Masten Space Systems Files for Chapter 11 Bankruptcy

Masten’s XL-1 lunar lander was designed science and technology payloads to the Moon’s South Pole. (Credits: Masten Space Systems)

Updated 7/29/2022, 1:24 p.m. PDT: Added statements from NASA and Masten Space Systems. Clarified contract award included paying for launch.

by Douglas Messier
Managing Editor

MOJAVE, Calif. — Masten Space Systems filed for Chapter 11 bankruptcy on Thursday, signaling serious financial distress at the pioneering NewSpace company and putting at risk a NASA-funded mission to send a Masten-built lander to the surface of the moon.

The company said it owed 50 to 99 creditors between $10 to $50 million. Top creditors included SpaceX ($4.6 million), Psionic LLC ($2.8 million), Astrobotic Technology ($2.7 million), NuSpace ($1.7 million), and Frontier Aerospace ($1.2 million).

NASA awarded Masten a contract in April 2020 to deliver the MoonRanger rover and eight scientific payloads to the lunar surface aboard Masten’s XL-1 lander late next year. The space agency awarded the contract for Masten Mission One under its Commercial Lunar Payload Services (CLPS) initiative, which pays commercial companies to deliver instruments to the moon.

“The $75.9 million award includes end-to-end services for delivery of the instruments, including payload integration, launch from Earth, landing on the Moon’s surface, and operation for at least 12 days,” NASA said in a press release.

Masten struck an optimistic tone that bankruptcy would allow it to return to operations after the company furloughed its employees for the month of July.

“Masten intends to use the Chapter 11 process to streamline Masten’s expenses, optimize its operations, and conduct sale processes that maximize value for its unsecured creditors. We expect the case to move quickly in order to minimize expenses,” the company said in a statement. “”We are hopeful that this process will enable Masten to continue operations and deliver value for its customers and the space industry.”

NASA said in a statement that Masten’s contract original $75.9 million had been increased by $5.4 million to $81.3 million. Masten has received $66.1 million thus far.

Through the agency’s Commercial Lunar Payload Services (CLPS) initiative, NASA purchases delivery services from vendors to deliver NASA payloads to the lunar surface. In 2020, the agency selected Masten Space Systems of Mojave, California, to deliver and operate eight payloads – with nine science and technology instruments – to the Moon’s South Pole in 2023. NASA received notification its payloads slated for delivery aboard Masten Mission One may be impacted by Masten business operations. The agency is working closely with the company to ensure that any potential changes comply with Federal Acquisition Regulations. In the event Masten Space Systems is unable to complete its task order, NASA will manifest its payloads on other CLPS flights.

NASA’s CLPS contract did not cover the entire cost of mission. Masten had difficulty raising additional funds by finding private payloads to fly to the lunar surface.

“We ran out of money after grossly underbidding. The estimate was $105 million but I was told that we had found a 30 million dollar private customer who wanted to fly with us,” said a source who requested anonymity.

In addition to building the lander, Masten is also responsible for paying for a launch aboard a SpaceX Falcon 9 rocket out of the NASA contract award. It’s not known what the launch cost, but the bankruptcy filing said Masten owes $4.5 million to SpaceX.

The Chapter 11 filing in Delaware Bankruptcy Court came after Masten spent the last several months shedding key employees. Reuben Garcia left in March after nearly 12 years with the company. His most recent roles were as director of technical operations/manager of landing systems.

Long-time CEO Sean Mahoney, who joined Masten as director of strategy in December 2010, announced his departure in April. The company began losing employees in the months that followed, the anonymous source said.

“When the board ‘phased out’ Sean Mahoney sometime in April or May, the long-time angel investor Joel Scotkin took over as temporary CEO,” the source said. “He tried to reassure the team by saying that Masten had a two month runway and that would be plenty of time to find investors. However, that’s when we started leaking employees, maybe at a rate of two to three per week….

“Joel Scotkin tried to raise money, and we had several letters of intent, but the deals all fell through,” the source added. “Our greatest failure overall is most likely that we never had a chief engineer on the project, and our systems engineering team had never worked on spacecraft (they had lots of experience in construction work if I’m not mistaken).” 

On June 24, the company laid off 20 employees, including 15 engineers working on the XL-1 lander, the source said. Masten subsequently furloughed the rest of its staff for the month of July, hoping to bring them back if the company’s financial situation improved.

Masten is one of five companies awarded contracts for CLPS lunar landers. The other companies include: Astrobotic Technology of Pittsburgh, Pa.; Draper of Cambridge, Mass.; Firefly Aerospace of Cedar Park, Texas; and Intuitive Machines of Houston, Texas.

The XL-1 lander was originally scheduled to launch in December 2022 bound for a landing at the moon’s south pole. In June 2021, Masten announced an 11-month launch delay to November 2023. The company said the delay was caused by industry-wide supply chain disruptions and the effects of the ongoing COVID-19 pandemic.

Masten has built and operated a family of reusable, low-altitude rockets that have been used to fly experiments and test technologies for use in landing vehicles on other worlds. Masten Mission One was the company’s first contract to build and operate a spacecraft.

Masten Mission One Payloads

NASA selected the following payloads to fly on Masten’s XL-1 lander.

  • Lunar Compact Infrared Imaging System (L-CIRiS) will deploy a radiometer – a device that measures infrared wavelengths of light – to explore the Moon’s surface composition, map its surface temperature distribution, and demonstrate the instrument’s feasibility for future lunar resource utilization activities.
  • Linear Energy Transfer Spectrometer (LETS) is a sensor that will measure the radiation environment on the Moon’s surface. The payload also is being flown on a CLPS flight to the Moon in 2021.
  • Heimdall is a flexible camera system for conducting lunar science on commercial vehicles. This innovation includes a single digital video recorder and four cameras: a wide-angle descent imager, a narrow-angle regolith imager, and two wide-angle panoramic imagers. This camera system is intended to model the properties of the Moon’s regolith – the soil and other material that make up the top layer of the lunar surface – and characterize and map geologic features. Other goals for this instrument include characterizing potential landing or trafficability hazards.
  • MoonRanger is a small robotic rover that weighs less than 30 pounds and will demonstrate communications and mapping technologies. It will demonstrate the ability to move quickly across long distances on the lunar surface with autonomous navigation and without the ability to communicate with Earth in real time. It is a technology that could enable exploration of destinations that are far from lunar landing sites. The MoonRanger will carry the Neutron Spectrometer System, which will measure the concentration of hydrogen in the Moon’s regolith – a possible indication of the existence of buried water.
  • Mass Spectrometer Observing Lunar Operations (MSolo) is a device to measure potentially accessible resources on the Moon’s surface. It will identify gases coming off a lander during touchdown on the lunar surface to help scientists understand what elements are coming from the lunar surface and which ones are introduced by a lander itself.
  • Near-Infrared Volatile Spectrometer System (NIRVSS) is a tool to measure surface composition and temperature. The instrument will characterize the variability of the lunar soils and detect volatiles such as methane, carbon dioxide, ammonia and water.
  • Laser Retroreflector Array (LRA) is a series of eight small mirrors to measure distance and support landing accuracy. It requires no power or communications from the lander and can be detected by future spacecraft orbiting or landing on the Moon.
  • Sample Acquisition, Morphology Filtering, and Probing of Lunar Regolith (SAMPLR) is a robotic arm that will collect samples of lunar regolith and demonstrate the use of a robotic scoop that can filter and isolate particles of different sizes. The sampling technology makes use of a flight spare from the Mars Exploration Rover project.