Mynaric Secures Another USD 5.0 million Bridge Loan to Meet Immediate Working Capital Needs

Rhea-AI Summary

Mynaric AG (NASDAQ:MYNA) has secured an additional USD 5.0 million bridge loan from U.S.-based lenders, supplementing previous loans of USD 95 million and USD 16.5 million from October and November 2024. The new bridge loan, maturing on January 31, 2025, carries interest at Term SOFR (3-month) plus 10% margin. The company's cash position stands at EUR 8.9 million as of December 20, 2024.

The loan availability depends on proving the company's ability to meet obligations. Mynaric remains in negotiations for additional capital, contingent on initiating financial reorganization under German StaRUG law. If StaRUG proceedings open, shareholders risk losing part or all of their investment. Without StaRUG proceedings, the company lacks alternative financing options.

Positive

• Secured additional USD 5.0 million in bridge loan financing
• Current cash position of EUR 8.9 million as of December 20, 2024
• Lender willing to provide additional funding pending restructuring

Negative

• Company requires immediate working capital needs indicating financial distress
• High interest rates on loans (SOFR + 10% margin)
• Risk of shareholders losing part or all investment if StaRUG proceedings open
• No alternative financing options available outside StaRUG proceedings
• Short-term loan maturity (January 31, 2025) indicating urgent financial situation

Insights

Financial Restructuring Expert

This bridge loan development signals severe financial distress at Mynaric. The company has now secured $5.0 million in additional bridge financing, bringing total bridge loans to $21.5 million on top of their existing $95 million term loan. The high-interest rate of SOFR + 10% and short-term maturity (January 31, 2025) indicate lenders' significant concerns about repayment risk. With only €8.9 million in cash reserves, the company's liquidity position is critically low. The requirement for restructuring expert approval and the likely initiation of StaRUG proceedings (German bankruptcy protection) suggest imminent financial reorganization that could severely dilute or wipe out existing shareholders. The provision for contingent liabilities covering all outstanding loans is particularly concerning, as it indicates preparation for potential default scenarios.

Distressed Debt Analyst

The terms of this bridge financing reveal a company in severe financial distress. The 10% margin over SOFR represents extremely expensive capital, typical of last-resort financing. The short one-month maturity and requirement for restructuring expert approval indicate lenders are maintaining tight control while limiting their exposure. Most telling is the lender's insistence on StaRUG proceedings as a condition for additional funding - this effectively signals that a formal restructuring process is inevitable. The company's admission that alternative financing options are "not available or in sight" suggests extremely negotiating leverage. For context, this resembles the final stages before many companies enter formal restructuring, where bridge loans serve merely to maintain basic operations while reorganization plans are finalized.

MUNICH, GERMANY / ACCESSWIRE / December 23, 2024 / Mynaric AG (NASDAQ:MYNA) (ISIN: US62857X1019) (FRA:M0YN) (ISIN: DE000A31C305) (the "Company") today entered into an amendment to its existing loan agreement with its U.S.-based lenders, which are funds affiliated with a U.S.-based global investment management firm, pursuant to which such lenders have agreed to provide a third bridge loan in the amount of USD 5.0 million. Such bridge loan is in addition to the USD 95 million originally provided under such loan agreement and the two bridge loans in the aggregate amount of USD 16.5 million that such lenders agreed to provide in October 2024 and November 2024.

As is the case for the existing USD 95 million term loans and the previous USD 16.5 million bridge loans, the new bridge loan will be guaranteed and secured by the Company and each of its subsidiaries and bear interest at a rate equal to the Term Secured Overnight Financing Rate (SOFR) for a 3-month tenor, subject to a 2% floor, plus a margin of 10% or, at the option of the borrower, a certain alternative base rate, subject to a 2% floor, plus a margin of 9%. The new bridge loan will mature on January 31, 2025.

In addition, the maturity date of the two existing USD 16.5 million bridge loans was extended and will now also be January 31, 2025.

The availability of the new bridge loan is subject to the satisfaction of certain conditions, including the delivery of an updated liquidity plan from the Company's independent restructuring expert showing that it is more likely than not that the Company and its subsidiaries will be able to pay their obligations when due during the period that the bridge loan is outstanding. The Company expects to satisfy this condition as well as all other necessary conditions, and have the bridge loan fully available and drawn as of today to meet immediate working capital needs.

The bridge loan can be terminated early if, among other things, the previously commissioned independent German restructuring expert provides notice on or prior to the maturity date of the bridge loan that it is no longer more likely than not that the Company is capable of being restructured.

Excluding the proceeds of its loans, as of December 20, 2024, the Company had cash and cash equivalents on hand of EUR 8.9 million, which the Company will also use to meet its on-going operational and working capital needs.

The provision that the Company made earlier this December for contingent liabilities resulting from guarantee obligations in the amount of all loans provided by the Lender outstanding, including interest and exit fee, remains in place.

The Company remains in negotiations with its Lender 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 remains 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")). As of today, the Company 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.

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.

Contact:

Mynaric AG
Phone: +49 8105 7999 0
E-mail: comms@mynaric.com
www.mynaric.com

SOURCE: Mynaric AG

View the original press release on accesswire.com

FAQ

What is the amount and terms of Mynaric's (MYNA) new bridge loan in December 2024?

Mynaric secured a USD 5.0 million bridge loan with interest at Term SOFR (3-month) plus 10% margin, maturing on January 31, 2025.

What is Mynaric's (MYNA) total loan amount after the December 2024 bridge loan?

The total loan amount is USD 116.5 million, consisting of the original USD 95 million, USD 16.5 million in bridge loans from October/November 2024, and the new USD 5.0 million bridge loan.

What is Mynaric's (MYNA) cash position as of December 20, 2024?

Mynaric had EUR 8.9 million in cash and cash equivalents as of December 20, 2024.

What are the risks for Mynaric (MYNA) shareholders under potential StaRUG proceedings?

Under StaRUG proceedings, shareholders risk losing part or all of their investment in the company.

When do Mynaric's (MYNA) bridge loans mature?

All bridge loans, including the new USD 5.0 million loan and previous USD 16.5 million loans, mature on January 31, 2025.