XCOR Struggles to stay Afloat
XCOR Aerospace is an American private spaceflight and rocket engine development company based at the Mojave Air and Space Port in Mojave, California, Midland International Air and Spaceport in Midland, Texas and the Amsterdam area, the Netherlands.
The company raised capital in 2009, 2011, and 2014 through Reg D private placements.
Bad News for Investors
According to reports, Chief executive, Michael Blum, a member of the board of directors, said in an Oct. 19 interview with Space News that XCOR has been trying to line up new investors or other partners to keep the company alive.
He reportedly said they have only a few weeks to reach an agreement or it would run out of money.
XCOR is best known in the industry for Lynx, a suborbital spaceplane announced in 2008 designed to carry one pilot and one spaceflight participant. The vehicle was designed to take off from a runway under rocket power and fly a suborbital arc, gliding back to a runway landing.
In 2016, the company announced it was laying off approximately half of its employees and shelving work on Lynx to focus on an engine project under a contract with United Launch Alliance. XCOR never completed the initial prototype of Lynx.
At the end of June, the company said it was laying off the rest of its employees due to “adverse financial conditions,” hiring a few back as contractors. According to reports, a sudden termination of a contract from a larger company led to those layoffs.
Investigating Potential Claims
The White Law Group is investigating the liability that brokerage firms and financial advisors may have for recommending high risk private placement investments, like XCOR Aerospace Inc., to their clients.
Brokerage firms that recommend private placement investments are required to perform adequate due diligence on the investments. They must ensure a reasonable likelihood of success.
Brokerage firms must also evaluate whether the investments are suitable in light of their client’s age, net worth, investment experience, risk tolerance, and investment objectives. Firms that fail to perform adequate due diligence, or that make unsuitable recommendations, can be held responsible for losses in a FINRA arbitration claim.
If you suffered losses investing XCOR Aerospace Inc. or another private placement investment and would like to discuss your litigation options, please call The White Law Group at 888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.