Mynaric Enters into Negotiation for Further Funding with Existing Lender Subject to Financial Reorganization Under StaRUG, and Postpones Upcoming AGM

Rhea-AI Summary

Mynaric AG (NASDAQ:MYNA) has received notice from its German restructuring expert indicating future capital requirements. The company is negotiating with its primary lender to extend $16.5 million in bridge loans due December 30, 2024, and secure additional funding for production and operations.

The lender's support is conditional on initiating financial reorganization under the German StaRUG act. Management believes it's likely they will agree on additional funding and apply for StaRUG proceedings, which could result in shareholders losing part or all of their investment. The company must make provisions for contingent liabilities for all outstanding loans, leading to full consumption of share capital.

Due to these developments, Mynaric has postponed its December 11, 2024 annual general meeting and will convene an extraordinary general meeting.

Positive

• None.

Negative

• Bridge loans of $16.5M maturing December 30, 2024 require extension
• Company requires additional capital for operations and production
• Share capital fully consumed by contingent liability provisions
• Potential complete loss of shareholder value under StaRUG proceedings
• No alternative financing options currently available

Insights

Financial Analyst

This is a critical development signaling severe financial distress at Mynaric. The company is seeking to restructure its $16.5 million bridge loan due December 30, 2024, while simultaneously requiring additional capital. The initiation of StaRUG proceedings (German equivalent of Chapter 11) is particularly concerning as it explicitly warns of potential total loss for shareholders. The provision for contingent liabilities will consume the entire share capital, indicating severe balance sheet deterioration. Most alarming is the lack of alternative financing options and the forced cancellation of the AGM. For a company with a market cap of only $35.6 million, these developments suggest a high risk of significant shareholder dilution or complete equity wipeout if restructuring efforts fail.

Legal Expert

The potential StaRUG proceedings represent a significant legal development for Mynaric. This German restructuring framework, similar to US Chapter 11, provides a court-supervised process for financial reorganization while allowing the company to continue operations. The mandatory shareholder meeting under Section 92 of the German Stock Act is triggered by the loss of half the share capital, a serious legal threshold. The postponement of the AGM and the explicit warning about potential total shareholder losses indicate the gravity of the situation. The restructuring process will likely involve complex negotiations with creditors and could result in substantial changes to the company's capital structure.

MUNICH, GERMANY / ACCESSWIRE / December 6, 2024 / Mynaric AG (NASDAQ:MYNA; ISIN: US62857X1019)(FRA:M0YN; ISIN: DE000A31C305) (the "Company") received preliminary notice from its commissioned independent German restructuring expert indicating further future capital need. Based on these preliminary findings, the Company has entered into negotiations with its primary lender (the "Lender"), affiliates of a US-based global investment management firm, to resolve upon an extension of the US$16.5 million bridge loans maturing on December 30, 2024, as well as to provide additional capital needed to support the Company's production ramp and fund its on-going operations per the Company's restructuring plan

The Lender's willingness to provide additional funding is contingent on the initiation of a financial reorganization under the German Corporate Stabilization and Restructuring Act (Gesetz über den Stabilisierungs- und Restrukturierungsrahmen für Unternehmen ("StaRUG")). At this point in time, management considers it more likely than not that the Lender and the Company will agree on additional funding for financial restructuring and that the Company will apply for the initiation of StaRUG proceedings. If StaRUG proceedings are opened, this could result in shareholders losing part or all of their investment in the Company. If StaRUG proceedings are not opened, the Company would have to explore other financing opportunities that are currently not available or in sight.

Absent other current financing options, the Company will now make a provision for contingent liabilities resulting from guarantee obligations in the amount of all loans provided by Lender outstanding, including interest and exit fee. This will lead to a consumption in-full of the share capital of the Company. Therefore, an extraordinary general meeting will be convened in due course in accordance with Section 92 of the German Stock Corporation Act (Aktiengesetz).

With a view to the latest developments, the annual general meeting of the Company, scheduled for December 11, 2024, will be cancelled and postponed. The Company will announce details of this separately in due course.

About Mynaric

Mynaric (NASDAQ:MYNA)(FRA:M0YN) is leading the industrial revolution of laser communications by producing optical communications terminals for air, space and mobile applications. Laser communication networks provide connectivity from the sky, allowing for ultra-high data rates and secure, long-distance data transmission between moving objects for wireless terrestrial, mobility, airborne- and space-based applications. The company is headquartered in Munich, Germany, with additional locations in Los Angeles, California, and Washington, D.C. For more information, visit mynaric.com.

Forward-Looking Statement

This release includes forward-looking statements. All statements other than statements of historical or current facts contained in this release, including statements regarding our future results of operations and financial position, industry dynamics, business strategy and plans and our objectives for future operations, are forward-looking statements. These statements represent our opinions, expectations, assumptions, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. Forward looking statements are often indicated by terms such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "goal," "intend," "look forward to," "may," "plan," "potential," "predict," "project," "should," "target" "will," "would" and/or the negative of these terms or other similar expressions that are intended to identify forward-looking statements.

The forward-looking statements included in this release are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve known and unknown risks, uncertainties and assumptions that are difficult to predict or are beyond our control, and actual results may differ materially from those expected or implied as forward-looking statements. These risks, uncertainties and assumptions include, but are not limited to (i) the impact of any geopolitical tensions or the global COVID-19 pandemic on the global economy, our industry and markets as well as our business, (ii) risks related to our limited operating history, our history of significant losses and the execution of our business strategy, (iii) risks related to our ability to successfully manufacture and deploy our products and risks related to serial production of our products, (iv) risks related to our sales cycle which can be long and complicated, (v) risks related to our limited experience with order processing, our dependency on third-party suppliers and external procurement risks, (vi) risks related to defects or performance problems in our products, (vii) effects of competition and the development of the market for laser communication technology in general, (viii) risks related to our ability to manage future growth effectively and to obtain sufficient financing for the operations and ongoing growth of our business, (ix) risks relating to the uncertainty of the projected financial information, (x) risks related to our ability to adequately protect our intellectual property and proprietary rights and (xi) changes in regulatory requirements, governmental incentives and market developments. Moreover, new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We caution you therefore against relying on these forward-looking statements, and we qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements included in this release are made only as of the date hereof. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Unless required under applicable law, neither we nor any other person undertakes any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release or otherwise. You should read this release with the understanding that our actual future results, levels of activity, performance and events and circumstances may materially differ from what we expect.

This release may include certain financial measures not presented in accordance with IFRS. Such financial measures are not measures of financial performance in accordance with IFRS and may exclude items that are significant in understanding and assessing our financial results. Therefore, these measures should not be considered in isolation or as an alternative to loss for the period or other measures of profitability, liquidity or performance under IFRS. You should be aware that our presentation of these measures may not be comparable to similarly titled measures used by other companies, which may be defined and calculated differently.

End of Inside Information

SOURCE: Mynaric AG

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FAQ

What is the amount of Mynaric (MYNA) bridge loans maturing on December 30, 2024?

Mynaric has $16.5 million in bridge loans maturing on December 30, 2024.

What is the potential impact of StaRUG proceedings on Mynaric (MYNA) shareholders?

Under StaRUG proceedings, Mynaric shareholders could lose part or all of their investment in the company.

Why did Mynaric (MYNA) postpone its December 11, 2024 annual general meeting?

Mynaric postponed the meeting due to developments regarding financial reorganization and the need to make provisions for contingent liabilities.