It had been selling off items it owns in a bid to survive, including its converted jet Cosmic Girl, and most of its headquarters in California.
It had been hoped the launch, called Start Me Up after the 1981 Rolling Stones hit, would turn the country into a global player - from manufacturing satellites to building rockets and creating new spaceports.
But the rocket experienced an anomaly which "prematurely ended" the first burn and Sir Richard's space dream was all but over.
Two months later the company "paused all operations" in an apparent attempt to shore up its finances and almost all employees were laid off.
Earlier this month, Sir Richard told the BBC that he had personally lost around £1.5bn during the pandemic after lockdowns hit his airline and leisure businesses.
"There was a time when I thought we were going to lose everything", he said. However, he has managed to retain his billionaire status - he has a net worth of £2.4bn according to the latest Sunday Times Rich List.