WASHINGTON — Astrobotic Technology, a lunar lander developer, has made a formal offer for “substantially all” of the assets of Masten Space Systems, another lander company that filed for Chapter 11 bankruptcy last month. .
In a filing in the U.S. bankruptcy court in Delaware on Aug. 14, Masten said it had received a “hunting horse” offer of $4.2 million for Masten’s assets, including a SpaceX launch credit from worth $14 million, from Astrobotic. The agreement, in effect, sets a minimum price for the sale of these assets but does not prevent Masten from seeking higher offers through an auction process that runs until the beginning of September.
The deal appears to replace an earlier agreement between Masten and a third lunar lander company, Intuitive Machines, included in Masten’s Chapter 11 filing on July 28. This deal only covered SpaceX’s launch credits, and Masten did not disclose the value in his original filing. .
Masten said in the filing that it wasn’t until August 3, after the initial filing, that he was “seriously engaged in conversations with Astrobotic” that led to the deal. On August 10, Astrobotic agreed to bid for “substantially all” of Masten’s assets. The agreement also includes up to $1.4 million in debtor-in-possession financing that can be used as credit towards the purchase of the asset.
The filing did not indicate which assets, if any, could be excluded from the deal. In addition to its work on the XL-1 lunar lander, Masten also operated suborbital vertical takeoff and vertical landing (VTVL) vehicles for technology demonstration. Astrobotic, through a spokesperson, declined to comment on the August 15 filing.
Potentially the most valuable asset is SpaceX’s launch credit. SpaceX terminated an existing launch contract with Masten on June 30 due to missed payments, but agreed to provide transferable credit for the amount paid to date. However, the filing says SpaceX requires credit to go to “certain parties within the CLPS vendor pool,” a reference to NASA’s Commercial Lunar Payload Services program. That is, according to the filing notes, “a very small pool of potential assignees.”
There are 14 companies eligible to compete for CLPS task orders, including five – Astrobotic, Draper, Firefly Aerospace, Intuitive Machines and Masten – with active task orders. All but Draper plan to launch at least some of their CLPS missions on SpaceX vehicles. Draper, who won his CLPS award for a farside lunar landing mission on July 21, did not announce his plans for the launch of the mission.
Masten financial problems
The filing also describes in greater detail the series of events that led Masten to file for Chapter 11 bankruptcy in July. The company had, over the years, demonstrated its technical capabilities with its VTVL vehicles, but “from a business perspective, the company was less successful financially,” the filing notes.
The company, with less than 25 employees for much of its history, had to expand when it won its CLPS award in April 2020. This created “financial pressures that the company has been unable to overcome.” put back”, indicates the file, further complicated by the pandemic.
At the end of 2021, the company tried to raise $60 million but failed to find much interest, which it accused of being late to market. “When the debtor entered the market at the end of the year, many investors interested in making substantial investments in space companies had already done so.”
In March 2022, a space company identified in the filing only as Company A approached Masten about a potential acquisition. This led to a letter of intent at the end of this month on an acquisition, but in late April Company A pulled out, citing “significant liabilities recognized to date and additional expected future losses” from the mission CLPS.
A second space company, Company B, approached Masten in May about a potential acquisition or purchase of Masten’s assets through a bankruptcy proceeding known as a sale under the section 363. This company, however, concluded that it could not conclude the agreement within the short time required by Masten. There were also discussions with a C company, described as another CLPS company, about selling Masten’s CLPS prize, but this did not happen due to the uncertainty of NASA approving the transfer.
In late July, when Masten filed for Chapter 11 bankruptcy, the company had only $22,000 in cash and had laid off all but six of its employees.
Masten’s bankruptcy filing and potential sale of its assets raise doubts about the future of its lunar lander program for CLPS and VTVL flights, which NASA uses as part of its Flight Opportunities program.
NASA CLPS officials said shortly after Chapter 11 was filed that if Masten was unable to complete his CLPS task order, they would consider either reassigning the payloads intended to fly on that lander on other missions, or to participate in a new task order. They added, however, that they had not yet made a decision because they had not been officially informed by Masten that he would not be able to fulfill his mission order.
The same goes for Masten’s work with the Flight Opportunities program. “We still have mission orders with them,” John Kelly, NASA Flight Opportunities program manager, said during a NASA town hall meeting Aug. 8 at the Small Satellite Conference in Logan, Utah. “We’ll wait and see what happens.”
Jim Reuter, NASA’s associate administrator for space technology, told a NASA Advisory Council Technology Committee meeting Aug. 3 that there was an “unsustainable” number of companies in the CLPS program. . “There’s going to be some sorting.”
He said at the time that he believed Masten would try to keep his VTVL vehicles in any bankruptcy reorganization. “We do a lot with them on that, so that’s where it would really affect us without them,” he said. “But it’s in the work.”