Satellogic secures $30 million from Tether Investments for strategic expansion

Satellogic secures $30 million from Tether Investments for strategic expansion
by Clarence Oxford
Los Angeles CA (SPX) Apr 16, 2024

Satellogic Inc. (NASDAQ: SATL) has announced a significant capital injection of $30 million through a Note Purchase Agreement with Tether Investments Limited, marking a pivotal step in its expansion efforts. The agreement allows Nettar Group, Inc., a wholly-owned subsidiary of Satellogic, to issue Secured Convertible Notes to the investor with the potential for issuing additional notes up to a total of $50 million.

Emiliano Kargieman, CEO and Founder of Satellogic, highlighted the strategic importance of this investment, stating, "The proceeds from Tether's investment will significantly support our mission, especially as we expand our U.S. strategy, delve deeper into the National Security market, and explore global Space Systems opportunities." Rick Dunn, CFO of Satellogic, also noted that this financial facility is crucial for the company's planned growth in 2024.

The Secured Convertible Notes are initially set at a floating interest rate of SOFR plus 6.50% annually, with a potential increase by 4.0% in certain default scenarios. These notes are backed by substantial assets of the company and its subsidiaries, including intellectual property, ensuring a secure investment for the lender.

Key terms of the Notes allow for conversion into Satellogic's Class A ordinary shares at $1.20 per share, with standard anti-dilution adjustments. This conversion is contingent upon approval from the Committee on Foreign Investment in the United States (CFIUS).

Should the company undergo an asset sale resulting in significant proceeds, it is obligated to offer prepayment of the Notes. Additionally, in the event of a control change, note holders may demand repurchase at a premium price.

The agreement also includes covenants limiting Satellogic's operational flexibilities, such as incurring additional debt, asset sales, and dividend distributions. In conjunction with the Offering, Satellogic has granted Tether pre-emptive rights to maintain its ownership percentage and entered into a registration rights agreement for the shares issuable upon conversion.

The Offering, structured as a private placement, bypasses the registration requirements under the Securities Act of 1933, indicating a targeted strategic financial maneuver rather than a public offering.

This development not only secures essential funding for Satellogic but also reinforces its strategic partnership with Tether Investments Limited, setting the stage for future growth initiatives.