UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
| Item 1.01 | Entry into a Material Agreement |
On August 14, 2023, we entered into a Settlement Agreement and General Release (the “Settlement Agreement”) with Fortis Advisors, LLC (the “Representative”), acting solely in its capacity as representative of certain converting holders of Apollo as set forth therein (the “Apollo Holders”) as defined in the Settlement Agreement. Under the Settlement Agreement, we have the option to pay to the Apollo Holders, in the sole discretion of the board of directors of the Company (the “Board”), either: (i) a cash payment in the amount of $2.0 million in immediately available funds, plus that number of immediately freely tradeable shares of Class A Common Stock, rounded up to the nearest whole share, determined by dividing $8.0 million by the 10-day volume weighted average price of the Class A Common Stock (the “VWAP Calculation) as calculated in accordance with the Settlement Agreement (“Option 1”); or (ii) a cash payment of $7.0 million (“Option 2”). On September 29, 2023, the Board elected to settle its obligations to the Apollo Holders through the issuance of shares of the Company’s Class A Common Stock and the payment of $2.0 million in cash on October 2, 2023.
Under Nasdaq Listing Rule 5635(d), stockholder approval is required for a transaction other than a public offering involving the sale or issuance by an issuer of shares of common stock if the number of shares to be issued is or may be equal to 20% or more of the number of shares of common stock outstanding before the issuance, at a price that is less than the “minimum price,” defined as the lower of the closing price immediately preceding the signing of the binding agreement or the average closing price of the shares of common stock for the five trading days immediately preceding the signing of the binding agreement. Under the VWAP Calculation, the number of shares of Class A Common Stock that are required to be issued under the Settlement Agreement is 4,519,085. Because the issuance of 4,519,085 shares of Class A Common Stock under the Settlement Agreement would violate Nasdaq Listing Rule 5635(d) without prior stockholder approval, the Company and the Representative entered into an amendment (the “Amendment”) to the Settlement Agreement on October 2, 2023.
The Amendment provides that, on October 2, 2023, the Company will issue 3,708,520 shares (the “Settlement Shares”) to the Apollo Holders and pay the Apollo Holders $2.0 million in cash. The Amendment further provides the Company a period of 60 days to obtain stockholder approval to issue shares of Class A Common Stock having an aggregate value of $866,661.78, plus interest accruing at a rate of 6.0% per annum (such aggregate amount being the “Shortfall Value”). The number of shares of Class A Common Stock to be issued will be determined by dividing the Shortfall Value by the 10-day volume weighted average price of the Class A Common Stock.
The Settlement Shares are registered under our registration statement on Form S-3 (Registration No. 333-271589) filed with the SEC on May 2, 2023, as amended by Pre-Effective Amendment No. 1 filed with the SEC on May 4 2023, and Pre-Effective Amendment No. 2 filed with the SEC on May 8, 2023 and declared effective on May 16, 2023.
The foregoing summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the copy of the Amendment filed herewith as Exhibit 10.1, which is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description | |
| 5.1 | Legal Opinion of Cozen O’Connor PC | |
| 10.1 | Amendment to Settlement Agreement | |
| 23.1 | Consent of Cozen O’Connor PC (included in Exhibit 5.1) | |
| 104 | Cover Page Interactive Data File (embedded with the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: October 2, 2023 | Astra Space, Inc. | |||||
| By: | /s/ Axel Martinez | |||||
| Name: | Axel Martinez | |||||
| Title: | Chief Financial Officer | |||||