- Dec 1, 2023
Terran Orbital Closes $32 Million Public Offering Amid Cash Worries
Terran Orbital announced today (September 25) that it closed a $32.5 million public offering, in part to address cash burn concerns. The public offering pricing was announced last week, and it closed on Thursday (September 21).
The offering includes 23,214,290 shares of its common stock and warrants to purchase the same number of shares of common stock, at a combined public offering of $1.40 per share (or common stock equivalent), according to a company announcement. The exercise price of these warrants is $1.50 per share, and are set to expire in five years with the ability to exercise them at any time.
“Terran Orbital expects to use the net proceeds of the offering for general corporate purposes, including capital expenditures, working capital, research and development, and general and administrative expenses, and maintenance of the liquidity covenant in the company’s debt documents,” officials wrote in a press release from September 18
H.C. Wainwright & Co. is the exclusive placement agent for the offering.
The fundraising comes following months of concerns with cash burn at Terran. CEO Marc Bell first raised the possibility of fundraising in May during a call with investors. The company had roughly $57 million in cash by the end of Q1, which some investors said could mean (at the current rate of burn back then) that the company would run low in half a year.
“We have lots of options in the capital market, but we’re going to be smart as we move forward,” Bell said of the situation at the time, in the phone call. “We’re trying to be smart as we raise capital. Eventually, you’ll see very quickly as these new facilities come online and these new programs start filling, that things turn very quickly in terms of revenues, profitability, and cash.”
(Terran Orbital opened a new 60,000-square-foot satellite manufacturing facility earlier this month.)
May also saw Terran post a record in terms of revenue, standing at $28 million. That’s 115 percent higher than the year before. The company also announced that a new customer, then unnamed, had signed on to an $87 million contract for low Earth orbit satellite manufacturing. Other orders, and a milestone payment from Rivada Space Networks for a constellation, were also expected to boost revenues. But Rivada is also in the midst of gathering the cash for the deal, which is now valued at as much as $2.4 billion.
Providing this all goes through, a recent consensus of investors suggests that Terran could turn a profit as soon as 2025.
Correction (September 25, 2023): This article originally referred to the new public offering as an initial public offering. SpaceRef regrets the error.