Astra defaults on debt and may not be able to raise the necessary funds

Struggling space company Astra revealed in A Deposit of securities Late Friday it defaulted on a recent debt agreement and may not be able to raise the necessary funds as funds dwindle.

Astra twice last month failed to meet minimum cash reserve requirements tied to a $12.5 million bond issuance to New Jersey investment group High Trail Capital.

The debt increase first required Astra to have “at least $15.0 million of cash and cash equivalents” on hand. These liquidity requirements were revised after Astra failed to demonstrate compliance for the first time, to require “at least $10.5 million of unrestricted, unencumbered cash and cash equivalents.”

After falling out of compliance for a second time, Astra now owes $8 million of the total principal investment.

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

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

The company cut 25% of its workforce in early August to shift focus from rocket development to spacecraft engine production. It is expected to announce third-quarter results after the market closes on November 13.