XCOR Owes $27.5 Million to Creditors, Orbital Outfitters Out of Business

Lynx engine hot fire. (Credit: XCOR)

The numbers are in on XCOR Aerospace’s bankruptcy, and as one would expect, they’re not real pretty.

The company has $1.1 million in assets and $1,424.66 in cash, according to documents filed with the Bankruptcy Court for the Eastern District of California. XCOR owes $27.46 million to creditors, with $23.6 million in unsecured debts and $3.86 million in liabilities secured by assets.

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Henry Vanderbilt on XCOR’s Bankruptcy

XCOR CEO Jeff Greason inspects the Lynx main engine after a hotfire test while Chief Test Engineer Doug Jones looks on. (Credit: XCOR)

Space is hard. Space startups immensely so.

XCOR’s decision to file for Chapter 7 bankruptcy on Tuesday marks the end of a company that seemed to be in perpetual start-up mode since its founding 18 years ago. Lacking a billionaire backer with deep pockets and a thick Rolodex, the company attempted to develop revolutionary rocket engine technology and a suborbital space plane with funding that would be a rounding error for the giant aerospace primes.

So, how far did it get? What might bidders find valuable when XCOR’s assets are auctioned off? And what problems might have helped to cause the company’s fatal plunge into insolvency?

Henry Vanderbilt has a few ideas on these subjects. Henry is an XCOR shareholder who worked at the company back in the day. He went on to found the Space Access Society, whose conferences were a highlight of the year for the New Space community until recently.
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XCOR Files for Chapter 7 Bankruptcy

Lynx suborbital space plane (Credit: XCOR)

MOJAVE, Calif. – Troubled XCOR Aerospace, a pioneer in reusable rocket engine technology, filed for Chapter 7 bankruptcy in federal court on Wednesday, according to court documents.

The filing will lead to the liquidation of the 18-year old company, whose engine technology was designed to power the two-person Lynx suborbital space plane XCOR was building. The vehicle, which was designed to take off and land on a runway, was only partially completed before most work on it stopped last year.

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Down to the Wire to Save XCOR From Chapter 7 Bankruptcy

Lynx cockpit view. (Credit: XCOR)

XCOR has a matter of weeks to conclude a deal with a potential partner or face liquidation under Chapter 7 bankruptcy.

In an Oct. 19 interview, Michael Blum, a member of the board of directors of XCOR who took over as chief executive at the end of June, said the company has been in discussions with potential strategic partners and other investors interested in its propulsion technology and Lynx suborbital spaceplane, but those negotiations have taken longer than expected to finalize.

“Our time is slowly running out,” Blum said. The XCOR board and its major shareholders have been providing a “minimum amount of capital” over the last several months to keep the company going and pay its bills, but said their patience is running out. “Once that happens, the future gets very bleak.”

XCOR has been in discussions with a number of potential partners and investors, Blum said. One approach has involved discussions with strategic partners, including an unidentified large aerospace and defense company primarily interested in XCOR’s propulsion technology and related intellectual property.

XCOR has also been in talks with investor groups. One such group, he said, is particularly interested in XCOR’s Lynx suborbital spaceplane as a means to quickly get into the space tourism market. XCOR has been working on the Lynx for several years, and the prototype vehicle is about two-thirds complete. A second group, Blum said, is in the industrial and manufacturing sector that is already familiar with XCOR.

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Gibson: Cancellation of ULA Contract Led to Recent XCOR Layoffs

John (Jay) Gibson

Former XCOR CEO Jay Gibson told the Senate Armed Services Committee this week that the cancellation of an engine contract by United Launch Alliance led the struggling Mojave-based company to lay off its remaining employees last month.

“We were a subcontractor, and in the days of continuing resolutions we felt like we had a commitment from our prime” for funding that he said would last a year or more. “With less than 30 days notice, we were told that funding was terminated.”
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XCOR Lost ULA Engine Contract

Lynx engine hot fire. (Credit: XCOR)

Despite laying off its 21 remaining employees, XCOR Aerospace isn’t dead yet. But, it’s not in real good shape, either.

It turns out that a major blow to the company was the loss of a contract with United Launch Alliance (ULA) to develop an upper stage for the Vulcan booster.

The primary impetus for the layoffs, Acting CEO and XCOR Board member Michael Blum told me, is the loss of a contract for engine development that the company had with United Launch Alliance. “The proceeds should have been enough to fund the prototype of Lynx [the company’s planned spacecraft], but ULA decided they’re not going to continue funding the contract. So we find ourselves in a difficult financial situation where we need to raise money or find joint developments to continue.” ULA declined to comment.
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XCOR Lays off Remaining Employees

Lynx engine hot fire. (Credit: XCOR)

Struggling XCOR Aerospace has laid off its remaining employees in Mojave, Calif. and Midland, Texas.

“Due to adverse financial conditions XCOR had to terminate all employees as of 30 June 2017,” the company said in a statement. “XCOR management will retain critical employees on a contract basis to maintain the company’s intellectual property and is actively seeking other options that would allow it to resume full employment and activity.”

The move follows the news last month that CEO Jay Gibson was leaving the company after President Donald Trump nominated him for a high-level position at the Department of Defense. Gibson left the company at the end of June.

XCOR hired Gibson in March 2015 to replace founder Jeff Greason. The objective was for Gibson to focus on the business side while Greason focused on completing construction on the two-seat Lynx suborbital space plane.

That arrangement did not work out. By November, Greason and two other founders, Dan DeLong and Aleta Jackson, had left the company to found Agile Aerospace.

Greason, DeLong, Jackson and Doug Jones founded the company in 1999 after being laid off from Rotary Rocket.

In May 2016, XCOR laid off about 25 employees — roughly half of its workforce — and suspended work on the Lynx. The company has since refocused its energies on its rocket engine work.

XCOR had been working on an upper stage for United Launch Alliance’s Vulcan launch vehicle.

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Jay Gibson Out at XCOR, In With Trump Administration

John (Jay) Gibson

Jay Gibson’s two-year tenure as president and CEO of XCOR appears to be at an end.

On Friday, President Donald Trump announced his intent to nominate Gibson to be deputy chief management officer of the Department of Defense.

The announcement describes Gibson as “most recently” having been XCOR’s president and CEO. However, a source says he is still at the company.

The nomination is subject to Senate confirmation.

XCOR hired Gibson in March 2015 to replace founder Jeff Greason. The objective was for Gibson to focus on the business side while Greason focused on completing construction on the Lynx suborbital space plane.

That arrangement did not work out. By November, Greason and two other founders, Dan DeLong and Aleta Jackson, had left the company to found Agile Aerospace.

In May 2016, XCOR laid off about 25 employees — roughly half of its workforce — and suspended work on the Lynx. The company has since refocused its energies on its rocket engine work.

UPDATE: XCOR board member Michael Blum issued the following written statement:

“Jay Gibson is still at XCOR but will be leaving shortly for a tremendous opportunity to serve his country in a very senior role at DoD. He has been a great CEO whose leadership and experience has guided XCOR through ups and downs.”

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XCOR Partners with Immortal Data on Shipslog Data Acquisition System

XCOR_SXC_logoMIDLAND, Texas, Nov. 28, 2016 (XCOR PR) –  XCOR Aerospace and Immortal Data Incorporated have entered into a  licensing agreement having Immortal Data  further developing and commercializing the ShipsLogTM software,  the data acquisition system for the XCOR Lynx Space Plane and its engine test stand.  After enhancement and integration, ShipsLogTM will be a key element of a tail to nose aerospace data collection, storage and display solution offered by Immortal Data.  Development efforts will begin immediately at Immortal Data facilities in Midland, TX, a facility funded by Midland Development Corporation, at the Midland International Air and Space Port.

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A Note to Readers….

mojave_tower_sunset_smHi everybody.

As I had previously disclosed, I was working on a book project about XCOR Aerospace. That is no longer the case. I have therefore taken the disclosure statement down from the website.

The end of the book project had several causes. One is that progress on the Lynx at XCOR was extraordinarily slow over the years I’ve been here in Mojave. It was hard coming up with a narrative given the way things were going. Ever watched a desert tortoise move? It was a lot like that. If you haven’t, trust me. They’re very s-l-o-o-w-w.

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Glasgow Prestwick Official Visits Midland

orbital_access_logoThe Midland Reporter-Telegram has an account of a visit by Glasgow Prestwick Airport and Spaceport Business Development Director Mike Stewart’s visit to the west Texas city to discuss cooperation. 

Glasgow Prestwick Airport wants to become a spaceport. It also hosts Orbital Access, a company owned by Stuart McIntyre that is working on an air-launched satellite delivery system.
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XCOR Signs MOU With Glasgow Prestwick Spaceport, Orbital Access

Lynx nose structure. (Credit: XCOR)
Lynx nose structure. (Credit: XCOR)

FARNBOROUGH, UK, July 12, 2016 (XCOR PR) – US manned space launch vehicle designer XCOR Aerospace has signed a strategic Memorandum of Understanding (MoU) with spaceplane design and operating company Orbital Access Limited and Glasgow Prestwick Spaceport. This partnership is supported by Scottish Enterprise, the Scottish Government’s economic development agency.

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Entrepreneurial Lingo Lesson: The Pivot

twist_chubby1_disrupt copy
First in an irregular series on entrepreneurial buzz words

Come on let’s pivot again,
Like we did last quarter!
Yeaaah, let’s pivot again,
Like we did last year!

Do you remember when,
ROI was really hummin’,
Yeaaaah, let’s pivot again,
Pivotin’ time is here!

Heeee, and round and round til IPO we go!
Oh, baby, make those investors love us so!

Let’s pivot again,
Like we did last quarter!
Yeaaah, let’s pivot again,
Like we did last year!

There comes a time in the existence of many startups when there an urgent need to change direction. You set up the company to pursue a goal, but for one reason or several — a lack of a market, shortage of investment, regulatory hurdles, a flawed concept — you have to direct all that talent, technology and enthusiasm toward a new objective that will keep the company in operation.

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Readers on Lynx: It’s Dead, Jim

Lynx_suspended_pollParabolic Arc readers are not real optimistic about the future of the Lynx, the suborbital space plane that XCOR suspended work on recently when it laid off most of the staff working on it.

Sixty-nine percent of voters believe that Lynx is as dead as a door nail despite XCOR’s pledge to revive work on the program at a future date. Only 13 percent of voters believe Lynx will fly at some point in the future.

The remaining 18 percent of voters just didn’t care, viewing suborbital space travel as being about a dozen years past its prime.

We’ve got a new poll up on the site asking whether you would like to go to Mars on one of the human missions Elon Musk is planning to launch beginning in 2024.

As I’ve said before: vote early, vote often. Just vote, dammit! Vote! And remember, no wagering.

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