investor group sends letter to Terran Orbital board regarding meeting request

A group of concerned investors in Terran Orbital comprised of Sophis Investments, Roark’s Drift and Tyvak Nano-Satellite Systems’ co-founders, Jordi Puig-Suari, Roland Coelho and Austin Williams, together with certain affiliates, which owns approximately 8.4% of the company’s common stock, sent a third request to the company’s board of directors to discuss protecting and optimizing long-term shareholder value. After repeated attempts, the investor group relayed another message to encourage constructive dialogue with the board regarding opportunities to enhance shareholder value, including, separating the roles of chairman and CEO and hiring a new CEO with demonstrable industry experience and credibility, reconstituting the board and instituting corporate governance practices, and conducting a strategic review process. The full text of the letter follows: “…As our goal remains to protect and maximize the material value we believe is embedded within Terran, we are following up on our previously unanswered correspondence addressed to Terran’s Board of Directors (the “Board”) dated October 11, 2023 and October 15, 2023. The Concerned Investor Group is the Company’s largest independent shareholder and is comprised of co-founders of the Company who have a demonstrable, intimate understanding of Terran, deep industry expertise relevant to its business, and who are committed to helping the Company realize its full potential. Despite the statements made by the Company during its Virtual Town Hall held on October 26, 2023 and in its October 19, 2023 open letter to shareholders that it welcomes and considers shareholder feedback, the Board has ignored our multiple requests for a meeting. Moreover, the Board has seemingly dismissed out of hand the proposals outlined in our letter dated October 11, 2023 regarding opportunities to enhance shareholder value, including (i) separating the roles of Chairman and CEO and hiring a new CEO with demonstrable industry experience and credibility, (ii) reconstituting the Board and instituting best-in-class corporate governance practices, and (iii) conducting a strategic review process. It is simply unacceptable that the Board has refused to meet with us and rather has decided to adopt a seemingly hostile and dismissive attitude toward us as shareholders. We believe such a stance only further erodes shareholder value and market confidence in Terran. Based on our due diligence, we anticipate that the Company will report FY2023 revenue of approximately $143 million, materially below Company guidance of $250 million provided throughout the year.1 Our reduced revenue projection is based on the revenue shortfall due to the delays in customer activity referenced in the Company’s September 20, 2023 prospectus and again during the October 26, 2023 Virtual Town Hall. Make no mistake: a 43% miss vs. revenue guidance, with less than eight weeks to go in the year and without proactively providing investors with an interim update, raises major concerns while continuing to call into question the Board and management’s credibility. Furthermore, in light of the Company’s cash burn rate, treating such a large miss nonchalantly or unduly relying on prospective new orders or delinquent customer payments to materialize is, in our view, a reckless gamble with shareholders’ capital. As of the date of this letter, Terran’s stock price is down over 40% since September 18, 2023 following its latest dilutive capital raise,2 remains below $1 despite announcing ~$160 million in new orders in recent weeks, and is at risk of being delisted by the New York Stock Exchange. The Board can no longer ignore what we believe the market clearly knows: there are major issues that need to be addressed at the Company. Enclosed is our updated financial addendum, reflecting our revised financial projections described above. Our projections incorporate the recent subcontract award from Lockheed Martin for the Tranche 2 beta contract announced on October 24, 2023; and also account for the impact of certain potential new orders that we believe our CEO candidate can deliver; while discounting the Company’s largest (currently insufficiently funded) backlogged order, which would provide incremental upside…”