Astra Consolidates Operations As Awaits Privatization Deal

Astra is consolidating its operations at its headquarters in Alameda, California, less than two years after expanding into a new facility. The move comes as the company continues to struggle financially and works towards finalizing a deal to go private.

In a delayed quarterly filing with the U.S. Securities and Exchange Commission (SEC) on May 29, Astra announced its decision to relocate the satellite propulsion manufacturing facility in Sunnyvale, California, to its Alameda headquarters by the end of the third quarter. The company did not provide a specific reason for the move, but it is expected to result in cost savings.

Astra initially announced in 2022 the opening of the Sunnyvale facility for its Astra Spacecraft Engine electric propulsion systems, which allowed the Alameda headquarters to focus on launch vehicle development. The Sunnyvale facility officially opened in March 2023.

Currently, satellite thrusters represent the majority of Astra’s business. The company has deferred work on its new launch vehicle, Rocket 4, to concentrate on its "space products" unit, which includes satellite propulsion systems. In 2023, Astra reported $3.9 million in revenue solely from this unit.

In the first quarter of 2024, Astra reported $285,000 in revenue, again exclusively from its space products unit, and an operating loss of $24.4 million for the quarter.

The company's financial health remains precarious, with $6.6 million in cash and cash equivalents at the end of the quarter. However, $3.5 million of this amount is allocated for the privatization deal, and an additional $500,000 is restricted under a customer contract until thruster deliveries begin in November.

Despite these challenges, Astra has managed to raise modest amounts of cash through the sale of convertible notes and stock warrants. However, the company has warned that if these cash infusions are interrupted or if the privatization deal falls through

“the Company’s operations and production plans will be further scaled back or curtailed and the Company may be required to file a Chapter 7 [bankruptcy] Liquidation.” - Astra

The privatization deal, announced in March and led by co-founders Chris Kemp and Adam London, offers $0.50 per share and was scheduled to close in the second quarter of 2024. However, the SEC filing did not provide any updates on the progress of this deal.

As Astra navigates these financial hurdles, the consolidation of its operations in Alameda marks a significant step in its efforts to reduce costs and streamline its business. The outcome of the privatization deal remains crucial for the company's future, as it continues to seek stability in a challenging financial environment.