Filed pursuant to Rule 424(b)(3)

Registration No. 333-266074

PROSPECTUS SUPPLEMENT

(to Prospectus dated July 15, 2022)

 

Terran Orbital Corporation

Up to 27,714,791 Shares of Common Stock

 

 

This prospectus supplement supplements the prospectus dated July 15, 2022 (as supplemented, the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-266074). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information on Terran Orbital Corporation’s unaudited fourth quarter and full-year 2022 results, which is set forth below.

The Prospectus and this prospectus supplement relate to the offer and sale of up to 27,714,791 shares of our common stock, par value $0.0001 per share, by B. Riley Principal Capital II, LLC, who is the selling stockholder named in the Prospectus (“B. Riley Principal Capital II” or the “Selling Stockholder”). The shares of common stock to which the Prospectus and this prospectus supplement relate have been or may be issued by us to B. Riley Principal Capital II pursuant to a common stock purchase agreement, dated as of July 5, 2022, we entered into with B. Riley Principal Capital II (the “Purchase Agreement). Such shares of common stock include (i) up to 27,500,000 shares of common stock that we may, in our sole discretion, elect sell to B. Riley Principal Capital II, from time to time after the date of this prospectus, pursuant to the Purchase Agreement and (ii) 214,791 shares of common stock we issued to B. Riley Principal Capital II on July 5, 2022 as consideration for its commitment to purchase shares of our common stock in one or more purchases that we may, in our sole discretion, direct them to make, from time to time after the date of the Prospectus, pursuant to the Purchase Agreement.

Our common stock and public warrants are listed on the New York Stock Exchange (the “NYSE”) under the symbols “LLAP” and “LLAP WS”, respectively. On March 20, 2023, the last reported sales price of our common stock was $1.73 per share and the last reported sales price of our public warrants was $0.26 per warrant.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and, as such, have elected to comply with certain reduced disclosure and regulatory requirements.

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

Investing in our common stock or warrants involves risks. See the section entitled “Risk Factors” beginning on page 13 of the Prospectus to read about factors you should consider before buying our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

The date of this prospectus supplement is March 21, 2023.

TERRAN ORBITAL CORPORATION

Consolidated Balance Sheets (Unaudited)

(In thousands)

 

		December 31,
		2022				2021
Assets:
Cash and cash equivalents		$	93,561			$	27,325
Accounts receivable, net			4,754				3,723
Contract assets, net			6,763				2,757
Inventory			24,133				7,783
Prepaid expenses and other current assets			9,710				57,639
Total current assets			138,921				99,227
Property, plant, and equipment, net			24,743				35,530
Other assets			18,990				639
Total assets		$	182,654			$	135,396
Liabilities, mezzanine equity and shareholders’ deficit:
Current portion of long-term debt		$	7,739			$	14
Accounts payable			21,188				9,366
Contract liabilities			27,228				17,558
Reserve for anticipated losses on contracts			2,860				886
Accrued expenses and other current liabilities			11,721				76,136
Total current liabilities			70,736				103,960
Long-term debt			142,620				115,134
Warrant and derivative liabilities			39,950				5,631
Other liabilities			20,769				2,028
Total liabilities			274,075				226,753
Mezzanine equity:
Redeemable convertible preferred stock			—				8,000
Shareholders’ deficit:
Preferred stock			—				—
Common stock			14				8
Additional paid-in capital			269,574				97,737
Accumulated deficit			(361,168	)			(197,066	)
Accumulated other comprehensive income (loss)			159				(36	)
Total shareholders’ deficit			(91,421	)			(99,357	)
Total liabilities, mezzanine equity and shareholders’ deficit		$	182,654			$	135,396

TERRAN ORBITAL CORPORATION

Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(In thousands, except share and per share amounts)

 

		Three Months Ended December 31,								Years Ended December 31,
		2022				2021				2022				2021
Revenue		$	31,923			$	10,748			$	94,237			$	40,906
Cost of sales			42,710				10,007				111,494				33,912
Gross (loss) profit			(10,787	)			741				(17,257	)			6,994
Selling, general, and administrative expenses			27,587				13,123				111,870				43,703
Loss on impairment			23,694				—				23,694				—
Loss from operations			(62,068	)			(12,382	)			(152,821	)			(36,709	)
Interest expense, net			9,637				1,791				26,644				7,965
Loss on extinguishment of debt			—				27,922				23,141				96,024
Change in fair value of warrant and derivative liabilities			(40,975	)			(1,792	)			(43,300	)			(1,716	)
Other expense (income)			2,147				(66	)			4,514				(38	)
Loss before income taxes			(32,877	)			(40,237	)			(163,820	)			(138,944	)
Provision for income taxes			102				16				160				38
Net loss			(32,979	)			(40,253	)			(163,980	)			(138,982	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments			(132	)			6				195				168
Total comprehensive loss		$	(33,111	)		$	(40,247	)		$	(163,785	)		$	(138,814	)
Weighted-average shares outstanding - basic and diluted			142,930,585				78,535,842				128,261,443				76,713,895
Net loss per share - basic and diluted		$	(0.23	)		$	(0.51	)		$	(1.28	)		$	(1.81	)

TERRAN ORBITAL CORPORATION

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 

		Years Ended December 31,
		2022				2021
Cash flows from operating activities:
Net loss		$	(163,980	)		$	(138,982	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			4,008				3,053
Non-cash interest expense			14,309				7,908
Share-based compensation expense			51,082				678
Provision for losses on receivables and inventory			3,598				877
Loss on impairment			23,694				—
Loss on extinguishment of debt			23,141				96,024
Change in fair value of warrant and derivative liabilities			(43,300	)			(1,716	)
Amortization of operating right-of-use assets			994				—
Other non-cash, net			1,000				(567	)
Changes in operating assets and liabilities:							—
Accounts receivable, net			376				(1,687	)
Contract assets			(4,054	)			(901	)
Inventory			(14,564	)			(5,393	)
Prepaid expenses and other current assets			105				596
Accounts payable			12,981				2,161
Contract liabilities			10,012				(229	)
Reserve for anticipated losses on contracts			1,975				(1,322	)
Accrued expenses and other current liabilities			(2,685	)			4,634
Accrued interest			(1,835	)			—
Other, net			1,339				(21	)
Net cash used in operating activities			(81,804	)			(34,887	)
Cash flows from investing activities:
Purchases of property, plant, and equipment			(22,469	)			(16,352	)
Net cash used in investing activities			(22,469	)			(16,352	)
Cash flows from financing activities:
Proceeds from long-term debt			77,369				58,241
Proceeds from warrants and derivatives			101,734				16,759
Proceeds from Tailwind Two Merger and PIPE Investment			58,424				—
Proceeds from issuance of common stock			14,791				—
Proceeds from issuance of common stock under the Committed Equity Facility			1,795				—
Repayment of long-term debt			(32,890	)			(10	)
Payment of issuance costs			(49,515	)			(8,880	)
Proceeds from exercise of stock options			356				242
Payment of withholding taxes on net share settlements			(1,515	)			—
Net cash provided by financing activities			170,549				66,352
Effect of exchange rate fluctuations on cash and cash equivalents			(40	)			(124	)
Net increase in cash and cash equivalents			66,236				14,989
Cash and cash equivalents at beginning of period			27,325				12,336
Cash and cash equivalents at end of period		$	93,561			$	27,325