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It costs time and money to reach the moon. Moon Express is running out of both

Once a darling start-up, Moon Express is now on survival mode

Rachael Joy
Florida Today
  • Moon Express is one of 12 eligible companies to compete for contracts worth $2.6 billion
  • Space Florida once wooed the company to set up shop here

For many companies Cape Canaveral is the land where space dreams are made, but for Bob Richards, the CEO of a startup that wants to fly to the moon, moving his business to the Space Coast has been more of a nightmare. He lost talented engineers, was forced out of a prime launch pad and was sued by Space Florida, the government agency tasked with attracting aerospace business to Florida.  

Now he’s running out of time to realize his lifelong dream of reaching the moon and keep his company afloat in the process. 

“I'm not a billionaire myself. I only have so many resources myself, and I can't imagine being able to keep trying after a year. So I've got kind of that horizon in front of me right now," Richards told FLORIDA TODAY. 

Richards' company, Moon Express, was founded in 2010 with the goal of mining the moon for valuable resources such as Helium-3, which some see as a potential clean energy source. But right now the focus is to build and operate a lunar lander and be the first commercial company to send government and private payloads to the moon.

Richards is banking on a lifeline in the form of a NASA Commercial Lunar Payload Services contact. His company is one of 12 eligible to compete for the contracts worth $2.6 billion in total through 2028.

Embarrassed by his current financial situation and in an effort to stay focused, Richards hasn’t spoken to the press in nearly two years.

“When the company went into survival mode, it wasn't the time to brag about things we were going to do," Richards said. "Now NASA has money on the table. There are other credible companies competing for it. This is the time to actually win a contract. We need to hunker down, write a proposal, win one of these CLPS missions."

During better times, Bob Richards, CEO and co-founder of Moon Express, addressed the National Space Club in 2016 about the company's progress in Florida.

Last year his company was evicted by Space Florida from its office space in Cape Canaveral for falling behind on rent so he’s writing proposals from a partially remodeled high bay at Launch Complex 17 using his cell phone as a hotspot to save on internet. When the license comes up for renewal in 2021 the Air Force has made it clear if Moon Express hasn’t secured a NASA contract, it will probably need to move out.

At its peak Moon Express had 45 employees but has dwindled down to seven. 

"There were some, as in every startup, missteps technically and managerially and so on," said Jim Cantrell, a former SpaceX engineer who helped design the Moon Express lander. 

For a company that was once a top contender for the Google Lunar X-prize, it wasn’t supposed to be this way.

In the early days Moon Express was the lunar start-up with major space pedigree. Its founder Richards, along with Todd Hawley and Peter Diamandis (founder of XPRIZE), created International Space University in 1987. Notable alumni include NASA astronaut Jessica Meir and VP of Virgin Galactic Will Pomerantz and literally thousands of others who are peppered through the entire aerospace industry, some at very high levels.

October 2018:Moon Express secures $10 million funding to advance Cape Canaveral operations

November 2018:Moon Express among commercial partners NASA selects for robotic lunar missions

Richards is an entrepreneur with degrees in engineering and physics who has a knack for fundraising. He amassed an impressive $50 million from hotshot Silicon Valley investors like Barney Pell and Naveen Jain and even a few celebrities such as musician Will.i.am. The reveal of the Moon Express lunar lander prototype in 2013 was a glitzy Las Vegas production more suitable for primetime NBC than NASA TV.  

So what went wrong?

A match made in Florida

It started like any other budding romance.

In 2014 Moon Express was riding high after a successful test of its lunar lander MTV-1x at Kennedy Space Center. It was the first ever commercial lander prototype that was actually flown in a flight test. NASA was so impressed it put the prototype spacecraft on display at the Kennedy Space Center Visitor Complex.

Soon after Space Florida came-a-courtin'.

Up until that point Moon Express was based at NASA Ames Research Center in California with a propulsion team in Huntsville, Alabama. But Space Florida was wooing the company into relocating to the Sunshine State.

“At the beginning we were the shiny one, we were the one they wanted to attract and they put a lot of effort into it," Richards said of Space Florida attentions. "I was the centerfold of their annual report one year. I felt the glow. When we were good for them, boy, were they all over us.” 

August 2016:Moon Express approved for first commercial lunar mission

Space Florida was offering the company a sweet deal. They would give Moon Express up to $2 million in matching funds backed by the Florida Department of Transportation and a lease agreement for Launch Complex 36 which had last been used in 2005 to launch Atlas rockets.  

“I became convinced that this was the place, not just to test the vehicle but for the transition of Moon Express from a kind of an R&D company at NASA Ames to an operational company where we needed to build and fly these things," Richards said.

Moon Express and Space Florida made it official in 2015. Richards consolidated his operations and moved the company to Cape Canaveral where they got to work improving Launch Complex 36. Everything seemed to be going great but what Richards didn’t know was that Space Florida had started eyeing a new catch.

A very big catch.

“About midway through, Frank DiBello called me and said 'Bob, we need to talk.'”

Dibello is the CEO of Space Florida who also goes way back with Richards. He was even on the board of International Space University at one point. Turns out Space Florida was on the cusp of securing a deal with Jeff Bezos’ Blue Origin and Launch Complex 36 was the only pad that fit Blue Origin's size requirements.

“It was an awkward situation because I didn't know what the outcome was, but everybody, I knew, had a very positive desire to take care of Moon Express, but not to lose the opportunity to attract Bezos," Richards said.

In 2016, Richards sat down with Space Florida, Kennedy Space Center and the 45th Space Wing and they hammered out a new deal. If Moon Express would give up Launch Complex 36, it could have Launch Complexes 17 and 18 instead. At first blush it seemed like it was a good trade — two for the price of one — but LC 17 was in disrepair and required more work than 36.  

The pads last housed United Launch Alliance's Delta II rocket, which completed its final flight from Florida in 2011.

In addition, 17 and 18 were not run by Space Florida so Moon Express had to do a direct license with the Air Force’s 45th Space Wing, which Richards says was not an easy transition.

“We’d already made investments in 36, we had people working there, we’d already done all the necessary site surveys. We invested a year and a lot of money into getting set up at 36," Richards said. "Also just think of even moving expenses. The relocation from 36 to 17 was about $100,000 that Space Florida promised to get to us and they just never did.”

Space Florida counters that Moon Express spent around $40k at Launch Complex 36. In an effort to match the money spent, Space Florida agreed to perform the same services at LC 17.  

According to Dale Ketcham, a vice president at Space Florida, the agency's records show it spent $14k but he recalls spending more.

"We spent closer to north of 30, but I don't have any documentation to that effect," Ketcham said, "It was associated with other expenditures all geared toward seeing to it they weren't spending twice for the same product."

At the time Richards wasn’t too worried about the money. Moon Express was full steam ahead working on their lunar lander designs while pumping cash into the launch complex construction.

Richards was also busy paving the way for commercial companies to get legal permission to travel beyond low Earth orbit. In 2016, Moon Express was the first private company in history to receive U.S. government approval to send a spacecraft to the Moon.

But in mid 2017 a major investor, whom Richards declined to name, pulled out unexpectedly putting Moon Express in a precarious situation.  

“Had I known that the rest of the money was not going to come, I wouldn't have spent everything that we had," Richards said. "But we did. We spent everything we had and built up the staff and the engineering."

People got up early to watch the demolition of the launch towers at Launch Complex 17 which is now occupied by Moon Express, a private company developing small lunar landers that NASA may use to send science instruments to the lunar surface in the next few years.

In July 2018 the twin towers at LC 17 were removed by the Air Force as part of a demolition planned before Moon Express moved in. The implosion was symbolic for Richards. 

“At the time that the towers came down, it was kind of a representative moment. It’s a lot of things collapsing all around me. It was a time when I didn't know where my next money was going to come from. We were not getting along well with Space Florida.”

The demolition:Twin launch towers tumble at Cape Canaveral's historic Launch Complex 17

The demolition at LC 17 dragged on for a year making it difficult for Moon Express staff to work at that site so they consolidated to office space they had been renting from Space Florida since 2015 right outside the gates of Cape Canaveral Air Force Station.

Moon Express spent around $284,000 updating LC 17 and 18 which Space Florida matched paying out approximately $142,000 per their contract. 

But Richards says they have an outstanding invoice due for around $169,000 that Space Florida never paid. Richards also never forgot the $100,000 he says he was promised for the upgrades they made at LC 36 before moving out. 

“As far as I was concerned they owed us a quarter million dollars and we are struggling right at that moment to make payroll and really needed the money," Richards said. 

Space Florida confirmed it received the invoice in February of 2019 but says it had accounting issues. 

"We sent an email with a line by line review of all the deficiencies that were in that second invoice," Ketcham said, "and we never received anything back from them that would help cure those deficiencies." Space Florida required additional backup paperwork for the charges and also verification that the work performed was facility improvements. 

According to Space Florida, Moon Express went dark for months. The agency sent a letter to Moon Express in June 2019 notifying the company it had 30 days to clear up the invoice concerns or the payments would be rejected. 

Richards says he didn't receive that letter or that it was missed. He explained they were not aware of an impending deadline because he had written and verbal acknowledgement from Space Florida that their contract was being extended until October 2019 and therefore had plenty of time to submit the additional paperwork. The last official contract between Space Florida and Moon Express seen by FLORIDA TODAY shows it expired in September of 2018.

In July 2019, Space Florida sent a final letter stating the matter was closed. 

"We are here to grow companies like Moon Express but we also are obligated both by contract and by fiduciary relationship to maintain the integrity of expenditures of state tax dollars," Ketcham said.

Things deteriorated rapidly from this point. A month later Space Florida sent Moon Express an eviction notice. 

During its cash crunch, Moon Express fell two months behind paying rent for the office space, which was $1,869 a month.

“So we owed them under $4,000 when we were arguing over hundreds of thousands of dollars they owed us," Richards said.  At that point Moon Express had paid over $100,000 in total rent over the last five years. 

"If somebody is not responding month after month after month and we're trying to help you, at some point your patience runs out and you have to move on and I think that would be our position as to what drove the eviction because according to us they're not paying," Ketcham explained.

“This isn’t the worst part. What that led to, was the next package we got from their lawyers. They sued us," Richards said. 

Space Florida sued Moon Express for $10,844.95 in back rent and claimed their lease expired in March 2019. Moon Express's VP of Operations Daven Maharaj did sign and return the lease renewal for another year the day it expired in March (but did not receive a countersigned lease from Space Florida) and assumed they were good until 2020. 

“We continued to pay Space Florida rent until October 2019, when we received the lawsuit claiming we were illegal tenants even though Space Florida had continued to accept rent payments from us, and we had signed a lease extension," Richards explained.

Moon Express did not have the resources to respond to the lawsuit so a judge awarded a default judgement in favor of Space Florida for $15,000.

"My take on the success of Space Florida is that they are fantastic at working with large companies with deep pockets that can go to these great ribbon cutting ceremonies," Maharaj said, "but as soon as they're into the entrepreneurial commercial company where you've got hills and valleys and uncertainty they're a disaster. They don't understand it. They just can't deal with it. and I think we're a prime example of that."

Ketcham says the money the state spent on Moon Express won't go to waste since it improved LC 17 which will be of value to the next customer and ultimately continue to help grow the space industry here. 

"At the end of the day, the marketplace is going to determine who's successful and who's not, who gets customers and contracts and can raise money," Ketcham said,  "We're here to help but not everybody's going to make it."

Richard and Maharaj packed up and moved out of the office over Halloween weekend last year.  Since then Richards has laid low and kept the story to himself but now he feels it's time to share his experience.

"I want the truth out because I don’t want them to do it again. I don’t want that to happen again to somebody else, maybe some other entrepreneur that comes out here and has less experience than maybe I do," Richards said. 

Richards' issues with Space Florida are not the sole source of his current financial situation. He's been criticized for his management style. 

"Looking back, when insecurity arose around financing, to keep payroll going, I should have been far more harsh and let people go sooner," Richards reflected.

"He's really focused on getting the vision out there and that's what he should be doing as CEO," Cantrell said, "My criticism has always been that he needs a lot stronger second guy in charge."

In total Moon Express claims it spent over $700,000 on launchpad upgrades and employed Florida residents which resulted into additional financial benefit to the state.

Today Richards feels he's down but not out. The company is operating on a round of funding secured in early 2020. He calls the determination to keep going 'defiant entrepreneurialism' and is totally focused now on winning a NASA Commercial Lunar Payload Services contract.

Moon Express has strategic partnerships with industry leaders including an exclusive arrangement with Nanoracks, the main company that handles payloads on the International Space Station. 

 “Nanoracks partnered with us exclusively on CLPS proposals. And if we win one, they will be the ones that handle the NASA payloads," Richards said.

Another ally is his relationship with Cantrell, who now runs Phantom Space and has signed on to provide propulsion for Moon Express' lunar lander. 

"We're big believers in Bob and Moon Express and we think that there's a really, really solid design here and a great business plan," Cantrell said. 

Every morning, Richards who lives on the Indian River, looks out at NASA's iconic Vehicle Assembly Building.  He says it inspires him to keep pursuing his lifelong goal until the very end.

“Even if we're not successful. Ultimately, this story is important. It's important for perseverance, it's important for inspiration. Hopefully it has a happy ending. I don't know that right now. But, what's the happy ending? Do we actually get to land on the moon? That would be happy.”

Contact Rachael Joy at 321-242-3577. Follow her on Twitter @Rachael_Joy.