Masten Gets $4.5 Million Bid for Assets from Astrobotic Technology

A rendering of Astrobotic’s Peregrine lunar lander is shown, with NASA’s three water-detecting payloads (MSolo, NSS, and NIRVSS) highlighted in blue. (Credit: Astrobotic Technology)

Updated 8/12/2022 at 12:02 p.m. EDT with information about launch credit with SpaceX.

by Douglas Messier
Managing Editor

MOJAVE, Calif. — Astrobotic Technology has made an initial bid of $4.5 million to acquire the assets of Masten Space Systems, which sought protection from creditors last month by filing for Chapter 11 bankruptcy. The bid will serve as a minimum during the subsequent auction of Masten’s assets.

Astrobotic has also agreed to provide Masten with a $1.4 million debtor in possession (DIP) loan to allow the company to function as it works through bankruptcy.

“Ultimately, Masten was able to reach an agreement for a loan (the “DIP Loan”) with Astrobotic Technology, Inc. (“Astrobotic”) by and through which Astrobotic agreed to serve as a postpetition lender that will provide Masten funding for a sale process for substantially all of Masten’s assets. Further, Astrobotic has entered into a separate agreement under which Astrobotic will serve as the stalking horse for substantially all of Masten’s business. Significantly, as part of this contemplated sale, Astrobotic would purchase the SpaceX Credit,” the company said in a filing.

The SpaceX credit involves $14 million that Masten paid to the company to launch Masten Mission 1 to the moon. In April 2020, NASA awarded the company a contract worth $75.9 million contract to deliver the MoonRanger rover and a suite of scientific instruments to the lunar surface under the space agency’s Commercial Lunar Payload Services (CLPS) program.

SpaceX canceled the launch in June because Masten had not paid the company an additional $4.6 million as required under the contract. The credit for what Masten did pay is a valuable asset during bankruptcy.

Astrobotic’s $4.5 million offer is known as a stalking-horse bid, which essentially sets a floor for bids that other parties cannot go below when Masten auctions off its assets next month. Masten wants to conduct the auction on or before Sept. 6. Details of the two agreements with Astrobotic were revealed in documents filed in Delaware Bankruptcy Court on Wednesday.

“Masten intends to use this Chapter 11 case to sell substantially all of the company’s assets, including the SpaceX launch credit, as a means of funding the company through the sale process. As more fully set forth above, the Debtor has marketed some or all of its programs and assets, and ultimately, after speaking with a number of parties, the Debtor has tentatively entered into a stalking horse agreement with Astrobotic for $4.5 million, which will be subject to a postpetition marketing process and higher and better bids, and ultimately approval by this Court,” Masten said in the document.

Masten has built and flown a series of vertical takeoff/vertical landing vehicles at the Mojave Air and Space Port in California. The company has developed a number of space technologies, usually with NASA funding.

NASA’s $75.9 million award under the CLPS program didn’t cover the entire cost of Masten Mission 1 to the moon. Masten was unsuccessful in raising additional funding to cover the gap, leading to the declaration of bankruptcy. Three companies also declined to buy Masten earlier this year, in large part due to liabilities related to the moon mission.

NASA has awarded Pittsburgh-based Astrobotic two separate CLPS contracts to deliver a rover and scientific instruments to the lunar surface on a pair of missions.