Astra has been thrown a vital lifeline within the type of new debt financing, which offers the corporate with just a little extra time to search out funding to stave off disaster.
The corporate stated on Monday that it had closed $13.4 million in preliminary debt financing with JMCM Holdings LLC and Sherpa Enterprise Funds II, linked to a non-binding time period sheet Astra filed with the U.S. Securities Trade Fee in October. Per that doc, Astra stated it was working with the buyers, together with JMCM and Sherpa Enterprise, to lift $15 to $25 million.
The brand new buyers additionally agreed to offer Astra with a $3.05 million mortgage that can come due on November 17. Sherpa Enterprise Funds II is related to Scott Stanford and his agency Acme. Stanford was an early investor in Astra and sits on its board of administrators.
The brand new debt financing replaces an earlier settlement that Astra had with funding group Excessive Path Capital from August – an settlement that Astra defaulted on final week. These new buyers agreed to buy the rest of that excellent mortgage and waive a key requirement that Astra have a minimum of $10.5 million of money and money equivalents readily available.
Critically, that earlier settlement was secured by first precedence pursuits in all of Astra’s property – which is to say, the debtor would have first precedence entry to Astra’s equipment, tools and different property in case of default – and this new settlement is secured by that very same collateral.
The financing is “to offer Astra with time to lift further liquidity by way of varied capital elevating and value chopping initiatives and strategic transactions,” the corporate stated in a press release on the information. Astra has been looking for strategic capital to remain afloat for weeks, together with looking for “strategic investments” in its spacecraft engine enterprise it acquired in 2021.
Whereas sources inform TechCrunch that Astra all however bungled that acquisition, it stays Astra’s solely path to income provided that the corporate has delayed improvement on its Rocket 4 launch.
