra “was in dire need of cash.”
The board again considered a bankruptcy filing at a Feb. 22 meeting, where management recommended furloughing employees other than those needed with bankruptcy planning no later than Feb. 26 as the board engaged a law firm to prepare for a Chapter 7 filing. Around that time, Kemp and London submitted a revised, far lower offer to take the company private while also offering $300,000 “in order to avert an immediate furlough of the Company’s employees.”
The board’s special committee was informed at a March 5 meeting that if the company did not accept the revised offer and interim financing associated with it, all of Astra’s remaining cash would be used in the next day to cover payroll and insurance liabilities and to make Chapter 7 filing preparations. The deal to go private was approved and announced March 7.
The board approved the deal because it concluded it had nothing to lose by doing since the only alternative was a Chapter 7 bankruptcy, according to filings: “executing the Revised Take Private Proposal – even if it ultimately did not close – was preferrable to filing for Chapter 7 Liquidation imminently.”
That deal has yet to close. At the time of the announcement, Astra said it expected the deal to be completed and the company taken private in the second quarter, and the latest SEC filings did not update that schedule.
The April 8 filing did include projections about the company’s future finances developed in February. It projected nearly $5 million in revenue for the first quarter of 2024, with quarterly revenues reaching a peaking $22.4 million in the second quarter of 2025. Those projections also assume the company would resume launches in 2025, launching once a quarter.
However, Riveron, the company brought in by Astra to assist it during its consideration of various financing options, dismissed those projections as “optimistic and not likely to be achieved,” according to the SEC filing. Those projections included assumptions such as raising $90 million in the first quarter of 2024. According to its 10-K filing, the company has raised $13.9 million since the end of December.