Terran Orbital Corporation (NYSE: LLAP) has entered into a note and warrant purchase agreement pursuant to which the company received a $100 million investment from Lockheed Martin (NYSE: LMT) in exchange for convertible notes and warrants issued by Terran Orbital.
In connection with the investment, Terran Orbital and Lockheed Martin also entered into a new Strategic Cooperation Agreement (SCA) that runs through 2035 and allows Terran Orbital to pursue a wider variety of opportunities with Lockheed Martin.
Terran Orbital intends to use the funds to acquire additional satellite assembly space, increase module production as well as satisfy working capital needs while expanding advanced manufacturing abilities. Terran Orbital’s advanced manufacturing capabilities, which were originally planned for expansion on Florida’s Space Coast in partnership with Space Florida, have been accelerated and will now be based in Irvine, California. Terran Orbital has added more than 140,000 square feet in Irvine alone in the past 12 months.
The SCA with Lockheed Martin creates further opportunities for both organizations to share their expertise and relationships to advance emerging technology across military, commercial, and civil customers. This will be achieved by focusing on:
Terran Orbital believes there are growing unmet needs in adjacent markets to the company’s core satellite offerings. In order to address these needs, Terran Orbital plans to expand product and service offerings to include:
The conflict in Ukraine has highlighted the need for advanced satellite imagery. Terran Orbital intends to address such demand through a specialized SAR satellite product line based on the company’s PredaSAR satellites. Terran Orbital will no longer pursue their own constellation and believes that offering PredaSAR as a product is a financially efficient and expeditious method of getting SAR technology into the hands of those protecting and defending our Nation and Allies.
The terms and conditions of the transaction, including the note and warrant purchase agreement and the new SCA, are more fully described in the Company’s Current Report on Form 8-K, being filed today with the Securities and Exchange Commission.
The convertible notes were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and, along with the shares of common stock underlying the convertible notes, have not been registered under the Securities Act or applicable state securities laws. Accordingly, the convertible notes may not be offered, sold, pledged or otherwise transferred except pursuant to an effective Securities Act registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.
“In today’s market, customers want the industry to determine the leaders that will deliver timely, quality, and affordable solutions across a variety of missions,” said Terran Orbital Co-Founder, Chairman, and Chief Executive Officer, Marc Bell. “This is a continued expansion of our collaboration with Lockheed Martin, and complements and accelerates the decision Terran Orbital made amid the lingering supply chain crisis to continue to vertically integrate products and components to facilitate full in-house satellite and manufacturing production. We see the opportunity to dramatically ramp up our capabilities and external product offerings, which we believe will move Terran Orbital toward profitability.”