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CUSIP No. 04634X202 |
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Reverse Stock Split
As further described in the Issuers Current Report on Form 8-K filed with the Commission on September 13,
2023, the Issuer effected (a) a 1-for-15 reverse stock split of the shares of the Class A common stock and (b) a 1-for-15 reverse stock split of the shares of the Class B common stock on September 13, 2023 (collectively, the Reverse Stock Split).
As a result of the Reverse Stock Split, (i) 27,095,633 shares of Class B Common Stock held by the Reporting Person were converted into 1,806,376 shares
of Class B Common Stock, (ii) 982,815 options that would have been exercisable for Class A Common Stock within 60 days at a prices ranging from $0.47 to $9.04 per share were converted into 65,521 options that are exercisable for
Class A Common Stock within the next 60 days at prices ranging from $6.90 to $135.60 per share, (iii) 653,105 shares of Class A Common Stock previously awarded to the Reporting Person as restricted stock units (RSUs) or
purchased in open market transactions by the Reporting Person were converted into 43,541 shares of Class A Common Stock, (iv) 33,000 shares of Class A Common Stock held by the Reporting Persons spouse were converted into 2,200 shares
of Class A Common Stock and (v) 54,225 shares of Class A Common Stock underlying RSUs that may vest within the next 60 days were converted into 3,615 shares of Class A Common Stock.
Non-binding Term Sheet
On October 19, 2023, the Issuer executed a non-binding term sheet (the Term Sheet) with a prospective
investor unaffiliated with the Reporting Person (the Proposed Lead Investor) for the potential issuance of senior secured convertible notes (the Notes) in a potential principal amount of up to $25 million (the
Proposed Financing). The Term Sheet contemplates that a number of investors, to be identified by the Proposed Lead Investor at a future uncertain date, would participate in an initial closing of the Proposed Financing in aggregate
principal amount of at least $15 million, and that additional potential investors, to be identified by the Proposed Lead Investor and the Issuer (collectively with the Proposed Lead Investor and the Reporting Person, the Potential
Investors), would further participate in the Proposed Financing for additional principal amounts to be determined. Any additional Notes would be issued within 90 days from the initial closing.
The Reporting Person has expressed an interest in investing up to $2 million in the initial closing of the Proposed Financing on the terms outlined in
the Term Sheet. However, there can be no assurance that the Reporting Person or any of the other Potential Investors will ultimately determine to participate in the Proposed Financing
The Term Sheet contemplates that the Notes will be guaranteed by all existing and future subsidiaries of the Issuer (the Guarantors), including
Astra Space Operations, LLC and Astra Spacecraft Engines, Inc. (ASE), and the obligations will be secured by a first lien senior security interests in all of the assets of the Issuer and each Guarantor.
Under the proposed terms of the Notes, the Notes will mature on the date that is two years from the date of closing (the Maturity Date).
In the case of a sale of all or substantially all of ASE or a change of control of the Issuer, each Potential Investor, in its sole discretion, will have the
option to either (A) declare its Note payable in an amount equal to the greater of (x) the note balance and (y) the applicable Minimum Return, or (B) convert the Note into shares of Class A Common Stock at the Conversion
Price (as defined below).
Under the terms of the Proposed Financing, the Potential Investors will be entitled to a minimum return on the principal amount
invested (the Minimum Return) at any repayment event, including upon acceleration of obligations in an event of default. The Minimum Return will range from 1.25x to 1.75x of the principal amount of the Notes, depending on the timing of
the repayment event.
Under the proposed terms of the Notes, at any time that the Notes are outstanding, the Potential Investors will, at their sole
discretion, have the option to elect to convert the principal and interest owing under the Notes into shares of Class A Common Stock of the Issuer at a conversion price equal to the lower of (i) the closing trading price of the
Class A Common Stock on the date immediately preceding the signing of a definitive agreement for the Proposed Financing; or (ii) the average closing price of the Class A Common Stock for the five trading days immediately preceding the
signing of the definitive agreement for the Proposed Financing (the Conversion Price).
Under the proposed terms, interest shall accrue on all
outstanding principal amounts at a rate of 12% per annum, payable in kind, subject to increase to 15% per annum at any time that there is an event of default.
The Notes will include customary affirmative and negative covenants and events of default.