Astra has been given a crucial lifeline in the form of new debt financing, giving the company a little more time to find financing to avoid a catastrophe.
The company said on Monday it had closed $13.4 million in initial debt financing with JMCM Holdings LLC and Sherpa Venture Funds II, in connection with a non-binding term sheet Astra filed with the U.S. Securities and Exchange Commission. United in October. According to that document, Astra said it was working with investors, including JMCM and Sherpa Venture, to raise between $15 million and $25 million.
The new investors also agreed to provide Astra with a $3.05 million loan that will mature on November 17. Sherpa Venture Funds II is partnered with Scott Stanford and his firm Acme. Stanford was an early investor in Astra and serves on its board of directors.
The new debt financing replaces a previous agreement Astra had with investment group High Trail Capital since August, an agreement Astra breached last week. These new investors agreed to purchase the remainder of that outstanding loan and waive the key requirement that Astra have at least $10.5 million in cash and cash equivalents on hand.
Crucially, that previous agreement was secured by first priority interests in all of Astra’s assets – that is, the debtor would have first priority access to Astra’s machinery, equipment and other assets in the event of default – and this new agreement is guaranteed by that same guarantee.
The financing is “to provide Astra time to raise additional liquidity through various capital raising and cost reduction initiatives and strategic transactions,” the company said in a statement on the news. Astra has been seeking strategic capital for weeks to stay afloat, including seeking “strategic investments” in its spacecraft engine business that it acquired in 2021.
While sources tell TechCrunch that Astra all but failed on that acquisition, it remains Astra’s only path to revenue as the company has delayed development of its Rocket 4 launch.
