Terran Orbital Announces up to $98 Million of New Capital Through ATM Program

Rhea-AI Summary

Terran Orbital (NYSE: LLAP) has announced the launch of an at-the-market (ATM) offering program, allowing the company to offer up to $98 million of its common stock. The program will be conducted through H.C. Wainwright & Co., as the sales agent. However, due to certain debt document restrictions, Terran Orbital is currently to selling 26,362,513 shares unless it obtains required consent for more.

CEO Marc Bell stated that the ATM program aims to provide customers and vendors with additional confidence in the company's capital adequacy for managing current and future programs. The move is intended to support Terran Orbital's ability to deliver maximum value to customers and stakeholders as business pipeline opportunities convert to awards.

Positive

• Potential to raise up to $98 million in new capital
• Flexibility to offer common stock as needed through ATM program
• Aims to strengthen confidence in capital adequacy for current and future programs

Negative

• to selling 26,362,513 shares without additional consent
• Potential dilution of existing shareholders' equity
• Indicates possible need for additional funding to support operations

Insights

Financial Analyst

The announcement of an at-the-market (ATM) offering program by Terran Orbital is a significant move in terms of capital generation. This allows the company to issue up to $98 million worth of common stock, which is a substantial amount. Such a move can provide the company with flexibility and liquidity, critical for managing ongoing and future projects within the aerospace and defense industries.

From an investor’s perspective, the issuance dilutes existing shares, which might initially seem negative. However, the increased capital can be used to fund new projects, enhance R&D and potentially drive long-term growth. It’s also noteworthy that the company is limited to selling 26,362,513 shares unless further consents are obtained. This limitation could slightly restrict their immediate funding capability but ensures they don't excessively dilute the shares all at once, which is reassuring for current shareholders.

The fact that H.C. Wainwright & Co., LLC, a well-known investment bank, is involved as the sales agent adds a layer of credibility and professionalism to this operation. This move signals management’s proactive stance in ensuring the company’s financial health, which could instill confidence among investors.

Market Research Analyst

The ATM program is a strategic financial tool that Terran Orbital is leveraging to bolster its capital base without the need for a more traditional and potentially lengthy underwritten offering. This approach is particularly useful for companies in high-growth sectors like aerospace and defense, where capital demands can be unpredictable yet significant.

For retail investors, understanding the implications of this move is essential. While it might lead to some share price volatility in the short term due to potential dilution effects, the long-term view is typically more positive. The capital raised can be funneled into expanding their satellite technology offerings, entering new markets and improving existing operational capabilities. This positions the company to compete effectively and innovate within a rapidly evolving industry.

The CEO’s statement underscores management's confidence in converting their business pipeline into actual awards, suggesting a healthy demand for their solutions. This is a positive indicator for the company’s future performance and aligns with their goal of delivering maximum value to stakeholders.

Legal Expert

The statement includes a critical caveat regarding the limitation imposed by certain debt documents, which restricts the company to selling only a specific number of shares unless additional consents are obtained. This is an important legal and regulatory aspect that investors should not overlook. It underscores the need for Terran Orbital to navigate its debt covenants carefully to avoid any breaches that could lead to adverse consequences.

Moreover, the press release clarifies that it does not constitute an offer to sell or solicitation of an offer to buy securities in any jurisdiction where such actions would be unlawful. This demonstrates compliance with securities laws and highlights the structured and legally sound approach the company is taking. Ensuring rigorous adherence to legal mandates is important in maintaining investor trust and avoiding any potential legal pitfalls.

BOCA RATON, Fla.--(BUSINESS WIRE)-- Terran Orbital Corporation (NYSE: LLAP), a global leader in satellite-based solutions primarily serving the aerospace and defense industries (the “Company”), today announced the launch of an at-the-market offering program (the “ATM”), which will allow the Company to offer its common stock, from time to time, in transactions that are deemed to be “at the market” offerings not to exceed an aggregate amount of $98,000,000. Notwithstanding the foregoing, pursuant to certain of the Company’s debt documents, the Company is limited to selling 26,362,513 shares of its common stock under the at-the-market program unless the Company obtains the required consent to sell more shares of common stock. Sales pursuant to the ATM will be conducted through the Company’s sales agent, H.C. Wainwright & Co., LLC.

“As opportunities from our business pipeline convert to awards, we want to give our customers and vendors additional confidence that we have adequate capital to successfully manage current and future programs,” said Marc Bell, Co-Founder, Chairman, and Chief Executive Officer of Terran Orbital. “We are confident that the ATM announced today will allow us to deliver maximum value to our customers and other stakeholders.”

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Terran Orbital

Terran Orbital is a leading manufacturer of satellite products primarily serving the aerospace and defense industries. Terran Orbital provides end-to-end satellite solutions by combining satellite design, production, launch planning, mission operations, and on-orbit support to meet the needs of the most demanding military, civil, and commercial customers. Learn more at www.terranorbital.com.

Forward-Looking Statements

This press release contains “forward-looking statements” for purposes of the federal securities laws. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements under the US securities laws. All statements, other than statements of present or historical facts, contained in this press release, regarding the ATM and expectations, plans and objectives of management are forward-looking statements. Forward-looking statements are typically identified by such words as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook, “estimate,” “will,” “should,” “would” and “could” and other similar words and expressions. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by the forward-looking statements, including, but not limited to: our ability to implement business plans, forecasts, and other expectations; our ability to finance and invest in growth initiatives; the ability to get the stockholder approval to effectuate a reverse stock-split, if necessary; and the other risks disclosed in our Annual Report on Form 10-K filed with the SEC on April 1, 2024 and the prospectus supplement dated September 18, 2023 related to our Registration Statement on Form S-3, as amended (File No. 333-271093), which was declared effective by the SEC on April 18, 2023.

These forward-looking statements are based on management’s current expectations, plans, forecasts, assumptions, and beliefs concerning future developments and their potential effects. There can be no assurance that the future developments affecting us will be those that we have anticipated, and we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240723412383/en/

Terran Orbital Media Contact

Public Relations

pr@terranorbital.com

949-508-6404

Source: Terran Orbital

FAQ

What is the maximum amount Terran Orbital (LLAP) can raise through its new ATM program?

Terran Orbital can raise up to $98 million through its new at-the-market (ATM) offering program.

How many shares is Terran Orbital (LLAP) currently to selling under the ATM program?

Terran Orbital is currently to selling 26,362,513 shares of its common stock under the ATM program, unless it obtains required consent to sell more.

Who is the sales agent for Terran Orbital's (LLAP) ATM offering program?

H.C. Wainwright & Co., is the sales agent for Terran Orbital's ATM offering program.

What is the primary purpose of Terran Orbital's (LLAP) ATM program according to the CEO?

According to CEO Marc Bell, the ATM program aims to provide customers and vendors with additional confidence in the company's capital adequacy for managing current and future programs.