Astra Announces Closing of Take-Private Transaction

Rhea-AI Summary

Astra Space, Inc. (Nasdaq: ASTR) has successfully closed its take-private transaction, as announced on March 7, 2024. Apogee Parent, Inc., formed by Astra's co-founders Chris Kemp and Dr. Adam London, has acquired all outstanding Class A shares for $0.50 per share in cash. As a result, Astra's Class A shares ceased trading on Nasdaq on July 18, 2024.

The company plans to suspend its periodic reporting obligations and terminate the registration of Class A shares. Prior to this, Astra had received deficiency notices from Nasdaq for non-compliance with listing rules regarding minimum share price and stockholders' equity requirements. Houlihan Lokey Capital, Inc. and Freshfields Bruckhaus Deringer US LLP advised the Special Committee, while Cozen O'Connor, P.C. served as Astra's legal counsel.

Positive

• Successful closing of take-private transaction
• Acquisition price of $0.50 per share in cash for Class A shareholders

Negative

• Delisting from Nasdaq Capital Market
• Suspension of periodic reporting obligations
• Previous non-compliance with Nasdaq listing rules (share price below $1.00 and stockholders' equity below $2.5 million)

Financial Analyst

The take-private transaction of Astra Space, Inc. involves significant implications for both current shareholders and the company's future trajectory. This move effectively takes Astra off the public markets, which means its stock will no longer be traded on Nasdaq. For current shareholders, the payout of $0.50 per share represents the final value they will receive, which may be disappointing considering the stock once traded much higher.

Taking the company private often aims to provide the management team with more freedom to restructure and execute long-term strategies without the pressures of quarterly earnings reports. However, the fact that Astra received deficiency notices from Nasdaq due to low stock prices and insufficient stockholders’ equity suggests that the company was struggling significantly in the public markets. This transition might be seen as an attempt to stabilize the company's finances and operations out of the public eye.

Given the struggles highlighted by the deficiency notices, this move could potentially be beneficial in the long term if it allows management to make necessary adjustments without public market scrutiny. However, it is also an indication of the company's current financial difficulties. Retail investors who held on to their shares may face a loss, as $0.50 per share could be seen as undervaluing their investments.

Legal Expert

The legal aspects of Astra's take-private transaction are complex and involve multiple parties, including advisors and legal counsel. The involvement of reputable firms like Freshfields Bruckhaus Deringer US LLP and Cozen O’Connor, P.C., indicates a well-structured process ensuring compliance with relevant laws and regulations. The Merger Agreement outlines that the founders will acquire all outstanding shares for $0.50 per share, which might raise questions among shareholders regarding the fairness of this valuation.

The terms also involve suspending periodic reporting obligations and delisting from Nasdaq. This move would reduce transparency for investors but could ease regulatory burdens on the company. The deficiency notices from Nasdaq highlight the legal and financial compliance issues Astra has been facing, further justifying the decision to go private in order to address these challenges more effectively.

This transaction underscores the importance of regulatory compliance and fiduciary duties towards shareholders. The involvement of the Special Committee and their advisors aims to ensure that the transaction is conducted fairly, although shareholders might contest the valuation of their shares.

ALAMEDA, Calif.--(BUSINESS WIRE)-- Astra Space, Inc. (“Astra” or the “Company”) (Nasdaq: ASTR) announced today the successful closing of its take-private transaction.

Under the terms of the definitive agreement for the transaction (the “Merger Agreement”) that was previously announced on March 7, 2024, Apogee Parent, Inc., (“Parent”), an entity formed by Chris Kemp, Astra’s co-founder, chief executive officer and chairman, and Dr. Adam London, Astra’s co-founder, chief technology officer and director, will acquire all of the outstanding shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Shares”) not already owned by it for the right to receive $0.50 per share in cash, as more fully described in the Merger Agreement.

With the completion of the take-private acquisition, the Class A Shares ceased trading prior to the opening of trading on July 18, 2024 and will no longer be listed on the Nasdaq Capital Market (“Nasdaq”). The Company also intends to make the applicable filings with the U.S. Securities and Exchange Commission (the “SEC”) to suspend its periodic reporting obligations and to terminate the registration of the Class A Shares underlying the Company’s active registration statements.

As previously disclosed, (i) on April 17, 2024, the Company received a deficiency notice from Nasdaq that the Company is not in compliance with Nasdaq Listing Rule 5450(a)(1) because the per share closing bid price of the Class A Shares had been below $1.00 for thirty consecutive business days prior to such deficiency notice; and (ii) on April 23, 2024, the Company received a deficiency notice from Nasdaq that the Company is not in compliance with the minimum stockholders’ equity listing requirement set forth in Nasdaq Listing Rule 5550(b)(1) because the Company’s Annual Report on Form 10-K for the period ended December 31, 2023, reported stockholders’ equity below $2.5 million.

Advisors

Houlihan Lokey Capital, Inc. served as financial advisor to the Special Committee of the Board of Directors of Astra (the “Special Committee”), and Freshfields Bruckhaus Deringer US LLP served as the Special Committee’s legal counsel. Cozen O’Connor, P.C. served as legal counsel to Astra. Pillsbury Winthrop Shaw Pittman LLP served as legal counsel to Parent and Moelis & Company served as financial advisor to Parent.

About Astra Space, Inc.

Astra’s mission is to improve life on Earth from space by creating a healthier and more connected planet. Today, Astra offers one of the lowest cost-per-launch dedicated orbital launch services, and one of the industry’s leading flight-proven electric propulsion systems for satellites, the Astra Spacecraft Engine.

About Apogee Parent Inc.

Parent was formed solely for the purpose of entering into and consummating the merger with Astra. Parent is owned by a number of long-term investors of Astra and its predecessor, including Mr. Kemp and Dr. London.

Forward Looking Statements

Certain statements made in this press release are “forward-looking statements.” Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: (i) the Company’s failure to meet projected development and delivery targets, including as a result of the decisions of governmental authorities or other third parties not within the Company’s control; (ii) changes in applicable laws or regulations; (iii) the ability of the Company to meet its financial and strategic goals; (iv) the ability of the Company to pursue a growth strategy and manage growth profitability; (v) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors and (vi) other risks and uncertainties described from time to time in other reports and other public filings with the SEC, including the Company's registration statements, annual reports and quarterly reports.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240717856488/en/

Investor Contact:

investors@astra.com

Media Contact:

press@astra.com

Source: Astra Space, Inc.

FAQ

What was the acquisition price per share for Astra Space (ASTR) in the take-private transaction?

Apogee Parent, Inc. acquired all outstanding Class A shares of Astra Space (ASTR) for $0.50 per share in cash.

When did Astra Space (ASTR) shares cease trading on Nasdaq?

Astra Space (ASTR) Class A shares ceased trading prior to the opening of trading on July 18, 2024, and were delisted from the Nasdaq Capital Market.

What deficiency notices did Astra Space (ASTR) receive from Nasdaq before the take-private transaction?

Astra Space (ASTR) received two deficiency notices from Nasdaq: one on April 17, 2024, for the share price being below $1.00 for 30 consecutive business days, and another on April 23, 2024, for stockholders' equity falling below $2.5 million.

Who formed Apogee Parent, Inc. to acquire Astra Space (ASTR)?

Apogee Parent, Inc. was formed by Chris Kemp, Astra's co-founder, CEO, and chairman, and Dr. Adam London, Astra's co-founder, CTO, and director.