Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 7, 2022,~~August 10, 2023, the registrant had ~~211,926,952~~217,501,756 shares of Class A common stock, $0.0001 par value per share, outstanding and 55,539,188 shares of Class B common stock, $0.0001 par value per share, outstanding.


	As of
	September 30, 2022			December 31, 2021			June 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	67,608		$	325,007		$	13,384		$	33,644
Marketable securities		82,936			—			12,935			69,173
Trade accounts receivable		4,923			1,816			5,546			5,327
Inventories		5,174			7,675			11,231			4,142
Prepaid and other current assets		7,609			12,238			15,757			13,496
Total current assets		168,250			346,736			58,853			125,782
Non-current assets:
Property, plant and equipment, net		20,048			66,316			28,301			24,271
Right-of-use asset		14,909			9,079			11,096			12,813
Goodwill		—			58,251
Intangible assets, net		10,699			17,921			8,999			10,132
Other non-current assets		1,999			721			1,847			1,701
Total assets	$	215,905		$	499,024		$	109,096		$	174,699

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,347		$	9,122		$	7,187		$	1,799
Operating lease obligation, current portion		3,903			1,704			3,797			3,800
Contingent consideration, current portion		32,420			—
Contingent consideration								14,510			33,900
Accrued expenses and other current liabilities		27,382			29,899			40,262			42,043
Total current liabilities		73,052			40,725			65,756			81,542
Non-current liabilities:
Operating lease obligation, net of current portion		10,974			7,180			7,548			9,051
Contingent consideration, net of current portion		10,530			13,700
Other non-current liabilities		7,277			899			8,629			1,796
Total liabilities		101,833			62,504			81,933			92,389

Commitments and Contingencies (Note 11)
Commitments and Contingencies (Note 7)

STOCKHOLDERS’ EQUITY
Founders convertible preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021		—			—
Class A common stock, $0.0001 par value; 400,000,000 shares authorized; 211,824,567 and 207,451,107 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		22			22
Class B common stock, $0.0001 par value; 65,000,000 shares authorized; 55,539,188 and 55,539,189 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		6			6
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of June 30, 2023 and December 31, 2022								—			—
Class A common stock, $0.0001 par value; 400,000,000 shares authorized; 216,481,966 and 213,697,468 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively								22			22
Class B common stock, $0.0001 par value; 65,000,000 shares authorized; 55,539,188 shares issued and outstanding as of both June 30, 2023 and December 31, 2022, respectively								6			6
Additional paid in capital		1,889,759			1,844,875			1,905,870			1,902,213
Accumulated other comprehensive loss		(202	)		—			(17	)		(110	)
Accumulated deficit		(1,775,513	)		(1,408,383	)		(1,878,718	)		(1,819,821	)
Total stockholders’ equity		114,072			436,520			27,163			82,310
Total liabilities and stockholders’ equity	$	215,905		$	499,024		$	109,096		$	174,699

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Revenues
Launch services	$	—		$	—		$	5,899		$	—		$	—		$	1,988		$	—		$	5,899
Space products		2,777			—			3,471			—			707			694			707			694
Total revenues		2,777			—			9,370			—			707			2,682			707			6,593
Cost of revenues
Launch services		—			—			28,193			—			—			17,179			—			28,193
Space products		1,071			—			1,337			—			388			266			388			266
Total cost of revenues		1,071			—			29,530			—			388			17,445			388			28,459
Gross income (loss)		1,706			—			(20,160	)		—
Gross profit (loss)														319			(14,763	)		319			(21,866	)
Operating expenses:
Research and development		32,821			21,724			111,546			44,159			24,395			40,798			55,477			78,725
Sales and marketing		4,052			1,090			13,452			2,229			650			4,636			3,134			9,400
General and administrative		19,222			19,730			60,816			50,712			7,580			20,608			23,262			41,594
Impairment expense		75,116			—			75,116			—
Goodwill impairment		58,251			—			58,251			—
Loss on change in fair value of contingent consideration		11,949			—			29,249			—
(Gain) Loss on change in fair value of contingent consideration														(16,625	)		1,800			(19,390	)		17,300
Total operating expenses		201,411			42,544			348,430			97,100			16,000			67,842			62,483			147,019
Operating loss		(199,705	)		(42,544	)		(368,590	)		(97,100	)		(15,681	)		(82,605	)		(62,164	)		(168,885	)
Interest income (expense), net		616			18			1,146			(1,194	)
Other (expense) income, net		(25	)		25,895			314			25,177
Loss on extinguishment of convertible notes		—			—			—			(131,908	)
Loss on extinguishment of convertible notes attributable to related parties		—			—			—			(1,875	)
Interest income														384			356			1,714			530
Other income (expense), net														1,293			(54	)		1,553			339
Loss before taxes		(199,114	)		(16,631	)		(367,130	)		(206,900	)		(14,004	)		(82,303	)		(58,897	)		(168,016	)
Income tax (benefit) provision		—			(383	)		—			(383	)
Income tax provision														—			—			—			-
Net loss	$	(199,114	)	$	(16,248	)	$	(367,130	)	$	(206,517	)	$	(14,004	)	$	(82,303	)	$	(58,897	)	$	(168,016	)
Adjustment to redemption value on Convertible Preferred Stock		—			—			—			(1,011,726	)
Net loss attributable to common stockholders	$	(199,114	)	$	(16,248	)	$	(367,130	)	$	(1,218,243	)

Net loss per share:
Weighted average number of shares of Class A common stock outstanding – basic and diluted		210,788,116			201,080,003			209,317,361			79,784,524			215,869,537			209,021,924			215,288,148			208,569,794
Net loss per share of Class A common stock – basic and diluted	$	(0.75	)	$	(0.06	)	$	(1.39	)	$	(9.39	)	$	(0.05	)	$	(0.31	)	$	(0.22	)	$	(0.64	)
Weighted average number of shares of Class B common stock outstanding – basic and diluted		55,539,188			56,239,188			55,539,188			49,970,071			55,539,188			55,539,188			55,539,188			55,539,188
Net loss per share of Class B common stock – basic and diluted	$	(0.75	)	$	(0.06	)	$	(1.39	)	$	(9.39	)	$	(0.05	)	$	(0.31	)	$	(0.22	)	$	(0.64	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
~~Nine Months Ended September 30, 2022~~



	Class A Common Stock				Class B Common Stock					Additional Paid in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'			Six Months Ended June 30, 2022
	Shares		Amount		Shares			Amount		Capital		Loss			Deficit			Equity			Class A Common Stock				Class B Common Stock				Additional Paid in		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
																					Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Equity
Balance as of December 31, 2021		207,451,107	$	22		55,539,189		$	6	$	1,844,875	$	—		$	(1,408,383	)	$	436,520			207,451,107	$	22		55,539,188	$	6	$	1,844,875	$	—		$	(1,408,383	)	$	436,520
Stock-based compensation		—		—		(1	)		—		17,041		—			—			17,041			—		—				—		17,041		—			—			17,041
Issuance of common stock under equity plans		1,159,383		—		—			—		793		—			—			793			1,159,383		—		—		—		793		—			—			793
Unrealized gain (loss) on available-for-sale marketable securities		—		—		—			—		—		(155	)		—			(155	)
Unrealized loss on available-for-sale marketable securities																						—		—		—		—		—		(155	)		—			(155	)
Net loss		—		—		—			—		—		—			(85,713	)		(85,713	)		—		—		—		—		—		—			(85,713	)		(85,713	)
Balance as of March 31, 2022		208,610,490	$	22		55,539,188		$	6	$	1,862,709	$	(155	)	$	(1,494,096	)	$	368,486			208,610,490	$	22		55,539,188	$	6	$	1,862,709	$	(155	)	$	(1,494,096	)	$	368,486
Stock-based compensation		—		—		—			—		12,791		—			—			12,791			—		—				—		12,791		—			—			12,791
Issuance of common stock under equity plans		797,935		—		—			—		27		—			—			27			797,935		—		—		—		27		—			—			27
Unrealized loss on available-for-sale marketable securities		—		—		—			—		—		(78	)		—			(78	)
Unrealized gain on available-for-sale marketable securities																						—		—		—		—		—		(78	)		—			(78	)
Net loss		—		—		—			—		—		—			(82,303	)		(82,303	)		—		—		—		—		—		—			(82,303	)		(82,303	)
Balance as of June 30, 2022		209,408,425	$	22		55,539,188		$	6	$	1,875,527	$	(233	)	$	(1,576,399	)	$	298,923			209,408,425	$	22		55,539,188	$	6	$	1,875,527	$	(233	)	$	(1,576,399	)	$	298,923
Stock-based compensation		—		—		—			—		13,748		—			—			13,748
Issuance of common stock under equity plans		2,057,044		—		—			—		484		—			—			484
Issuance of common stock as consideration for the commitment under the Common Stock Purchase agreement (Note 13)		359,098		—		—			—		—		—			—			—
Unrealized gain on available-for-sale marketable securities		—		—		—			—		—		31			—			31
Net loss		—		—		—			—		—		—			(199,114	)		(199,114	)
Balance as of September 30, 2022		211,824,567	$	22		55,539,188		$	6	$	1,889,759	$	(202	)	$	(1,775,513	)	$	114,072

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~CONDENSED CONSOLIDATED STATEMENTS OF TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT~~)
Nine Months Ended September 30, 2021

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~


	Nine Months Ended September 30,						Six Months Ended June 30,
	2022			2021			2023			2022
Cash flows from operating activities:
Net loss	$	(367,130	)	$	(206,517	)	$	(58,897	)	$	(168,016	)
Adjustments to reconcile net loss to cash flows used in operating activities
Stock-based compensation		43,580			20,465			3,216			29,832
Impairment expense		75,116			—
Goodwill impairment		58,251			—
Depreciation		9,664			2,958			1,900			6,004
Amortization of intangible assets		2,394			938			1,133			1,629
Inventory write-downs		18,828			—			—			18,828
Non-cash lease expense		1,370			767			1,716			729
Deferred income taxes		—			(383	)
Change in fair value of warrant liabilities		—			(20,447	)
Gain on forgiveness of PPP note		—			(4,850	)
Accretion (amortization) of marketable securities purchased at a premium (discount)		33			—
Loss on change in fair value of contingent consideration		29,249			—
Loss on extinguishment of convertible notes		—			131,908
Loss on extinguishment of convertible notes attributable to related parties		—			1,875
Amortization of convertible note discounts		—			315
Amortization of convertible note discounts attributable to related parties		—			55
Loss on marketable securities		24			—
Loss (Gain) on change in fair value of contingent consideration								(19,390	)		17,300
Accretion (Amortization) of marketable securities purchased at a premium (discount)								(679	)		132
Changes in operating assets and liabilities:
Trade accounts receivable		(3,107	)		—			(219	)		(1,632	)
Inventories		(15,466	)		(4,246	)		(7,089	)		(13,446	)
Prepaid and other current assets		3,768			(13,935	)		(2,261	)		7,447
Other non-current assets		(1,278	)		(101	)		(146	)		(2,393	)
Accounts payable		2,990			1,333			7,783			6,268
Lease liabilities		(1,207	)		(861	)		(1,506	)		(631	)
Accrued expenses and other current liabilities		(2,125	)		11,355			(1,885	)		1,153
Other non-current liabilities		10,431			(205	)		6,836			4,934
Net cash used in operating activities	$	(134,615	)	$	(79,576	)	$	(69,488	)	$	(91,862	)
Cash flows from investing activities:
Acquisition of Apollo, net of cash acquired		—			(19,360	)
Acquisition of trademark		(850	)		(3,200	)		—			(850	)
Purchases of marketable securities		(136,445	)		—			—			(102,010	)
Proceeds from sales of marketable securities		6,000			—
Proceeds from maturities of marketable securities		47,250			—			57,010			5,277
Purchases of property, plant and equipment		(40,043	)		(18,720	)		(8,223	)		(32,064	)
Net cash used in investing activities	$	(124,088	)	$	(41,280	)
Net cash provided by (used in) investing activities							$	48,787		$	(129,647	)
Cash flows from financing activities:
Proceeds from business combination and private offering, net of transaction costs of $23,337		—			463,648
Borrowings on Pendrell bridge loan		—			10,000
Repayment on Pendrell bridge loan		—			(10,000	)
Proceeds from issuance of Series C preferred stock		—			30,000
Issuance cost of Series C preferred stock		—			(94	)
Repayments on term loans		—			(2,800	)
Repayments on equipment advances		—			(3,636	)
Proceeds from stock issued under equity plans		1,304			1,779
Proceeds from issuance of common stock under equity plans								441			106
Proceeds from Employee Stock Purchase Plans								—			711
Net cash provided by financing activities	$	1,304		$	488,897		$	441		$	817

Net increase (decrease) in cash and cash equivalents	$	(257,399	)	$	368,041
Net decrease in cash and cash equivalents							$	(20,260	)	$	(220,692	)
Cash and cash equivalents at beginning of period		325,007			10,611			33,644			325,007
Cash and cash equivalents at end of period	$	67,608		$	378,652		$	13,384		$	104,315

Non-cash investing and financing activities:
Conversion of Series A, Series B, Series C, and Founders' convertible preferred into common stock	$	—		$	330,764
Assets acquired included in accounts payable, accrued expenses and other current liabilities								1,062			4,983

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Note 1 — Description of Business, Basis of Presentation and Significant Accounting Policies

Description of Business

Astra Space, Inc. (the "Company") designs, tests, manufactures and operates the next generation of launch services and space products and services that it expects to enable a new generation of global communications, earth observation, precision weather monitoring, navigation, and surveillance capabilities. ~~Astra Space, Inc.'s~~The Company's mission is to Improve Life on Earth from ~~Space~~®Space® through greater connectivity and more regular observation and to enable a wave of innovation in ~~low~~Low Earth ~~orbit~~Orbit ("LEO") by expanding its space platform offerings. Currently, the Company's business consists of two segments, a mobile orbital launch system (“Launch Services”) and a space products business that produces the Astra Spacecraft EngineTM products (“Space Products”).

Holicity Inc. (“Holicity”) was originally incorporated in Delaware and was established as a special purpose acquisition company, which completed its initial public offering in August 2020. On June 30, 2021 (the “Closing Date”), Holicity consummated a business combination (the “Business Combination”) pursuant to the Business Combination Agreement dated as of February 2, 2021 (the “BCA”), by and among Holicity, Holicity Merger Sub Inc., a wholly owned subsidiary of Holicity (“Merger Sub”), and Astra Space Operations, Inc. (“pre-combination Astra”). Immediately upon the consummation of the Business Combination, Merger Sub merged with and into pre-combination Astra with pre-combination Astra surviving the merger as a wholly owned subsidiary of Holicity. Holicity changed its name to “Astra Space, Inc.” and pre-combination Astra changed its name to “Astra Space Operations, Inc.”

Unless the context otherwise requires, ~~“we”, “us”, “our”,~~ “Astra” and the “Company” refers to Astra Space, Inc., the combined company and its subsidiaries following the Business Combination and Astra Space Operations, Inc. prior to the Business Combination. See Note 3 — Acquisitions for further discussion of the Business ~~Combination.~~Combination, included in the Notes to Consolidated Financial Statements in Astra’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the "SEC") on March 30, 2023 (“2022 Annual Report”). The Company’s Class A common stock is listed on the Nasdaq under the symbol “ASTR”.

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of Astra and its subsidiaries, and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for financial reporting. The condensed consolidated financial statements included herein are unaudited, and reflect all adjustments which are, in the opinion of management, of a normal recurring nature and necessary for a fair statement of the results for the periods presented. The ~~December 31, 2021~~ condensed consolidated balance sheet data as of December 31, 2022 were derived from Astra’s audited consolidated financial statements included in its 2022 Annual ~~Report on Form 10-K for year ended December 31, 2021 as filed with the SEC.~~Report. All intercompany transactions and balances have been eliminated in consolidation. The operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2022,~~2023, or for any other future period.

~~Business Combination~~Reclassification

~~On June 30, 2021, the Business Combination pursuant~~Certain prior period amounts have been reclassified to conform to the ~~BCA, by and among Holicity, Merger Sub, and pre-combination Astra,~~current period presentation. The impact of these reclassifications was ~~accounted for as a reverse recapitalization as pre-combination Astra was determined~~not material to ~~be the accounting acquirer under ASC 805. The determination is primarily based on the evaluation of the following facts and circumstances:~~

•

~~the equity holders of pre-combination Astra hold the majority of voting rights in the Company;~~

•

~~the board of directors of pre-combination Astra represent a majority of the members of the board of directors of the Company;~~

•

~~the senior management of pre-combination Astra became the senior management of the Company; and~~

•

~~the operations of pre-combination Astra comprise the ongoing operations of the Company.~~

~~In connection with the Business Combination, outstanding common stock and preferred convertible stock of the pre-combination Astra was converted into common stock of the Company, par value of $0.0001~~ per share, representing a recapitalization, and the net assets of the Company were acquired and recorded at historical cost, with no goodwill or intangible assets recorded. Pre-combination Astra was deemed to be the predecessor and the condensed ~~consolidated assets and liabilities and results of operations prior to~~financial statements for the Closing Date are those of pre-combination Astra. Reported shares and earnings per share available to common stockholders, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the BCA. The number of shares of preferred stock was also retroactively restated based on the exchange ratio. See Note 3 — Acquisitions for additional information.periods presented.

~~Table of Contents~~

Liquidity

The accompanying unaudited condensed consolidated ~~interim~~ financial statements have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these unaudited condensed consolidated ~~interim~~ financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

Pursuant to the requirements of ~~the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”)~~ASC Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these unaudited condensed consolidated ~~interim~~ financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within the control of the Company as of the date the unaudited condensed consolidated ~~interim~~ financial statements are issued. When substantial doubt exists, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the unaudited condensed consolidated ~~interim~~ financial statements are issued, and (2) it is probable that the plans, when implemented, will

Table of Contents

mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the unaudited condensed consolidated ~~interim~~ financial statements are issued.

The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern over the next twelve months through ~~November 2023.~~August 2024. Since inception, the Company has incurred significant operating losses and has an accumulated deficit of approximately $~~1,775.5~~1.9 ~~million.~~billion. As of ~~September~~June 30, ~~2022,~~2023, the Company’s existing sources of liquidity included cash and cash equivalents of $~~67.6~~13.4 million and marketable securities of $~~82.9~~12.9 million. The Company believes that its current level of cash and cash equivalents and marketable securities are not sufficient to fund commercial scale production and sale of its services and products. These conditions raise substantial doubt regarding its ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements.

In order to proceed with the Company’s business plan, the Company will need to raise substantial additional funds through the issuance of additional debt, equity or both. Until such time, if ever, the Company can generate revenue sufficient to achieve profitability, the Company expects to finance its operations through equity or debt ~~financings,~~financing, which may not be available to the Company on the timing needed or on terms that the Company deems to be favorable. To the extent that the Company raises additional capital through the sale of equity or convertible debt securities, the ownership interest of its stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting the Company’s ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If the Company is unable to obtain sufficient financial resources, its business, financial condition and results of operations will be materially and adversely affected. The Company may be required to delay, limit, reduce or terminate its product development activities or future commercialization efforts. There can be no assurance that the Company will be able to obtain the needed financing on acceptable terms or at all.

In an effort to alleviate these conditions, ~~management~~the Company continues to seek and evaluate opportunities to raise additional capital through the issuance of equity or debt securities. As an example, on August 2, 2022, the Company entered into a Common Stock Purchase Agreement with B. Riley Principal Capital II LLC ("B. Riley"), which would allow the Company to sell newly issued shares of its Class A Common Stock to B. Riley in aggregate amount not to exceed $~~100.0~~

~~million or~~ ~~19.99% of the aggregate outstanding Class A and Class B Common Stock of the Company as of August 2, 2022. See~~ ~~Note 13 – Stockholders’ Equity~~ for additional information about this financing arrangement. However, actual sales of shares under the Purchase Agreement will depend on a variety of factors including, among other things, market conditions and the trading price of the Class A Common Stock, and the full amount of capital may not be fully realized. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. OurThe Company's ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, ~~our~~its performance and investor sentiment with respect to usthe Company and ~~our~~its industry. See Note 8 – Stockholders’ Equity and Note 12 - Subsequent Events for additional information about financing arrangements entered into since June 30, 2023.

As a result of these uncertainties, and notwithstanding management’s plans and efforts to date, there is substantial doubt about the Company’s ability to continue as a going concern. If ~~we are~~the Company is unable to raise substantial additional capital in the near term, ~~our~~the Company's operations and production plans will be scaled back or curtailed. See Note 12 - Subsequent Events for restructuring activities the Company has implemented since June 30, 2023. If the funds raised are insufficient to provide a bridge to full commercial production at a profit, ~~our~~the Company's operations could be severely curtailed or cease entirely and wethe Company may not realize any significant value from ~~our~~its assets.

~~We have,~~The Company has, however, prepared these unaudited condensed consolidated financial statements on a going concern basis, assuming that ~~our~~the Company's financial resources will be sufficient to meet ~~our~~its capital needs over the next twelve months. Accordingly, ~~our~~the Company's financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should weit be unable to continue in operation.

9Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains cash and cash equivalent balances in bank accounts with multiple banking partners. All cash accounts are located in the United States (“U.S.”) and insured by the FDIC up to $250,000. Marketable securities consist of highly liquid investments with financial institutions, which management believes to be of a high credit quality. The Company's accounts receivable are derived from revenue earned from customers or invoices billed to customer that represent unconditional right to consideration located within the U.S. The Company mitigates collection risks from its customers by performing regular credit evaluations of the Company's customers’ financial conditions. The Company believes there is no exposure to any significant credit risks related to its cash and cash equivalents or accounts receivable and has not experienced any losses in such accounts.

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~~Impairment of long-lived assets, indefinite-lived intangibles and goodwill~~

The Company performs an annual impairment review of goodwill and indefinite-lived intangible assets during the fourth fiscal quarter of each year, and more frequently if the Company believes that indicators of impairment exist. Long-lived assets are tested for recoverability when events or changes in circumstances indicate that their carrying amounts may not be recoverable. As of ~~the third quarter of fiscal year~~June 30, 2023 and December 31, 2022, the Company determined that impairment indicators were present based on the existence of substantial doubt about the Company’s ability to continue as a going concern, a sustained decrease in the Company’s share price and macroeconomic factors. Accordingly, the Company proceeded with the quantitative impairment tests.following customers accounted for greater than

~~For indefinite-lived intangible assets, the Company compared the carrying amount~~10% of the ~~asset to its fair value, resulting in a non-cash impairment charge, as described further in Note 5 – Goodwill and Intangible Assets.~~Company's trade accounts receivable:


	June 30, 2023			December 31, 2022
Customer 1		25.7	%		21.7	%
Customer 2		20.7	%		53.3	%
Customer 3		16.5	%		20.8	%
Customer 4		13.2	%		—
Customer 5		10.3	%		—

For the ~~long-lived assets,~~three and six months ended June 30, 2023 and 2022, the ~~Company compared the sum~~following customers accounted for greater than 10% of the ~~undiscounted future cash flows attributable to the Launch Services and Space Products asset groups (the lowest level~~Company's total revenues:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Customer 4		100.0	%		—			100	%		—
Customer 6		—			90.9	%		—			84.1	%
Customer 7		—		(1)				—			10.5	%

____________

(1)

These customers accounted for which identifiable cash flows are available) to their respective carrying amounts and concluded that the Space Products asset group was recoverable. The Launch Services asset group was not recoverable, and the Company proceeded with the comparisonless than 10% of the ~~asset group’s carrying amount to its fair value, resulting in a non-cash impairment charge, as described further in Note 4 – Supplemental Financial Information.~~

For goodwill, the Company compared the carrying amount of the reporting unit to its fair value. During the third quarter of fiscal year 2022, the Company took steps to realign management and internal reporting, resulting in ~~two~~ operating and reportable segments, as described further in Note 16 – Segment Information. In accordance with the accounting guidance under ASC 350, the reorganization triggered a goodwill impairment test based on the reporting structure immediately before the reorganization, as a single reporting unit, resulting in a non-cash impairment charge writing off the entire goodwill balance, as described further in Note 5 – Goodwill and Intangible Assets.

~~Fair values of the Company’s reporting units were determined using the discounted cash flow model and fair value ofthe tradename was determined using the relief-from-royalty method. Significant inputs include discount rates, growth rates, and cash flow projections, and~~recognized revenue for the ~~tradename, the royalty rate. These valuation inputs are considered Level 3 inputs as defined by ASC 820~~ period.~~Fair Value Measurement.~~

~~Impact of the COVID-19 Pandemic~~

The Company has been actively monitoring the ongoing COVID-19 pandemic situation and its impact on the Company’s business while keeping abreast of the latest developments, particularly the variants of the virus, to ensure preparedness for Astra’s employees and its business. The COVID-19 pandemic had disrupted everyday life and markets worldwide, leading to significant business and supply-chain disruption, as well as broad-based changes in supply and demand. The Company has been diligent in testing and monitoring its employees, and there have been disruptions in productivity, although these disruptions have not resulted in suspension of its manufacturing facilities. However, there has been a trend in many parts of the world of increasing availability and administration of vaccines against COVID-19, as well as an easing of restrictions on social, business, travel and government activities and functions. On the other hand, infection rates and regulations continue to fluctuate in various regions and there are ongoing global impacts resulting from the pandemic, including challenges and increases in costs for logistics and supply chains, such as increased intermittent supplier delays and a shortfall of semiconductor supply. Ultimately, the Company cannot predict the duration of the COVID-19 pandemic. The Company will continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve its business as appropriate and deploy its production, workforce and other resources accordingly.

Use of Estimates and ~~Judgements~~Judgments

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the unaudited condensed consolidated financial statements and accompanying notes. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ significantly from those estimates. Significant items subject to such estimates and assumptions include the valuation of goodwill and long-lived assets, inventory valuation and reserves, stock-based compensation, pre-combination Astra common stock, useful lives of intangible assets and property, plant and equipment, deferred tax assets, income tax uncertainties, contingent consideration, and other contingencies.

~~Table of Contents~~

Significant Accounting Policies

~~Other than those described below, there~~There have been no changes to the Company’s significant accounting policies described in the Company’s 2022 Annual Report ~~on Form 10-K for the year ended December 31, 2021,~~ that have had a material impact on its unaudited condensed consolidated financial statements and related notes.

~~Segment reporting.~~Recently Adopted Accounting Standards ~~Operating segments~~

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are ~~identified as components~~required for equity-linked contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The Company adopted the ASU on January 1, 2023. Adoption of ~~an enterprise about~~the ASU did not impact the Company’s financial position, results of operations or cash flows.

Recently Issued Accounting Standards Not Yet Adopted

In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848), Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”). In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which ~~separate discrete financial information is available for evaluation by~~provided temporary relief when transitioning from the ~~chief operating decision-maker~~London Interbank Offered Rate (“~~CODM”~~LIBOR”) ~~in making decisions regarding resource allocation and assessing performance. Prior~~ to the ~~third quarter~~Secured Overnight Financing Rate (“SOFR”) or another applicable rate during the original transition period ending on December 31, 2022. In March 2021, the UK Financial Conduct Authority (the “FCA”) announced that the intended cessation date of ~~fiscal year 2022,~~ the ~~Company operated as~~ ~~one~~ ~~operating~~overnight 1-, 3-, 6-, and ~~reportable segment, as the CODM reviewed financial information presented on a consolidated basis for purposes~~12-month tenors of ~~making operating decisions, allocating resources and evaluating financial performance.~~

During the third quarter of fiscal year 2022, the Company took steps to realign management and internal reporting, resulting in two operating and reportable segments: Launch Services and Space Products. The segment reporting for prior periods has been reclassified to conform toU.S. dollar LIBOR would be June 30, 2023, which is beyond the current ~~period presentation. Refer~~sunset date of Topic 848. In light of this development, the FASB issued this update to ~~Note 16 – Segment Information for more information.~~

~~Marketable securities.~~ ~~Marketable securities consist~~defer the sunset date of ~~U.S. Treasury securities, corporate debt securities, commercial paper, and asset backed securities.~~Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The Company ~~classifies marketable securities as available-for-sale at the time of purchase and reevaluates such classification as of each balance sheet date. Interest receivable~~does not anticipate this new guidance to have a material impact on these securities is presented in other current assets on the condensed consolidated balance sheets. All marketable securities are recorded at their estimated fair values. When the fair value of a marketable security declines below its amortized cost basis, the carrying value of the security will be reduced to its fair value if it is more likely than not that management is required to sell the impaired security before recovery of its amortized basis, or management has the intention to sell the security. If neither of these conditions are met, the Company determines whether any portion of the decline is due to credit losses. Any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in the Company’s condensed consolidated statement of operations. When the fair value of the security declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive income (loss) and are recognized in the Company’s condensed consolidated statementfinancial position, results of operations, ~~only if the Company sells~~cash flows, or intends to sell the security before recovery of its cost basis. Realized gains and losses are determined based on the specific identification method and are reported in other income (expense), net in the Company’s condensed consolidated statements of operations.related disclosures.

Note 2 — Revenues

The Company recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Through its current offerings, the Company expects to generate revenue by providing the following goods or services:

~~Launch Services~~ — To provide rapid, global, and affordable launch services to satellite operators and governments in partnership with third-party spaceport providers globally. The launch services include services tied directly to launch along with complementary services that are not part of the Company's fixed pricing for which we charge a separate fee. The Company operated its launches from Pacific Spaceport Complex in Kodiak, Alaska and Cape Canaveral Space Force Station in Cape Canaveral, Florida. The Company is in discussions with SaxaVord UK Spaceport regarding an opportunity to launch from the United Kingdom.

~~Space Products~~ — To design and provide space products based on the customers' needs for a successful satellite launch and other products that the Company may sell in the future. Currently the Company offers two in-space electric propulsion systems.

As of September 30, 2022, the Company has entered into contracts for launch services and space products. The Company’s contracts may provide customers with termination for convenience clauses, which may or may not include termination penalties. In some contracts, the size of the contractual termination penalty increases closer to the scheduled launch date. At each balance sheet date, the Company evaluates each contract’s termination provisions and the impact on the accounting contract term, i.e., the period in which the Company has enforceable rights and obligations. This includes evaluating whether there are termination penalties and if so, whether they are considered substantive. The Company applies judgment in determining whether the termination penalties are substantive. In July 2022, the Company decided to focus on the development and production of the next version of its launch system. As a result, the Company has discontinued the production of launch vehicles supported by its current launch system and does not plan to conduct any further commercial launches in 2022. The Company has begun discussions with customers for whom it agreed to launch payloads on launch vehicles supported by its old launch system and the shift of those flights to launch vehicles supported by our new launch vehicle. If a customer terminates its contract with the Company due to the shifting of the flights, the customer may not be obligated to pay the termination for convenience penalties. As of September 30, 2022, the Company has not incurred any termination penalties in launch services as a result of the shifting of flights.

118

Table of Contents

~~Recognition of Revenue~~

The work performed by the Company in fulfilling ~~launch services~~Launch Services and ~~space products~~Space Products performance obligations is not expected to create an asset to the customer since the launch vehicle that is built to deliver the customer’s payload into orbit will not be owned by the customer ornor will the propulsion systems that are built to thrust the customers' satellite into orbit ~~will not~~ be ~~owned~~controlled by the customer until they are delivered to the customer. The Company recognizes revenue at a point in time upon satisfaction of the performance obligations under its ~~launch services~~Launch Services and ~~space products~~Space Products agreements. The following table presents revenue disaggregated by type ~~of revenue~~ for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,				Three months ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
in thousands									2023		2022		2023		2022
Launch services	$	—	$	—	$	5,899	$	—	$	—	$	1,988	$	—	$	5,899
Space products		2,777		—		3,471		—		707		694		707		694
Total revenues	$	2,777	$	—	$	9,370	$	—	$	707	$	2,682	$	707	$	6,593

Contracts with governmental entities involving research and development milestone activities do not represent contracts with customers under ASC 606 and as such, amounts received are recorded in other income ~~(expense), net~~ in the unaudited condensed consolidated statements of operations. $1.5 million such income was recorded for the three and six months ended June 30, 2023. No such income was recorded for the three months ended ~~September~~June 30, 2022. The Company recorded $0.4 million in other income for the ~~nine~~six months ended ~~September~~June 30, 2022.No ~~such income was recorded for the three and nine months ended September 30, 2021.~~

Contract ~~Balances and Remaining Performance Obligations~~balances

~~Contract balances.~~Contract assets and liabilities represent the differences in the timing of revenue recognition from the receipt of cash from the Company’s customers and billings. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. ~~Receivables represent~~Contract assets become receivables once the Company's rights to consideration ~~that are~~become unconditional. Such rights are considered unconditional if only the passage of time is required before payment of that consideration is due. The Company had deferred contract costs of $no3.3 ~~contract assets~~million and $2.4 million as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021.~~2022, respectively. The Company had contract liabilities of $~~18.0~~33.1 million and $~~10.4~~24.1 million as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. ~~The~~During both the three and six months ended June 30, 2023, the Company recognized $0.7 million of revenue that was included in the contract liabilities balance at the beginning of the periods. During the three and six months ended June 30, 2022, the Company recognized revenue of $~~0.3~~2.7 million and $~~5.2~~4.9 million, ~~during the three and nine months ended September 30, 2022,~~ respectively, that was included in the contract liabilities balance at the beginning of the ~~period.~~ periods.No ~~revenue was recognized for the three and nine months ended September 30, 2021.~~

Remaining performance obligations

. Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied. It includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods and does not include contracts where the customer is not committed. Customers are not considered committed when they are able to terminate their contractual obligations to usthe Company without payment of a substantive penalty under the contract. Many of the Company’s contracts allow the customer to terminate the contract prior to launch or delivery without a substantive penalty, and therefore the enforceable contract is for a period less than the stated contractual term. Further, the Company has elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company had unsatisfied performance obligations of $~~40.6~~ ~~million as of September 30, 2022.~~

~~Note 3 — Acquisitions~~

~~Acquisition of Apollo Fusion, Inc.~~

On July 1, 2021, or the Apollo Acquisition Date, the Company, through its wholly owned indirect subsidiary, merged with Apollo Fusion, Inc. ("Apollo"). The results of Apollo’s operations have been included in the unaudited condensed consolidated financial statements since that date. Apollo designs, tests, manufactures and operates propulsion modules to enable satellites to orbit in space.

~~The fair value of the consideration paid as of July 1, 2021, was $70.8~~ ~~million, net of cash acquired (the "Apollo Merger"), which consisted of the following:~~

~~Table of Contents~~

Purchase Consideration (in thousands)

Cash paid for outstanding Apollo common stock and options

$
19,926

Fair value of Astra Class A common stock issued

33,008

Fair value of contingent consideration

18,400

Total purchase consideration

71,334

Less: cash acquired

566

Total purchase consideration, net of cash acquired

$
70,768

The fair value of the shares of Class A common stock issued in the Apollo Merger was determined based on the closing market price of the Company’s Class A common stock on the Apollo Acquisition Date.

The vesting of all unvested stock options of Apollo granted prior to the Apollo Acquisition Date were accelerated prior to the acquisition and were then cancelled in exchange for a right of each option-holder to cash, equity and contingent consideration based on their pro-rata percentage, assuming all stock options of Apollo had been exercised.

~~The contingent consideration requires the Company to pay up to $75.0~~ million of additional consideration to Apollo’s former shareholders and option-holders, if Apollo meets certain customer revenue related milestones over a two and half year period ending on December 31, 2023. The contingent consideration is earned, which is a combination of total contract value and relevant payout ratio, if the contract with the customer is entered into after the acquisition date and 25% of revenue under the contract is recognized by December 31, 2023 under ASC 606. Contingent consideration is payable on a quarterly basis based on the milestones achieved. The fair value of the contingent consideration arrangement at the acquisition date was $~~18.4~~ million. The Company estimated the fair value of the contingent consideration using a Monte Carlo simulation model. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in ASC 820. As of September 30, 2022, the contingent consideration recognized increased to $~~43.0~~ ~~million as a result of changes in forecasted revenues subject to milestone payments and the passage of time. The Company has recognized $24.6~~ ~~million in cumulative net losses on changes in fair value of contingent consideration from the Apollo Acquisition Date, of which $12.0~~ ~~million and $29.2~~ ~~million in loss was recognized in the condensed consolidated statement of operations for the three and nine months ended September 30, 2022, respectively.~~

~~An additional $10.0~~ million of cash ("Cash Earnout") will be paid to employees of Apollo that joined Astra, subject to certain vesting conditions, as amended. The Cash Earnout is accounted for as compensation expense over the requisite service period in the post-acquisition period as the payment is subject to the employee's continued employment with the Company. The Company has recognized $~~8.4~~ ~~million in compensation cost from the Apollo Acquisition Date, of which $2.6~~ million in compensation cost was recognized in research and development expense in the condensed consolidated statement of operations for the nine months ended September 30, 2022. During the third quarter of 2022, the agreement was amended to remove the performance conditions and the Company paid $~~1.7~~ ~~million to fulfill the Company’s remaining obligation under the Cash Earnout as of September 30, 2022. The remaining accrued liability of $1.9~~ ~~million was written off as of September 30, 2022, since the total eligible compensation under the Cash Earnout was fully paid.~~

~~In addition, the Company awarded~~ ~~1,047,115~~ Performance Stock Units ("PSUs") to employees of Apollo that joined Astra, subject to certain performance-based milestones, as amended, and other vesting provisions. The PSUs are accounted for as compensation expense over the requisite service period in the post-acquisition period as the vesting of PSUs is subject to time-based and performance-based vesting conditions. During the third quarter of 2022, the performance stock award agreements were amended to remove the performance-based milestone as a vesting condition. The PSUs now are only subject to vesting based on the applicable employees’ years of service. See Note 14 — Stock-Based Compensation for additional information.

The Company allocated the fair value of the purchase consideration to the tangible assets, liabilities and intangible assets acquired, based on the fair values as of the acquisition date. We have completed the valuation as of March 31, 2022. The excess purchase price over those fair values is recorded as goodwill. The valuation assumptions of acquired assets and assumed liabilities require significant estimates, especially with respect to intangible assets. The final purchase consideration allocation is presented in the following table.

~~Table of Contents~~

(in thousands)

Fair Value

Inventory

$
131

Prepaid and other current assets

796

Property, plant and equipment

996

Right of use assets

163

Goodwill

58,251

Intangible assets

15,350

Other non-current assets

75

Total assets acquired

75,762

Accounts payable

(950
)
Accrued expenses and other current liabilities

(1,939
)
Operating lease obligation

(163
)
Other non-current liabilities

(1,942
)
Total liabilities assumed

(4,994
)
Fair value of net assets acquired

$
70,768

Goodwill is primarily attributable to the assembled workforce and anticipated synergies expected from the integration of the Apollo business. The synergies include operating efficiencies, and other strategic benefits projected to be achieved as a result of the Apollo Merger. Goodwill is not deductible for tax purposes.

~~There were $2.8~~ ~~million and $3.5~~ million of revenues recorded during the three and nine months ended September 30, 2022, respectively, related to Apollo. It was impracticable to determine the effect on net income attributable to Apollo as the Company had integrated a substantial portion of Apollo into its ongoing operations during the year.

Intangible Assets

Fair Value

Weighted-Average Amortization Periods

(in thousands)

(in years)
Developed technology

$
12,100

6
Customer contracts and related relationships

2,900

3
Order backlog

200

1
Tradename

150

2
Total identified intangible assets

$
15,350

Developed technology relates to propulsion modules. The Company valued the developed technology using the relief-from-royalty method under the income approach. This method is based on the application of a royalty rate to forecasted revenue that are expected to be generated by developed technology. The economic useful life was determined based on the technology cycle related to the developed technology, as well as the cash flows over the forecast period.

Customer contracts and related relationships represent the fair value of future projected revenue that will be derived from sales of products to existing customers of Apollo. Customer contracts and related relationships were valued using the multi-period excess earnings method under the income approach. This method reflects the present value of the projected cash flows that are expected to be generated by the customer contracts and related relationships less charges representing the contribution of other assets to those cash flows. The economic useful life was determined based on historical customer turnover rates.

Order backlog represents business under existing contractual obligations. The fair value of backlog was determined using the multi-period excess earnings method under the income approach based on expected operating cash flows from future contractual revenue. The economic useful life was determined based on the expected life of the backlog and the cash flows over the forecast period.

Trade name relates to the “Apollo” trade name. The fair value was determined by applying the relief-from-royalty method under the income approach. This method is based on the application of a royalty rate to forecasted revenue under the trade name. The economic useful life was determined based on the expected life of the trade name and the cash flows anticipated over the forecast period.

The Company believes the amounts of purchased intangible assets recorded above represent the fair values of, and approximate the amounts a market participant would pay for, these intangible assets as of the Apollo Acquisition Date.

~~Unaudited Pro Forma Information~~

~~Table of Contents~~

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if Apollo had been acquired as of the beginning of fiscal year 2020. The unaudited pro forma results include certain pro forma adjustments to revenue and net loss that were directly attributable to the acquisition including transaction costs and amortization of intangible assets. Transactions costs of approximately $~~4.4~~ ~~million are assumed to have occurred on January 1, 2020 and are recognized as if incurred in the first quarter of 2020. Of these transaction costs, $0.4~~ ~~million are incurred by Apollo and $4.0~~ million are incurred by the Company. Intangible assets are assumed to be recognized at their assigned fair values as of the pro forma close date of January 1, 2020 and are amortized over their estimated useful lives. The amortization expenses were $~~0.8~~ ~~million and $2.5~~ ~~million for the three and nine months ended September 30, 2021, respectively.~~ The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2020 or of the results of our future operations of the combined business.

in thousands

For the Three Months Ended September 30, 2021

For The Nine Months Ended September 30, 2021

Pro forma net revenues

$
—

$
400

Pro forma net loss and net loss attributable to common stockholders

$
(13,038
)

$
(207,789
)

~~Reverse Recapitalization~~

On June 30, 2021, pre-combination Astra Space, Inc. and Holicity Inc. consummated the Business Combination contemplated by the BCA, with pre-combination Astra surviving the merger as a wholly owned subsidiary of Holicity. Upon consummation of the Business Combination, Holicity changed its name to Astra Space, Inc., and pre-combination Astra changed its name to Astra Space Operations, Inc.

~~Immediately following the Business Combination, there were~~ ~~198,090,903~~ ~~shares of Class A common stock and~~ ~~56,239,189~~ ~~shares of Class B common stock issued and outstanding with a par value of $0.0001. Additionally, there were outstanding options to purchase an aggregate of~~ ~~5,993,412~~ ~~shares of Class A common stock and outstanding warrants to purchase~~ ~~15,813,829~~ ~~shares of Class A common stock.~~

The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP as pre-combination Astra has been determined to be the accounting acquirer. Under this method of accounting, while Holicity was the legal acquirer, it has been treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of pre-combination Astra issuing stock for the net assets of Holicity, accompanied by a recapitalization. The net assets of Holicity were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of pre-combination Astra. Reported shares and earnings per share available to holders of the Company’s common stock, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio established in the BCA (~~approximately one pre-combination Astra share to 0.665 of the Company's shares~~).

~~The most significant change in the post-combination Company’s reported financial position and results was an increase in cash, net of transactions costs, of $463.6~~ ~~million, including $200.0~~ ~~million in gross proceeds from the private placements (the “PIPE”). In connection with the Business Combination, $25.2~~ ~~million of transaction costs were paid on the Closing Date. Additionally, on the Closing Date, the Company repaid the short-term promissory notes with Pendrell (the “Bridge Loan”) of $10.4~~ ~~million, which included principal of $10.0~~ ~~million and end of term fee of $0.4~~95.2 million as of June 30, ~~2021. The Company also repaid the outstanding principal and interest of~~2023, $~~4.6~~46.0 million ~~for the term loan~~of which is expected to be recognized by June 2024, and ~~equipment advances with Silicon Valley Bank. Refer to Note 6 – Long-term Debt.~~

~~The Company incurred~~ $~~25.5~~49.2 million ~~in transaction costs relating to the merger with Holicity, of which $23.3~~ ~~million has been recorded against additional paid-in capital in the Condensed Consolidated Balance Sheets~~between July 2024 and ~~the remaining amount of $2.2~~ million was recognized as general and administrative expenses on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021. On the date of the Business Combination, the Company recorded a liability related to the Public and Private Placement Warrants of $~~56.8~~ million, with an offsetting entry to additional paid-in capital. In relation to the Public and Private Placement Warrants, the Company recognized a portion of pre-combination Astra’s capitalizable transaction costs relating to the merger with Holicity, using the relative fair value method, as general and administrative expenses in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021.

~~Upon closing of the Business Combination, the shareholders of Holicity, including Holicity founders, were issued~~ ~~37,489,019~~ ~~shares of Class A common stock. In connection with the Closing, holders of~~ ~~10,981~~ ~~shares of common stock of Holicity were redeemed at a price per share of $10.00. In connection with the Closing~~ ~~20,000,000~~ ~~shares were issued to PIPE investors at a price per share of $10.00~~.

~~Table of Contents~~

~~The number of shares of Class A common stock issued immediately following the consummation of the Business Combination were:~~


~~Common stock of Holicity~~			~~29,989,019~~
~~Holicity founder shares~~			~~7,500,000~~
~~Shares issued in PIPE~~			~~20,000,000~~
~~Business Combination and PIPE shares~~			~~57,489,019~~
~~Pre-combination Astra shares~~			~~140,601,884~~
~~Total shares of Class A common stock immediately after Business Combination~~			~~198,090,903~~

~~In addition, in connection with the consummation of the Business Combination,~~ ~~56,239,189~~ ~~shares of Class B common stock were issued to two executive officers and founders of the Company: Chris Kemp and Adam London in exchange for an aggregate~~ ~~73,699,647~~ ~~shares of common stock and an aggregate~~ ~~10,870,562~~ ~~shares of Founders Preferred Stock of pre-combination Astra.~~2028.

Note 43 — Supplemental Financial Information

Inventories



in thousands	As of September 30, 2022		As of December 31, 2021		June 30, 2023		December 31, 2022
Raw materials	$	1,015	$	5,775	$	9,090	$	2,622
Work in progress		4,159		941		2,141		1,520
Finished goods		—		959		—		—
Inventories	$	5,174	$	7,675	$	11,231	$	4,142

There were no inventory write-downs recorded during the three and six months ended ~~September~~June 30, ~~2022.~~2023. There were $13.3 million and $18.8 million of inventory write-downs recorded within cost of revenues during the ~~nine~~three and six months ended ~~September~~June 30, 2022, respectively, of which $10.2 million of inventory write-downs related to the discontinuance of production of the ~~current~~former version of ~~its~~the Company's launch vehicle as ~~the Company~~it focuses on developing the new version of its launch system. ~~There were~~ The amounts as of December 31, 2022 have been revised to correct the classification of inventory between raw materials and work in progress and to correct the classification of deferred contract costs from inventory to prepaid and other current assets.

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Table of Contents

~~inventory write-downs recorded during the three~~

Prepaid and ~~nine months ended September 30, 2021.~~other current assets


in thousands	June 30, 2023		December 31, 2022
Deposits	$	5,592	$	379
Prepaid license and other prepaid expenses		3,030		3,589
Employee Retention Credit - Payroll Tax		2,101		4,283
Deferred contract costs		3,306		2,446
Other current assets		1,728		2,799
Prepaid and other current assets	$	15,757	$	13,496

Property, Plant and Equipment, net

Presented in the table below are the major classes of property, plant and equipment:


in thousands	As of September 30, 2022			As of December 31, 2021			June 30, 2023			December 31, 2022
Construction in progress	$	6,381		$	39,246		$	6,703		$	8,309
Computer and software		6,501			3,092			2,924			2,810
Leasehold improvements		58,255			14,177			11,946			10,390
Research equipment		14,478			8,935			9,031			9,042
Production equipment		23,439			10,442			20,042			14,100
Furniture and fixtures		1,523			1,001			500			565
Total property, plant and equipment		110,577			76,893			51,146			45,216
Less: accumulated depreciation		(20,241	)		(10,577	)		(22,845	)		(20,945	)
Less: accumulated impairment charges		(70,288	)		—
Property, plant and equipment, net	$	20,048		$	66,316		$	28,301		$	24,271

Depreciation expense amounted to $~~3.7~~1.1 million and $~~0.8~~4.0 million for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Depreciation expense amounted to $~~9.7~~1.9 million and $~~3.0~~6.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

~~The Company recorded a non-cash impairment charge of $70.3~~ million primarily related to leasehold improvements, production equipment and research equipment of Launch Services in the condensed consolidated statements of operations for the three and nine months ended September 30, 2022. No impairment charges were recorded for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021. See Note 1 – Description of Business, Basis of Presentation~~2023 and ~~Significant Accounting Policies, for discussion of triggers for impairment as of September 30,~~ 2022.

~~Table of Contents~~

Accrued Expenses and Other Current Liabilities


in thousands	As of September 30, 2022		As of December 31, 2021		June 30, 2023		December 31, 2022
Employee compensation and benefits	$	5,882	$	9,927	$	3,133	$	5,861
Contract liabilities, current portion		12,028		10,162		26,511		24,137
Construction in progress related accruals		1,072		3,726		320		2,692
Professional services						2,787		756
Accrued expenses		5,280		3,464		3,484		4,423
Accrued inventory purchases						3,110		2,848
Other (miscellaneous)		3,120		2,620		917		1,326
Accrued expenses and other current liabilities	$	27,382	$	29,899	$	40,262	$	42,043

Other Non-Current Liabilities


in thousands	As of September 30, 2022		As of December 31, 2021		June 30, 2023		December 31, 2022
Contract liabilities, net of current portion		6,013		149	$	6,605	$	—
Other (miscellaneous)		1,264		750		2,024		1,796
Other non-current liabilities	$	7,277	$	899	$	8,629	$	1,796

~~Note 5 — Goodwill and Intangible Assets~~

~~Goodwill~~

~~The following table summarizes the changes in the carrying amount of goodwill:~~

(in thousands)

Carrying Amount

Accumulated Impairment Charge

Net Book Value

Goodwill

$
58,251

$
(58,251
)

$
—

~~The Company recorded a pre-tax impairment charge of $58.3~~ ~~million for the three and nine months ended September 30, 2022, respectively, fully impairing its goodwill balance. There was~~ no impairment charge for the three and nine months ended September 30, 2021. See Note 1 – Description of Business, Basis of Presentation and Significant Accounting Policies for discussion of events triggering the goodwill impairment test.

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Note 4 — Intangible Assets


in thousands	Gross Carrying Amount		Accumulated Impairment Charge			Accumulated Amortization			Net Book Value		Carrying Amount		Accumulated Amortization			Net Book Value
As of September 30, 2022:
June 30, 2023
Definite-lived intangible assets
Developed technology	$	12,100	$	(2,191	)	$	(2,521	)	$	7,388	$	9,909	$	(3,687	)	$	6,222
Customer contracts and related relationship		2,900		(517	)		(1,208	)		1,175		2,383		(1,712	)		671
Order backlog		200		—			(200	)		—
Trade names		150		(27	)		(94	)		29		123		(123	)		—
Intangible assets subject to amortization		15,350		(2,734	)		(4,023	)		8,593		12,415		(5,522	)		6,893
Indefinite-lived intangible assets
Trademarks		4,200		(2,094	)		—			2,106		2,106		—			2,106
Total	$	19,550	$	(4,828	)	$	(4,023	)	$	10,699	$	14,521	$	(5,522	)	$	8,999

~~The Company recorded a pre-tax~~There were no impairment ~~charge of $4.8~~ ~~million~~charges for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022, respectively. There was~~ 2023 and 2022.no impairment charge for the three and nine months ended September 30, 2021. See Note 1 – Description of Business, Basis of Presentation and Significant Accounting Policies for discussion of events triggering the impairment assessment of definite-lived and indefinite-lived intangible assets.


in thousands	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Carrying Amount		Accumulated Amortization			Net Book Value
As of December 31, 2021:
December 31, 2022
Definite-lived intangible assets
Developed technology	$	12,100	$	(1,008	)	$	11,092	$	9,909	$	(2,910	)	$	6,999
Customer contracts and related relationship		2,900		(483	)		2,417		2,383		(1,376	)		1,007
Order backlog		200		(100	)		100
Trade names		150		(38	)		112		123		(103	)		20
Intangible assets subject to amortization		15,350		(1,629	)		13,721		12,415		(4,389	)		8,026
Indefinite-lived intangible assets
Trademarks		4,200		—			4,200		2,106		—			2,106
Total	$	19,550	$	(1,629	)	$	17,921	$	14,521	$	(4,389	)	$	10,132

Based on the amount of intangible assets as of ~~September~~June 30, ~~2022,~~2023, the expected amortization expense for each of the next five years and thereafter is as follows:


in thousands	Expected Amortization Expense		Expected Amortization Expense
2022 (remainder)	$	567
2023		2,247
2023 (remainder)			$	1,114
2024		1,891		1,891
2025		1,555		1,555
2026		1,555		1,555
Thereafter		778
2027				778
Total Intangible assets subject to amortization	$	8,593	$	6,893

Note ~~6 — Long-Term Debt~~

There is no short-term and long-term debt outstanding as of September 30, 2022 and December 31, 2021, respectively. In connection with the Business Combination, all outstanding debt with the exception of the Paycheck Protection Program note was paid on June 30, 2021. Refer to Note – 3 Acquisitions. In August 2021, the Company's application for forgiveness of the Paycheck Protection Program note was approved in the full amount of the outstanding principal balance and accrued interest.

~~Table of Contents~~

~~Term Loan and Equipment Advances~~

On December 25, 2018, the Company entered into a loan agreement (the “2018 Loan Agreement”) with Silicon Valley Bank (“SVB”). Pursuant to the 2018 Loan Agreement, the Company could borrow up to a total of $~~3.0~~ ~~million term loans (“2018 Term Loans”) and $7.0~~ million equipment loans (“2018 Equipment Advances”) with access period ended on April 30, 2020 for 2018 Term Loans and June 30, 2019 for 2018 Equipment Advances. Amounts borrowed under the 2018 Loan Agreement were repaid prior to or on June 30, 2021.

In connection with the execution of the 2018 Loan Agreement, the Company entered into a 2018 warrant agreement which granted certain warrants to SVB (the “Warrants”). The Warrants were issued in one initial tranche on December 25, 2018 and three subsequent tranches in 2019 each time the Company made an additional debt draw under the 2018 Loan Agreement. Pursuant to the warrant agreement, SVB had the option to purchase an aggregate of ~~480,520~~ ~~shares of Class A common stock. The warrants had a weighted average exercise price of $0.24~~ ~~per share and were exercisable for a period of~~ 10 years. The Company accounted for all the Warrants issued as equity instruments since the Warrants were indexed to the Company’s common shares and met the criteria for classification in stockholders’ equity. In July 2021, SVB exercised all the outstanding Warrants and the Company issued 472,113 shares of Company's Class A Common Stock, net of exercise price.

~~Paycheck Protection Program Note (“PPP Note”)~~

~~On April 20, 2020, the Company received loan proceeds of approximately $4.9~~ million under the Paycheck Protection Program (“PPP”), offered by the U.S. Small Business Administration (the “SBA”) pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The PPP Note proceeds were available to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves, rent and utilities, and mortgage interest payments. The PPP Note was subject to forgiveness to the extent proceeds were used for payroll costs, including payments required to continue group health care benefits, and certain rent, utility, and mortgage interest expenses (collectively, “Qualifying Expenses”), pursuant to the terms and limitations of the PPP Note.

The Company used the PPP Note amount intended for Qualifying Expenses. During the three months ended March 31, 2021, the Company submitted a forgiveness application to its lender seeking full forgiveness of the PPP Note. On August 24, 2021, the Company received notice from the lender that the Small Business Administration has approved the application for forgiveness of the PPP Note in the full amount.

~~Convertible Notes~~

~~Issuance of Convertible Notes~~

~~From June 2019 through July 2019, the Company issued $14.8~~ ~~million of convertible promissory notes (the “June 2019 Convertible Notes”) to certain investors. The June 2019 Convertible Notes matured on~~ ~~June 10, 2021~~ ~~and accrued interest at~~ ~~2.37% or~~ ~~2.13%, compounded annually on basis of 360-days year of twelve 30-day months. Principal and any accrued but unpaid interest were due and payable at maturity.~~

~~From October 2019 through December 2020, the Company issued $45.0~~ million of convertible promissory notes (the “October 2019 Convertible Notes” and collectively with the June 2019 Convertible Notes, the “Convertible Notes”) to certain investors. The October 2019 Convertible Notes matured on October 1, 2021 and accrued interest at ~~1.69~~%, ~~1.59% or 1.85%, compounded annually on basis of 360-days year of twelve 30-day months. Principal and any accrued but unpaid interest were due and payable at maturity.~~

~~Settlement of Convertible Notes~~

~~On January 28, 2021, the Company entered a stock purchase agreement with certain investors to close the issuance of Series C convertible preferred stock at a cash purchase price of $6.62~~ ~~per share and settle all outstanding Convertible Notes through Series C convertible preferred stock at a conversion price of $1.33~~ ~~or $1.71~~ ~~per share (“Series C Financing”). The Company issued~~ ~~38,323,292~~ ~~shares of Series C Convertible Preferred Shares (pre-combination) for conversion of outstanding Convertible Notes of $61.0~~ ~~million.~~

~~The June 2019 Convertible Notes were settled pursuant to the contractual conversion upon the Next Equity Financing feature with such financing yielding at least $20.0~~ ~~million in a single transaction. The Company credited the net carrying amount of the June 2019 Convertible Notes of $14.5~~ ~~million, including any unamortized debt discount, to Series C convertible preferred stock with no gain or loss recognized.~~

The October 2019 Convertible Notes were settled based on negotiated terms between the Company and the note holders as the Series C Financing did not meet the definition of Next Equity Financing for the October 2019 Convertible Notes. The Company assessed the economics of the settlement of the October 2019 Convertible Notes and concluded that it should be treated as a privately negotiated

~~Table of Contents~~

debt redemption/settlement transaction where debt extinguishment accounting should be applied. Therefore, the Company derecognized the net carrying amount, including any unamortized debt discount, of the October 2019 Convertible Notes of $~~42.6~~ million and recognized the Series C convertible preferred stock issued specifically to settle the October 2019 Convertible Notes at fair value as the reacquisition consideration. Accrued and unpaid interest of $~~0.6~~ million was settled and not paid in cash and therefore it was included in calculating the extinguishment loss. The difference between the net carrying amount of the October 2019 Convertible Notes, plus accrued and unpaid interest, and the reacquisition consideration was recorded as a loss on extinguishment in the condensed consolidated statement of operations for the nine months ended September 30, 2021.

~~The Company issued in aggregate~~ ~~26,727,308~~ ~~shares of Series C convertible preferred stock (pre-combination) to settle the October 2019 Convertible Notes. The fair value of the Series C convertible preferred stock was determined to be $176.9~~ ~~million using the cash purchase price of $6.62~~ ~~per share on January 28, 2021. These October 2019 Convertible Notes had a carrying amount plus accrued and unpaid interest of $43.2~~ ~~million upon settlement. The difference of $133.8~~ ~~million was recognized as a loss on extinguishment on the Company’s condensed consolidated statement of operations for the nine months ended September 30, 2021.~~

~~Bridge Loan~~

~~On May 20, 2021, the Company entered into a short-term promissory note (the “Bridge Loan”) with Pendrell as the lender, pursuant to which Pendrell agreed to make available to the Company up to $20.6~~ ~~million in borrowings. Pendrell is the parent of X-icity Holdings Corporation, the sponsor of Holicity. The interest rate on the Bridge Loan borrowings was a fixed rate of~~ ~~5.00~~% per annum. However, if repaid in full in connection with the closing of the Business Combination, then no interest will be due and payable. The Company was required to pay an upfront fee in the amount of ~~1.00% of the principal amount and an end of term fee in the amount of~~ ~~2.00~~% of the principal amount. The funds drawn on the Bridge Loan may be prepaid by the Company at any time. The Bridge Loan matures upon the earliest of (a) the closing of the Business Combination, (b) 60 days following the abandonment of the Business Combination and (c) the date when the commitment amount is otherwise paid in full or accelerated pursuant to the terms of the Bridge Loan. Under the terms of the Bridge Loan, the Company borrowed $~~10.0~~ ~~million in June 2021, and subsequently paid off the outstanding principal and end of term fee totaling $10.4~~ ~~million on June 30, 2021. Refer to Note – 3 Acquisitions.~~

Note 106 — Fair Value Measurements

The Company measures its financial assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value, as follows:

Level 1 Observable inputs, such as quoted prices in active markets for identical assets or liabilities;

Level 2 Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3 Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company uses the market approach to measure fair value for its financial ~~assets and liabilities.~~assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable ~~assets or liabilities.~~assets.

The carrying amounts of Company's financial instruments, which include cash equivalents, accounts receivable, prepaid expenses, other current assets, accounts payable, accrued liabilities and certain other current liabilities approximate fair value because of their short-term maturities.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring ~~basis (in thousands):~~basis:


in thousands	June 30, 2023
Description	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market account	$	327	$	—	$	—	$	327
Marketable securities
US Treasury securities		7,952		—		—		7,952
Corporate debt securities		—		4,983		—		4,983
Total financial assets	$	8,279	$	4,983	$	—	$	13,262
Liabilities:
Contingent consideration	$	—	$	—	$	14,510	$	14,510
Total financial liabilities	$	—	$	—	$	14,510	$	14,510

As of September 30, 2022

Description

Level 1

Level 2

Level 3

Total

Assets

Cash equivalents:

Money market account

$
17,349

$
—

$
—

$
17,349

Marketable securities

US Treasury securities

15,746

—

—

15,746

Corporate debt securities

—

14,406

—

14,406

Commercial paper

—

48,253

—

48,253

Asset backed securities

—

4,531

—

4,531

Total financial assets

$
33,095

$
67,190

$
—

$
100,285

Liabilities:

Contingent consideration

$
—

$
—

$
42,950

$
42,950

Total financial liabilities

$
—

$
—

$
42,950

$
42,950


	As of December 31, 2021
in thousands									December 31, 2022
Description	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Money market account	$	100,000	$	—	$	—	$	100,000	$	21,909	$	—	$	—	$	21,909
Marketable securities
US Treasury securities										14,713		—		—		14,713
Corporate debt securities										—		16,915		—		16,915
Commercial paper										—		34,698		—		34,698
Asset backed securities										—		2,847		—		2,847
Total financial assets	$	100,000	$	—	$	—	$	100,000	$	36,622	$	54,460	$	—	$	91,082
Liabilities:
Contingent consideration	$	—	$	—	$	13,700	$	13,700	$	—	$	—	$	33,900	$	33,900
Total financial liabilities	$	—	$	—	$	13,700	$	13,700	$	—	$	—	$	33,900	$	33,900

The following table presents a summary of the changes in fair value of the Company's Level 3 financial instruments:


in thousands	Contingent Consideration
Fair value as of December 31, 2022	$	33,900
Gain on change in fair value of contingent consideration		(19,390	)
Fair value as of June 30, 2023	$	14,510

in thousands

Contingent Consideration

Fair value as of December 31, 2021

$
13,700

Loss on change in fair value of contingent consideration included in
other income (expense), net

29,249

Fair value as of September 30, 2022

$
42,949

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in thousands	Contingent Consideration
Fair value as of December 31, 2021	$	13,700
Loss on change in fair value of contingent consideration		17,300
Fair value as of June 30, 2022	$	31,000

In connection with the Apollo Fusion, Inc. ("Apollo") acquisition, the Company was required to make contingent payments in cash and Class A common stock, subject to the Apollo assets achieving certain revenue and contract thresholds from the date of the acquisition through December 31, 2023. The fair value of the contingent consideration related to the acquisition of Apollo ~~acquisition~~Fusion, Inc. (“Apollo”) is classified as a Level 3 financial ~~instruments. To~~instrument. As of June 30, 2023, given the limited number of months remaining in the earn-out period, the Company estimated the fair value of contingent consideration using its current forecast of eligible revenues and contracts through December 31, 2023. In all prior periods since the acquisition closed on July 1, 2021, the Company used a Monte Carlo simulation model to determine the fair value of the contingent consideration due to the ~~Company used a Monte Carlo simulation model.~~significant variability of estimating future revenues and contracts during those prior periods. The Monte Carlo simulation considered assumptions including revenue ~~volatilities,~~volatility, risk free rates, discount rates and additional revenue discount rate. Additionally, other key assumptions used in the Monte Carlo simulation included forecasted revenues from new customers and probability of achieving ~~it.~~them. The following table sets forth ~~the range of inputs for~~ the significant assumptions utilized to determine the fair value of contingent consideration as of ~~September 30, 2022 and~~ December 31, ~~2021:~~2022:

As of September 30, 2022

As of December 31, 2021

Risk-free interest rate

4.08
%

0.56
%
Expected revenue volatility

19.0
%

20.0
%
Revenue discount rate

9.00
%

5.50
%
Discount rate

4.80
%

3.25
%


	December 31, 2022
Risk-free interest rate		4.14	%
Expected revenue volatility		19.00	%
Revenue discount rate		10.00	%
Discount rate		7.50	%

The Company began investing in available-for-sale marketable securities in the first quarter of 2022. These marketable securities are classified as short term investments on the unaudited condensed consolidated balance sheets. The following is a summary of available-for-sale marketable securities as of ~~September~~June 30, ~~2022 (in thousands):~~2023 and December 31, 2022:

The following table presents the breakdown of the available-for-sale marketable securities in an unrealized loss position as of ~~September~~June 30, ~~2022 (in thousands).~~2023.


in thousands	June 30, 2023
	Fair Value		Gross Unrealized Loss
U.S. Treasury securities
Less than 12 months	$	7,952	$	(8	)
Total	$	7,952	$	(8	)

Corporate debt securities
Less than 12 months	$	4,983	$	(9	)
Total	$	4,983	$	(9	)

September 30, 2022

Fair Value

Gross Unrealized Loss

U.S. Treasury securities

Less than 12 months

$
15,746

$
52

Total

$
15,746

$
52

Corporate debt securities

Less than 12 months

$
14,406

$
122

Total

$
14,406

$
122

Commercial paper

Less than 12 months

$
48,253

$
-

Total

$
48,253

$
-

Asset backed securities

Less than 12 months

$
4,531

$
28

Total

$
4,531

$
28


in thousands	December 31, 2022
	Fair Value		Gross Unrealized Loss
U.S. Treasury securities
Less than 12 months	$	14,713	$	(50	)
Total	$	14,713	$	(50	)

Corporate debt securities
Less than 12 months	$	16,915	$	(57	)
Total	$	16,915	$	(57	)

Commercial paper
Less than 12 months	$	34,698	$	—
Total	$	34,698	$	—

Asset backed securities
Less than 12 months	$	2,847	$	(3	)
Total	$	2,847	$	(3	)

The Company does not believe these available-for-sale marketable securities to be other-than-temporarily impaired as of ~~September~~June 30, ~~2022.~~2023. There ~~was a~~were no realized ~~loss of $~~0 ~~and $0.1~~ ~~million~~gains or losses on available-for-sale marketable securities during the three and ~~nine~~six months ended ~~September~~June 30, 2023 and 2022.

Note ~~11 —~~7. Commitments and Contingencies

Legal Proceedings

The Company is party to ordinary and routine litigation incidental to its business. On a case-by-case basis, the Company engages inside and outside counsel to assess the probability of potential liability resulting from such litigation. After making such assessments, the Company makes an accrual for the estimated loss only when the loss is probable, and an amount can be reasonably estimated. The Company and or its current or former directors and officers are currently parties to the following litigation matters:

On February 9, 2022, a putative class action was filed in the United States District Court for the Eastern District of New York styled Artery v. Astra Space, Inc. et al., Case No. 1:22-cv-00737 (E.D.N.Y.) (the “Artery Action”). The complaint alleges that the Company and certain of its current and former officers violated provisions of the Securities Exchange Act of 1934 with respect to certain statements concerning the Company's capabilities and business prospects. The complaint seeks unspecified damages on behalf of a purported class of purchasers of the Company's securities between February 2, 2021 and December 29, 2021. On March 23, 2022, a second putative class

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action was filed in the United States District Court for the Eastern District of New York styled Riley v. Astra Space, Inc., et al., Case No. 1:22-cv-01591 (E.D.N.Y.) (the “Riley ~~Action,” with~~Action”). On November 14, 2022, the Artery Action and the ~~“Securities Actions”). The~~ Riley Action ~~alleges the same claims, based upon similar facts, against the same defendants, and seeks the same damages. The Company expects that the two cases will be~~were consolidated into a single action. Defendants intend to move to dismiss once an amended complaint is filed. The co-lead plaintiffs have requested an extension to file their amended complaint for which the Court has not yet issued action (the “Securities Action”), restyled In re Astra Space Inc. f/k/a ~~decision. The Company believes that~~Holicity Inc. Securities Litigation, and Lead Plaintiffs were appointed. On December 14, 2022, the Securities ~~Actions are without merit and intends~~Action was transferred to defend them vigorously. Due to the early stage of the cases, neither the likelihood that a loss, if any, will be realized, nor an estimate of the possible loss or range of loss, if any, can be determined.

~~On March 8, 2022, a stockholder derivative suit was filed in~~ the United States District Court for the ~~State~~Northern District of ~~Delaware styled Meyer, et al., v. Kemp, et al.,~~California under Case No. ~~22-cv-00308 (D. Del.).~~3:22-cv-08875. On December 28, 2022, Lead Plaintiffs filed their amended complaint. The amended complaint ~~asserts claims against~~alleges that the ~~current members of the Company's board of directors~~Company and ~~certain~~several of its current and former officers ~~for breach~~and directors violated provisions of ~~their fiduciary duty, waste, unjust enrichment, and contribution under~~ the Securities Exchange Act of 1934 ~~based upon~~with respect to certain statements concerning the ~~conduct alleged in the Artery Action.~~Company’s projected launch cadence and payload capacity goals. The ~~plaintiffs seek monetary~~amended complaint seeks unspecified damages ~~in favor~~on behalf of ~~the Company in an unstated amount, reformation~~a purported class of purchasers of the Company’s ~~corporate governance~~securities between February 2, 2021 and internal procedures, restitution including a disgorgement of any compensation, profits or other benefits achieved, and reimbursement of the plaintiffs’ reasonable fees and costs, including attorney's fees. The Company believes that the case is without merit and intendsDecember 29, 2021. Defendants moved to defend it vigorously. Due to the early stage of the case, neither the likelihood that a loss, if any, will be realized, nor an estimate of the possible loss or range of loss, if any, can be determined. On July 8, 2022, the plaintiffs voluntarily dismissed this suit. The dismissal was without prejudice to plaintiffs’ right to re-file the lawsuitdismiss on December 28, 2022. See Note 12 - Subsequent Events for developments in the ~~Court of Chancery of the State of Delaware.~~Securities Action occurring after June 30, 2023.

On April 27, 2022, a stockholder derivative suit was filed in the United States District Court for the Eastern District of New York styled Gonzalez v. Kemp, et al., Case No. 22-cv-02401 (E.D.N.Y.) (the “Gonzalez Action”). On January 25, 2023, the plaintiff filed an amended complaint. The amended complaint asserts claims against ~~the current members~~certain of the Company’s ~~board of directors and certain of its~~ current and former officers and directors for alleged breaches of their fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, ~~and~~ waste of corporate assets, alleged violations of Section 14(a) of the Securities Exchange Act of 1934 (the ~~"Exchange Act"~~“Exchange Act”), and for contribution under Section 10(b) and 21D of the Exchange Act based upon the conduct alleged in the ~~Artery~~Securities Action described above. The plaintiff in the Gonzalez Action seeks monetary damages in favor of the Company in an unstated amount, reforms to the Company’s corporate governance and internal procedures, restitution including disgorgement of any compensation, profits or other benefits received, and reimbursement of the plaintiff's reasonable fees and costs, including ~~attorney's~~attorney’s fees. On February 17, 2023, the Gonzalez Action was transferred to the United States District Court for the Northern District of California under Case No. 3:23-cv-00713. Defendants filed a motion to dismiss the amended complaint on April 18, 2023. On June 12, 2023, the Court in the Gonzalez Action granted the Company’s motion to stay the case until a final judgment has been issued in the Securities Action. The Company believes that the case is without merit and intends to defend it vigorously. Due to the early stage of the case, neither the likelihood that a loss, if any, will be realized, nor an estimate of the possible loss or range of loss, if any, can be determined.

The Company has tendered defense of each of the ~~three~~ foregoing claims under its ~~Directors'~~Directors’ and Officers’ policy. The retention under this policy is $20.0 million.

On or about June 30, 2023, a stockholder derivative suit was filed in the Delaware Court of Chancery styled Capani v. Chris C. Kemp, et al., C.A. No. 2023-0676- (“Capani Action”). The Capani Action appears to be brought by the same plaintiff who filed the first derivative complaint in the District Court of Delaware in early 2022. The first derivative complaint was voluntarily dismissed without prejudice after the Company filed a motion to dismiss. The stockholder subsequently served a books and records demand before filing the present lawsuit. The Company believes that the case is without merit and intends to defend it vigorously. Due to the early stage of the case, neither the likelihood that a loss, if any, will be realized, nor an estimate of the possible loss or range of loss, if any, can be determined.

Indemnification Obligations to former Company Board Members

On May 20, 2022, a putative class action was filed in the Court of Chancery of the State of Delaware styled Newbold v. McCaw et. al., Case No. 2022-0439 (the “Newbold Action”). The complaint alleges that Pendrell Corporation, X-icity Holdings Corporation f/k/a Pendrell Holicity Holdings and certain former officers, directors or controlling stockholders of Holicity, Inc. n/k/a Astra Space, Inc., breached their fiduciary duties to the Company in closing on the Business Combination. The complaint seeks unspecified damages on behalf of a purported class of stockholders of the ~~Company's~~Company’s securities ~~from June 28, 2021 through June 30, 2021.~~during a specified time period.

Neither the Company nor any of its board members are parties in this action. ~~The~~Mr. McCaw, who served as a former member of the Company’s ~~former~~ board, ~~member, Mr. McCaw,~~ is a defendant in this action, but the allegations relate to periods prior to the Business Combination. Astra is obligated to indemnify certain of the defendants in the Newbold Action. The Company has tendered defense of this action under its Directors’ and Officers' Policy. The Company also tendered defense of this claim under the tail policy it was required to purchase in connection with the Business Combination. The retention under ~~that~~the tail policy is $1.5 million. Due to the early stage of this case, neither the likelihood that a loss, if any, will be realized, nor an estimate of the possible loss or range of loss, if any, can be determined. See Note 12 – Subsequent Events for information about developments occurring in the Newbold Action after June 30, 2023.

25Delaware Court of Chancery Approval of Petition relating to Amendment to Increase Authorized Shares

On March 1, 2023, the Company filed a petition in the Delaware Court of Chancery (the “Court of Chancery”) seeking validation of the amendment of its certificate of incorporation in connection with the Business Combination to increase its authorized shares of Common Stock (the “Charter Amendment”) as a result of uncertainty regarding the validity of such amendment given a recent decision of the Court of Chancery.

On March 14, 2023, the Court of Chancery validated and declared effective the Charter Amendment, increasing the Company’s authorized Common Stock from 220,000,000 to 465,000,000, thereby permitting the Company to issue additional shares of Class A and Class B common stock in connection with the Business Combination and thereafter.

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Purchase Commitments

In order to reduce manufacturing lead times and to have access to an adequate supply of components, the Company enters into agreements with certain suppliers to procure component inventory based on the Company's production needs. A significant portion of the Company's purchase commitments arising from these agreements consist of firm and non-cancelable commitments. As of ~~September~~June 30, ~~2022, we~~2023, the Company had $27.1 million outstanding purchase commitments ~~aggregating $39.0~~ ~~million for which~~whose terms run through May 2026. Payments will be made against these supplier contracts as deliveries occur throughout the ~~Company was or will become obligated to make payments within 12 months to 60 months from the execution date of the agreements. Of these, there are agreements containing an aggregate of $32.1~~ ~~million in early termination penalties. For example, one of the supply agreement penalties includes payment of~~ 50~~% of the remaining purchase commitment at any point during the contract~~ term. In another agreement, the Company may terminate the supply agreement by paying the balance on the remaining purchase commitment only after the first anniversary of the commencement date. If the agreement is terminated before the first anniversary, the Company has to pay the entire contract amount of $~~9.6~~ ~~million.~~

Note ~~12 — Convertible Preferred Stock~~

~~Convertible Preferred Stock~~

~~From pre-combination Astra’s inception until the consummation of the Business Combination, approximately $100.2~~ ~~million of cash capital contributions was raised, net of issuance costs, through the issuance of three rounds of convertible preferred equity.~~

The three classes of convertible preferred stock of pre-combination Astra were: Series A convertible preferred stock, Series B convertible preferred stock and Series C convertible preferred stock (collectively, the “Convertible Preferred Stock”). Immediately before the consummation of the Business Combination, the Convertible Preferred Stock of pre-combination Astra consisted of:

Series

Shares Outstanding (pre-combination Astra)

Liquidation
Price Per
Share

Conversion
Price Per
Share

Annual
Noncumulative
Dividend
Rights Per
Share

A

65,780,540

$
0.243233

$
0.243233

$
0.019459

B

70,713,123

1.333008

1.333008

0.106640

C

50,483,785

6.620970

6.620970

0.529680

Total

186,977,448

~~Upon the consummation of the Business Combination in June 2021,~~ ~~186,977,448~~ ~~shares of Convertible Preferred Stock (pre-combination Astra) converted into~~ ~~124,340,003~~ ~~shares of Class A common stock of the Company. The Company no longer had Convertible Preferred Stock authorized, issued or outstanding subsequent to the close of Business Combination in June 2021.~~

On January 28, 2021, concurrent with Series C Financing, the Company amended its certificate of incorporation to add a merger with a special purpose acquisition company (“SPAC Transaction”) as one of the defined Deemed Liquidation events. In addition, upon triggering of the Deemed Liquidation events, the holders of the Convertible Preferred Stock were entitled to receive the greater of their liquidation preference per share and the as converted value per share. As of March 31, 2021, the Company assessed the probability of a SPAC Transaction to be probable and therefore, the Convertible Preferred Stock were considered probable of becoming redeemable.

Subsequent measurement of Convertible Preferred Stock was then required for the three months ended March 31, 2021. The Company elected to apply the current redemption value method to measure the redeemable Convertible Preferred Stock. Under the method, changes in the redemption value were recognized immediately as they occurred and the carrying value of the Convertible Preferred Stock was adjusted to the redemption value at the end of each reporting date. In the absence of retained earnings, adjustments to redemption value were recorded against additional paid-in capital, if any, and then to accumulated deficit. As of March 31, 2021, adjustments to the carrying amount of the Convertible Preferred Stock of $~~1.1~~ ~~billion, reflecting the estimated redemption value of $7.18~~ ~~per share as of March 31, 2021, were treated as deemed dividends and were recognized against additional paid-in capital and accumulated deficit on the consolidated balance sheet.~~

On the Closing Date of the Business Combination, all outstanding Convertible Preferred Stock converted into Class A common stock of the Company, therefore, the Company applied conversion accounting to derecognize the existing carrying amount of the Convertible Preferred Stock and increased additional paid-in capital as of June 30, 2021.

Note 149 — Stock-based Compensation

Stock-based incentive awards are provided to employees under the terms of ~~various Astra equity incentive plans.~~

~~2021 Omnibus Incentive Plan~~

~~In June 2021, the Board of Directors approved the~~Astra's 2021 Omnibus Incentive Plan (the “2021 Plan”)~~, which reserved~~ ~~36.8~~ million shares of Class A common stock for issuance for awards in accordance with the terms of the 2021 Plan. On January 1, 2022, pursuant to the terms of the 2021 Plan, the number of shares of Class A common stock available for issuance under the 2021 Plan increased by ~~13.1~~ ~~million. Similarly, the share reserve increases on January 1 of each year from~~ ~~2023~~ to ~~2031~~ ~~by the lesser of (i)~~ 5~~% of the sum of number of shares of (x) Class A common stock~~ and (y) Class B common stock outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares of Class A common stock as determined by the Board. On June 1, 2022, the shareholders of the Company approved the amendment of 2021 Plan to increase the Class A common stock available for issuance under the 2021 plan by 6 million. The purpose of the 2021 Plan is to advance the Company’s interests by providing for the grant to employees, directors, consultants and advisors of stock and stock-based awards. As of September 30, 2022, ~~16.8~~ ~~million shares remain available for issuance under the plan.~~

~~2021 Employee Stock Purchase Plan~~

~~In June 2021, the Board of Directors approved the~~ 2021 Employee Stock Purchase Plan (the “2021 ESPP”) ~~to reserve~~ ~~5.0~~ million shares of Class A common stock for issuance for awards in accordance with the terms of the ESPP. On January 1, 2022, pursuant to the terms of the 2021 ESPP, the number of shares of Class A common stock available for issuance under the 2021 ESPP increased by ~~2.6~~ ~~million. Similarly, the number of shares of Class A common stock reserved for issuance under the 2021 ESPP will ultimately increase on January 1 of each year from~~ ~~2023~~ to ~~2031~~ ~~by the lesser of (i)~~ 1% of the sum of number of shares of Class A common stock and Class B common stock outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares of Class A common stock as determined by the Board. The purpose of the 2021 ESPP is to enable eligible employees to use payroll deductions to purchase shares of Class A common stock and thereby acquire an interest in the company. Eligible employees are offered shares through a 24~~-month offering period, which consists of four consecutive 6-month purchase periods. Employees may purchase a limited amount of shares of the Company's stock at a discount of up to~~ 15~~% of the lesser of the fair market value at the beginning of the offering period or the end of each 6-month purchase period.~~ ~~0.5~~ ~~million shares were issued under the Employee Stock Purchase Plan during the nine months ended September 30, 2022. As of September 30, 2022,~~ ~~7.2~~ ~~million shares remain available for issuance under the 2021 ESPP. As of September 30, 2022, the Company had $1.1~~ ~~million of unrecognized stock-based compensation expense related to the 2021 ESPP. This cost is expected to be recognized over a weighted-average period of~~ ~~0.93~~ ~~years.~~.

~~2016 Equity Incentive Plan~~

~~In 2016, pre-combination Astra adopted the 2016 Equity Incentive Plan (the “2016 Plan”).~~ Under this Plan, the Board of Directors or a committee appointed by the Board of Directors is authorized to provide stock-based compensation in the form of stock options, stock appreciation rights, restricted stock, and other performance or value-based awards within parameters set forth in the Plan to employees, directors, and non-employee consultants.

In connection with the Business Combination, the Company assumed the 2016 Plan upon closing. Each outstanding and unexercised option (“Astra Option”) was converted, at the exchange ratio established in the BCA, into an option (“New Astra Option”) to acquire shares of the Company’s Class A common stock with the same terms and conditions as applicable to the Astra Option immediately prior to the Business Combination. As of September 30, 2022, there were no shares available for issuance under the plan.

The following table summarizes stock-based compensation expense that the Company recorded in the condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021, respectively:

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For the Three Months
Ended September 30,

For The Nine Months
Ended September 30,

in thousands

2022

2021

2022

2021

Cost of revenues

$
109

$
—

$
806

$
—

Research and development

5,565

1,334

17,133

4,638

Sales and marketing

1,562

15

4,559

70

General and administrative

6,512

1,339

21,082

15,757

Stock-based compensation expense

$
13,748

$
2,688

$
43,580

$
20,465

~~On November 22, 2021, under~~ the 2021 Plan, the ~~Company's compensation committee issued~~ ~~1,047,115~~ ~~PSUs~~Company grants restricted stock units (“RSUs”), performance-based stock units ("PSUs"), time-based stock options and performance stock options ("PSOs") to ~~the employees of Apollo who joined Astra.~~ ~~PSUs are subject to certain performance-based~~its executive officers. RSUs and time-based stock options granted have service-based vesting conditions and would vest over four years with 25% of awards vesting on July 1, 2022, and the remaining 75% vesting quarterly over the remaining 12 quarters beginning on November 15, 2022, only for the portion ofonly. PSUs ~~that is eligible to become vested which will be determined based upon timely satisfaction of~~granted have service and performance conditions. The ~~number of PSUs vested~~service conditions vary for each executive officer and is ~~determined by multiplying the total number of PSUs granted by the percentage of milestones achieved and by the percentage of PSUs that satisfy the time-based vesting condition~~based on ~~such time-vesting date.~~

~~Certain performance conditions for PSUs are subjective and the number of PSUs related to these performance conditions did not meet the criteria for the grant date. Accordingly,~~ ~~523,557~~ ~~PSUs and~~ ~~52,355~~ ~~PSUs related~~their continued service to the ~~performance conditions that are not subjective were considered granted as of November 22, 2021 and January 21, 2022, respectively.~~

Company. Stock option holders have a 10-year period to exercise their options before options expire. In July 2022, the PSU agreements were amended to remove the performance-based vesting conditions and only retain the time-based vesting condition. ~~Therefore, the Company recognized $0.3~~ ~~million and $1.5~~ million compensation costs related to PSUs for the three and nine months ended September 30, 2022, respectively, to reflect the PSUs that satisfied the time-based vesting condition on the time-vesting dates.

~~On September 20, 2021, under the 2021 Plan, the Company’s compensation committee granted~~ ~~3,972,185~~ ~~restricted stock units (“RSUs”),~~ ~~3,426,094~~ ~~time-based stock options and~~ ~~13,016,178~~ performance stock options ("PSOs") to its executive officers. RSUs and time-based stock options granted have service-based vesting conditions only. The service conditions vary for each executive officer and is based on their continued service to the Company. Option holders have a ~~10-year~~ ~~period to exercise their options before options expire.~~ Forfeitures are recognized in the period of occurrence and stock-based compensation costs are recognized based on grant-date fair value as RSUs and time-based stock options vest.

~~PSOs, only eligible~~2023 Bonus Incentive Plan

Under the 2021 Plan, the Board approved the 2023 Bonus Incentive Plan (the "2023 Bonus Plan") on December 12, 2022 for the majority of employees. The 2023 Bonus Plan, in part, provides for performance stock options to be granted to executives, certain key contributors and to the ~~executive officers of~~employees.

On March 8, 2023, the Company ~~are subject~~approved the issuance of an aggregate of 5.3 million PSOs under the 2023 Bonus Plan to certain executives and key contributors, which may be earned for such quarter over a two year period based on meeting certain performance conditions. The performance conditions, as ~~follows,~~further described below, are structured such that the PSOs allocated to each quarter will be earned on a quarterly basis upon the achievement of quarterly Baseline and Stretch Key Performance Indicators ("KPIs") associated with the operations of the Company's Launch Services and Space Products segments. The KPIs are approved by the Compensation Committee at the beginning of each quarter and are communicated to the award holders thereafter, upon such communication

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establishing the measurement date for that quarter's PSO allocation. The KPIs related to the PSOs allocated to the first and second quarter of 2023 were not communicated to the award holders until May 31, 2023; accordingly, the Company has determined May 31, 2023 as the measurement date for these PSO awards.

The Company used the Black-Scholes option pricing-model to calculate the fair value of $0.4 million for the first and second quarter PSOs as of May 31, 2023 using the March 8, 2023 closing price based on fair value inputs as of the grant date. As of June 30, 2023, none of the KPIs for the first and second quarter of fiscal year 2023 were achieved. Accordingly, no stock-based compensation expense has been recognized for PSOs allocated to the first and second quarter of 2023 and awards have no intrinsic value as of June 30, 2023 as the awards will be remeasured with the third quarter allocation of the awards and KPIs.

The Company has not determined the fair value of the PSO awards allocated to the remainder 2023 and 2024 as the KPIs for those awards have not yet been determined or communicated. As a result, the measurement date of this portion of the award has not been achieved and no stock-based compensation expense has been recognized for the awards to date.

Cancellation of Performance Stock Options awards with Service, Performance and Market Conditions

On September 20, 2021, under the 2021 Plan, the Company’s Board granted 13,016,178 performance stock options to its executive officers. Of the performance stock options originally granted, only 9,762,133 remained outstanding due to forfeitures occurring in connection with the resignations of former executive officers. The performance stock options were subject to the achievement of the following milestones and the milestones dodid not need to be achieved in any specific order or sequence:

Milestone A: The Company has had a successful orbital delivery.

Milestone B: The Company has had six orbital launches during a six consecutive month period.

Milestone C: The Company has completed a prototype for a spacecraft that has achieved an orbital launch.

Milestone D: The Company has conducted twenty-six orbital launches during a six consecutive month period.

Milestone E: The Company has achieved an orbital launch for an aggregate of 100 spacecraft.

~~These PSOs also require~~After a milestone is achieved, twenty percent (20%) of the PSO grant would vest on the vesting date immediately following the date that the volume weighted average share price for a period of thirty trading days ~~meet~~has met the share price ~~thresholds~~threshold. For this purpose, a “vesting date” is the February 15, May 15, August 15 or November 15 immediately following the date the share price threshold is achieved and the “share price threshold” is (a) $15.00 following the achievement of ~~$15.00,~~the first milestone; (b) $20.00 following the achievement of the second milestone; (c) $30.00 following the achievement of the third milestone; (d) $40.00 following the achievement of the fourth milestone, and (e) $50.00 following the achievement of the ~~first milestone,~~fifth milestone.

During the second ~~milestone, third milestone, fourth milestone~~quarter, the Board determined that the performance stock options no longer served the goal of driving financial performance and ~~fifth milestone, respectively, before a milestone will be deemed achieved. After each milestone is achieved,~~ 20%long-term shareholder value, nor did they serve as retention tools for the Company’s executive officers. Accordingly, the Board recommended cancellation of the PSOs, ~~will vest on~~subject to stockholder approval.

On June 8, 2023, stockholders approved the vesting date immediately following the date at which the price thresholds are met. For this purpose, a "vesting date" is February 15, May 15, August 15 and November 15 of any applicable year. The milestones must be achieved over a period of approximately ~~five years, with the earliest vesting date of November 15, 2022, and the last vesting date no later than November 15, 2026, if all vesting conditions are met. No unvested portion~~cancellation of the ~~PSOs shall vest after November 15, 2026.~~performance stock options and a proposed framework for a replacement award, to be granted to Mr. Kemp, Dr. London and Mr. Attiq before July 31, 2023, subject to the Board’s approval of the final award terms, including any performance conditions. As of ~~September 30, 2022,~~August 14, 2023, the Board has not approved replacement awards.

As a result of the cancellation of the PSO, without a concurrent replacement award, the cancellation is deemed a settlement of the award with no consideration under ASC 718. As of June 8, 2023, the share price requirements had not been met and on June 8, 2023, the Company assessed the probability of success for the five milestones mentioned above and determined that ~~it is probable that~~only Milestone A has been achieved without the share price threshold. As of the date of cancellation, the Company ~~will achieve Milestone A and~~concluded that achievement of Milestone B ~~within~~was not probable as a result of the ~~requisite period.~~Company’s decision to focus on its Space Products business. Therefore, the Company ~~recognized~~reversed all stock-based compensation expense to date of $~~5.2~~6.8 million ~~and~~associated with Milestone B during the three months ended June 30, 2023. Additionally, the $~~14.2~~3.6 million ~~compensation costs related to PSOs for the three and nine months ended September 30, 2022, respectively. As~~ of ~~September 30, 2022, we had~~ unrecognized stock-based compensation expense ofremaining for Milestone B and $~~32.8~~24.6 million ~~for the milestones that~~unrecognized stock-compensation expense associated with Milestones C - E were not ~~considered probable~~recognized as stock-based compensation as achievement of ~~achievement.~~the performance conditions was determined to not be probable.

~~In April 2021, the Board of Directors approved the acceleration of the vesting of~~ ~~1,900,000~~ ~~pre-combination Astra stock options issued to two executive officers: Kelyn Brannon and Martin Attiq, on December 27, 2020. The Company recognized the remaining~~

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The following table summarizes stock-based compensation (benefit) expense that the Company recorded in the unaudited condensed consolidated statements of $~~7.2~~ ~~million on its Condensed Consolidated Statements of Operations~~operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2023 and 2022:


	Three Months Ended June 30,					Six Months Ended June 30,
in thousands	2023			2022		2023			2022
Cost of revenues	$	—		$	456	$	—		$	697
Research and development		1,336			4,832		3,695			11,568
Sales and marketing		(936	)		1,417		(556	)		2,997
General and administrative		(2,512	)		6,086		77			14,570
Stock-based compensation (benefit) expense	$	(2,112	)	$	12,791	$	3,216		$	29,832

~~In February 2021, the Board of Directors approved the acceleration in vesting of~~ ~~206,250~~ ~~pre-combination Astra stock options that were issued to one employee on May 15, 2020. The remaining unvested options were fully vested upon acceleration.~~ The Company ~~recorded a~~recognized $~~1.4~~0.1 million ~~stock-based~~and $1.2 million compensation ~~expense~~costs related to ~~the modification~~PSUs for the ~~three~~six months ended ~~March 31, 2021.~~June 30, 2023 and 2022, respectively, to reflect the PSUs that satisfied the time-based vesting condition on the time-vesting dates.

As of ~~September~~June 30, ~~2022,~~2023, the Company had $~~103.9~~42.6 million of unrecognized stock-based compensation expense related to all of the Company's stock-based awards. This cost is expected to be recognized over a weighted-average period of ~~3.0~~3.1 years.

~~Secondary Sales~~

In April 2021, four executive officers, Chris Kemp, CEO, Adam London, CTO, Kelyn Brannon, Chief Financial Officer (“CFO”), and Martin Attiq, Chief Business Officer (“CBO”), entered into stock purchase agreements with new investors to sell ~~2,534,793~~, ~~865,560~~, ~~1,500,000~~ ~~and~~ ~~400,000~~ ~~shares, respectively, of Class A common stock of pre-combination Astra, at a purchase price per share of $5.66~~ (“April 2021 Secondary Sales”). No additional stock-based compensation expense was recognized for the three and nine months ended September 30, 2021 as the purchase price was below fair market value of Class A common stock of pre-combination Astra at the time of the sales.

In ~~January 2021, concurrent with Series C Financing,~~ ~~two~~ executive officers, Chris Kemp, founder and Chief Executive Officer (“CEO”), and Adam London, founder and Chief Technology Officer (“CTO”), entered into stock purchase agreements with certain investors including ACME SPV AS, LLC to sell ~~3,775,879~~ ~~and~~ ~~2,265,529~~ shares, respectively, of Founders Convertible Preferred Stock at purchase prices in excess of the estimated fair value at the time of the transactions (“January 2021 Secondary Sales”) to certain investors. Upon the sale, the Founders Convertible Preferred Stock automatically converted into Series C Convertible Preferred Stock. The Company’s board member, Scott Stanford, is a member of ACME SPV AS, LLC and the Company facilitated the January 2021 Secondary Sales. As a result, for the three months ended March 31, 2021, the Company recorded a total of $~~8.2~~ million in stock-based compensation expense for the difference between the price paid by these investors and the estimated fair value of the Founders Convertible Preferred Stock on the date of the transaction.

Stock Options Awards

The following is a summary of stock option activity for the ~~nine~~six months ended ~~September~~June 30, ~~2022:~~2023:


	No. of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Term (in Years)		Aggregate Intrinsic Value

Outstanding – December 31, 2022		16,248,601		$	7.11		8.4	$	9,630
Granted		16,959,558			0.52		8.2		—
Exercised		180,923			0.46		0.4		—
Forfeited/Cancelled		(12,154,477	)		7.41		—		—
Expired		(93,082	)		1.89		—		—
Outstanding – June 30, 2023		21,141,523		$	1.64		8.9	$	64,724

Unvested – June 30, 2023		16,912,151		$	0.28		9.32	$	56,754
Exercisable – June 30, 2023		4,229,372		$	7.07		7.1	$	7,970

No. of
Options

Weighted- Average Exercise Price

Weighted- Average
Remaining
Term
(in Years)

Aggregate Intrinsic
Value

Outstanding – December 31, 2021

20,326,384

$
7.52

9.4

$
22,782,654

Granted

1,242,027

4.85

Exercised

(620,145
)

0.45

Forfeited

(267,189
)

1.18

Expired

(5,067
)

6.75

Outstanding – September 30, 2022

20,676,010

$
7.61

8.7

$
414,014

Unvested – September 30, 2022

520,648

$
8.37

8.86

$
124,254

Exercisable – September 30, 2022

20,155,362

$
3.83

7.6

$
289,760

The Company uses the Black-Scholes option pricing-model to calculate the grant date fair value of time-based and performance-based options. The following table summarizes the assumptions used in estimating the fair value of options granted in the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022:

Time Based Stock Options

Expected terms (years)(1)

5.81

Expected volatility(2)

68.9
%
Risk-free interest rate(3)

1.70
%
Expected dividend rate(4)

-

Grant-date fair value

$
3.20

~~Table of Contents~~


	Six Months Ended June 30,
	2023	2022
Expected terms (years)(1)	6.7	5.8
Expected volatility(2)	97.2%	68.9%
Risk-free interest rate(3)	3.5%	1.7%
Expected dividend rate(4)	—	—
Grant-date fair value	$0.35 - $0.56	$3.20

____________

(1)

The expected term is the length of time the grant is expected to be outstanding before it is exercised or terminated. This number is calculated as the midpoint between the vesting term and the original contractual term (contractual period to exercise). If the option contains graded vesting, then the vesting term would be based on the vesting pattern.

(2)

Expected volatility, or the standard deviation of annualized returns, was calculated based on ~~comparable companies’ reported volatilities.~~the Company's common stock price history for the expected term as of the valuation date.

(3)

Risk-free interest was obtained from USU.S. treasury notes for the expected terms noted as of the valuation date.

(4)

The Company has assumed a dividend yield of zero as it has no plans to declare dividends in the foreseeable future.

The following is a summary of restricted stock units for the ~~nine~~six months ended ~~September~~June 30, ~~2022:~~2023:


	Number of RSUs Outstanding			Weighted- Average Grant Date Fair Value Per Share		Number of RSUs Outstanding			Weighted- Average Grant Date Fair Value Per Share
Outstanding – December 31, 2021		10,678,818		$	9.20
Outstanding – December 31, 2022							16,121,844		$	3.35
Granted		13,760,707			2.51		990,959			0.52
Vested		(2,737,757	)		8.40		(1,818,269	)		4.81
Forfeited		(2,941,954	)		7.18		(3,168,829	)		3.90
Outstanding – September 30, 2022		18,759,814		$	4.73

Outstanding – June 30, 2023							12,125,705		$	2.75

Total fair value as of the respective vesting dates of restricted stock units vested for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was approximately $~~6.5~~0.9 million. As of ~~September~~June 30, ~~2022,~~2023, the aggregate intrinsic value of unvested restricted stock units was $~~11.7~~4.5 million.

The 2021 ESPP, which is maintained by the Company, allows employees to purchase the Company’s common stock at a discount of up to 15% of the lesser of the fair market value at the beginning of the offering period or the end of each six-month purchase period. 0.8 million shares were issued under the 2021 ESPP during the six months ended June 30, 2023. As of June 30, 2023, 9.1 million shares remain available for issuance under the 2021 ESPP. As of June 30, 2023, the Company had $0.2 million of unrecognized stock-based compensation expense related to the 2021 ESPP. This cost is expected to be recognized over a weighted-average period of 0.76 years.

Note 1510 — Loss per Share

Founders Convertible Preferred Stock and Convertible Preferred Stock were participating securities in periods of income, as the Founders Convertible Preferred Stock and Convertible Preferred Stock participated in undistributed earnings on an as-if-converted or as-vested basis. However, the Founders Convertible Preferred Stock and Convertible Preferred Stock, did not share in losses.

The Company computes earnings per share of Common Stock using the two-class method required for participating ~~securities and does not apply the two-class method in periods of net loss.~~securities. Basic and diluted earnings per share were the same for the periods presented as the inclusion of all potential Common Stock outstanding would have been anti-dilutive. Earnings per share calculations for all periods prior to the Business Combination have been retrospectively restated to the equivalent number of shares reflecting the exchange ratio established in the BCA. Subsequent to the Business Combination, earnings per share was calculated based on weighted average number of shares of common stock then outstanding.

The following tables set forth the computation of basic and diluted loss for the three and six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021, and the nine months ended September 30, 2022 and 2021:~~2022:


	For The Three Months Ended September 30,												Three Months Ended June 30,
	2022						2021						2023						2022
(in thousands, except share and per share amounts)	Class A Common			Class B Common			Class A Common			Class B Common			Class A Common			Class B Common			Class A Common			Class B Common
Net loss attributed to common stockholders	$	(157,592	)	$	(41,522	)	$	(12,697	)	$	(3,551	)	$	(11,138	)	$	(2,866	)	$	(65,025	)	$	(17,278	)
Basic weighted average common shares outstanding		210,788,116			55,539,188			201,080,003			56,239,188			215,869,537			55,539,188			209,021,924			55,539,188
Dilutive weighted average common shares outstanding		210,788,116			55,539,188			201,080,003			56,239,188			215,869,537			55,539,188			209,021,924			55,539,188
Loss per share attributable to common stockholders:
Basic and Diluted loss per share	$	(0.75	)	$	(0.75	)	$	(0.06	)	$	(0.06	)	$	(0.05	)	$	(0.05	)	$	(0.31	)	$	(0.31	)


	Six months ended June 30,
	2023						2022
(in thousands, except share and per share amounts)	Class A Common			Class B Common			Class A Common			Class B Common
Net loss attributed to common stockholders	$	(46,819	)	$	(12,078	)	$	(132,684	)	$	(35,332	)
Basic weighted average common shares outstanding		215,288,148			55,539,188			208,569,794			55,539,188
Dilutive weighted average common shares outstanding		215,288,148			55,539,188			208,569,794			55,539,188
Loss per share attributable to common stockholders:
Basic and Diluted loss per share	$	(0.22	)	$	(0.22	)	$	(0.64	)	$	(0.64	)

Table of Contents

For The Nine Months Ended September 30,

2022

2021

(in thousands, except share and per share amounts)

Class A
Common

Class B
Common

Class A
Common

Class B
Common

Net loss attributed to common stockholders

$
(290,145
)

$
(76,985
)

$
(126,985
)

$
(79,532
)
Adjustment to redemption value on Convertible Preferred Stock

—

—

(622,098
)

(389,628
)
Net loss attributed to common stockholders

$
(290,145
)

$
(76,985
)

$
(749,083
)

$
(469,160
)
Basic weighted average common shares outstanding

209,317,361

55,539,188

79,784,524

49,970,071

Dilutive weighted average common shares outstanding

209,317,361

55,539,188

79,784,524

49,970,071

Loss per share attributable to common stockholders:

Basic and Diluted loss per share

$
(1.39
)

$
(1.39
)

$
(9.39
)

$
(9.39
)

There were no preferred dividends declared or accumulated as of ~~September~~June 30, ~~2022.~~2023. The following Class A securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive:


	June 30,
	2023		2022
Stock options		15,879,677		8,166,274
RSUs		12,091,018		15,558,491
Warrants		25,000		—
Total		27,995,695		23,724,765

As of September 30,

2022

2021

Class A
Common

Class A
Common

Stock options

7,139,177

20,752,943

RSUs

18,759,814

9,352,100

Convertible Preferred Stock

—

—

Warrants

—

15,333,309

Total

25,898,991

45,438,352

~~The Class A securities excluded in the computation of diluted shares outstanding were the same for the three and nine months ending September 30, 2022 and September 30, 2021~~ There were no Class B securities that were excluded in the computation of diluted shares outstanding for the three and ~~nine~~six months ~~ending September~~ended June 30, ~~2022~~2023 and ~~September 30, 2021.~~2022.

Note 1611 — Segment Information

The Company reports segment information based on a “management” approach to reflect the operating segments for which the Company’s Chief Executive Officer, as the Chief Operating Decision Maker (“CODM”), makes decisions and assesses performance. Prior to the current reporting period, the Company had a single operating and ~~reportable~~reporting segment. Following commencement of revenue-generating activities for Space Products (as defined below) during the third quarter of fiscal year 2022, the Company restructured the management, operations, and periodic management and internal reporting packages to address the shift in strategy. As a result of these changes, the Company determined that its ~~reportable~~reporting segments had changed and that beginning in the ~~current reporting period~~third quarter of 2022, the Company has two operating and ~~reportable~~reporting segments: Launch Services and Space Products. The Company recast prior period information related to the change in ~~segments, however, there were no revenues or cost of revenues associated to these segments in the prior year.~~segments.

Launch ~~services~~Services segment provides rapid, global, and affordable launch services to satellite operators and ~~governments in partnership with third-party spaceport providers globally, including complementary services that are not part of the Company's fixed pricing.~~governments.

Space Products consist of designing and providing space products based on the customers' needs for a successful satellite ~~launch and other products that the Company may sell in the future.~~

~~The accounting policies of the various segments are the same as those described in Note 2.~~launch.

The following table shows revenue by ~~reportable~~reporting segment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021:~~2022:

~~Table of Contents~~


	Three Months Ended September 30,				Nine Months Ended September 30,					Three months ended June 30,					Six months ended June 30,
(in thousands)	2022		2021		2022			2021
in thousands										2023		2022			2023		2022
Revenues:
Launch services	$	—	$	—	$	5,899		$	—	$	—	$	1,988		$	—	$	5,899
Space products		2,777		—		3,471			—		707		694			707		694
Total revenues:	$	2,777	$	—	$	9,370		$	—	$	707	$	2,682		$	707	$	6,593

Cost of revenues:
Launch services		—		—		28,193			—		—		17,179		$	—	$	28,193
Space products		1,071		—		1,337			—		388		266			388		266
Total cost of revenues:	$	1,071	$	—	$	29,530		$	—	$	388	$	17,445		$	388	$	28,459

Gross profit (loss):
Launch services		-		—		(22,294	)		—	$	—	$	(15,191	)	$	—	$	(22,294	)
Space products		1,706		—		2,134			—		319		428			319		428
Total gross profit (loss):	$	1,706	$	—	$	(20,160	)	$	—	$	319	$	(14,763	)	$	319	$	(21,866	)

The Company evaluates the performance of its ~~reportable~~reporting segments based on segment gross profit. Segment gross profit is segment revenue less segment cost of revenue. Unallocated expenses include operating expenses related to research and development, selling and marketing and general and administrative expenses as they are not considered when management evaluates segment performance.

Table of Contents

The following table reconciles segment gross profit to loss before income taxes for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021:~~2022:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three months ended June 30,						Six months ended June 30,
(in thousands)	2022			2021			2022			2021
in thousands													2023			2022			2023			2022
Gross profit (loss)	$	1,706		$	—		$	(20,160	)	$	—		$	319		$	(14,763	)	$	319		$	(21,866	)
Research and development		32,821			21,724			111,546			44,159			24,395			40,798			55,477			78,725
Selling and marketing		4,052			1,090			13,452			2,229			650			4,636			3,134			9,400
General and administrative		19,222			19,730			60,816			50,712			7,580			20,608			23,262			41,594
Impairment expense		75,116			—			75,116			—
Goodwill impairment		58,251			—			58,251			—
Loss on change in fair value of contingent consideration		11,949			—			29,249			—
Loss (Gain) on change in fair value of contingent consideration														(16,625	)		1,800			(19,390	)		17,300
Interest (income) expense, net		(616	)		(18	)		(1,146	)		1,194			(384	)		(356	)		(1,714	)		(530	)
Other expense (income), net		25			(25,895	)		(314	)		(25,177	)		(1,293	)		54			(1,553	)		(339	)
Loss on extinguishment of convertible notes		—			—			—			131,908
Loss on extinguishment of convertible notes attributable to related parties		—			—			—			1,875
Loss before taxes	$	(199,114	)	$	(16,631	)	$	(367,130	)	$	(206,900	)	$	(14,004	)	$	(82,303	)	$	(58,897	)	$	(168,016	)

The Company does not evaluate performance or allocate resources based on reporting segment’s total assets or operating expenses, and therefore such information is not presented.

All of the Company’s long-lived assets are located in the United States. The Company is subject to International Traffic in Arms Regulations (“ITAR”) and generates all of its revenue in the United States.

~~For the three and nine months ended September 30, 2022, one customer accounted for~~ ~~100% and~~ 37~~% of the Company’s total revenues, which pertained to the revenues within the Space Products segment. In addition, a second customer accounted for~~ 59% of the Company's total revenues for the nine months ended September 30, 2022, which pertained to the revenues within the Launch Services segment. The Company did not generate revenue in the three and nine months ended September 30, 2021.

Note 1712 — ~~Related Party Transactions~~Subsequent Events

~~Cue Health, Inc.~~B. Riley Agreement and Registration Rights Agreement

33Effective July 5, 2023 and in conjunction with the Company entering into the Sales Agreement (defined below), the Company terminated the B Riley Agreement. As of July 5, 2023, B. Riley did not hold any Registrable Securities (as such term is defined in the Registration Rights Agreement). Accordingly, the Company’s obligations under the Registration Rights Agreement were also terminated as of July 5, 2023.

Table of Contents

~~In August 2021,~~Reverse Stock Split

On July 6, 2023, the Company’s board of directors approved the Reverse Stock Split at a ratio of (a) one (1) new share of Class A Common Stock for fifteen (15) shares of Class A Common Stock then issued and outstanding; and (b) one (1) new share of Class B Common Stock for fifteen (15) shares of Class B Common Stock then issued and outstanding. The Reverse Stock Split is expected to be consummated on or before October 2, 2023, by the filing of an amendment to the Company’s Second Amended and Restated Certificate of Incorporation.

The following pro forma loss shares outstanding and per share is provided to show the effect of the reverse stock split for the periods presented:


	Three Months Ended June 30, 2023
	As Reported						Impact of Reverse Stock Split						Revised
	Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock
Net loss attributed to common stockholders	$	(11,138	)	$	(2,866	)							$	(11,138	)	$	(2,866	)
Basic weighted average common shares outstanding		215,869,537			55,539,188			(201,478,234	)		(51,836,575	)		14,391,302			3,702,613
Dilutive weighted average common shares outstanding		215,869,537			55,539,188			(201,478,234	)		(51,836,575	)		14,391,302			3,702,613
Basic and Diluted loss per share	$	(0.05	)	$	(0.05	)	$	(0.72	)	$	(0.72	)	$	(0.77	)	$	(0.77	)

	Three Months Ended June 30, 2022
	As Reported						Impact of Reverse Stock Split						Revised
	Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock
Net loss attributed to common stockholders	$	(65,025	)	$	(17,278	)							$	(65,025	)	$	(17,278	)
Basic weighted average common shares outstanding		209,021,924			55,539,188			(195,087,129	)		(51,836,575	)		13,934,795			3,702,613
Dilutive weighted average common shares outstanding		209,021,924			55,539,188			(195,087,129	)		(51,836,575	)		13,934,795			3,702,613
Basic and Diluted loss per share	$	(0.31	)	$	(0.31	)	$	(4.36	)	$	(4.36	)	$	(4.67	)	$	(4.67	)

	Six Months Ended June 30, 2023
	As Reported						Impact of Reverse Stock Split						Revised
	Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock
Net loss attributed to common stockholders	$	(46,819	)	$	(12,078	)							$	(46,819	)	$	(12,078	)
Basic weighted average common shares outstanding		215,288,148			55,539,188			(200,935,605	)		(51,836,575	)		14,352,543			3,702,613
Dilutive weighted average common shares outstanding		215,288,148			55,539,188			(200,935,605	)		(51,836,575	)		14,352,543			3,702,613
Basic and Diluted loss per share	$	(0.22	)	$	(0.22	)	$	(3.04	)	$	(3.04	)	$	(3.26	)	$	(3.26	)

	Six Months Ended June 30, 2022
	As Reported						Impact of Reverse Stock Split						Revised
	Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock			Class A Common Stock			Class B Common Stock
Net loss attributed to common stockholders	$	(132,684	)	$	(35,332	)							$	(132,684	)	$	(35,332	)
Basic weighted average common shares outstanding		208,569,794			55,539,188			(194,665,141	)		(51,836,575	)		13,904,653			3,702,613
Dilutive weighted average common shares outstanding		208,569,794			55,539,188			(194,665,141	)		(51,836,575	)		13,904,653			3,702,613
Basic and Diluted loss per share	$	(0.64	)	$	(0.64	)	$	(8.90	)	$	(8.90	)	$	(9.54	)	$	(9.54	)

ATM Sales Agreement

On July 10, 2023, the Company entered into a ~~six-month subscription arrangement~~Sales Agreement (the “Sales Agreement”) with ~~Cue Health Inc.~~Roth Capital Partners, LLC ("Roth”). The Sales Agreement provides for the ~~purchase~~offer and sale of ~~COVID-19 test readers and the related test cartridges. Under Cue Health Inc.’s standard subscription arrangement, the Company receives a twenty percent (~~up to $2065.0~~%) discount on each Cue Reader and fourteen percent (~~14%) discount on each test cartridge. Mr. Stanford, a member of the Board and the Company’s Lead Director, serves on the board of directors of Cue Health Inc. Funds affiliated with ACME Capital collectively beneficially own ~~10.4% of the outstanding common stock of Cue Health Inc. Mr. Stanford was not involved in the negotiation~~ million of the Company’s arrangement with Cue Health Inc. The Company conducted its independent evaluation of Cue’s services and determined in its sole judgment Cue’s product and services were the best option for the Company to ensure it could maintain a safe and productive work environment. The Company made purchases of $~~0.2~~ ~~million and $0.8~~ million during the three and nine months ended September 30, 2022. In September 2022, the Company and Cue Health Inc. entered an amendment to the purchase agreement for a last time buy of test cartridges, with the agreement expected to be terminated in the fourth quarter of 2022. No ~~such purchases were made during the three and nine months ended September 30, 2021.~~

~~Convertible Promissory Notes~~

~~In June 2019, the Company~~newly issued ~~promissory convertible notes to A/NPC Holdings LLC and Sherpa Ventures Fund, II LP for gross proceeds of $10.0~~ ~~million and $0.6~~ ~~million, respectively. In November 2020, the Company issued promissory convertible notes to Sherpa Ventures Fund II, LP and Eagle Creek Capital LLC, for gross proceeds of $0.2~~ ~~million and $0.5~~ million, respectively. Some of the Company’s board members at that time were or are related parties of these entities. Nomi Bergman, who was serving as the Company's director when the promissory convertible notes were issued, is a principal of A/NPC Holdings LLC and Scott Stanford, who serves as the Company's director, is a principal of Sherpa Ventures Fund II, LP and a member of Eagle Creek Capital, LLC. In all instances the terms of these transactions were the same as third-party investors.

~~On January 28, 2021, the Company settled the promissory convertible notes through the issuance of Series C convertible preferred stock.~~ ~~7,819,887~~ ~~and~~ ~~469,193~~ ~~shares of Series C convertible preferred stock were issued to A/NPC Holdings LLC and Sherpa Ventures Fund II, LP at a per share price of $1.33~~ ~~to settle $10.4~~ ~~million and $0.6~~ ~~million outstanding principal and accrued interest, respectively. Additionally,~~ ~~264,928~~ ~~and~~ ~~115,771~~ ~~shares of Series C convertible preferred stock were issued to Eagle Creek Capital, LLC and Sherpa Ventures Fund II, LP at a per share price of $1.71~~ ~~to settle $0.5~~ ~~million and $0.2~~ ~~million outstanding principal and accrued interest, respectively. See Note 6 — Long-Term Debt for mechanism of settlement.~~

and expansion of our Astra Spacecraft Engine™ business, capital expenditures, funding strategic investments, working capital and satisfaction of other obligations and other liabilities.

The terms of the Securities Purchase Agreement and Notes (both defined and described below) require the Company to maintain an approved at-the-market equity program and/or equity line that, at all times, shall have available and unused capacity to generate at least $20.0 million of gross proceeds to the Company, which restriction will limit the Company’s ability to use the full capacity of this Sales Agreement while the Senior Notes (defined below) are outstanding.

On or about July 21, 2023, the Delaware Chancery Court denied the defendants’ motion to dismiss the amended complaint.

On August 2, 2023, the Company received an order granting its motion to dismiss the amended complaint in the Securities Action. The plaintiffs in this action have a period of 21 days to file an amended complaint. The Company continues to believe that the Securities Action is without merit and intends to defend it vigorously if the plaintiffs timely file an amended complaint. Due to this right and the early stage of the case, neither the likelihood that a loss, if any, will be realized, nor an estimate of the possible loss or range of loss, if any, can be determined.

On August 4, 2023, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an institutional investor (the “Investor”) pursuant to which the Investor agreed to purchase, and the Company agreed to issue and sell in a registered direct offering to the Investor (the “Offering”), $12.5 million aggregate principal amount of senior secured notes (the “Initial Note”) and warrants (the “Initial Warrants”) to purchase up to 22.5 million shares of the Company’s Class A common stock (the “Class A Common Stock” and such shares of Class A Common Stock issuable upon exercise of the Initial Warrants, (the “Warrant Shares”), subject to customary closing conditions. As described in more detail below, subject to the satisfaction of the conditions in the Purchase Agreement, the Company may issue and sell to the Investor up to an additional $7.5 million aggregate principal amount of senior secured notes (the “Additional Notes” and, together with the Initial Note, the “Notes”) and warrants (the “Additional Warrants” and, together with the Initial Warrants, the “Warrants”) to purchase the aggregate number of shares of Class A Common Stock equal to 65% of the aggregate principal amount of the Additional Notes issued divided by the Market Stock Price (as defined in the Notes).

The Initial Note bears interest at 9.0% per annum, mature on November 1, 2024, and is secured by a first priority security interest in all of the assets of the Company and its subsidiaries. The Initial Warrants are immediately exercisable upon issuance at an exercise price of $0.45 per share, subject to certain adjustments, and expire on August 4, 2028.

The Securities Purchase Agreement contains customary representations, warranties and agreements by the Company, obligations of the parties, termination provisions and closing conditions. Pursuant to the Securities Purchase Agreement, the Company has agreed to indemnify the Investor against certain liabilities. The representations, warranties and covenants contained in the Securities Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. The Securities Purchase Agreement also includes certain covenants that, among other things, limit the Company’s ability to issue certain types of securities for specified periods of time.

Subject to the satisfaction of the conditions in the Securities Purchase Agreement, the Company may issue and sell to the Investor up to an additional $7.5 million aggregate principal amount of Additional Notes (issuable incrementally in up to two separate subsequent closings) and Additional Warrants to purchase the aggregate number of shares of Class A Common Stock equal to 65% of the aggregate principal amount of the Additional Notes issued divided by the Market Stock Price (as defined in the Notes). Certain of those conditions in the Purchase Agreement include, but are not limited to: (i) the daily VWAP (as defined in the Warrants) of the Class A Common Stock on Nasdaq is not less than $1.00, (ii) after giving pro forma effect to the proposed subsequent closings, the Company’s pro forma indebtedness does not exceed certain specified relative percentages of its market capitalization, (iii) the last funding date under the Securities Purchase Agreement was at least 90 days prior to the proposed subsequent closing, (iv) on the subsequent closing date, the Company will have aggregate capacity to generate gross proceeds of at least $20.0 million under an approved at-the-market equity program and/or equity line; and (v) if the Company reports cash and cash equivalents of less than $50.0 million at the end of the calendar quarter immediately preceding the date of such Additional Notes purchase, the Company’s Available Cash (as defined in the Purchase Agreement) on the last calendar day of such quarterly period must be greater than or equal to (x) the sum of the Company’s cash and cash equivalents on the last calendar day of the immediately preceding calendar quarter, less (y) $10.0 million. No offer to sell Additional Notes to the Investor may occur earlier than two trading days following the Company’s public announcement of its earnings for the fiscal year ended December 31, 2023 and no later than August 4, 2024.

Table of Contents

offer, sell, grant any option or right to purchase, issue or otherwise dispose of, including make any filing to do the same, any equity or equity-linked securities, subject to limited exceptions, including without limitation, sales pursuant to the Sales Agreement.

So long as the Notes are outstanding, the Securities Purchase Agreement provides that the Company may not, directly or indirectly, offer, sell, grant any option to purchase or otherwise dispose of any of its or its subsidiaries’ equity, equity-linked, equity equivalent securities or securities convertible into or exercisable for equity (excluding offerings of Class A Common Stock through an approved at-the-market equity program) unless the Company offers certain participation rights to the holders of the Notes, subject to limited exceptions.

So long as any Notes or Warrants are outstanding, the Securities Purchase Agreement also provides that the Company and its subsidiaries may not effect or enter into any “Variable Rate Transactions” (as defined in the Purchase Agreement). Sales of Class A common stock pursuant to an approved at-the-market equity program, including the Sales Agreement, will not be considered Variable Rate Transactions.

The Notes will not be issued pursuant to an indenture. The Initial Notes will mature on November 1, 2024; provided, that the maturity date may be extended for up to an additional year by written agreement of the Company and the holders thereof. The Notes will bear interest at 9.0% per annum, which interest rate would increase to 15.0% per annum upon the existence of an Event of Default (as defined in the Notes) and the Company will be required to make quarterly cash amortization payments. The Notes are be secured by first-priority security interests in all tangible and intangible assets, now owned and hereafter created or acquired, of the Company and its subsidiaries. As additional security for the Notes, the Company is required to maintain a minimum of $15 million unrestricted and unencumbered cash and cash equivalents, $5 million of which must be deposited in a restricted account, which is not accessible to the Company while the Notes are outstanding. Upon issuance of additional Notes up to the maximum borrowing capacity, the Company will be required to maintain a minimum of $20 million unrestricted and unencumbered cash and cash equivalents, $8 million of which must be deposited in a restricted account. which is not accessible to the Company while the Notes are outstanding. The Company is also required to maintain an approved at-the-market equity program and/or equity line that, at all times, shall have available and unused capacity to generate at least $20.0 million of gross proceeds to the Company, which restriction limits the Company’s ability to use the full capacity of the Sales Agreement.

The Company may redeem all (or a portion thereof not less than $5.0 million) of the Notes at a price of 105% of the then-outstanding principal amount at any time. Upon a Fundamental Change (as defined in the Notes), a holder may require the Company to repurchase the Notes at a price equal to 105% of the aggregate principal amount of the Notes to be repurchased.

The Notes impose certain customary affirmative and negative covenants upon the Company, as well as covenants that, among other things, restrict the Company and its subsidiaries from incurring any additional indebtedness or suffering any liens, subject to specified exceptions and restrict the ability of the Company and its subsidiaries from making certain investments, subject to specified exceptions. If an event of default under the Notes occurs, the holders of the Notes can elect to accelerate all amounts due under the Notes for cash equal to 115% of the then-outstanding principal amount of the Notes, plus accrued and unpaid default interest, which accrues at a rate per annum equal to 15% from the date of a default or event of default.

The Investor purchased the Initial Notes at a discount to their face value for a total purchase price of $12.1 million. The Company expects to receive net proceeds of $10.8 million, after deducting the placement agent fee and offering expenses. The Company intends to use the proceeds of the Senior Note for working capital and general corporate purposes.

The Initial Warrants are immediately exercisable upon issuance at an exercise price of $0.45 per Share, subject to certain adjustments. The exercise price of the Warrants, and the number of Warrant Shares potentially issuable upon exercise of the Warrants, will be adjusted proportionately if the Company subdivides its shares of common stock into a greater number of shares or combines its shares of common stock into a smaller number of shares. In addition, until the earlier to occur of (i) such date as the Company has completed Equity Issuances (as defined in the Warrants) after August 4, 2023 for gross proceeds of at least $20.0 million, and (ii) August 4, 2024, if the Company grants, issues or sells or is deemed to have granted, issued or sold, any shares of Class A Common Stock (excluding any Excluded Securities (as defined in the Warrants) for a consideration per share (the “New Issuance Price”) less than a price equal to the Warrant exercise price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Warrant exercise price then in effect will be reduced to an amount equal to the New Issuance Price. The Warrants will also be adjusted in connection with the Reverse Stock Split.

The Warrants will be recognized as a component of permanent stockholders’ equity within additional paid-in-capital on the condensed consolidated balance sheets and will be recorded at the issuance date using a relative fair value allocation method. The Company has determined the fair value of the Initial Warrants at issuance, which will result in a discount on the Initial Note, and will allocate the

proceeds from the offer and sale of the Initial Note proportionately to the Initial Note and to the Initial Warrants, of which $4.8 million will be allocated to the Initial Warrants.

The Company determined the fair value of the Initial Warrants as of August 4, 2023 using the Black-Scholes option pricing model and applying the following assumptions:



Expected terms (years)				5.0
Expected volatility				93.6%
Risk-free interest rate				3.99%
Expected dividend rate				—
Grant-date fair value				$0.40
Exercise Price				$0.45

The Initial Note was issued at 97% of par, resulting in net cash proceeds of $12.1 million, after deducting the $0.4 million discount fee withheld by the lender and before placement agent fee and offering expenses. In connection with entering into the Initial Note, the Company incurred $1.3 million of offering expenses, including agent fees, accounting and legal fees paid directly to the lenders and other direct third-party costs. Total issuance costs also include the fair value of $4.8 million of issuance costs. The Company allocated all costs to the Initial Note including lender discount fees, third-party issuance costs and fair value of warrants for an aggregate of $6.5 million as unamortized discount, which will be amortized to non-cash interest expense over the term of the Initial Note using the effective interest method.

The net proceeds to the Company after deducting lender fees, cash paid to third-parties for issuance costs and the fair value of Warrants will be as follows:


in thousands
Senior Note Principal	$	12,500
Less: lender original issue discount (1)		375
Net cash proceeds		12,125
Less: cash expenses for third-party issuance costs (1)		1,285
Net proceeds after lender fees and third-party issuance costs		10,840
Less: Discount associated with fair value of Warrants (1)		4,811
Senior Note, net proceeds after lender fees, third-party issuance costs and Warrants	$	6,029

(1)

amounts will be accounted for as debt discount and amortized to interest expense over the term of the loan using the effective interest method.

The carrying value of the Initial Note will be presented as follows on the Company consolidated balance sheet and will be referred to as the “Senior Note”:

The effective interest rate on the Senior Note, including the discount accretion is expected to approximate 62.45% as of August 4, 2023.

On August 4, 2023, the Company implemented a strategic restructuring of its workforce. The restructuring involved the reallocation of approximately 50 engineering and manufacturing personnel from Launch Services to Space Products. In addition, the Company also announced that it had reduced its overall workforce by approximately 25% since the beginning of the second quarter, including a reduction of approximately 70 employees on August 4, 2023. The affected employees primarily supported the Company’s launch services, selling, general and administrative and shared services functions and will be paid their base compensation for a period of 60 days consistent with the Company’s normal pay periods.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the financial condition and results of operations of Astra Space, Inc. should be read together with our audited consolidated financial statements as of and for the years ended December 31, 2022 and 2021 and ~~2020 and~~ unaudited ~~interim~~ condensed consolidated financial statements as of and for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, together with related notes thereto. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those projected in these forward-looking statements as a result of various factors, including those set forth in the risk factors previously disclosed in our annual report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the SEC on March ~~31, 2022,~~30, 2023, as updated by factors disclosed in the section titled "Risk Factors" in this Quarterly Report on Form 10-Q ~~and our~~ ("Quarterly ~~Report on Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 4, 2022 and in this Quarterly Report on Form 10-Q.~~Report"). Certain amounts may not foot due to rounding. Unless the context otherwise requires, all references in this section to “the Company” “Astra,” “us,” “our” or “we” refer to Astra Space, Inc. ~~after~~

A discussion regarding our financial condition and results of operations for the ~~closing of the Business Combination on~~three and six months ended June 30, ~~2021,~~2023 and ~~Astra Space Operations, Inc., formerly known as Astra Space, Inc., prior to the~~2022 is presented below.

~~Our~~Astra’s mission is ~~to launch a new generation of launch services and space products~~ to Improve Life on Earth from Space®. by launching a new generation of space products and services. These ~~services~~products and ~~products~~services are enabled by new constellations of small satellites in Low Earth Orbit (“LEO”), which have rapidly become smaller, cheaper, and many times more numerous than ~~legacy~~traditional satellites. ~~Launch vehicles, however, have not evolved in~~We believe that frequent, reliable, dedicated launches and space products enabled by scaled manufacturing are the ~~same way — most rockets remain focused on serving legacy satellites and human spaceflight missions and we aim~~keys to ~~provide~~accelerating the ~~world’s first mass-produced~~growth of the space economy. Currently, our business consists of two segments, a mobile orbital launch ~~system. We manage our~~system (“Launch Services”) and a space products business ~~and report our financial results in two segments: Launch Services and~~ that produces the Astra Spacecraft Engine products (“Space ~~Products.~~Products”).

~~In July~~Astra aims to develop and operate a mass-producible dedicated mobile orbital launch system. Our system consists of a small launch vehicle that can be transported inside standard shipping containers and mobile ground launch infrastructure that we designed to be rapidly deployed anywhere in the world we are licensed to operate and where our spaceports are located. This system is designed by Astra and manufactured in Astra’s vertically-integrated rocket factory in Alameda, California, which we have designed to manufacture and integrate the majority of the components. Our launch system requires a launch site with little more than a concrete pad and we expect to ultimately be able to conduct a launch with six Astra employees at the launch site. Our system is designed to meet the needs of modern LEO satellite constellations, allowing precise and rapid placement of individual satellites into their required orbits. We believe this makes Astra’s system more responsive and affordable than other launch alternatives for the thousands of LEO satellites which commercial companies and governments plan to launch in the coming decade.

We have made significant progress in the development of the system to date. On November 20, 2021, we successfully launched launch vehicle LV0007 into orbit at an inclination of 86.0 degrees, an altitude of 500 kilometers and velocity of 7.61 kilometers per second, making Astra one of the fastest U.S. companies to have successfully demonstrated the orbital placement of a test payload. We commenced paid commercial launch services in 2022. To date, we have conducted three commercial launches and have delivered 23 satellites into low earth orbit. We have conducted launch operations from Pacific Spaceport Complex in Kodiak, Alaska and Cape Canaveral Space Force Station in Cape Canaveral, Florida.

During the third quarter of 2022, we decided to focus on the development and production of the next version of our launch system, which we ~~unveiled~~announced at our inaugural ~~SpaceTech~~Spacetech Day on May 12, 2022. As a result, we have discontinued the production of launch vehicles supported by our ~~current~~previous launch system, Launch System 1, and ~~do not plan to conduct any further commercial launches in 2022.~~ commenced development of our new launch system, Launch System 2. On April 25, 2023, Astra hosted its second annual Spacetech Day at both our Alameda Skyhawk factory and Sunnyvale Oakmead facility where we unveiled Rocket 4, which is part of our Launch System 2.

As part of the development cycle for ~~our new launch system,~~Rocket 4, we expect to conduct one or more test launches of ~~our~~this new launch ~~system~~system. The timing of test launches is driven by our development progress, which has been delayed by resource allocations and prioritization away from Launch Systems development in favor of our Space Products business, primarily focused on the Astra Spacecraft EngineTM. As a result, we expect delays in the ~~later part~~timing of ~~2023, and at this time, do not expect that we will be able to conduct paid commercial~~the initial test launch or launches ~~until 2024~~ using this new launch system. ~~Whether and when we will be able~~Our ability to conduct paid commercial launches in 2024 and beyond will depend ~~in part upon~~on the ultimate timing and success of ~~these~~the initial test ~~launches.~~

launches which will in turn depend on the resources that we are able to devote to Launch Systems development in the coming quarters. Our new launch system is intended to ~~support launch vehicles that will~~ serve a market focused on ~~populating mega constellations.~~delivering LEO satellites directly to their desired orbits, and as such is applicable to deployment and replenishment of both small and large constellations, as well as single-satellite or rapid response missions. We have designed ~~this~~the new version of our launch system to support more payload capacity, greater reliability, and a more frequent launch cadence, which we believe will allow us to offer our customers more variable and dependable ~~services. We have begun discussions~~services, and increases the addressable market that we can serve with ~~customers for whom we agreed to launch payloads on~~ our ~~Rocket 3 series launch vehicles (aka launch system 1.0) and the shift of those flights to our Rocket 4 series (aka~~ Launch ~~System 2).~~Services business.

~~We have also been focusing on the growth of our~~Our Space Products business offers high quality space products ~~business with sales~~to operators of ~~our~~LEO satellite constellations. Currently, through a newly established subsidiary, we offer an industry leading spacecraft engine platform consisting of propulsion systems. Our typical offering consists of the design and delivery of a fully integrated propulsion module comprised of a thruster, a power processing unit, a tank and a feed system, called the Astra Spacecraft EngineTM. The Astra Spacecraft Engine™ can be configured with multiple thrusters and power processing units to handle a wide range of missions, from the smallest earth observation satellites up to large communications satellites with multiple kilowatts of solar power, and is designed to use either Xenon or Krypton as a ~~propulsion engine that assists satellites in achieving and maintaining targeted orbits. Including 14 units in Apollo Fusion’s backlog on July 1, 2021,~~propellant. In 2022, we ~~have received cumulative committed orders for 214~~began delivery of our Astra Spacecraft EnginesTMas to our customers and in 2023, we commenced operation of ~~September 30, 2022, an increase~~our spacecraft engine production facility in Sunnyvale, California.

We have recently added the Spacecraft Propulsion Kit to our space products offering. The Spacecraft Propulsion Kit disaggregates the four subsystems of ~~107.8% compared to June 30, 2022, and 237~~the Astra Spacecraft ~~Engines™ as~~EngineTM module, enabling satellite builders to take advantage of ~~November 2, 2022,~~shorter lead times to access key components of their propulsion system that they can customize and integrate into their spacecraft for their unique missions.

We believe that these two operating segments will create an ~~increase~~integrated space services platform that will allow our customers to focus on innovative applications rather than investing in bespoke satellite development and separately contracting launch services. Our ability to achieve these goals and objectives by our planned timelines are conditional upon a number of ~~130% compared~~factors, including our ability to ~~June 30, 2022. We have also completed~~successfully and timely develop our launch vehicles and our ability to effectively market and sell our services and products. See the ~~delivery of two full programs~~information provided under the heading “Risk Factors” in this prospectus supplement and the accompanying prospectus, and in the documents incorporated by reference into this prospectus supplement and the accompanying prospectus.

On August 4, 2023, we announced a strategic reallocation of our workforce from our Launch Services organization to our Space Products to support our growing customer base and order backlog of its spacecraft engines, which included the reduction of approximately 70 employees primarily supporting our launch services, selling, general and administrative and shared services functions. Cumulative reductions in workforce are expected to result in over $4.0 million of quarterly cost savings beginning in the fourth quarter of 2023, which when combined with ongoing reductions in capital expenditures and operating expenses, is expected to result in substantial reductions to operating cash use over the next several quarters. The restructuring is intended to focus our resources on serving contractual commitments in our Space Products business in the near term and leveraging the growth opportunities in Space Products given customer interest in Astra Spacecraft ~~Engines™~~Engine™.

While we continue to be focused on the development of Rocket 4 and the servicing of its existing launch contracts, the prioritization of its resources away from Launch Services in favor of the Space Products business, including in connection with this strategic restructuring, will affect the timing of our future test launches and thus paid commercial launch operations. As a result, we expect delays in the timing of the initial test launch or launches using this new launch system. Our ability to conduct paid commercial launches in 2024 and beyond will depend on the ultimate timing and success of the initial test launches which will in turn depend on the resources that we are able to devote to Launch Systems development in the coming quarters.

On August 4, 2023, we entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor (the “Investor”) pursuant to which the Investor agreed to purchase, and the Company agreed to issue and sell in a registered direct offering to the Investor (the “Offering”), $12.5 million aggregate principal amount of senior secured notes (the “Initial Note”) and warrants (the “Initial Warrants”) to purchase up to 22.5 million shares of the Company’s Class A common stock (the “Class A Common Stock” and such shares of Class A Common Stock issuable upon exercise of the Initial Warrants, the “Warrant Shares”), subject to customary closing conditions. Subject to the satisfaction of the conditions in the Purchase Agreement, the Company may issue and sell to the Investor up to an additional $7.5 million aggregate principal amount of senior secured notes (the “Additional Notes” and, together with the Initial Note, the “Notes”) and warrants (the “Additional Warrants” and, together with the Initial Warrants, the “Warrants”) to purchase the aggregate number of shares of Class A Common Stock equal to 65% of the aggregate principal amount of the Additional Notes issued divided by the Market Stock Price (as defined in the Notes).

~~Segments~~The Initial Notes bear interest at 9.0% per annum, mature on November 1, 2024, and are secured by a first priority security interest in all of our assets and our subsidiaries. The Initial Warrants are immediately exercisable upon issuance at an exercise price of $0.45 per share, subject to certain adjustments, and will expire on August 4, 2028. The Initial Notes and the Initial Warrants will be referred to in our Condensed Consolidated Financial Statements as the Senior Notes and Warrants, respectively.

~~As discussed in Note 16 – Segments Information~~Net proceeds from the Offering, after deducting the placement agent fees and offering expenses, were approximately $10.8 million. We intend to use the net proceeds from the Offering for general corporate purposes. Our general corporate purposes include, but are not limited to, pursuing the Company’s growth strategies, continuing the development of our Launch System 2 and expansion of the Astra

Spacecraft Engine™ business, capital expenditures, funding strategic investments, working capital and satisfaction of other obligations and other liabilities.

We offered the Notes and the Warrants pursuant to our ~~consolidated financial statements~~effective shelf registration statement on Form S-3 (File No. 333-271589), filed with the SEC on May 2, 2023, as amended by Pre-Effective Amendment No. 1 to the Registration Statement on Form S-3, filed with the Commission on May 4, 2023, as further amended by Pre-Effective Amendment No. 2 to the Registration Statement on Form S-3, filed with the Commission on May 8, 2023, and declared effective by the Commission on May 16, 2023.

Please refer to “Liquidity and Capital Resources” for more information about the terms of the Securities Purchase Agreement, these Notes and Warrants. See also Note 12. Subsequent Events in the Notes to the Condensed Consolidated Financial Statements, included in Part I, Item 1 of this ~~form 10-Q,~~Quarterly Report for additional information including fair value of warrants, discounts and issuance costs and net carrying value of the Senior Note after applying all discounts.

On July 10, 2023, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC ("Roth”) for the offer and sale of our ~~reportable segments changed~~Class A Common Stock (the “ATM Shares”), from time to time through an “at the market offering” program (the “ATM Program”) under which Roth acts as sales agent or principal. The ATM Shares will be issued pursuant to our effective shelf registration statement on Form S-3 (File No. 333-271589), filed with the SEC on May 2, 2023, as amended by Pre-Effective Amendment No. 1 to the Registration Statement on Form S-3, filed with the Commission on May 4, 2023, as further amended by Pre-Effective Amendment No. 2 to the Registration Statement on Form S-3, filed with the Commission on May 8, 2023, and declared effective by the Commission on May 16, 2023. We filed a/ prospectus supplement, dated July 10, 2023, with the SEC in connection with the offer and sale of the ATM Shares, pursuant to which we may offer and sell up to $65.0 million of ATM Shares; provided however that, until the consummation of a reverse stock split (the “Reverse Stock Split”) of all of our issued and outstanding Class A Common Stock and Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), we may only offer and sell 50.0 million ATM Shares pursuant to the terms of the Sales Agreement; provided further that while the Notes are outstanding, we will be required to have available and unused capacity to generate gross proceeds of at least $20.0 million under the ATM Program.

Under the Sales Agreement, we will specify the parameters for the sale of the ATM Shares, including the number of ATM Shares to be issued, the time period during which sales are requested to be made, any limitation on the number of ATM Shares that may be sold in any one trading day and any minimum price below which sales may not be made. Subject to the terms and conditions of the Sales Agreement, Roth may sell the ATM Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act, including sales made directly on Nasdaq in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices and/or any other method permitted by law. We have no obligation to sell any ATM Shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement.

Effective July 5, 2023, in connection with the entry of the Sales Agreement, we terminated the Common Stock Purchase Agreement between us and B. Riley Principal Capital II, LLC (“B. Riley”) dated August 2, 2022. As of July 5, 2023, B. Riley no longer holds Registrable Securities (as such term is defined in the Registration Rights Agreement between us and B. Riley, dated August 2, 2022 (the “Registration Rights Agreement”). Accordingly, our obligations under the Registration Rights Agreement were also terminated as of July 5, 2023.

On July 6, 2023, our board of directors approved a reverse stock split at a ratio of (a) one new share of Class A common stock for 15 shares of Class A common stock then issued and outstanding; and (b) one new share of Class B common stock for 15 shares of Class B common stock then issued and outstanding (the “Reverse Stock Split”). The Reverse Stock Split is expected to be consummated on or before October 2, 2023. Our stockholders had previously approved the Reverse Stock Split at our 2023 Annual Meeting of Stockholders on June 8, 2023, at a ratio in the range of 1-for-5 to 1-for-15, with the final decision of whether to proceed with the reverse stock split and the exact ratio and timing of the reverse stock split to be determined by our board of directors, in its discretion, but no later than June 8, 2024. As of August 14, 2023, the Company has not yet completed the Reverse Stock Split. See Note 12. Subsequent Events to our Condensed Consolidated Financial Statements included in Part I. Item 1 of this Quarterly Report for additional details and the pro forma loss per share for the three and ~~nine~~six months ended ~~September~~June 30, 2023 and 2022. ~~The segment reporting for prior periods has been reclassified to conform~~

In addition to the ~~current period presentation; however, there were no revenues~~Notes and Warrants Offering and ATM Program, we continue to evaluate the financing opportunities available to us to strengthen our financial position and we remained focused on thoughtfully pursuing opportunities to raise additional capital. We have been in discussions with a number of potential lenders and investors and have discussed a range of possible financing transactions, including through the issuance of debt securities or ~~cost~~additional equity securities. The terms of ~~revenues associated~~any such financings, if available, may involve restrictive covenants, may require us to ~~these segments in~~pledge collateral as security and could restrict our ability to manage our business as we had intended. Further, the ~~prior period.~~terms of any such financings may be dilutive to existing investors, may require us to sell equity at a discount

We identify our reporting segments based on the organizational units used by management to monitor performance and make operating decisions. The Company previously had one operating and reportable segment. Following the realignment, the Company now has the following two operating and reportable segments: (i) Launch Services and (ii) Space Products. In conjunction with the realignment of our management and internal reporting in the third quarter of 2022, the Company reclassified assets and liabilities, as well as goodwill, to the reporting units.

~~On March 11, 2020,~~to market prices, provide warrants to purchase additional equity securities and could require us to give an investor certain governance or similar rights to control our management. Moreover, the ~~World Health Organization declared the novel strain~~terms of ~~coronavirus (“COVID-19”) a global pandemic and recommended containment and mitigation measures worldwide. The extent of the impact of the coronavirus pandemic~~any such financings may contain restrictions or impose additional conditions on Astra’s operational and financial performance will depend on various future developments, including variants of the disease, the duration and spread of the outbreak and impact on its customers, suppliers, and employees, all of which is uncertain at this time. Astra believes the COVID-19 pandemic may adversely impact future revenue and results of operations, but Astra is unable to predict at this time the size and duration of this adverse impact. Astra has seen some signs of positive effects for its long-term business prospects and partnerships as a result of the pandemic. The COVID-19 pandemic has created an even greater need for broadband internet access, and businesses are thinking differently about how their workforce can stay connected. There have also been recent government and commercial announcements about continuous investments in this area and we believe this will continue to support the growth of the small satellite market for the foreseeable future.

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including competition from better known and well-capitalized companies, the risk of actual or perceived safety issues and their consequences for our reputation, the potential delisting of our Class A common stock from the NASDAQ Global Select Market, our ability to ~~operate as a going concern and~~issue additional Senior Notes pursuant to the ~~other factors discussed under “Risk Factors” in our Annual Report on Form 10-K for~~terms of the ~~period ended December 31, 2021, filed with~~Securities Purchase Agreement or may require us to prepay all of the SEC on March 31, 2022, as updated by factors disclosed in the section titled "Risk Factors" in this Quarterly Report on Form 10-Q and in our Quarterly Report for the quarter ended June 30, 2022, filed with the SEC on August 4, 2022. We believe the factors discussed below are key to our success.

We commenced paid commercial launch services in 2022, with our launch on February 10, 2022, of launch vehicle LV0008. We have made substantial progress towards demonstrating a monthly launch production capability during the first three quarters of 2022, with a goal of reaching an even more frequent launch production capability in the future with our new Launch System 2.Senior Notes outstanding. As a result, we ~~have decided~~may be required to ~~focus on the~~delay, limit, reduce or terminate our development of our new launch system and thus, have discontinued the production of launch vehicles supported by our current launch system. When we refer to a “commercial launch,” we mean a launch conducted under an FAA commercial launch license.activities or future commercialization efforts.

~~We also commenced delivery~~Given the strength of ~~space products~~the Astra Spacecraft EngineTM business, we have engaged PJT Partners, a global, advisory-focused investment bank, to act as the Company’s financial advisor in connection with future financing activities and to explore potential strategic investments in the Astra Spacecraft EngineTM business to strengthen Astra’s balance sheet. The structure of any such investment is subject to ongoing due diligence and the negotiation of definitive documentation, but may involve the issuance of debt securities or equity securities in which the Astra Spacecraft EngineTM subsidiary is the primary borrower or issuer. In addition, such transaction may require us to give an investor certain rights to control or manage the Astra Spacecraft EngineTM business and may result in such investor receiving preferential returns in connection with any subsequent sale of the business.

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. Preparation of the financial statements requires our management to make a number of judgments, estimates and assumptions relating to the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the ~~second quarter of 2022.~~reporting period. We expect the volume of delivery of our space products would increase in the future as we continue to fulfill our obligations under existing space products contracts and enter into contracts with potential new customers. In late July 2022, the Company entered into a lease agreement for approximately 60,000 square feet of manufacturing facility in Sunnyvale, California having a lease term of 36 months. This new lease facility will enable expansion of our space products production and development capacity, thermal testing capacity.

~~We aim~~consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a ~~cost-efficient dedicated orbital launch system provider. We plan to increase~~high degree of judgment and (2) the ~~maximum payload capacity~~use of different judgments, estimates and assumptions could have a material impact on our ~~launch vehicle to meet customer needs and demands through a process of iterative development and improvement.~~consolidated financial statements. We have made no updates or made additions to our significant ~~investment~~accounting policies as described in our manufacturing facility located in Alameda, California. Please see risk factors previously disclosed in our Annual Report on Form 10-K for the period ended December 31, 2021, filed with the SEC on March 31, 2022, as updated by factors disclosed in the section titled "Risk Factors" in this Quarterly Report on Form 10-Q and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 4, 2022, for factors that could affect our ability to realize benefits from the investment in our manufacturing facility.

We plan to develop, license or acquire core space technologies that we expect to commercialize and incorporate into our launch vehicles, spacecrafts and other infrastructure that we will use to deliver our product and space service offerings. These core technologies including, among other things, electric propulsion and solar power. For example, we acquired propulsion technology through our merger with Apollo Fusion, which we announced on June 2, 2021, and closed on July 1, 2021.

As of September 30, 2022, we were in the preliminary stages of developing our space services offering, but have since decided to put these development efforts on hold as we focus on our primary objectives of developing our new Launch System 2 and the production and delivery of our Astra Spacecraft Engines™. As a result, we do not expect to generate any revenue and are planning to reduce our investments in our space services offerings for the remainder of 2022 and in 2023. We continue to explore opportunities to develop or

partner in the development of our space services offering as it remains a significant part of our long-term business strategy. Once developed, we would expect our space services offering to include providing modular configurable satellite buses for customers, leveraging both in-house and partner-provided subsystem components and in-house design and integration services, as well as operational support of satellites on orbit, to turn-key provision of entire constellations, offering "concept to constellation" in months instead of years. Specifically, we would expect our space services to encompass all aspects of hosted satellite and constellation services, including hosting customer payloads onto our satellites, and delivering services, such as communication services. These services are expected to allow customers to focus on developing innovative payloads rather than having to design or develop complete satellite buses or satellites or constellations, which we will provide, along with ancillary services that are likely to include telemetry, tracking and control ("TT&C"), communications, processing, as well as software development and maintenance.

~~Impairment of long-lived assets, indefinite-lived intangible assets and goodwill~~

As of the third quarter of fiscal year 2022, the Company determined that impairment indicators were present based on the existence of substantial doubt about the Company’s ability to continue as a going concern, a sustained decrease in the Company’s share price and macroeconomic factors. As a result, we performed quantitative impairment testing and recorded a total impairment charge of $133.4 million for the three and nine months ended September 30, 2022. The total impairment charge reflects a $58.3 million charge in goodwill, $2.1 million charge in indefinite-lived intangible assets and $73 million in long-lived assets of Launch Services related to property, plant and equipment. For further information, refer to Note 1 - Description of Business, Basis of Presentation and Significant Accounting Policies ~~Note 4 – Supplemental Financial Information,~~in our 2022 Annual Report.

During the six months ended June 30, 2023, as described below, our critical accounting estimates were updated for the valuation methodology for contingent consideration and ~~Note 5 – Goodwill and Intangible Assets~~the impact of probability assessments on stock-based compensation related to our ~~condensed consolidated financial statements~~performance-based options as compared to those critical accounting estimates previously disclosed in “Critical Accounting Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in ~~Part I, Item 1 of this form 10-Q.~~the 2022 Annual Report.

In connection with the Apollo acquisition, we are required to make contingent payments in cash and Class A common stock, subject to the Apollo assets achieving certain sales and revenue thresholds from the date of the acquisition through December 31, 2023. The fair value of the liabilities for the contingent payments recognized as part of the purchase accounting opening balance sheet as of July 1, 2021 totaled $18.4 million and was estimated by discounting to present value the probability-weighted contingent payments expected to be made using a Monte Carlo simulation model. Assumptions used in this calculation were customer revenue, expected revenue, discount rate and various probability factors. The ultimate settlement of contingent consideration could deviate from current estimates based on the actual results of these financial measures.

As of June 30, 2023, the contingent consideration recognized decreased to $14.5 million as compared to $33.9 million at December 31, 2022. We estimated the fair value of contingent consideration as of June 30, 2023 based on our current forecast of eligible revenues and contracts through December 31, 2023. As result of changes in forecasted revenues subject to milestone payments, we have recognized $16.6 million in gain on changes in fair value of contingent consideration for the three months ended June 30, 2023.

We use the fair value method of accounting for our stock-based awards granted to employees to measure the cost of employee services received in exchange for the stock-based awards. Certain stock options include service, market and performance conditions (“Performance-based stock options”). The fair value of performance-based stock options is estimated on the date of grant using the Monte Carlo simulation model. Awards that include performance conditions are assessed at the end of each reporting period whether those performance conditions are met or probable of being met and involves significant judgment. If such operational milestone becomes probable any time after the grant date, we will recognize a cumulative catch-up expense from the grant date to that point in time. If the related share price milestone is achieved earlier than achievement of the related operational milestone, then the stock-based compensation expense will continue to be recognized over the expected achievement period for the operational milestone. We reverse all previously recognized costs for unvested performance-based stock options in the period it is determined that the operational milestone, or performance condition, is deemed improbable of achievement within the service period.

During the three months ended June 30, 2023, in conjunction with the cancellation of the Performance-based stock options, we assessed the probability of achieving the underlying performance condition and determined it was no longer probable. As a result, we reversed stock-based compensation expenses recognized to date of $6.8 million associated with the awards.

We ~~are an early-stage company and our historical results may not be indicative~~commenced delivery of ~~our future results for reasons that may be difficult to anticipate. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable~~Space Products to our ~~historical or future results~~customers during the year ended December 31, 2022. We recognized revenues of ~~operations.~~$0.7 million for each the three and six months ended June 30, 2023 and 2022, respectively, all of which were related to deliveries made to our Space Products customers.

We commenced our first paid commercial launch ~~which occurred~~ in February 2022 with vehicles LV0008 followed by ~~subsequent~~ paid commercial launches ~~which occurred~~of LV0009 and LV0010 in March and June 2022, respectively. The orbital launch of LV0009 conducted in March 2022, ~~and June 2022. These launches represent the start~~represented our first paid delivery of ~~our paid commercial launch operations. As discussed earlier,~~customer payloads into Earth orbit. In August 2022, we ~~have~~ discontinued the production of launch vehicles supported by our ~~current launch system and do~~Launch System 1. Therefore, we did not ~~plan to~~ conduct any further commercial launches in ~~2022. See “Overview”~~late 2022 as we shifted resources to the development of our Launch System 2. We recognized revenues of $2.0 million and $5.9 million related to our Launch Services activities for ~~more information about our decision to stop producing launch vehicles supported by our current launch system.~~the three and six months ended June 30, 2022, respectively.

We also commenced delivery of space products to our customers during the three and nine months ended September 30, 2022. As we are in the very early stages of developing our space services offering and have decided to put these development activities on hold for the near future, we do not ~~expect~~anticipate any revenues related to ~~generate revenues by delivering space services~~Launch Services in 2023 as we work to develop and test the next version of our ~~customers at this time.~~launch system: Rocket 4 (aka Launch System 2).

Cost of revenues consist primarily of direct material, direct labor, manufacturing overhead, other personnel-related expenses, which include salaries, bonuses, benefits, ~~and~~ stock-based compensation expense, and depreciation expense. Cost of revenues also includes inventory write-downs to reduce the carrying value of inventory related to ~~launch services~~Launch Services when the carrying value exceeds its estimated net realizable value. ~~We anticipate recording write-downs~~

Costs of revenues were $0.4 million and $0.3 million for the three months ended June 30, 2023 and 2022, respectively, and was primarily related to deliveries to our Space Products customers.

As with revenues, we do not anticipate any costs of revenues related to our Launch Services in 2023.

During the second half of 2022, we discontinued paid commercial launches in order to focus on developing our Launch System 2. Out of the $17.2 million cost of revenues for three months ended June 30, 2022, $13.3 million were for inventory ~~over~~write-downs and $3.9 million of cost of launch services. The $13.3 million of inventory write-downs was driven by $10.2 million related to the ~~foreseeable future as we continue to ramp production~~

discontinuance of launch vehicles supported by our ~~new~~current launch ~~system. We expect our~~system and $3.1 million of other write-downs. The cost of ~~revenues to increase in future periods as we sell more~~ launch services does not reflect the actual gross margins as certain inventory values were recorded at net realizable value.

Cost of revenues were $28.5 million for the six months ended June 30, 2022, which included $18.8 million related to inventory write-downs and ~~space products. As we grow into~~$9.6 million related to paid commercial launch activities in the first half of 2022. The $18.8 million of inventory write-downs was driven by $10.2 million related to the discontinuance of launch vehicles supported by our current ~~capacity~~launch system, $5.5 million related to the net realizable value write-downs and ~~execute on cost-reduction initiatives, we expect our gross margins to improve over time.~~$3.1 million of other write-downs.

Our ~~research and development~~R&D expenses consist primarily of internal and external expenses incurred in connection with our research activities and development programs. These expenses include, but are not limited to, development supplies, testing materials, personnel and personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation expense), depreciation expense, amortization of intangible assets, overhead allocation (consisting of various support and facility costs), and consulting fees. ~~Research and development~~R&D costs are expensed as incurred.

We allocate ~~research and development~~R&D costs by function rather than by project, as a significant majority of our historical ~~research and development~~R&D spending was related to the initial development and testing of our underlying technology, including preparation for multiple test launches.

Our current primary research and development objectives focus on the development and finalization of our offerings. The successful development of these offerings involves many uncertainties, including:

A change in the outcome of any of these variables could delay the development of our launch systems and ~~space products,~~Space Products, which in turn could impact the timing of commercialization of our offerings.

AsOur Space Products business is focused on scaling our new production facility, though some R&D activities will continue to further improve the current product, develop and potentially introduce other versions of the Astra Spacecraft EngineTM, and potentially develop and introduce other Space Products to the marketplace.

Currently, as a result of our resource allocations and prioritization away from Launch Systems development in favor of our Space Products business, our Launch Services business is investing in the R&D activities necessary to complete the design, build, and qualification of Launch System 2, which we ~~are developing~~expect will bring significantly more capability to the market as compared to the prior version of our Launch System.

R&D costs were $24.4 million and ~~building our launch~~$40.8 million for the three months ended June 30, 2023 and 2022, respectively. The $16.4 million decrease mainly reflected a $6.1 million reduction in R&D materials costs, $3.5 million reduction in stock-based compensation expense, $3.4 million reduction of personnel-related costs due to lower headcount in R&D departments, $2.8 million reduction of professional services, ~~we have expensed all research~~$2.4 million reduction of depreciation and ~~development~~amortization and $0.3 million decrease in other R&D costs. The decreased R&D costs ~~associated with developing~~were partially offset by the effect of $1.4 million higher labor and ~~building our launch services offering. We expect that our research~~overhead costs capitalized to inventory for the three months ended June 30, 2022, as compared to the three months ended June 30, 2023 and ~~development expenses will~~a $0.7 million increase in insurance costs.

R&D costs were $55.5 million for the ~~short-term~~six months ended June 30, 2023, compared to $78.7 million for the six months ended June 30, 2022. The $23.2 million decrease mainly reflected a $7.9 million reduction in stock-based compensation expense, $5.0 million reduction in personnel-related costs due to lower headcount in R&D departments, $4.9 million reduction in professional services, $3.8 million reduction in R&D materials costs, $2.7 million reduction in depreciation and amortization, $1.7 million reduction of other R&D costs, and $1.1 million reduction in licensed technology costs. The decreased R&D costs were partially offset by the effect of $2.9 million

higher labor and overhead costs capitalized to inventory for the six months ended June 30, 2022, as ~~we invest~~compared to the six months ended June 30, 2023 and a $1.0 million increase in ~~improving and further reducing the costs of our launch system.~~facilities costs.

Sales and marketing expenses consist of personnel and personnel-related expenses (including stock-based compensation expense) for our business development team as well as advertising and marketing expenses. We expect to increase our sales and marketing activities in order to grow our customer base and increase market share in the future.

Sales and marketing expenses were $0.7 million and $4.6 million for the three months ended June 30, 2023 and 2022, respectively. The $3.9 million decrease mainly reflected a $2.4 million reduction in stock-based compensation expense, $1.4 million reduction in personnel-related costs and $0.3 million reduction in depreciation and amortization. The decreased sales and marketing costs were partially offset by a $0.2 million increase in facilities costs.

Sales and marketing expenses were $3.1 million for the six months ended June 30, 2023, compared to $9.4 million for the six months ended June 30, 2022. The $6.3 million decrease mainly reflected a $3.6 million reduction in stock-based compensation expense, $1.8 million reduction in personnel-related costs, $0.7 million reduction of depreciation and amortization and $0.2 million reduction in other sales and marketing costs.

General and administrative expenses consist primarily of personnel and personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation expense) for personnel in executive, finance, accounting, corporate development and other administrative functions. General and administrative expenses also include legal fees, professional fees paid for accounting, auditing, consulting, tax, and investor relations services, insurance costs, ~~and~~ facility costs not otherwise included in ~~research and development~~R&D expenses and costs associated with compliance with the rules and regulations of the SEC and the stock exchange.

General and administrative expenses were $7.6 million and $20.6 million for the three months ended June 30, 2023 and 2022, respectively. The $13.0 million decrease was primarily due to a $8.6 million reduction in stock-based compensation expense, $2.8 million reduction in personnel-related costs, $1.9 million reduction in professional services costs, and a $1.4 million reduction in insurance costs. The decreased general and administrative costs were partially offset by a $1.7 million increase in other general and administrative costs.

General and administrative expenses were $23.3 million for the six months ended June 30, 2023, compared to $41.6 million for the six months ended June 30, 2022. The $18.3 million decrease was primarily due to a $14.5 million reduction in stock-based compensation expense, $2.5 million reduction in personnel-related costs, $2.1 million reduction in insurance costs, and a $1.3 million reduction in professional services costs. The decreased general and administrative costs were partially offset by a $2.1 million decrease in other general and administrative costs.

Gain on change in fair value of contingent consideration of $16.6 million for the three months ended June 30, 2023, as compared to the loss of $1.8 million on the change in fair value of contingent consideration three months ended June 30, 2022, was primarily due to lower revenues forecasted in estimating the fair value of contingent consideration.

Gain on change in fair value of contingent consideration of $19.4 million for the six months ended June 30, 2023, as compared to the loss of $17.3 million on the change in fair value of contingent consideration six months ended June 30, 2022, was primarily due to lower revenues forecasted in estimating the fair value of contingent consideration.

Interest income of $0.4 million for the three months ended June 30, 2023 was unchanged as compared to the corresponding period in 2022.

Interest income was $1.7 million for the six months ended June 30, 2023, compared to interest expense of $0.5 million for the six months ended June 30, 2022. The $1.2 million increase in interest income was primarily due to increased interest income related to investment in marketable securities during the six months ended June 30, 2023.

Other income (expense), net primarily consists of income from government research and development contracts.

Other income was $1.3 million for the three months ended June 30, 2023 as compared to other expense of $0.1 million for the corresponding period in 2022. The increase in other income was primarily due to $1.5 million higher income from government research and development contracts for the three months ended June 30, 2023 as compared to the corresponding prior year period, which is partially offset by other miscellaneous expenses.

Other income, net was $1.6 million for the six months ended June 30, 2023, compared to $0.3 million for the six months ended June 30, 2022. The increase in other income was primarily related to $1.3 million higher income from government research and development contracts, which is partially offset by other miscellaneous expenses.

Our provision for income tax ~~provision~~ consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. We maintain a valuation allowance against the full value of our U.S. and state net deferred tax assets because we believe the recoverability of the tax assets is not more likely than not.

~~Other income (expense), net primarily consists of income from government research and development contracts.~~

and the reported amounts of revenue and expenses during the reporting period. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our consolidated financial statements. Our significant accounting policies are described in Note 2 in our Annual Report on Form 10-K for the year ended December 31, 2021, as updated as applicable in Note 1 to the condensed consolidated financial statements herein.

Except as outlined below, there were no significant changes in our critical accounting estimates during the three and nine months ended September 30, 2022 compared to those previously disclosed in “Critical Accounting Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2021 Annual Report on Form 10-K.

Goodwill and indefinite-lived intangible assets are not subject to amortization. We perform an annual impairment review of goodwill and indefinite-lived intangible assets during the fourth fiscal quarter of each year, and more frequently if we believe that indicators of impairment exist. We compare the fair value of our reporting unit to the respective carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value.

We believe that estimating for goodwill and indefinite-lived intangible assets requires significant judgments that are based on several factors including operating results and market conditions. We estimate fair value through various valuation methods, including the use of discounted expected future cash flows of each reporting unit, as well as the use of the relief-from-royalty method to estimate the fair value of our indefinite-lived intangible asset. During the third quarter of fiscal year 2022, we reorganized our reporting structure and determined to perform an interim quantitative impairment test. As a result, for the nine months ended September 30, 2022, we recognized impairment losses related to goodwill and indefinite-lived intangible assets of $58.3 million and $2.1 million, respectively.

Long-lived assets are primarily comprised of property, plant, and equipment and definite-lived intangible assets. We evaluate long-lived assets for impairment when events or changes in circumstances indicate, in management’s judgement, that the carrying amount of such assets may not be recoverable. Long-lived asset recoverability is measured by comparing the carrying amount of the asset group with its estimated future undiscounted pre-tax cash flows over the remaining life of the primary long-lived asset of the asset group. If the carrying amount exceeds the estimated future undiscounted cash flows as part of the recoverability assessment, an impairment charge is recognized equal to the difference between the carrying amount and fair value of the asset group. The impairment charge is allocated to the underlying long-lived assets in the asset group on a relative carrying amount basis; however, carrying amount after allocated impairment is subject to a floor of fair value on an individual asset basis.

We believe the accounting estimates used in the long-lived asset impairment assessment are critical accounting estimates because of the judgment required in identifying indicators of impairment, determining asset groups, assessing future undiscounted cash flows of the asset groups, and as applicable, evaluating the fair value of the determined asset groups as well as the underlying long-lived assets, once indicators of impairment have been identified. As a result of the reorganization, together with a sustained decrease in the Company’s share price, existence of substantial doubt about the Company’s ability to continue as a going concern, and macroeconomic factors we determined that triggers were present indicating long lived assets may not be recoverable. For the nine months ended September 30, 2022, we concluded that indicators of impairment were present and recorded a non-cash impairment charge on long-lived assets of $70.3 million related to property, plant, and equipment and $2.7 million related to definite-lived intangible assets.

Revenues were $2.7 million for the three months ended September 30, 2022. All of which was related to space products. We commenced delivery of space products to our customers during the three months ended September 30, 2022. No revenues were recognized during the three months ended September 30, 2021.

Revenues were $9.4 million for the nine months ended September 30, 2022 of which $5.9 million related to launch services and $3.4 million related to space products. We commenced paid commercial launch services and delivery of space products during the nine months ended September 30, 2022. We launched launch vehicles LV0008, LV0009 and LV0010 on February 10, 2022, March 15, 2022 and June 12, 2022, respectively, all of which were paid launches. The orbital launch of LV0009 conducted on March 15, 2022, represents our first paid delivery of customer payloads into Earth orbit. No revenues were recognized for the nine months ended September 30, 2021. We do not anticipate any revenues related to our launch services business in 2023 as we work to develop and test the next version of our launch system: Launch System 2.

Cost of revenues were $1.1 million for the three months ended September 30, 2022 which was driven by the cost of space products. The cost of space products does not reflect the actual gross margins as certain inventory values were recorded at net realizable value. No cost of revenues were recognized for the three months ended September 30, 2021.

Cost of revenues were $29.5 million for the nine months ended September 30, 2022 which was primarily driven by recording of $18.8 million of inventory write-downs and $6.9 million of cost of launch services and space products. The $18.8 million of inventory write-downs was driven by $10.2 million related to the discontinuance of launch vehicles supported by our current launch system, $5.5 million related to the net realizable value write-downs and $3.1 million of other write-downs. The cost of launch services does not reflect the actual gross margins as certain inventory values were recorded at net realizable value. In the first nine months of 2022, we conducted our first paid commercial launch and have not yet achieved economies of scale in our manufacturing processes. We also decided to stop paid commercial launches for the remainder of 2022 so that we can focus on developing our new launch system. As a result, we will continue to incur negative gross margins for the remainder of 2022. No cost of revenues were recognized for the nine months ended September 30, 2021.

Research and development costs were $32.8 million for the three months ended September 30, 2022, compared to $21.7 million for the three months ended September 30, 2021. The $11.1 million increase mainly reflected a $4.3 million increase in stock-based compensation expense, a $2.3 million increase in depreciation and amortization expense, a $2.3 million increase in third party consulting and recruitment costs offset by a $1.2 million decrease in technology licensed and software subscription licenses related expenses with the remainder due to changes in other research and development expenses. These increases were to support our product roadmap and launch services.

Research and development costs were $111.5 million for the nine months ended September 30, 2022, compared to $44.2 million for the nine months ended September 30, 2021. The $67.4 million increase mainly reflected a $24.5 million increase in personnel-related costs due to headcount increases in research and development departments, a $9.7 million increase in research and development materials expense, a $13.3 million increase in stock-based compensation expense, a $7.8 million increase in third party consulting and recruitment costs, a $6.7 million increase in depreciation and amortization expense and a $0.7 million increase in technology licensed and software subscription licenses related expenses with the remainder due to changes in other research and development expenses. These increases were to support our product roadmap and launch services.

Sales and marketing expenses were $4.1 million for the three months ended September 30, 2022, compared to $1.1 million for the three months ended September 30, 2021. The $3.0 million increase mainly reflected a $1.5 million in stock-based compensation expense, $1.3 million increase in personnel-related costs, with the remainder due to changes in other sales and marketing expenses. These increases were to support business development and marketing activities.

Sales and marketing expenses were $13.5 million for the nine months ended September 30, 2022, compared to $2.2 million for the nine months ended September 30, 2021. The $11.2 million increase mainly reflected a $4.7 million increase in personnel-related costs, a $4.5 million in stock-based compensation expense and a $0.8 million increase in depreciation expense with the remainder due to changes in other sales and marketing expenses. These increases were to support business development and marketing activities.

General and administrative expenses were $19.2 million for the three months ended September 30, 2022, compared to $19.7 million for the three months ended September 30, 2021. The $0.5 million decrease was primarily due to a $5.7 million decrease in insurance related expenses, $4.3 million decrease from transaction costs incurred and expensed by the Company in relation to the Business Combination, offset by a $5.1 million decrease in stock-based compensation expense, a $1.6 million increase in third party consulting and recruitment costs, $0.7 million increase in employee costs due to increased headcount, $0.3 million increase in accounting, audit and legal related fees which is partially with the remainder due to changes in facilities costs, IT equipment fees, and other services.

General and administrative expenses were $60.8 million for the nine months ended September 30, 2022, compared to $50.7 million for the nine months ended September 30, 2021. The $10.1 million increase was primarily due to a $11.1 million increase in employee costs due to increased headcount, a $5.3 million increase in stock-based compensation expense, a $4.0 million increase in accounting, audit and legal related fees, a $1.6 million increase in third party consulting and recruitment costs offset by $8.0 million decrease from transaction costs incurred and expensed by the Company in relation to the Business Combination, $2.0 million decrease in insurance related expenses with the remainder due to changes in facilities costs, IT equipment fees, and other services.

Impairment expense was $75.1 million for the three and nine months ended September 30, 2022 and was triggered by the existence of substantial doubt about the Company’s ability to continue as a going concern, a sustained decrease in the Company’s share price and macroeconomic factors. The impairment expense reflects charges of $70.3 million in property, plant and equipment, $2.7 million in definite-lived intangible assets, and $2.1 million in indefinite-lived intangible assets. No impairment charges were recorded for the three and nine months ended September 30, 2021.

Goodwill impairment was $58.3 million for the three and nine months ended September 30, 2022 and was triggered by the existence of substantial doubt about the Company’s ability to continue as a going concern, a sustained decrease in the Company’s share price and other macroeconomic factors. The expense reflects the full impairment of the Company’s goodwill balance. No goodwill impairment was recorded for the three and nine months ended September 30, 2021.

Loss on change in fair value of contingent consideration of $11.9 million and $29.2 million for the three and nine months ended September 30, 2022, respectively, was due to higher revenues forecasted in estimating the fair value of contingent consideration. No loss on change in fair value of contingent consideration was recorded for the three and nine months ended September 30, 2021.

Interest income was $0.6 million for the three months ended September 30, 2022, compared to interest expense of less than $0.1 million for the three months ended September 30, 2021. The $0.6 million increase in interest (expense) income, net was primarily due to the settlement of outstanding debt during the year ended December 31, 2021. Therefore, we did not incur any interest expense during the period and an increase of $0.4 million in interest income related during the three months ended September 30, 2022.

Interest income was $1.1 million for the nine months ended September 30, 2022, compared to interest expense of $1.2 million for the nine months ended September 30, 2021. The $1.7 million increase in interest (expense) income, net was primarily due to the settlement of outstanding debt during the year ended December 31, 2021. Therefore, we did not incur any interest expense during the period and an increase of $0.8 million in interest income related to investment in marketable securities during the nine months ended September 30, 2022.

Other expense, net was less than $0.1 million for the three months ended September 30, 2022, compared to other income, net of $25.9 million for the three months ended September 30, 2021. The $26.0 million decrease in other income was primarily due to $20.4 million in income from change in fair value of warrant liability, $4.9 million in income from a gain on forgiveness of PPP Note and $0.6 million in income from government research and development contracts for the three months ended September 30, 2021.

Other income, net was $0.3 million for the nine months ended September 30, 2022, compared to other income, net of $25.2 million for the three months ended September 30, 2021. The $24.9 million decrease in other income was primarily due to $20.4 million in income from change in fair value of warrant liability, $4.9 million in income from a gain on forgiveness of PPP Note and $0.6 million in income from government research and development contracts for the nine months ended September 30, 2021 offset by $0.8 million due to a nonrecurring payment to one of our investors for the nine months ended September 30, 2021.

~~No loss on extinguishment of convertible notes was recorded for the three months ended September 30, 2022 and 2021.~~

No loss on extinguishment of convertible notes was recorded for the nine months ended September 30, 2022. Loss on extinguishment of convertible notes of $131.9 million was recorded for the nine months ended September 30, 2021 due to the settlement of convertible notes on January 28, 2021.

~~No loss on extinguishment of convertible notes attributable to related parties was recorded for the three months ended September 30, 2022 and 2021.~~

No loss on extinguishment of convertible notes attributable to related parties was recorded for the nine months ended September 30, 2022. Loss on extinguishment of convertible notes attributable to related parties of $1.9 million was recorded for the nine months ended September 30, 2021 due to the settlement of convertible notes attributable to related parties on January 28, 2021.

We did not incur income tax expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022.~~

~~We recorded an income tax benefit of $0.4 million as the result of Apollo acquisition for the three months~~2023 and ~~nine months ended September 30, 2021.~~

~~No adjustment to redemption value on convertible preferred stock was recorded for the three months ended September 30,~~ 2022.

No adjustment to redemption value on convertible preferred stock was recorded for the nine months ended September 30, 2022. Adjustment to redemption value on Convertible Preferred Stock of $1,011.7 million for the nine months ended September 30, 2021 was recorded due to the re-measurement of Convertible Preferred Stock to its redemption value due to the likelihood of a redemption event becoming probable.

~~The following section discusses our principal liquidity and capital resources as well as our primary liquidity requirements and uses of cash.~~ Our cash and cash equivalents are maintained in highly liquid investments with remaining maturities of 90 days or less at the time of purchase. ~~We believe our cash equivalents are liquid and accessible.~~

We measure liquidity in terms of our ability to fund the cash requirements of our research and development activities and our current business operations, including our capital expenditure needs, contractual obligations and other commitments. Our current liquidity needs relate to our business operations, research and development activities, mainly in connection with the ongoing development of our technology, products and services, lease obligations and capital expenditures, which primarily relate to the development of our manufacturing ~~facility.~~facilities.

Given our current liquidity position and historical operating losses, we believe there is substantial doubt that we can continue as a going concern. Substantial doubt about an entity’s ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ~~See Part II, Item 1A “Risk Factors” for information about the risks related to our ability to continue operating as a going concern.~~

We have, however, prepared the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report ~~on Form 10-Q~~ on a going concern basis, assuming that our financial resources will be sufficient to meet our capital needs over the next twelve months. Accordingly, our financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

As of ~~September~~June 30, ~~2022,~~2023, our existing sources of liquidity included cash and cash equivalents of ~~$67.6~~$13.4 million and marketable securities of ~~$82.9~~$12.9 million. We have a limited history of operations and have incurred negative cash flows from operating activities and loss from operations in the past as reflected in the accumulated deficit of ~~$1,775.5 million~~$1.9 billion as of ~~September~~June 30, ~~2022.~~2023. We expect to continue to incur operating losses due to the investments we intend to make in ~~its~~our business, including the development of our products and services, although we expect those losses to be offset by revenues recognized through the delivery of our ~~space products~~Space Products in 2023. ~~Management remains~~We remain focused on managing ~~its~~ cash expenditures, including but not limited to, reducing ~~its~~ capital expenditures, consulting services and ~~re-focusing its~~limiting hiring ~~efforts.~~efforts to key positions within our Space Products business. On August 4, 2023, we implemented a strategic restructuring, reallocating approximately 50 engineering and manufacturing personnel from Launch Services to Space Products. This reallocation includes a combination of permanent reassignments and temporary assignments to support customer programs and increasing production and test capacity through the end of the year. In addition ~~Management continues~~to this reallocation, we have reduced our overall workforce by approximately 25% since June 30, 2023, including a reduction of approximately 70 employees that was announced on August 4, 2023. The affected employees primarily supported the Company’s launch services, selling, general and administrative and shared services functions and will be paid their base compensation for a period of 60 days consistent with the Company’s normal pay periods.

In addition, we continue to evaluate opportunities to strengthen our financial position, including through the issuance of additional equity securities or by entering into new financing arrangements, as ~~appropriate.~~appropriate and we remain focused on thoughtfully pursuing opportunities to raise additional capital. To that end, on July 10, 2023, we entered into a Sales Agreement with Roth Capital Partners LLC so that we could sell shares of our Class A common stock in at-market transactions. We have not received significant proceeds from sales of our Class A common stock under the ATM Program since its inception. See “ATM Program” below for more information. We also entered in a securities purchase agreement and commenced an offering of Notes and Warrants, which closed on August 4, 2023. We received net proceeds from the Notes and Warrant Offering of $10.8 million. See “Notes and Warrant Offering” below for more information.

We have also been in discussions with a number of potential lenders and investors and have discussed a range of possible financing transactions, including through the issuance of debt securities or additional equity securities. The terms of any such financings, if available, may involve restrictive covenants, may require us to pledge collateral as security and could restrict our ability to manage our business as we had intended. Further, the terms of any such financings may be dilutive to existing investors, may require us to sell equity at a discount to market prices, provide warrants to purchase additional equity securities and could require us to give an investor certain

governance or similar rights to control our management. As a result, we may be required to delay, limit, reduce or terminate our development activities or future commercialization efforts.

Given the strength of the Astra Spacecraft Engine™business, we have engaged PJT Partners, a global, advisory-focused investment bank, to act as the Company’s financial advisor in connection with future financing activities and to explore potential strategic investments in the Astra Spacecraft EngineTM business to strengthen Astra’s balance sheet. The structure of any such investment is subject to ongoing due diligence and the negotiation of definitive documentation, but may involve the issuance of debt securities or equity securities in which the Astra Spacecraft EngineTM subsidiary is the primary borrower or issuer. In addition, such transaction may require us to give an investor certain rights to control or manage the Astra Spacecraft EngineTM business and may result in such investor receiving preferential returns in connection with any subsequent sale of the business.

On August 4, 2023, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an institutional investor (the “Investor”) pursuant to which the Investor agreed to purchase, and we agreed to issue and sell in a registered direct offering to the Investor (the “Offering”), $12.5 million aggregate principal amount of senior secured notes (the “Initial Note”) and warrants (the “Initial Warrants”) to purchase up to 22.5 million shares of the Company’s Class A common stock (the “Class A common stock” and such shares of Class A common stock issuable upon exercise of the Initial Warrants, the “Warrant Shares”), subject to customary closing conditions. As described in more detail below, subject to the satisfaction of the conditions in the Purchase Agreement, we may issue and sell to the Investor up to an additional $7.5 million aggregate principal amount of senior secured notes (the “Additional Notes” and, together with the Initial Note, the “Notes”) and warrants (the “Additional Warrants” and, together with the Initial Warrants, the “Warrants”) to purchase the aggregate number of shares of Class A common stock equal to 65% of the aggregate principal amount of the Additional Notes issued divided by the Market Stock Price (as defined in the Notes).

The Initial Note bears interest at 9.0% per annum, mature on November 1, 2024, and is secured by a first priority security interest in all of our assets and those of our subsidiaries. The Initial Warrants are immediately exercisable upon issuance at an exercise price of $0.45 per share, subject to certain adjustments, and expire on August 4, 2028.

The Securities Purchase Agreement contains customary representations, warranties and agreements by us, obligations of the parties, termination provisions and closing conditions. Pursuant to the Securities Purchase Agreement, we have agreed to indemnify the Investor against certain liabilities. The representations, warranties and covenants contained in the Securities Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. The Securities Purchase Agreement also includes certain covenants that, among other things, limit our ability to issue certain types of securities for specified periods of time.

Subject to the satisfaction of the conditions in the Securities Purchase Agreement, we may issue and sell to the Investor up to an additional $7.5 million aggregate principal amount of Additional Notes (issuable incrementally in up to two separate subsequent closings) and Additional Warrants to purchase the aggregate number of shares of Class A common stock equal to 65% of the aggregate principal amount of the Additional Notes issued divided by the Market Stock Price (as defined in the Notes). Certain of those conditions in the Purchase Agreement include, but are not limited to: (i) the daily VWAP (as defined in the Warrants) of the Class A Common Stock on Nasdaq is not less than $1.00, (ii) after giving pro forma effect to the proposed subsequent closings, our pro forma indebtedness does not exceed certain specified relative percentages of our market capitalization, (iii) the last funding date under the Securities Purchase Agreement was at least 90 days prior to the proposed subsequent closing, (iv) on the subsequent closing date, we will have aggregate capacity to generate gross proceeds of at least $20.0 million under an approved at-the-market equity program and/or equity line; and (v) if we report cash and cash equivalents of less than $50.0 million at the end of the calendar quarter immediately preceding the date of such Additional Notes purchase, our Available Cash (as defined in the Purchase Agreement) on the last calendar day of such quarterly period must be greater than or equal to (x) the sum of our cash and cash equivalents on the last calendar day of the immediately preceding calendar quarter, less (y) $10.0 million. No offer to sell Additional Notes to the Investor may occur earlier than two trading days following our public announcement of our earnings for the fiscal year ended December 31, 2023 and no later than August 4, 2024.

The Securities Purchase Agreement also provides that for (i) 60 calendar days after August 4, 2023 and (ii) 45 days after each subsequent closing date pursuant to the Securities Purchase Agreement, we and our subsidiaries may not, directly or indirectly, register, offer, sell, grant any option or right to purchase, issue or otherwise dispose of, including make any filing to do the same, any equity or equity-linked securities, subject to limited exceptions, including without limitation, sales under the ATM Program.

So long as the Notes are outstanding, the Securities Purchase Agreement provides that we may not, directly or indirectly, offer, sell, grant any option to purchase or otherwise dispose of any of its or its subsidiaries’ equity, equity-linked, equity equivalent securities or securities convertible into or exercisable for equity (excluding offerings of Class A common stock through an approved at-the-market equity program) unless the Company ~~believes~~offers certain participation rights to the holders of the Notes, subject to limited exceptions.

So long as any Notes or Warrants are outstanding, the Securities Purchase Agreement also provides that itwe and our subsidiaries may not effect or enter into any “Variable Rate Transactions” (as defined in the Purchase Agreement). Sales of Class A common stock pursuant to an approved at-the-market equity program, including the Sales Agreement, will not be considered Variable Rate Transactions.

The Notes were not issued pursuant to an indenture. The Initial Notes (which are referred to in our Condensed Consolidated Financial Statements as the “Senior Note”) will mature on November 1, 2024; provided, that the maturity date may be extended for up to an additional year by our written agreement with the holders thereof. The Notes bear interest at 9.0% per annum, which interest rate would increase to 15% per annum upon the existence of an Event of Default (as defined in the Notes) and we will be required to make quarterly cash amortization payments. The Notes are secured by first-priority security interests in all tangible and intangible assets, now owned and hereafter created or acquired, of us and our subsidiaries. As additional security for the Notes, we are required to maintain a cash balance of $5.0 million in a restricted account, which is not accessible to us while the Notes are outstanding. We are also required to maintain an approved at-the-market equity program and/or equity line that, at all times, shall have available and unused capacity to generate at least $20.0 million of gross proceeds to us, which restriction limits our ability to use the full capacity of the Sales Agreement.

We may redeem all (or a portion thereof not less than $5.0 million) of the Notes at a price of 105% of the then-outstanding principal amount at any time. Upon a Fundamental Change (as defined in the Notes), a holder may require that we repurchase the Notes at a price equal to 105% of the aggregate principal amount of the Notes to be repurchased.

The Notes impose certain customary affirmative and negative covenants upon us, as well as covenants that, among other things, restrict the Company and its subsidiaries from incurring any additional indebtedness or suffering any liens, subject to specified exceptions and restrict the ability of us and our subsidiaries from making certain investments, subject to specified exceptions. If an event of default under the Notes occurs, the holders of the Notes can elect to accelerate all amounts due under the Notes for cash equal to 115% of the then-outstanding principal amount of the Notes, plus accrued and unpaid default interest, which accrues at a rate per annum equal to 15% from the date of a default or event of default.

The Investor purchased the Initial Notes at a discount to their face value for a total purchase price of $12.1 million. We received net proceeds of $10.8 million, after deducting the placement agent fee and offering expenses.

The Initial Warrants are immediately exercisable upon issuance at an exercise price of $0.45 per Share, subject to certain adjustments. The exercise price of the Warrants, and the number of Warrant Shares potentially issuable upon exercise of the Warrants, will be adjusted proportionately if we subdivide our shares of common stock into a greater number of shares or combines our shares of common stock into a smaller number of shares. In addition, until the earlier to occur of (i) such date as the Company has completed Equity Issuances (as defined in the Warrants) after August 4, 2023 for gross proceeds of at least $20.0 million, and (ii) August 4, 2024, if the Company grants, issues or sells or is deemed to have granted, issued or sold, any shares of Class A common stock (excluding any Excluded Securities (as defined in the Warrants) for a consideration per share (the “New Issuance Price”) less than a price equal to the Warrant exercise price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Warrant exercise price then in effect will be reduced to an amount equal to the New Issuance Price. The Warrants will also be adjusted in connection with the Reverse Stock Split.

On August 2, 2022, we entered into a $100.0 million Class A common stock purchase agreement with B. Riley to support working capital and other general corporate needs. No shares were sold to B. Riley under this Agreement and effective July 5, 2023, we terminated this agreement so that we could enter into a Sales Agreement with Roth Capital Partners LLC (“Roth”) on July 10, 2023.

The Sales Agreement provides for the offer and sale of up to $65.0 million of our newly issued Class A common stock, par value $0.0001 per share, from time to time through an “at the market offering” program. We will specify the parameters for the sale of the shares of Class A common stock, including the number of shares to be issued, the time period during which sales are requested to be made, any limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. We may offer and sell up to $65.0 million of shares of Class A common stock pursuant to the Sales Agreement; provided however that, until the consummation of a reverse stock split of all of our issued and outstanding Class A common stock and Class B common stock, par value $0.0001 per share, we may only offer and sell 50 million shares of Class A common stock pursuant to the terms of the Sales Agreement. See “Compliance with Continued Listing Standards of the Nasdaq Capital Market” for information on the expected timing of our reverse stock split. Actual sales of Class A Common stock under the Sales Agreement will depend on a variety of factors including, among other things, market conditions and the trading price of the Class A Common Stock, and the full amount of capital may not be fully realized. The terms of the Securities Purchase Agreement and Initial Notes require that we maintain an approved at-the-market equity program and/or equity line that, at all times, shall have available and unused capacity to generate at least $20.0 million

of gross proceeds to the Company, which restriction will limit the Company’s ability to use the full capacity of this Sales Agreement while the Notes are outstanding.

We intend to use the net proceeds from both our Notes and Warrants Offering and sales of our shares of Class A common stock under the Sales Agreement, if any, for general corporate purposes. Our general corporate purposes include, but are not limited to, pursuing our growth strategies, continuing the development of our Launch System 2 and expansion of our Astra Spacecraft Engine™ business, capital expenditures, funding strategic investments, working capital and satisfaction of other obligations and other liabilities.

Despite the receipt of proceeds from the Notes and Warrants Offering and possible proceeds from future sales of our Class A common stock under the Sales Agreement, we have limited cash resources ~~at the current level~~and will need additional capital to fund commercial scale production and sale of its services and products. ~~However, if~~If we execute on our Space Products deliverables and we are able to obtain significant additional financing and assuming our plans to manage capital expenditures are effective, ~~including savings expected to be realized from our approximately 16% reduction in existing headcount implemented on November 8, 2022 (of which there can be no assurance),~~ we ~~would~~ expect that our existing sources of liquidity will be sufficient to fund operating and capital expenditure requirements through at least 12 months from the date of ~~filing~~ this Quarterly Report, ~~on Form 10-Q. The Company’s~~or August 2024. Our current liquidity may not be sufficient to meet the required long-term liquidity needs associated with continued use of cash from operating activities at historical levels, ~~in addition to its~~ other liquidity needs associated with ~~its~~ capital expenditures, ~~and~~as well as other investing ~~requirements and the Company is~~needs. We are actively evaluating other sources of liquidity to further support ~~its~~ long-term business operations. ~~For additional information regarding~~As of June 30, 2023, we are not party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. The cash requirements ~~from contractual obligations~~for the upcoming 12 months relate to our leases and ~~lease obligations, see Note 11~~ operating and capital purchase commitments.— ~~Commitments and Contingencies and Note 9 — Leases in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~

On August 2, 2022, we entered into an $100 million Class A common stock purchase agreement with B. Riley to support working capital and other general corporate needs. Under the terms of this agreement, we have the right, without obligation, to sell and issue up to $100 million of our Class A common stock over a period of 24 months to B. Riley at the Company’s sole discretion, subject to certain limitations and conditions. See Note 13 — Stockholders' Equity in Part I, Item 1 of this Quarterly Report on Form 10-Q for more details.

Summary Statement of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022

The following table sets forth the primary sources and uses of cash and cash equivalents for the periods presented below:

Our cash flows from operating activities are significantly affected by our cash expenditures to support the growth of our business in areas such as research and development and general and administrative and working capital. Our operating cash inflows include cash from milestone billing under certain ~~space products~~Space Products contracts in 2023 and ~~launch services contracts.~~Launch Services contracts in 2022. These cash inflows are offset by our payments to suppliers for production materials and parts used in our manufacturing process as we ramp up our production for space products, payments to our employees and other operating expenses.

For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, net cash used in operating activities was ~~$134.6~~$69.5 million. The primary factors affecting ~~the Company’s~~our operating cash flows during the period were a net loss of ~~$367.1~~$58.9 million and non-cash charges of $12.1 million including a gain on change in fair value of contingent consideration of $19.4 million, partially offset by stock-based compensation expense of $3.2 million, depreciation and amortization expense of $3.0 million and non-cash lease expense of $1.7 million. Changes in operating working capital items were mainly due to an increase in accounts payable of $7.8 million and increase in other non-current liabilities of $6.8 million, partially offset by a decrease in inventories of $7.1 million, a decrease in prepaid and other current assets of $2.3 million, a decrease in accrued expenses and other current liabilities of $1.9 million, and a decrease in lease liabilities of $1.5 million.

For the six months ended June 30, 2022, net cash used in operating activities was $91.9 million. The primary factors affecting our operating cash flows during the period were a net loss of $168.0 million. This is offset by non-cash charges including stock-based compensation expense of ~~$43.6~~$29.8 million, inventory reserves including write-offs and net realizable value write-downs of $18.8 million, loss on change in fair value of contingent consideration of ~~$29.2~~$17.3 million, depreciation and amortization expense of ~~$12.1~~$7.6 million and non-cash lease expense of ~~$1.4~~$0.7 million. Changes in operating working capital items is mainly due to ~~decrease~~increased headcount and ramp-up of our production and primarily reflect the increase in inventories of ~~$15.5 million, trade accounts receivable of $3.1 million, accrued expense and other current liabilities of $2.1~~$13.4 million, other non-current assets of ~~$1.3~~$2.4 million, and ~~lease liabilities~~trade accounts receivable of ~~$1.2~~$1.6 million. Changes in operating working capital items was partially offset by a decrease in prepaid and other current assets of $7.4 million, accounts payable of $6.3 million, other non-current liabilities of $4.9 million, and accrued expense and other current liabilities of $1.2 million.

For the six months ended June 30, 2023, net cash provided by investing activities was $48.8 million, which was comprised mainly of maturities of marketable securities of $57.0 million, partially offset by $8.2 million of purchases of property, plant and equipment related

~~offset by an increase~~to leasehold improvements at our Sunnyvale manufacturing facility and production equipment at our manufacturing facility and corporate headquarters in ~~other non-current liabilities of $10.4 million, prepaid and other current assets of $3.8 million and accounts payable of $3.0 million.~~Alameda, California.

For the ~~nine~~six months ended September 30, 2021, net cash used in operating activities was $79.6 million. The primary factors affecting the Company’s operating cash flows during this period were net loss of $206.5 million and a non-cash gain of $20.4 million due to change in fair value of warrant liability and $4.9 million due to a gain on forgiveness of PPP Note, offset by non-cash charges including a non-cash loss on extinguishment of convertible notes of $133.8 million, stock-based compensation expense of $20.5 million, depreciation and amortization expense of $3.9 million, and amortization of convertible note debt discounts of $0.4 million. Changes in operating working capital items primarily reflect the increase in inventories of $4.2 million, prepaid and other current assets of $13.9 million, accounts payable of $1.3 million, accrued expenses and other current liabilities of $11.3 million and decrease in other non-current liabilities of $0.2 million.

~~For the nine months ended September~~June 30, 2022, net cash used in investing activities was ~~$124.1~~$129.6 million, which was comprised mainly of purchases of marketable securities of ~~$136.4~~$102.0 million, purchases of property, plant and equipment of ~~$40.0~~$32.1 million mainly related to the construction of our manufacturing facility ~~at our corporate headquarters in Alameda, California,~~ and acquisition of an indefinite-lived intangible trademark asset of $0.9 million. This was partially offset by proceeds from maturities of marketable securities of ~~$47.3 million and proceeds from sales of marketable securities of $6.0 million.~~

For the nine months ended September 30, 2021, net cash used in investing activities was $41.3 million, which was comprised mainly of cash paid as purchase price consideration in the acquisition of Apollo Fusion, Inc., net of cash acquired of $19.4 million, acquisition of an indefinite-lived intangible trademark asset of $3.2 million and purchases of property, plant and equipment of $18.7$5.3 million.

For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, net cash provided by financing activities amounted to ~~$1.3~~$0.4 million and consisted primarily of ~~$1.3 million of~~ proceeds from the ~~sale of shares of the Company’s Class A common stock and~~ issuance of shares of Class A common stock under equity plans.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, net cash provided by financing activities amounted to ~~$488.9~~$0.8 million and consisted primarily of proceeds from ~~the Business Combination and private offering, net~~employee stock purchase plan of ~~transaction costs, of $463.6 million, proceeds from the issuance of Series C of $30.0~~$0.7 million and ~~borrowings of $10.0 million, proceeds from the~~ issuance of stock under equity plans of ~~$1.8 million, offset by repayments on borrowings of $16.4~~$0.1 million.

We are a party to operating leases primarily for land and buildings (e.g., office buildings, manufacturing and testing facilities and spaceport) and certain equipment (e.g., copiers) under non-cancellable operating leases. The following table summarizes our lease commitments as of September 30, 2022:

On July 28, 2022, the Company entered into a lease agreement for approximately 60,000 square feet of manufacturing facility in Sunnyvale, California having a lease term of 36 months with an option to extend for a period of an additional 36 months. The undiscounted base rent payments for the first year of this lease is approximately $1.8 million with a 4% increase in base rent for each subsequent year. In addition to base rent, the Company will be responsible for the management fee of 5% of the base rent. In lieu of a cash security deposit, the Company is required to provide the landlord an irrevocable letter of credit in the amount of $0.3 million. This

new lease facility is expected to enable expansion of space product production and development capacity, thermal testing capacity. The Company is finalizing the build-out of this facility and is targeting the completion of that building during the first quarter of 2023.

In order to reduce manufacturing lead times and to have access to an adequate supply of components, we enter into agreements with certain suppliers to procure component inventory based on our production needs. A significant portion of our purchase commitments arising from these agreements consist of firm and non-cancelable commitments. As of September 30, 2022, we had purchase commitments aggregating $39.0 million for which we were or will become obligated to make payments within 12 months to 60 months from the execution date of the agreements. Of these, there are agreements containing an aggregate of $32.1 million in early termination penalties. For example, one of the supply agreement penalties includes payment of 50% of the remaining purchase commitment at any point during the contract term. In another agreement, we may terminate the supply agreement by paying the balance on the remaining purchase commitment only after the first anniversary of the commencement date. If this agreement is terminated before the first anniversary of the commencement date, we have to pay the entire contract amount of $9.6 million.

~~Apart from the aforementioned leases and purchase commitments, we do not have any other material contractual obligations, commitments or contingent obligations.~~

Compliance with the Continued Listing Standards of the ~~NASDAQ Global Select~~Nasdaq Capital Market (“~~NASDAQ”~~Nasdaq”)

On October 6, 2022, ~~the Company~~we received a deficiency notice from ~~NASDAQ~~Nasdaq that ~~it was~~we were not in compliance with Rule 5450(a)(1) of the listing requirements (the “Minimum Bid Price Requirement”) because ~~its~~our per share closing bid price has been below $1.00 for ~~the last~~ thirty consecutive business days. ~~This notice has no immediate effect on the listing of the Company’s~~Currently, our Class A common ~~stock. Pursuant~~stock trades on the Nasdaq Capital Market. At the time, our Class A common stock traded on the Nasdaq Global Select Market (see below for transition from Nasdaq Global Select Market to ~~Rule 5810(c)(3)(A), the Company has 180 calendar days, or until~~Nasdaq Capital Market effective April ~~4, 2023, to regain compliance with the minimum bid price requirement set forth in Rule 5450(a)(1) (the “Minimum Bid Price Requirement”)~~12, 2023).

Nasdaq’s notice stated that if, at any time before April 4, 2023, the per share closing bid price of Astra’s Class A common stock is at least $1.00 for a minimum of ten consecutive business days, ~~NASDAQ’s~~Nasdaq’s staff will provide ~~the Company~~us written notice that ~~it complies~~we comply with the Minimum Bid Price Requirement.

~~The Company intends to monitor~~ As of the date of this quarterly report, our per share closing bid price remains below $1.00. While this notice had no immediate effect on the listing of ~~its~~our Class A common stock, ~~and consider available options~~ if ~~its Class A common stock does not trade at a level likely~~we are unable to ~~result in the Company regaining compliance with Minimum Bid Price Requirement by April 4, 2023.~~

~~If the Company does not~~ regain compliance with the Minimum Bid Price Requirement byor otherwise maintain compliance with the other listing standards for Nasdaq, it could result in the delisting of our Class A common stock from Nasdaq.

On March 13, 2023, we submitted an application to Nasdaq for an additional 180-day period (the “Extended Compliance Period”) to comply with the minimum bid price requirement. On April 4,10, 2023, we received a letter from Nasdaq notifying us that, while we have not regained compliance with the ~~Company may be~~Minimum Bid Price Requirement, the Staff has determined that Astra is eligible for an additional 180 calendar day ~~compliance period. To qualify,~~period, or until October 2, 2023, to regain compliance. Nasdaq’s determination was based on (i) Astra ~~would need to, among other things, meet~~meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing ~~standards for NASDAQ,~~on Nasdaq, with the exception of the Minimum Bid Price Requirement, and ~~provide~~(ii) Astra’s written notice to Nasdaq ~~that it intends~~of its intention to cure the deficiency during the ~~second compliance period.~~

Extended Compliance Period. In connection with our request for extension to cure our notice of deficiency, we transferred our Class A Common Stock from the Nasdaq Global Select Market to the Nasdaq Capital Market, effective April 12, 2023. If ~~Nasdaq concludes that the Company will not be able~~we are unable to cure the deficiency during the ~~second compliance period, or the Company does not make the required representations, then NASDAQ~~Extended Compliance Period, Nasdaq will give notice that ~~the Company’s~~our Class A common stock is subject to delisting and ~~the Company~~we will be able to appeal that delisting before a ~~NASDAQ~~Nasdaq hearings panel.

On July 6, 2023, our board of directors approved a reverse stock split of all of our outstanding shares of Class A common stock and Class B common stock (the “Reverse Stock Split”) at a ratio of (a) one (1) new share of Class A Common Stock for fifteen (15) shares of Class A Common Stock then issued and outstanding; and (b) one (1) new share of Class B Common Stock for fifteen (15) shares of Class B Common Stock then issued and outstanding. The Reverse Stock Split is expected to be consummated on or before October 2, 2023. Our stockholders had previously approved the Reverse Stock Split at our 2023 Annual Meeting of Stockholders on June 8, 2023, at a ratio in the range of 1-for-5 to 1-for-15, with the final decision of whether to proceed with the reverse stock split and the exact ratio and timing of the reverse stock split to be determined by the board of directors, in its discretion, but no later than June 8, 2024.

~~There can be no assurance that~~Compliance with Recently Released Final Rules of the ~~Company will regain compliance with~~Securities and Exchange Commission

On July 26, 2023, the ~~Minimum Bid Price Requirement or that it will otherwise remain~~SEC released its final rule, Cybersecurity Risk Management, Strategy, Governance and Incident Reporting, which becomes effective 30 days after publication in ~~compliance with~~ the ~~other listing requirements for NASDAQ. The Company had previously failed to comply with Nasdaq’s requirement that its quarterly~~Federal Register.

Cybersecurity Risk Management, Strategy and ~~annual reports be timely filed when its~~Governance Annual Disclosures

In annual report on ~~Form~~form 10-K, registrants must describe their process, if any, for ~~the year ended December 31, 2022, was filed late as a result~~assessing, identifying, and managing material risks from cybersecurity threats, including whether cybersecurity is part of the ~~change in~~overall risk management program, engages consultants, auditors or other third parties, and processes to oversee and identify risks from use of third-parties. Disclosures must also include whether and how any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect the ~~Company’s filer status. The Company promptly notified Nasdaq when it became aware that its filer status had changed and its Form 10-K would be late. Please also see Risk Factors in Part II, Item 1A~~registrant’s business strategy, results of ~~this quarterly report on Form 10-Q for more information about risks associated with the Company’s failure to remain in compliance with the continuing listing standards of NASDAQ.~~operations, or financial condition.

Under the new rule, registrants are required to report “material” cybersecurity incidents on a Form 8-K within four business days of materiality determination and must include a description of the nature, scope, and timing of the incident and the material impact or reasonably likely material impact on the registrant. Materiality determination should be based on federal securities law materiality, including consideration of quantitative and qualitative factors.

The material incident disclosure requirements will become effective on or after December 18, 2023. Smaller reporting companies have a 180-day deferral. Disclosures for risk management, strategy and governance are effective for all registrants for fiscal years ending on or after December 15, 2023. We will be required to provide our risk management strategy and governance disclosures on its Annual Report on Form 10-K for the year ending December 31, 2023. We will be required to report material cybersecurity incidents on Form 8-K beginning June 2024.

Effective February 23 2023, the SEC has adopted final rules on the amendments to the Insider Trading Arrangements and Related Disclosures. The amendments include new requirements for registrants to disclose insider trading policies and procedures in accordance with Rule 10b5-1, which will require disclosure of directors and executives 10b5-1 plans in detail on a quarterly and annual basis.

Registrants other than Small Reporting Companies must begin providing disclosure with reports for periods that begin on or after April 1, 2023. Smaller Reporting Companies must begin providing scaled disclosures with reports covering the first full period that begins on or after October 1 2023. Astra must begin providing the scaled disclosures as required under the amendments in its 2023 Annual Report on Form 10-K for all 10b5-1 plans adopted or terminated during the three months ended December 31, 2023, with reporting under the requirements on a quarterly basis on Form 10-Q thereafter.

On May 3, the SEC adopted amendments that expand existing share repurchase disclosure requirements for domestic corporate issuers, foreign private issuers (FPIs), and listed closed-end funds. The final amendments require reporting of daily repurchase activity, as well as increased reporting regarding the rationale and objectives for share repurchase plans. Tabular disclosure of quantitative daily share repurchase data will be required including the following:

Reporting entities will also be required to indicate whether certain officers and directors purchased or sold shares subject to a repurchase plan within four business days of the announcement of the plan.

The final rule becomes effective 60 days after publication in the Federal Register. Registrants will be required to comply beginning with the filing that covers the first full fiscal quarter that begins on or after October 1, 2023. For example, a calendar year-end entity with a fourth quarter beginning on October 1, 2023 would be required to comply beginning with its December 31, 2023 Form 10-K (covering activity in that fourth quarter), and in Form 10-Q filings thereafter.

On October 26, the SEC adopted new Exchange Act Rule 10D-1 directing US securities exchanges to establish standards that require registrants to develop and implement a written policy for the recovery of erroneously awarded incentive-based compensation received by current and former executive officers in the event of a required accounting restatement. The new rule and related amendments also require registrants to file their recovery policy as an exhibit to their annual report and to provide other disclosures. The new rule, which was proposed in 2015 and reopened for comment in 2021 and 2022, is intended to implement the requirements of Section 954 of the Dodd-Frank Act.

The new rule and related amendments will become effective 60 days after publication in the Federal Register. The exchanges must file proposed listing standards to implement the SEC’s directive no later than 90 days after the final rules are published in the Federal Register, and those listing standards must be effective no later than one year after that publication date. Affected issuers will be required to adopt a recovery policy no later than 60 days after the listing standards become effective.

We have not, to date, been exposed to material market risks given our early stage of operations. As we expand our commercial operations, we expect to be exposed to foreign currency exchange rate and commodity price risks, particularly related to rocket propellants, helium, and aluminum, among others, and potentially other market risks, including those related to interest rates or valuation of financial instruments, among others.

As of September 30, 2022, we had $17.3 million of cash equivalents invested in money market funds and $82.9 million invested in marketable securities, which consisted of U.S. Treasury securities, corporate debt securities, commercial paper and asset backed securities. Our cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes. There ~~was~~were no material ~~interest rate~~changes in our market risk ~~for~~since the ~~nine months ended September 30, 2022 and~~ year ended December 31, ~~2021.~~

We are exposed to inflation risk. Inflationary factors, such as increases in raw material and overhead costs, could impair our operating results. Although there has been a significant increase in inflation recently, it has not had a substantial impact on our results of operations for the three and nine months ended September 30, 2022, respectively. However, a higher rate of inflation in the future may have an adverse effect on our ability to recover increasing costs and we might not be able to pass along cost increases to our customers.

There was no material foreign currency risk for the three and nine months ended September 30, 2022 and year ended December 31, 2021. Our activities to date have been limited and were conducted in the United States.2022.

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, who serves as our principal executive officer, and Chief Financial Officer, who serves as our principal financial officer, as appropriate, to allow for timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Our management, with the participation of our ~~principal executive officer~~Chief Executive Officer and ~~principal financial officer,~~Chief Financial Officer, evaluated, as of the end of the period covered by this ~~quarterly report~~Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and ~~procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).~~procedures. Based on that evaluation, our ~~principal executive officer~~Chief Executive Officer and ~~principal financial officer~~Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of ~~September~~June 30, ~~2022,~~2023, due to the material weaknesses in our internal control over financial reporting described below.

Material Weaknesses ~~and Remediation Plan~~in Internal Control over Financial Reporting

~~As previously disclosed, we have identified material weaknesses in our internal control over financial reporting and these material weaknesses continued to exist as of September 30, 2022.~~ A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, material weaknesses identified are:

We did not design and maintain an effective control environment to enable the identification and mitigation of risks of material ~~accounting errors based on~~misstatement which contributed to the following ~~control deficiencies:~~material weaknesses:

We did not design and maintain controls over an effective risk assessment, including: (i) identifying, assessing, and communicating appropriate objectives, (ii) identifying and analyzing risks to achieve these objectives, and (iii) identifying and assessing changes in the business that could impact our ~~system of~~ internal ~~controls.~~control over financial reporting.

We did not design and maintain effective control activities as the control activities did not adequately (i) address relevant risks, (ii) provide evidence of performance, (iii) provide appropriate segregation of duties, or (iv) operate at a sufficient level of ~~precision to identify all potentially material errors.~~precision.

We did not design and ~~implement~~maintain controls over information and communication relating to communicating accurate information internally and externally, including providing information pursuant to objectives, responsibilities, and functions of internal control.

We did not design and ~~implement~~maintain effective monitoring controls to ascertain whether the components of internal control are present and functioning.

These material weaknesses resulted in a restatement to ~~Additional~~additional paid-in-capital, ~~Accumulated~~accumulated deficit and ~~Adjustment~~adjustment to redemption value on ~~Convertible Preferred Stock as well as~~convertible preferred stock for the quarterly period ended June 30, 2021. These material weaknesses also resulted in audit adjustments and immaterial errors to ~~substantially all of~~ our accounts and disclosures, ~~which were recorded~~ as of and for the ~~year~~years ended December 31, 2022 and 2021.

Additionally, these material weaknesses could result in a misstatement of substantially all of our account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Our management, including our Chief Executive Officer and Chief Financial Officer, continue to work to design and implement both a ~~short- term~~short-term and a long-term remediation plan to correct the material weaknesses in our ~~disclosure controls and procedures and our~~ internal control over financial reporting as ~~updated~~described below. We are focused on ~~designing~~enhancing the design and ~~implementing~~implementation of effective internal control measures to improve our internal control over financial reporting and remediate these material weaknesses.

To address the material ~~weaknesses. These remediation measures include, but are not limited to:~~weaknesses, management has completed, or is in the process of:

As we continue our evaluation and assess the effectiveness of our internal control over financial reporting going forward, management may modify the actions described above or identify and take additional measures to address control deficiencies. While we prioritize achieving the effectiveness of our internal control over financial reporting and disclosure controls and procedures, until our remediation efforts, including any additional measures management identifies as necessary, are completed, validated and tested over a sustained period, the material weaknesses described above will continue to exist and management will not be able to conclude that ~~it is~~they are remediated. We are committed to continuous improvement and will continue to diligently review our internal control over financial reporting.

In the third quarter of 2022, we completed deployment of a new ERP system implementation for finance and procurement processes. As a result of the ERP system implementation, in the third quarter of 2022 certain internal controls over financial reporting have been automated, modified, or implemented to address the new control environment associated with the ERP system. While management believes that this new system will enhance its internal control over financial reporting, there are inherent risks in implementing any new system, and we will continue to evaluate and monitor these control changes as part of our assessment of the control design and effectiveness throughout 2022.

There have been no ~~other~~ changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~September~~June 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Discussion of legal matters is incorporated by reference from Part I, Item 1, Note ~~11 -~~7- Commitments and Contingencies, of this Quarterly Report on Form 10-Q, and should be considered an integral part of Part II, Item 1, “Legal Proceedings.”

Except for the risk factors set forth below, there have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the period ended December 31, ~~2021,~~2022, filed with the SEC on March 30, 2023 (as amended on March 31, ~~2022,~~2023) and our Quarterly Report on Form 10-Q for the ~~quarter~~period ended ~~June 30, 2022,~~March 31, 2023, filed with the SEC on May 15, 2023.

The future issuance of equity or of debt securities that are convertible into equity will dilute our share capital.

We may choose to raise additional capital in the future, depending on market conditions, strategic considerations and operational requirements. To the extent that additional capital is raised through the issuance of shares or other securities convertible into shares, our stockholders will be diluted. On July 10, 2023, we entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Agent”). The Sales Agreement provides for the offer and sale of up to $65.0 million of the Company’s newly issued Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), from time to time through an “at the market offering” program. We have issued securities under the Sales Agreement and may do so in the future. On August 4, ~~2022, and investors are encouraged~~2023, we issued warrants to ~~review these risk factors prior~~purchase up to ~~making an investment in the Company and in conjunction with their review of this Quarterly Report on Form 10-Q.~~

~~A summary~~22.5 million shares of the ~~material risks affecting~~Class A Common Stock. Future issuances of our ~~business, operations~~common stock or other equity securities pursuant to the Sales Agreement or otherwise, or the perception that such sales may occur, could adversely affect the trading price of our common stock and ~~financial results that have been included in this Quarterly Report on Form 10-Q include the following:~~

~~Our losses from operations and liquidity condition raise substantial doubt about~~of diminishing our ability to ~~continue as a going concern. As a result, there is significant risk in~~make payments on the ~~investment in shares of our Class A common stock~~Senior Note when due. If we incur additional indebtedness, the related risks that we now face would intensify and ~~you may lose all or part of your investment.~~

As of September 30, 2022, we had cash and cash equivalents of $67.6 million and marketable securities of $82.9 million, and have not generated sufficient revenues to enable us to finance our business operations internally. We have incurred significant losses since our inception and had an accumulated deficit of $1,776 million as of September 30, 2022 and we expect to continue to incur net losses intocould further exacerbate the ~~future. These conditions raise substantial doubt about~~risks associated with our ability to ~~continue as a going concern during~~service our indebtedness.

We may be required to incur further debt to meet future capital requirements of our business. Should we be required to incur additional debt, the ~~next twelve months. Our ability to continue as a going concern is dependent on~~restrictions imposed by the terms of such debt could adversely affect our financial condition and our ability to ~~generate cash flows from operations and find additional sources of funding through either equity offerings, debt financings, or a combination of any such transactions.~~respond to changes in our business.

To extend our financial runway, we continue to seek and evaluate opportunities to raise additional capital through the issuance of equity or debt securities. As an example, on August 2, 2022, the Company entered into a Common Stock Purchase Agreement with B. Riley Principal Capital II LLC ("B. Riley"), which would allow the Company to sell newly issued shares of its Class A Common Stock to B. Riley in aggregate amount not to exceed $100.0 million or 19.99% of the aggregate outstanding Class A and Class B Common Stock of the Company as of August 2, 2022. In addition, on November 8, 2022, we implemented a reduction of approximately 16% of our existing headcount. We are exploring other plans to mitigate an expected shortfall of capital to support future operations including raising additional funds through borrowings or additional sales of securities or other sources, and managing our working capital. However, there is no assurance that savings we expect as a result of our headcount reduction will be

realized or additional financing will be available when needed or that we will be able to obtain financing on terms acceptable to us or whether or when we will become profitable and generate positive operating cash flow. If we are unable to raise substantial additional capital, our operations and production plans may be scaled back or curtailed. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, there is substantial doubt that we will be able to continue as a going concern. If the foregoing plans are unsuccessful and we are unable to continue as a going concern, you could lose all or part of your investment in us.

We currently fail to satisfy certain continued listing requirements of the NASDAQ Global Select Market, have failed to satisfy certain of these requirements in the past and could fail to satisfy those requirements again in the future, which could negatively affect the market price of our Class A common stock, our liquidity and our ability to raise capital. Our failure to meet the continued listing requirements of~~NasdaqGlobal Select Market could result in a delisting of our Class A common stock.~~

Currently, our common stock trades on the NASDAQ Global Select Market. On October 6, 2022, we received a deficiency notice from NASDAQ that we were not in compliance with Rule 5450(a)(1) of the listing requirements (the “Minimum Bid Price Requirement”) because our per share closing bid price has been below $1.00 for the last thirty consecutive business days. As of the date of this quarterly report, our per share closing bid price remains below $1.00. While this notice had no immediate effect on the listing of the Company’s Class A common stock, if we are unable to regain compliance with the Minimum Bid Price Requirement or otherwise maintain compliance with the other listing standards for NASDAQ, it could resulting the delisting of our Class A common stock from Nasdaq, which could have a material impact on your ability to sell shares of our Class A common stock.

Pursuant to Rule 5810(c)(3)(A), we have 180 calendar days, or until April 4, 2023, to regain compliance with the Minimum Bid Price Requirement. NASDAQ’s notice stated that if, at any time before April 4, 2023, the per share closing bid price of Astra’s Class A common stock is at least $1.00 for a minimum of ten consecutive business days, Nasdaq’s staff will provide us written notice that it complies with the Minimum Bid Price Requirement.

While we intend to monitor the per share closing bid price of our Class A common stock and consider available options, including a reverse stock split, if our Class A common stock does not trade at a level likely to result in us regaining compliance with Minimum Bid Price Requirement by April 4, 2023, we cannot be certain that those available options, including a reverse stock split, would be sufficient to increase the closing per share price of our Class A common stock to more than $1.00 or prevent it from dropping below $1.00 at some point in the future.

If we ~~do not regain compliance with the Minimum Bid Price Requirement by April 4, 2023,~~incur additional debt, we may be ~~eligible~~subject to the following risks:

We cannot assure you that our leverage and such restrictions will not materially and adversely affect our ability to finance our future operations or capital needs or to engage in other business activities.

Volatility and weakness in bank and capital markets may adversely affect credit availability and related financing costs for us.

Banking and capital markets are experiencing periods of volatility and disruption. If the ~~continued listing requirement for market value~~disruption in these markets is prolonged, our ability to refinance, and the related cost of ~~publicly held shares and~~refinancing, some or all ~~other initial listing standards for NASDAQ, with the exception~~ of ~~the Minimum Bid Price Requirement, and provide written notice to NASDAQ that it intends to cure the deficiency during the second compliance period.~~our debt could be adversely affected. There is no guarantee that we will regain compliance with the Minimum Bid Price Requirement, that we will maintain compliance with other NASDAQ listing standards, or that we will be eligible for a second compliance period. We have previously failed to comply with listing standards as a result of our late filing of our annual report on Form 10-K for the year ended December 31, 2021 and there can be no assurance that wesuch markets will ~~not violate other NASDAQ listing standards in~~continue to be a reliable source of financing for us. These factors, including the ~~future.~~

If Nasdaq concludes that we will not be able to cure the deficiency during the second compliance period, or we do not make the required representations, then NASDAQ will give notice that our Class A common stock is subject to delisting and we will be able to appeal that delisting before a NASDAQ hearings panel. Such a delisting would likely have a negative effect on the pricetightening of our Class A common stock and would impair your ability to sell or purchase our Class A common stock when you wish to do so. In the event of a delisting, we would expect to take actions to restore our compliance with NASDAQ’s listing requirements, but we can provide no assurance that any such action taken by us would allow our Class A common stock to become listed again or improve the liquidity of our Class A common stock.

If we are delisted from Nasdaq, but obtain a substitute listing for our Class A common stock, it will likely be on a market with less liquidity, and therefore experience potentially more price volatility than experienced on NASDAQ. You may not be able to sell your shares of Class A common stock on any such substitute market in the quantities, at the times, or at the prices thatcredit markets, could potentially be available on a more liquid trading market. As a result of these factors, if our Class A common stock is delisted from NASDAQ, the value and liquidity of our Class A common stock would likely be significantly adversely affected. A ~~delisting~~ ~~of our common stock from NASDAQ could also~~ adversely affect our ability to obtain ~~financing~~cost-effective financing. Increased volatility and disruptions in the financial markets also could make it more difficult and more expensive for ~~our operations and/~~us to refinance outstanding indebtedness and to obtain financing. In addition, the adoption of new statutes and regulations, the implementation of recently enacted laws, or new interpretations or the enforcement of older laws and regulations applicable to the financial markets or the financial services industry could result in a ~~loss~~reduction in the amount of ~~confidence by investors, employees and/~~available credit or ~~business partners.~~

~~We are highly dependent on~~an increase in the cost of credit. Disruptions in the financial markets can also adversely affect our ~~senior management team~~lenders, insurers, customers, and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel or are unable to find and integrate appropriate replacements for employees who choose to leave the Company (including in our finance function where we have had significant recent turnover), we may not be able to successfully implement our business strategy and ourcounter-parties. Any of these results ~~of operation and ability to execute on our growth strategy will be affected.~~

Our success depends, in significant part, on the continued services of our senior management team and on our ability to attract, motivate, develop and retain a sufficient number of other highly skilled personnel, including engineers, manufacturing and quality assurance, design, finance, marketing, sales and support personnel. Our senior management team has extensive experience in the aerospace industry, and we believe that their depth of experience is instrumental to our continued success. The loss of any one or more members of our senior management team, for any reason, including resignation or retirement, could impair our ability to execute our business strategy and have a material adverse effect on our business, financial condition and results of operations.

Competition for qualified highly skilled personnel can be strong, and we can provide no assurance that we will be successful in attracting or retaining such personnel now or in the future.. Further, any inability to recruit, develop and retain qualified employees may result in high employee turnover and may force us to pay significantly higher wages, which may harm our profitability. The loss of any key employee or our inability to recruit, develop and retain these individuals as needed, could have a material adverse effect on our business, financial condition, and results of operations.

~~Further,~~The Warrants are exercisable for our Class A Common Stock, which would increase the number of shares eligible for future resale in the ~~last six months, we have experienced turnover~~public market and result in ~~critical leadership positions in~~dilution to our finance team, including the chief financial officer, the corporate controller and the director of SEC reporting. If we are unable to retain and successfully integrate their replacements, as well as retain the remaining members of our finance team, it could have a material adverse impact on our business and the reliability of our financial statements. Over the same period, we have also experienced turnover in other areas of our business, particularly related to engineering and operations. Similarly, if we are unable to integrate their replacements or retain other critical members of these functions, our ability to execute on our growth strategy and develop Launch System 2 and the production and delivery of our space products will be materially impeded.stockholders.

WeThe Warrants are ~~unsure how the news~~exercisable for 22.5 million shares of our ~~headcount reduction will impact~~Class A Common Stock at $0.45 per share. The additional shares of our ~~retention efforts for those employees who are not affected (the “retained employees”). If any~~Class A Common Stock issued upon exercise of the ~~retained employees decide~~Warrants will result in dilution to ~~leave~~ the ~~Company and we are unable to find and integrate qualified replacements for them, our business and future growth plans will be materially impacted.~~

~~We use social media as part~~then existing holders of our ~~marketing strategy~~Class A Common Stock and ~~to provide information to our investors and~~increase the ~~general~~number of shares eligible for resale in the public ~~about our products and services, including~~market. Sales of substantial numbers of such shares in the ~~stages of development~~public market could adversely affect the market price of our rocket and launch system. If we do not appropriately manage the content, timing and delivery of our communications through these social media channels and the content that others, including our employees, post regarding our business, products and services, our reputation could be damaged or we could be subject to regulatory or other violations, all of which could have a material adverse effect on our business operations.Class A Common Stock.

Despite our efforts to monitor evolving social media communication guidelines and comply with applicable rules, there is risk that the use of social media by us, our employees or our customers to communicate about our products, services or business may cause us to be found in violation of applicable requirements. For example, due to text restrictions on certain social media platforms, information that we share on social media may not be qualified as forward-looking statements or could be viewed as not providing full and complete information about our business. Further, images we share through social media may not meet certain requirements under export regulations such as ITAR and EAR, despite our best efforts to review such material before it is submitted. As a result, we may be subject to enforcement actions from regulatory bodies related to our social media activities. Efforts we take to correct disclosures may be viewed negatively by our investors. In addition, adverse events with respect to our company, including launch failures, unapproved marketing or other unintended messages posted on social media could require an active response from us, which may not be completed in a timely manner and could result in reputational damage. Further, our employees may knowingly or inadvertently make use of social media in ways that may not comply with our corporate policies or other legal or contractual requirements. This, may give rise to liability or lead to the loss of trade secrets or other intellectual property or disclosure of material non-public information. Furthermore, negative posts or comments about us or our products and services in social media could seriously damage our reputation, brand image and goodwill, which would have a material adverse effect on our business, financial condition, and results of operations.

Kelyn Brannon’s last day of employment with us is November 9, 2022. Axel Martinez, our current Executive Vice President of Finance, will be promoted to Chief Financial Officer effective November 10, 2022. Mr. Martinez will also serve as our principal financial officer and principal accounting officer.

Our financial arrangements with Ms. Brannon in connection with the transition of her employment and Mr. Martinez’ compensation were previously disclosed on a current report on Form 8-K filed with the Securities and Exchange Commission on September 30, 2022, and have not changed.

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.


Delaware	85-1270303
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1900 Skyhawk Street Alameda, CA	94501
(Address of principal executive offices)	(Zip Code)


Large accelerated filer	☒☐	Accelerated filer	☐
Non-accelerated filer	☐☒	Smaller reporting company	☐☒
Emerging growth company	☐


		Page
PART I.	FINANCIAL INFORMATION	1

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders' Equity	4
	Condensed Consolidated Statements of Cash Flows	65
	Notes to Unaudited Condensed Consolidated Financial Statements	86
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3526
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4739
Item 4.	Controls and Procedures	4739

PART II.	OTHER INFORMATION	5042

Item 1.	Legal Proceedings	5042
Item 1A.	Risk Factors	5042
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5243
Item 3.	Defaults Upon Senior Securities	5243
Item 4.	Mine Safety Disclosures	5243
Item 5.	Other Information	5243
Item 6.	Exhibits	5444
Signatures		5545


Assets acquired included in accounts payable, accrued expenses and other current liabilities		2,777		4,903
Public and private placement of warrants acquired as part of business combination		—		56,786
Change in redemption value of Convertible Preferred Stock		—		1,011,726
Issuance of Class A common stock upon acquisition of Apollo Fusion, Inc.		—		33,008
Fair value of contingent consideration provided upon acquisition of Apollo Fusion, Inc.		—		23,000
Supplemental disclosures of cash flow information:
Cash paid for interest	$	15	$	691


	Operating Leases
2022 (remainder)	$	1,010
2023		4,069
2024		3,941
2025		3,233
2026		2,075
Thereafter		3,705
Total future undiscounted minimum lease payments	$	18,033
Less: imputed interest		3,156
Total reported lease liability	$	14,877


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	For The Three Months Ended September 30,						For The Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Net loss	$	(199,114	)	$	(16,248	)	$	(367,130	)	$	(206,517	)	$	(14,004	)	$	(82,303	)	$	(58,897	)	$	(168,016	)
Other comprehensive loss:
Unrealized gain (loss) on available-for-sale marketable securities		31			—			(202	)		—			24			(78	)		93			(233	)
Total comprehensive loss	$	(199,083	)	$	(16,248	)	$	(367,332	)	$	(206,517	)	$	(13,980	)	$	(82,381	)	$	(58,804	)	$	(168,249	)


	Temporary Equity						Permanent Equity
	Convertible Preferred Stock						Common Stock (Pre-combination Astra)						Class A Common Stock ( New Astra)				Class B Common Stock (New Astra)				Founders Preferred Stock						Additional Paid in			Accumulated			Total Stockholders'
	Shares			Amount			Shares			Amount			Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Equity (Deficit)
Balance as of December 31, 2020		90,768,286		$	108,829			62,961,258	��	$	6			—	$	—		—	$	—		12,302,500		$	1		$	50,282		$	(190,697	)	$	(140,408	)
Cumulative effect adjustment due to adoption of ASU 2020-06		—			—			—			—			—		—		—		—		—			—			(9,719	)		691			(9,028	)
Stock-based compensation		—			—			—			—			—		—		—		—		—			—			2,177			—			2,177
Exercise of options		—			—			498,807			—			—		—		—		—		—			—			228			—			228
Issuance of Series C Convertible Preferred Stock, net of issuance costs		28,498,141			221,943			—			—			—		—		—		—		—			—			—			—			—
Conversion of Founders Convertible Preferred Stock to Series C Convertible Preferred Stock		5,073,576			—			—			—			—		—		—		—		(5,073,576	)		—			8,156			—			8,156
Adjustment to redemption value on Convertible Preferred Stock		—			1,011,726			—			—			—		—		—		—		—			—			(51,131	)		(960,595	)		(1,011,726	)
Net loss		—			—			—			—			—		—		—		—		—			—			—			(158,972	)		(158,972	)
Balance as of March 31, 2021		124,340,003		$	1,342,498			63,460,065		$	6			—	$	—		—	$	—	$	7,228,924		$	1		$	(7	)	$	(1,309,573	)	$	(1,309,573	)
Stock-based compensation		—			—			—			—			—		—		—		—		—			—			7,444			—			7,444
Exercise of options		—			—			1,812,081			—			—		—		—		—		—			—			1,081			—			1,081
Adjustment to redemption value on Convertible Preferred Stock		—			(1,011,726	)		—			—			—		—		—		—		—			—			1,011,726			—			1,011,726
Merger recapitalization- Class A		(124,340,003	)		(330,772	)		(16,261,881	)		(2	)		140,601,884		14		—		—		—						330,751			—			330,763
Merger recapitalization- Class B		—			—			(49,010,265	)		(4	)		—		—		56,239,189		6		(7,228,924	)		(1	)		—			—			1
Private offering and merger financing, net of redemptions and equity issuance costs of $23,337		—			—			—			—			57,489,019		6		—		—		—			—			406,863			—			406,869
Net loss		—			—			—			—			—		—		—		—		—			—			—			(31,297	)		(31,297	)
Balance as of June 30, 2021		—		$	—			—		$	—			198,090,903	$	20		56,239,189	$	6		—		$	—		$	1,757,858		$	(1,340,870	)	$	417,014
Stock-based compensation		—			—			—			—			—		—		—		—		—			—			2,688			—			2,688
Exercise of options		—			—			—			—			912,760		1		—		—		—			—			469			—			470
Exercise of warrants		—			—			—			—			472,113		—		—		—		—			—			—			—			—
Issuance of common stock upon acquisition of Apollo Fusion, Inc.		—			—			—			—			2,558,744		—		—		—		—			—			33,008			—			33,008
Net loss		—			—			—			—			—		—		—		—		—			—			—			(16,248	)		(16,248	)
Balance as of September 30, 2021		—		$	—			—		$	—			202,034,520	$	21		56,239,189	$	6		—		$	—		$	1,794,023		$	(1,357,118	)	$	436,932


Purchase Consideration (in thousands)
Cash paid for outstanding Apollo common stock and options	$	19,926
Fair value of Astra Class A common stock issued		33,008
Fair value of contingent consideration		18,400
Total purchase consideration		71,334
Less: cash acquired		566
Total purchase consideration, net of cash acquired	$	70,768


(in thousands)	Fair Value
Inventory	$	131
Prepaid and other current assets		796
Property, plant and equipment		996
Right of use assets		163
Goodwill		58,251
Intangible assets		15,350
Other non-current assets		75
Total assets acquired		75,762
Accounts payable		(950	)
Accrued expenses and other current liabilities		(1,939	)
Operating lease obligation		(163	)
Other non-current liabilities		(1,942	)
Total liabilities assumed		(4,994	)
Fair value of net assets acquired	$	70,768


Intangible Assets
	Fair Value		Weighted-Average Amortization Periods
	(in thousands)		(in years)
Developed technology	$	12,100	6
Customer contracts and related relationships		2,900	3
Order backlog		200	1
Tradename		150	2
Total identified intangible assets	$	15,350


	Three Months Ended September 30,					Nine Months Ended September 30,
in thousands	2022			2021		2022		2021
Change in fair value of warrant liabilities	$	—		$	20,447	$	—	$	20,447
Gain on forgiveness of PPP note		—			4,850		—		4,850
Other (miscellaneous)		(25	)		598		314		(120	)
Other (expense) income, net	$	(25	)	$	25,895	$	314	$	25,177


	June 30, 2023
in thousands	Amortized Cost		Fair Value
Due in 1 year or less	$	12,952	$	12,935


Series	Shares Outstanding (pre-combination Astra)		Liquidation Price Per Share		Conversion Price Per Share		Annual Noncumulative Dividend Rights Per Share
A		65,780,540	$	0.243233	$	0.243233	$	0.019459
B		70,713,123		1.333008		1.333008		0.106640
C		50,483,785		6.620970		6.620970		0.529680
Total		186,977,448


	For the Three Months Ended September 30,				For The Nine Months Ended September 30,
in thousands	2022		2021		2022		2021
Cost of revenues	$	109	$	—	$	806	$	—
Research and development		5,565		1,334		17,133		4,638
Sales and marketing		1,562		15		4,559		70
General and administrative		6,512		1,339		21,082		15,757
Stock-based compensation expense	$	13,748	$	2,688	$	43,580	$	20,465


	Time Based Stock Options

Expected terms (years)(1)		5.81
Expected volatility(2)		68.9	%
Risk-free interest rate(3)		1.70	%
Expected dividend rate(4)		-
Grant-date fair value	$	3.20


	As of September 30,
	2022		2021
	Class A Common		Class A Common
Stock options		7,139,177		20,752,943
RSUs		18,759,814		9,352,100
Convertible Preferred Stock		—		—
Warrants		—		15,333,309
Total		25,898,991		45,438,352


	Three Months Ended June 30,					Period over period change						Six Months Ended June 30,					Period over period change
(in thousands, except percentages)	2023		2022			($)			(%)			2023		2022			($)			(%)
Revenues:
Launch services	$	—	$	1,988		$	(1,988	)	n.m.			$	-	$	5,899		$	(5,899	)	n.m.
Space products		707		694			13			2	%		707		694			13			2	%
Total revenues		707		2,682			(1,975	)		74	%		707		6,593			(5,886	)		89	%

Cost of revenues:
Launch services		—		17,179			(17,179	)	n.m.				-		28,193			(28,193	)	n.m.
Space products		388		266			122			46	%		388		266			122			46	%
Total cost of revenues		388		17,445			(17,057	)		98	%		388		28,459			(28,071	)		99	%

Gross profit (loss):
Launch services		—		(15,191	)		15,191		n.m.				-		(22,294	)		22,294		n.m.
Space products		319		428			(109	)		25	%		319		428			(109	)		25	%
Total gross profit (loss)	$	319	$	(14,763	)	$	15,082			102	%	$	319	$	(21,866	)	$	22,185			101	%


	Minimum Lease Commitment
	(in thousands)
2022 (remainder)	$	1,010
2023		4,069
2024		3,941
2025		3,233
2026		2,075
Thereafter		3,705
Total future undiscounted minimum lease payments	$	18,033
Less: Imputed Interest		3,156
Total reported lease liability	$	14,877


	Astra Space, Inc.

Date: ~~November 9, 2022~~August 14, 2023	By:	/s/ Chris C. Kemp
		Chris C. Kemp
		Chief Executive Officer and Chairman of Board and Principal Executive Officer

Date: ~~November 9, 2022~~August 14, 2023	By:	/s/ ~~Kelyn J. Brannon~~Axel Martinez
		~~Kelyn J. Brannon~~Axel Martinez
		Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer

in thousands

Senior Note

Less: Unamortized debt discount and issuance costs

Carrying value of Senior Note