Lewitter v. Terran Orbital Corporation

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 24-CV-81191-RLR

STEVEN VERZWYVELT, JESSE RAMIREZ,

MICHAEL O’NEILL & JILL O’NEILL,

individually and on behalf of all others

similarly situated,

Plaintiffs,

v.

TERRAN ORBITAL CORPORATION,

MARC H. BELL, MATHIEU RIFFEL, GARY

A. HOBART & STRATTON SCLAVOS,

Defendants.

______________________________________/

ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS

THIS CAUSE is before the Court on the Motion to Dismiss filed by Defendants Terran

Orbital Corporation, Marc H. Bell, Mathieu Riffel, Gary A. Hobart, and Stratton Sclavos

(collectively, “Defendants”). DE 58. The Court has reviewed Plaintiffs’ Response [DE 72] and

Reply [DE 75]. For the reasons set forth below, Defendants’ Motion is GRANTED.

I. INTRODUCTION

At the center of this case are two things. The first is cash. More specifically, a company’s

cash reserves. A company must have a certain amount of cash on hand to operate. The Plaintiff-

investors in this case allege that Defendants’ representations about the amount of cash the company

had on hand—and the revenue the company expected to obtain in the future—were sufficiently

false and misleading so as to render Defendants liable to Plaintiffs for damages.

But at the center of this case is one more thing: the applicable legal standard for Plaintiffs

to prevail. The standard in this Circuit is very, very high. As detailed below, Plaintiffs have many

allegations in this case, and some of them are troubling. Even so, when the Court compares

Plaintiffs’ allegations to the applicable legal standard, the Court concludes that Plaintiffs’

allegations fall short.

Below, in the Court’s (III) summary of the facts, the Court focuses on Plaintiffs’

allegations about cash and revenue. The Court then turns to (IV) the applicable legal standard and

(V) the Court’s analysis of Plaintiffs’ allegations. First, however, the Court briefly summarizes

the (II) procedural history of this case.

II. PROCEDURAL BACKGROUND

Lead Plaintiffs1 (“Plaintiffs”) filed this class action lawsuit against Defendant Terran

Orbital Corporation (“Terran Orbital”). DE 37. Plaintiffs also named four individual Defendants:

Marc H. Bell, who served as CEO of Terran Orbital and as Chairman of its board of directors;

Gary A. Hobart, who served as Terran Orbital’s Chief Financial Officer, Executive Vice President,

and Treasurer before serving as Chief Transformation Officer; Mathieu Riffel, who is Terran

Orbital’s current Senior Vice President and Chief Accounting Officer; and Stratton Sclavos, who

is currently a director on Terran Orbital’s board of directors (collectively, the “Individual

Defendants,” and together with Terran Orbital, “Defendants”). Id. ¶¶ 17–20. Plaintiffs bring this

action on their own behalf and on behalf of a putative class of all persons and entities other than

1 At the start of this litigation, the Lead Plaintiff was Michael Lewitter. See DE 1 at 1. On January 2, 2025, upon

Plaintiffs’ motion, the Court appointed as Lead Plaintiffs Steven Verzwyvelt, Jesse Ramirez, Michael O’Neill, and

Jill O’Neill. DE 28.

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Defendants that purchased or otherwise acquired Terran Orbital securities between March 21,

2023, and August 14, 2024 (the “Class Period”) and were damaged thereby. Id. ¶ 1.

Pursuant to the Court’s scheduling order [DE 36], Plaintiffs filed the First Amended

Complaint on February 18, 2025, alleging that Defendants violated Section 10(b) of the Exchange

Act and Rule 10b-5, and that the Individual Defendants violated Section 20(a) of the Exchange

Act. DE 37. Defendants moved to dismiss [DE 58] on April 4, 2025, based on Federal Rules of

Civil Procedure 12(b)(6) and 9(b) and the Private Securities Litigation Reform Act (“PSLRA”).

Plaintiffs filed their Response in Opposition [DE 72] on May 19, 2025. Defendants filed their

Reply2 [DE 75] in Support on June 16, 2025.

III. FACTUAL BACKGROUND3

Defendant Terran Orbital is a startup company that sells small satellites to commercial and

governmental customers. DE 37 at 4–5. In 2022, Defendant Bell became Terran Orbital’s Chief

Executive Officer and, at that time, Bell took the company public through a special purpose

acquisition company, or SPAC. Id. at 5. The driving plan behind the SPAC was that Terran Orbital

would broadly expand its operations to build a multibillion-dollar enterprise, based upon Terran

Orbital’s anticipation that the demand for small satellites would “skyrocket” in the future. Id.

As Terran Orbital expanded its operations, it needed cash, and it obtained the needed cash

in the form of an investment from Lockheed Martin in late 2022. Id. The cash infusion from

Lockheed Martin began to deplete quickly, however, and investors were concerned that Terran

2 Defendants Riffel and Sclavos also filed separate replies in further support of the Motion to Dismiss on June 16,

2025. DE 73; DE 74. On July 10, 2025, Plaintiffs filed a stipulation, stating that Riffel’s and Sclavos’s further replies

exceeded the page limits. DE 76 at 2–3. The Court construed the stipulation as a motion for leave to file a sur-reply,

which the Court denied, stating that the Court would inform the parties if additional briefing were required. DE 77.

The Court did not require additional briefing.

3 At the motion-to-dismiss stage, the Court accepts as true all well-pled factual allegations. Ashcroft v. Iqbal, 556 U.S.

662, 696 (2009).

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Orbital’s revenue was far below its expenditures. Id. Investors’ fears were at least somewhat

assuaged in February 2023, however, when Terran Orbital announced a new contract with Rivada

Space Networks GmbH (“Rivada”). Id. That contract was for $2.4 billion. Id. For context, at the

time Terran Orbital entered into this contract, its revenue was a comparatively small $94 million.

Id. Once investors learned about the Rivada contract, Terran Orbital’s stock price doubled. Id.

Terran Orbital used the Rivada contract to assure investors that Terran Orbital had ample

liquidity to operate its business while waiting to convert contracts into free cashflow. Id. at 6. But

behind the scenes, management was exploring options to cover Terran Orbital’s immediate cash

requirements. Id. Investors were again concerned that Terran Orbital’s immediate cash needs were

much greater than its immediate revenue. Id. Stated differently, Terran Orbital needed cash in the

short-term to eventually make greater revenue in the long-term.

It is around this time that the Defendants began to make statements about Terran Orbital’s

cash reserves that, according to Plaintiffs, were false and misleading. For example, on an investor

call in December 2022, Bell stated, “We feel pretty good about where we are and have no concerns

at this point about our cash.” Id. at 23.

Three months after Bell stated that Terran Orbital had no concerns about cash, the company

cash reserves were $57 million, and its operating losses were $33 million. See id. This meant that

Terran Orbital was spending $33 million more than it was making. Id. To address this shortfall,

Terran Orbital again obtained additional investment in March of 2023 in the amount of $37 million.

Id. at 25. Yet despite this new infusion of investment capital, within a few months, Terran Orbital’s

cash reserves declined to $48 million, and its large operating losses continued. Id.

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At this time, without telling investors, Terran Orbital began to explore financing options,

including a sale of the company and additional equity investments. Id. In August of 2023, Bell

explained to the Terran Orbital board of directors (the “Board”) that payments from customers had

been delayed. Id. at 26. As a result of those delays, revenue was down. Id. And because revenue

was down, Terran Orbital’s immediate cash requirements (such as the need to make payroll) were

even more serious than in the past. See id. The Board therefore authorized the hiring of a strategic

advisor to try to find a solution to Terran Orbital’s cash problem. Id.

None of this was disclosed to investors, however. Instead, Terran Orbital hosted a call

with analysts in August 2023 about its financial results in the summer. Id. During the call, Bell

explained that the Rivada contract would provide substantial revenue in late 2023—helping the

company’s cash position—and that “the last thing any of us want to do is raise additional cash.”

Id. at 26–27.

At the same time, Terran Orbital senior management was negotiating to raise additional

cash. Id. at 27. In September of 2023, the negotiations concluded, and Terran Orbital once again

obtained cash in the form of an investment. Id. at 27–28. Yet the amount obtained, $33 million,

was still barely sufficient to satisfy Terran Orbital’s immediate cash requirements. Id. at 28.

Despite obtaining the additional $33 million, by the end of September, Terran Orbital’s cash

reserves had dwindled yet again to $38 million. Id. Unless revenue increased, Terran Orbital’s

immediate need for cash was great.

The Board responded to this problem by initiating a potential sale process. Id. at 28. Terran

Orbital reached out to over eighty different parties, including Lockheed Martin, to gauge the

parties’ interest in acquiring Terran Orbital. Id. At the same time, Bell informed investors that

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Terran Orbital revenues were sufficient to “increase[] its cash balance to a level that should provide

sufficient funding until Terran Orbital reaches ‘breakeven’ . . . in 2024.” Id. at 29.

Consistent with Bell’s representations of recent revenue, Terran Orbital released a

statement to the press informing them that as of October 2023, the company’s cash reserves had

increased to $70 million. Id. at 30. At this time, Bell also informed investors “that we will have

sufficient cash to cover capital investments and operations until becoming cash flow positive,

which is expected in 2024.” Id. at 31.

Shortly after the two statements referenced above, The Wall Street Journal published an

article indicating that Terran Orbital was seeking a buyer. Id. at 31. In response to employee

questions, Bell told employees that the story was not true, and that the story was “very wrong.” Id.

Yet on the same day Bell made these statements, Terran Orbital filed a report with the Securities

and Exchange Commission in which it confirmed the accuracy of the news report. Id. at 31–32.

Later, when Bell was confronted about his conflicting statements—one to employees and one to

the SEC—Bell indicated that his SEC filing was correct and that “all other information is not.” Id.

at 32.

In December of 2023, the Board held a meeting on the status of the potential sale of the

company. Id. The Board learned that there were six potential bidders, one of which was Lockheed

Martin. Id. Terran Orbital continued investigating the sale process with the six potential bidders.

Id. By the end of the month, due in part to some payments from customers, Terran Orbital’s cash

reserves were $70 million. Id. at 33.

By January of 2024, only one potential bidder for Terran Orbital remained—Lockheed

Martin. See id. at 34. In February 2024, Bell told an outside interviewer, “[W]e are not looking to

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raise money,” “we don’t need cash,” [w]e’re doing just fine,” and “[w]e have no intentions of

raising any more money.” Id.

Lockheed Martin made a tentative bid to buy Terran Orbital in March 2023. Id. at 35. The

Board began the process of considering the offer. Id. at 35–36. By the end of the month, Terran

Orbital reported that its cash reserves were $43 million and that its operating losses were $34

million. Id. at 37. Thus, in the span of three months—December to March—Terran Orbital’s cash

reserves had fallen from around $70 million to $43 million. Soon after this report, in late April

2024, Lockheed Martin withdrew its bid to buy Terran Orbital. Id. at 37–38.

A few days after Lockheed Martin withdrew its bid, Bell responded to analysts on a phone

call. Id. at 39. Bell stated, “Yes, we feel very comfortable with our liquidity position as it stands

today.” Id. A week after the call, Defendant Hobart informed the Board that the company might

need a cash infusion of $120 million to satisfy its 2024 cash requirements. Id. at 40. At that time,

Terran Orbital’s cash reserves had shrunk to $30 million. Id. at 41. Relatedly, Lockheed Martin

informed the company that it was not interested in further discussing its prior bid because of

concerns over Terran Orbital’s liquidity—its cash. Id. at 42.

Soon after Lockheed Martin indicated its lack of interest, in July 2024, an outside financial

services company working for Terran Orbital informed Lockheed Martin that Terran Orbital’s

need for cash was “dire,” and that Terran Orbital might therefore be willing to sell the company at

below market price. Id. at 26, 44. The Board simultaneously began to consider bankruptcy. Id. at

44. By the end of the month, Terran Orbital’s cash reserves had fallen to $14 million. Id.

In the following month, August 2024, Lockheed Martin made a second bid at a 75-percent

discount from the amount of its prior bid, which approximated a 50-percent discount from the

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then-trading price of Terran Orbital’s stock.4 Id. at 45, 47. The Board approved. Id. at 47. Bell

informed employees that they had to approve the offer because “they weren’t able to hit the next

payroll” and that Lockheed Martin had to buy the company “so they can pay the employees.” Id.

at 47–48. A few months later, the shareholders approved as well, Lockheed Martin purchased

Terran Orbital, and this lawsuit followed. Id. at 48.

IV. LEGAL STANDARD

Although the Court accepts Plaintiff’s factual allegations as true and draws reasonable

inferences from the Second Amended Complaint in the light most favorable to Plaintiff,

“conclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as

facts will not prevent dismissal.” Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th

Cir. 2002) (citing S. Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d 402, 406 (11th Cir. 1996)).

For claims sounding in fraud, the plaintiff must satisfy the heightened pleading standards

under Federal Rule of Civil Procedure 9(b). See Carvelli v. Ocwen Fin. Corp., 934 F.3d 1307,

1318 (11th Cir. 2019). A plaintiff alleging fraud must state “with particularity the circumstances

constituting the fraud.” Fed. R. Civ. P. 9(b). When a complaint alleges misrepresentations or

omissions in violation of securities laws, the Eleventh Circuit has held that the complaint must say

“(1) precisely what statements or omissions were made in which documents or oral

representations; (2) the time and place of each such statement and the person responsible for

making (or, in the case of omissions, not making) them; (3) the content of such statements and the

manner in which they misled the plaintiff; and (4) what the defendant obtained as a consequence

4 By this point, Terran Orbital’s finances were so dire that outside lenders were only willing to loan money to the

company at an annual interest rate of 145 percent. DE 37 at 45.

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of the fraud.” FindWhat Investor Grp. v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011)

(citing Garfield v. NDC Health Corp., 466 F.3d 1255, 1262 (11th Cir. 2006)).

The Private Securities Litigation Reform Act (“PSLRA”) imposes even higher pleading

requirements for securities class action claims brought under the Exchange Act. See 15 U.S.C.

§ 78u-4(a)(1); Carvelli, 934 F.3d at 1317–18. First, where the plaintiff alleges either an untrue

statement of material fact or the omission of a material fact, the complaint must set forth with

particularity “each statement alleged to have been misleading, the reason or reasons why the

statement is misleading, and, if an allegation regarding the statement or omission is made on

information and belief, the complaint shall state with particularity all facts on which that belief is

formed.” 15 U.S.C. § 78u–4(b)(1). Second, the plaintiff must allege “with particularity facts giving

rise to a strong inference that the defendant acted with the required state of mind [i.e., scienter].”

Id. § 78u–4(b)(2)(A). The complaint must allege facts supporting a strong inference of scienter

“for each defendant with respect to each violation.” Mizzaro v. Home Depot, Inc., 544 F.3d 1230,

1238 (11th Cir. 2008) (quoting Phillips v. Scientific–Atlanta, Inc., 374 F.3d 1015, 1016 (11th Cir.

2004)). Third, the plaintiff must plead that the defendant’s misrepresentation or omission “caused

the loss for which the plaintiff seeks to recover damages.” 15 U.S.C. § 78u-4(b)(4). Because Rule

9(b) and the PSLRA’s heightened pleading standards are claim-specific, the Court will address the

applicable standards on a claim-by-claim basis below.

Finally, in analyzing a motion to dismiss in a securities fraud case, the Court may consider

the full text of documents incorporated by reference into the complaint and other documents as to

which the Court may take judicial notice. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551

U.S. 308, 322 (2007). In particular, the Court may consider the full text of securities filings that

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allegedly contain misstatements. Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1276–81 (11th Cir.

1999) (noticing SEC filings). Documents incorporated by reference may be considered if they are

central to a plaintiff’s claim and undisputed. Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005);

see also Harris v. Ivax Corp., 182 F.3d 799, 802 n.2 (11th Cir. 1999).

V. ANALYSIS

Plaintiffs bring two counts in their First Amended Complaint. Count I alleges that

Defendants violated Section 10(b) of the Exchange Act and Rule 10b-5. DE 37 ¶¶ 242–48. Count

II alleges that the Individual Defendants violated Section 20(a) of the Exchange Act. Id. ¶¶ 249–

54.

A. Count I – Section 10(b) of the Exchange Act

Plaintiffs bring one count against all Defendants for violations of Section 10(b) of the

Exchange Act and Rule 10b-5. A securities fraud claim under Section 10(b) must satisfy six

elements: (1) a material misrepresentation or omission; (2) made with scienter; (3) a connection

with the purchase or sale of a security; (4) reliance on the misstatement or omission; (5) economic

loss; and (6) a causal connection between the material misrepresentation or omission and the loss,

an element commonly called “loss causation.” Mizzaro, 544 F.3d at 1236–37; see also 15 U.S.C.

§ 78j(b) and 17 C.F.R. § 240.10b-5.

Defendants’ Motion to Dismiss argues that Plaintiffs fail to allege the first two elements

for their Section 10(b) claim: a false or misleading statement, and scienter. Id.

Based on its analysis below, the Court concludes that many of the alleged

misrepresentations are non-actionable forward-looking statements, opinions, and puffery. The

Court also concludes that certain statements might be actionable because they could be materially

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misleading: Plaintiffs allege that Defendants knew of the liquidity risk at Terran Orbital and knew

that a sale of the company was likely necessary, yet Defendants repeatedly downplayed the

seriousness of the liquidity risk and disavowed the measure ultimately needed to correct the

problem—the sale of the company.

Despite these potentially actionable statements, the Court must consider the record as a

whole. When the record is viewed in its entirety, Terran Orbital’s liquidity risk was well

documented and was public knowledge; Terran Orbital did not disguise its cash reserves in its

public filings.5 The Court must weigh not only Terran Orbital’s cash reserves and operating losses,

but also Terran Orbital’s expected future revenues. Here, the law permits Defendants to have some

optimism.

For the reasons discussed below, the Court is uncertain as to whether Plaintiffs have

sufficiently alleged material misrepresentations. The Court does not reach a conclusion on the

issue. The Court’s ruling, instead, is based upon the Court’s determination that Plaintiffs have not

met their burden to plead the second requirement for the statements to be legally actionable:

scienter. Below, however, the Court analyzes the statements in detail for the benefit of the parties

and to inform any future briefing on the issue that may arise at a later stage of the proceeding.

1. Whether the False or Misleading Statements and Omissions are Actionable

Defendants argue that Plaintiffs have failed to plead actionable false or misleading

statements or omissions. Plaintiffs’ specific Count I allegations pertain to how, throughout the

Class Period, Defendants made or caused Terran Orbital to make false and misleading statements

and omissions regarding (i) Terran Orbital’s 2023 revenue outlook, (ii) Terran Orbital’s overall

5 Similarly, Terran Orbital disclosed to the public that it was investigating the potential sale of the company.

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liquidity, and (iii) the Rivada contract. DE 37 ¶¶ 134–62, 244–47. Most of the allegedly

misleading statements concern Terran Orbital’s overall liquidity.

A particular statement is a “misrepresentation” under Section 10(b) and Rule 10b-5 if “in

the light of the facts existing at the time of the [statement] . . . [a] reasonable investor, in the

exercise of due care, would have been misled by it.” IBEW Local 595 Pension and Money

Purchase Pension Plans v. ADT Corp., 660 F. App’x 850, 857 (11th Cir. 2016) (quoting FindWhat,

658 F.3d at 1305). To be actionable under the securities laws, misrepresentations and omissions

must also be “material.” 17 C.F.R. § 240.10(b).

Several doctrines limit the scope of actionable misrepresentations and omissions under

Rule 10b-5. As relevant here and as discussed below, Rule 10b-5 generally does not impose

liability for forward-looking statements, statements of opinion, and statements of generic corporate

optimism. See Carvelli, 934 F.3d at 1322–26. Furthermore, to be actionable under Rule 10b-5,

Plaintiffs must sufficiently allege that the representations or omissions were misleading. Id. at

1329 (dismissing Section 10(b) claims based on statements that “weren’t alleged to be false”); 15

U.S.C. § 78u-4(b)(1)(B) (requiring a complaint to “specify each statement alleged to have been

misleading” and “the reason or reasons why the statement is misleading”).

With these principles in mind, the Court analyzes whether Plaintiffs’ alleged

misrepresentations and omissions are actionable. The Court concludes that many of the statements

are non-actionable forward-looking statements, opinions, and puffery. The Court also concludes

certain statements might be actionable because they could be materially misleading.

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a. Non-actionable Forward-Looking Statements

The PSLRA includes a safe harbor provision “that immunizes certain ‘forward-looking’

statements from liability” when the statement is accompanied by “meaningful cautionary

statements.” Carvelli, 934 F.3d at 1324; 15 U.S.C. § 78u-5(c)(1). This protection can extend to

statements that “contain[] ‘some sentences that were forward-looking and some that were not,’”

“[b]ecause ‘forward-looking conclusions often rest both on historical observations and

assumptions about future events.’” Id. at 1328 (quoting Harris, 182 F.3d at 806–07) (citation

modified).

Defendants argue that Plaintiffs’ claims based on certain statements in the Amended

Complaint should be dismissed because they are non-actionable forward-looking statements

accompanied by specific cautionary statements. DE 58 at 18.

Upon review of the paragraphs, the Court is persuaded that the statements fall within the

PLSRA safe harbor. First, many of the statements clearly contain forward-looking statements (in

bold):

• “Given our current view of the steep ramp ahead, we anticipate in excess

of $250m in revenue in 2023. Upside beyond this level is possible

depending on our successful execution of our customer commitments.” DE

37 ¶ 135.

• “So the cash flow we generate from our programs and invoicing and

collection and invoicing should cover our needs going forward, and we’ll

start seeing that ramp up even more so going into 2024.” Id. ¶ 140.

• “. . . this level of cash is expected to be sufficient to cover our capital

investments and operating use until we achieve the expected break even,

barring any unforeseen events.” Id. ¶ 143.

The remaining statements in the relevant paragraphs also comprise forward-looking

language. Bell’s statement “I mean, Tranche 1 is a big part of it. Then you have Rivada right after

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that, and you have this new customer, and there is some other things coming down the pipe. But

Tranche 1 is by far the largest part of that component” came in response to an analyst’s forward-

looking question: “[A]s you build out this $250 million plus in revenue this year, what program

should we think are driving that?” Id. ¶ 136. And in response to a forward-looking question about

whether Terran Orbital would meet the required minimum cash balance under its debt agreements,

Riffel responded, “We do not have any concerns about that covenant at this time.” Id. ¶ 153. These

statements concern future payments and prospects—and “[s]tatements about projections of

revenue, income, and other financial items and metrics fall squarely within the definition of

forward-looking statements.” Gonzalez v. Cano Health, Inc., No. 22-20827-CV, 2024 WL

4415216, at *8 (S.D. Fla. Oct. 4, 2024).

Second, the statements above are accompanied by meaningful, specific cautionary

language. “In analyzing statements which Defendants argue are protected, the Court is to consider

‘any statement cited in the complaint’ as well as ‘any cautionary statement accompanying the

forward-looking statement, which are not subject to material dispute, cited by the defendant.’” In

re Royal Caribbean Cruises Ltd. Sec. Litig., No. 11-22855-CIV, 2013 WL 3295951, at *13 (S.D.

Fla. Apr. 19, 2013) (quoting 15 U.S.C. § 78u-5(e)). “If the Court determines that the statement is

accompanied by meaningful cautionary language, the defendants’ state of mind is irrelevant.” Id.

(quoting Harris, 182 F.3d at 803) (internal quotation marks omitted). The meaningful-cautionary-

language obligation requires that an issuer list “important factors that could cause actual results to

differ materially from those in the forward-looking statement.” Harris, 182 F.3d at 803.

“[M]eaningful cautionary language should be ‘explicit, repetitive and linked to the projections

about which the plaintiff complains.” In re Royal Caribbean, 2013 WL 3295951, at *15 (quoting

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Bellocco v. Curd, No. 02-CV-1141-T-27TBM, 2005 WL 2675022, at *3 (M.D. Fla. Oct. 20,

2005)). “[W]hen an investor has been warned of risks of a significance similar to that actually

realized, she is sufficiently on notice of the danger of the investment to make an intelligent decision

about it according to her own preferences for risk and reward.” Harris, 182 F.3d at 807.

Here, Defendants note that for each relevant statement, investors were expressly directed

to the risk disclosures in Terran Orbital’s SEC filings, of which the Court may take judicial notice.

See Bryant, 187 F.3d at 1276–81 (noticing SEC filings). Those disclosures were explicit, specific,

and linked to the concerns underpinning Plaintiffs’ claims—Plaintiffs acknowledge that

Defendants’ cautionary disclosures “referred to uncertainties regarding Rivada, financing, and

cash flows.” DE 72 at 25. Examples of Defendants’ cautionary disclosures include:

• “The timing and execution of our new contract work with Rivada and our

other new customer constellation are variables for our full year 2023 results

. . . .” DE 58-4 at 4.

• “Since our last earnings call, we have not received expected further

milestone payments and do not yet have a definitive schedule and when

further receipts maybe [sic] received.” DE 58-13 at 6.

• “We are currently not profitable, nor do we have positive cash flow. We

have increased the scale of our operations over recent years which has

increased our expenses at a higher rate than the increase in our revenue.

Additionally, we expect to increase research and development efforts

relating to new offerings and technologies, and hire more employees. These

efforts may be more costly than we expect and may not result in increased

revenue. Any failure to increase our revenue sufficiently to cover our

operating expenses and other investments could prevent us from achieving

or maintaining profitability or positive cash flow.” DE 58-1 at 9.

• “We are an early stage company with a history of losses and may not

achieve or maintain profitability.” Id.

• “Our contract with [Rivada] is subject to uncertainty.” Id. at 7.

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Plaintiffs argue that this cautionary language is not meaningful because it describes

“possible future risks while failing to disclose known facts suggesting risks that had already

happened.” DE 72 at 25 (quoting Pritchard v. Apyx Med. Corp., No. 19-CV-00919, 2020 WL

1180731, at *7 (M.D. Fla. Mar. 11, 2020)); see also Carvelli, 934 F.3d at 1327 (“[C]autionary

language can’t be ‘meaningful’ if it is nothing more than a front for present problems.”). But

Plaintiffs have not alleged facts to show that the risks had already happened. For example,

Plaintiffs do not allege that Defendants knew that Rivada would not continue the contract;

Plaintiffs allege that Defendants failed to disclose that its revenue forecasts were heavily dependent

on the Rivada contract. DE 37 ¶¶ 137, 162. Defendants adequately conveyed caution as to the

revenue impact and the dependability of the Rivada contract: “Whether the Company ultimately

recognizes revenue and profit on this contract is subject to a number of uncertainties including . . .

Rivada’s continuing ability to fund contract performance,” DE 58-3 at 5; “Our conversations with

Rivada have been positive, but there can be no assurance . . . ,” DE 58-11 at 8. And Plaintiffs do

not allege that Terran Orbital was out of cash, but that Defendants failed to disclose that Terran

Orbital required more cash to operate its growing business than generated. Id. ¶ 142. Defendants’

cautionary language was also on point in this respect. Defendants disclosed that: “We are currently

not profitable, nor do we have positive cash flow,” DE 58-1 at 9; “We may incur significant

expenses and capital expenditures . . . and we may by [sic] unable to adequately control our

expenses,” id. at 11; “As of December 31, 2023, the Rivada Agreement represented 88% of our

backlog,” id. at 7; “We may not be able to convert our backlog, or the sales opportunities

represented in our pipeline, into revenue,” id at 13.

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Based on the foregoing, Defendants have adequately listed important factors—the Rivada

contract, a history of losses, a limited operating history, significant expenses, lack of positive cash

flow—that could cause actual results to differ materially from those in the forward-looking

statements. Harris, 182 F.3d at 803. The language warned investors of risks of a significance

similar to that actually realized—such as the loss of the Rivada contract—and therefore put the

investors sufficiently on notice. Id. at 807.

b. Non-actionable Opinions

Opinion statements—statements concerning what a defendant believed or expected—“are

generally nonactionable because liability attaches only in the case of an ‘untrue statement of a

material fact.’” Carvelli, 934 F.3d at 1322 (citation and emphasis omitted). An opinion is

actionable in only three situations: (1) when a plaintiff can show that the speaker did not honestly

hold the opinion when stated, (2) when the opinion contains an embedded statement of untrue fact,

and (3) when a statement “omits material facts about the issuer’s inquiry into or knowledge

concerning a statement of opinion, and if those facts conflict with what a reasonable investor would

take from the statement itself.” Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension

Fund, 575 U.S. 175, 183–86, 189 (2015).

Defendants argue that certain statements are inactionable opinion statements. The Court

agrees that many of these statements are opinions because the statements express only belief,

feeling, and expectation:

• “We feel pretty good about where we are and have no concerns at this

point about our cash.” DE 37 ¶ 138.

• “The independent directors believe that under Marc’s continued leadership

Terran Orbital will soon achieve escape velocity in this rapidly growing

market for small satellites and busses.” Id. ¶ 144.

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• “. . . our current expectation that we will have sufficient cash to cover

capital investments and operations until becoming cash flow positive, which

is expected in 2024.” Id. ¶ 145.

• “We are entering 2024 with a strong financial foundation that we believe

will enable us to continue to execute on our strategic and operational

objectives.” Id. ¶ 148.

• “Yeah, we feel very comfortable with our liquidity position as it stands

today.” Id. ¶ 152.

• “We do not have any concerns about that covenant at this time.” Id. ¶ 153.

• “We feel very comfortable about our covenants going into the end of the

quarter. No issue on our side.” Id. ¶ 155.

Plaintiffs argue that the above statements are actionable because they are either untrue

because they are not honestly held opinions by the speaker, or misleading because they lack a

reasonable basis. DE 72 at 23. Following the Eleventh Circuit’s analysis in Carvelli, however,

Plaintiffs have “failed to allege facts with particularity that give rise to a strong inference that the

defendants didn’t truly believe what they asserted in the statements in question, or that the

statements embedded false facts.” 942 F.3d at 1323. Plaintiffs do not specifically allege that

Defendants did not hold their stated beliefs at the time that they made those statements. See

Carvelli v. Ocwen Fin. Corp., No. 9:17-CV-80500-RLR, 2018 WL 4941110, at *6 (S.D. Fla. Apr.

30, 2018), aff’d, 934 F.3d 1307 (11th Cir. 2019) (“‘[S]tatements about defendants’ belief in the

adequacy of loan loss reserves could be actionable,’ but only ‘if it is alleged that defendants did

not actually believe the loan loss reserves were adequate, or if defendants had no reasonable factual

basis for their belief.’” (quoting In re CIT Grp. Inc. Sec. Litig., 349 F. Supp. 2d 685, 690 (S.D.N.Y.

2004))). Plaintiffs may have alleged that Bell, for instance, knew about Terran Orbital’s serious

cash constraints, but Bell’s knowledge is not inconsistent with his stated “expectation” that Terran

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Orbital would “have sufficient cash to cover capital investments and operations until becoming

cash flow positive.” DE 37 ¶ 80.

Because “none of [these] statements of opinion are mutually exclusive of—or even

inconsistent with—[Defendants’] alleged knowledge,” Plaintiffs have not provided sufficient

allegations to render actionable these opinion statements. Carvelli, 924 F.3d at 1323.

c. Non-actionable Puffery

“[S]tatements that are vague, generalized, or ‘corporate puffery’ are not actionable under

the securities laws because a ‘reasonable investor would not base a decision on such statements.’”

In re KLX, Inc. Sec. Litig., 232 F. Supp. 3d 1269, 1276–77 (S.D. Fla. 2017) (quoting In re Royal

Caribbean, 2013 WL 3295951, at *12). “Plaintiffs must look beyond these optimistic

characterizations to the specific, verifiable statements made by Defendants if they are to

successfully allege a violation of the federal securities laws.” Waterford Twp. Gen. Emps. Ret. Sys.

v. BankUnited Fin. Corp., No. 08-CIV-22572, 2010 WL 1332574, at *8 (S.D. Fla. Mar. 30, 2010).

Defendants argue that certain statements are inactionable because they are general

statements of corporate optimism. The Court agrees as to the below statements:

• “The independent directors believe that under Marc’s continued leadership

Terran Orbital will soon achieve escape velocity in this rapidly growing

market for small satellites and busses.” DE 37 ¶ 144.

• “. . . we want to give our customers and vendors additional confidence that

we have adequate capital to successfully manage current and future

programs . . . .” Id. ¶ 157.

These “generalized, positive statements about the company’s competitive strengths,

experienced management, and future prospects are not actionable because they are immaterial.”

Douglas v. Norwegian Cruise Lines, No. 20-21107-CIV, 2021 WL 1378296, at *6 (S.D. Fla. Apr.

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12, 2021) (quoting Southland Securities Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 372

(5th Cir. 2004)).

d. Whether the Remaining Statements Are Misleading and Actionable

Defendants argue that most of Plaintiffs’ alleged statements also are inactionable because

Plaintiffs have not alleged particularized facts to show that the statements actually were false. DE

58 at 25. A statement does not necessarily have to be actually false, however, in order to be

actionable. A statement can be a misrepresentation if “in the light of the facts existing at the time

of the [statement] . . . [a] reasonable investor, in the exercise of due care, would have been misled

by it.” IBEW Local 595, 660 F. App’x at 857 (quoting FindWhat, 658 F.3d at 1305). To be

actionable, a misleading statement also must be material, meaning there is a “substantial likelihood

that the disclosure of the omitted fact would have been viewed by the reasonable investor as having

significantly altered the ‘total mix’ of information made available.” SEC v. Morgan Keegan & Co.,

Inc., 678 F.3d 1233, 1245 (11th Cir. 2012) (quoting TSC Indus., Inc. v. Northway, Inc., 426 U.S.

438, 449 (1976)). “When it comes to omissions specifically, the Supreme Court has clarified that

‘[s]ilence, absent a duty to disclose, is not misleading under Rule 10b–5.’” Carvelli, 934 .3d at

1317 (quoting Basic Inc. v. Levinson, 485 U.S. 224, 239 n.17 (1988)). “[A]bsent a duty, material

information needn’t be disclosed unless its omission would render misleading other information

that an issuer has disclosed.” Id. (citing Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 44

(2011)) (emphasis in original).

Upon review of the remaining alleged statements—those that were not inactionable

forward-looking statements, opinions, or puffery—the Court finds that Plaintiffs may have

sufficiently alleged certain material, misleading, and thus actionable misrepresentations (in bold

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below). Plaintiffs have alleged how Defendants’ repeated assurances belied Terran Orbital’s

seeming need for cash. Plaintiffs allege that in the summer of 2023, because “Terran Orbital was

still in dire need of additional cash,” senior management began holding discussions with external

parties regarding financing options. DE 37 ¶ 63. In August 2023, the Board unanimously approved

engaging Jefferies LLC (“Jefferies”) to advise on strategic alternatives to a capital raise, including

an investment, a sale of Terran Orbital, a take-private transaction, or an alternative strategic

relationship. Id. ¶ 66. In September 2023, the Board established the Special Committee to address

issues regarding Terran Orbital’s cash needs. Id. ¶ 69. In October 2023, “[a]s a direct result of

Terran Orbital’s continued cash constraints, the Board had authorized senior management,

including Bell and Hobart, to initiate a potential sale process.” Id. ¶ 72. In January 2024, Terran

Orbital met with Lockheed Martin and another potential bidder. Id. ¶ 88. Going into June 2024, a

financial advisory firm explained that Terran Orbital suffered from ongoing liquidity constraints

and cautioned that it may be unable to continue operating given the Company’s cash burn unless

it found a solution to those liquidity constraints. Id. ¶ 107.

Yet during this time period, Defendants made repeated statements indicating that they did

not need, and were not seeking, cash. In December 2023, Defendant Bell stated, “We are not

running out of cash . . . . and we are not going out looking for cash. * * * Cash is looking very

solid.” DE 37 ¶ 147. In January 2024, Bell stated, “The goal is demonstrate to the market that

cash is stable and no need to raise additional capital.” Id. ¶ 149. In February 2024, Bell stated

in an interview, “We’ve made it very public that we are not looking to raise money . . . It’s just

getting people comfortable that we don’t need cash. * * * We’re doing just fine. . . . We have

no intentions of raising any more money. That is the last thing we want to do.” Id. ¶ 150.

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Given Plaintiffs’ allegations, these definitive statements by Defendants arguably provided

an incomplete picture of Terran Orbital’s cash stability for investors. Plaintiffs’ allegations could

also have cast Defendants’ truthful statements in a misleading light. For instance, in response to

an analyst’s question about “the capital plan at this point going forward” and “raising cash to the

extent that you need to,” Defendant Bell stated, “Right now, the last thing any of us want to do

is raise additional cash. I don’t want the dilution . . . . Last thing I want is any dilution.” Id.

¶ 141. It may very well have been true that the last thing Defendants wanted was to raise additional

cash—but omitting the fact that Defendants needed cash and were seriously pursuing pathways to

acquire that cash could render Bell’s statement misleading.

Relatedly, Plaintiffs also sufficiently allege that Terran Orbital’s cashflow was heavily

dependent on receiving payments from Rivada and that the loss of the Rivada contract would

significantly impact Terran Orbital’s plan to become cashflow positive in 2024. See id. ¶ 162. Yet

Defendants continued to represent otherwise. During a call in November 2023, when an investor

asked, “[P]resuming [you] never get a single additional cent from Rivada, do you have enough

cash to make it through to cash flow positive?” Bell responded, “Yes, we do.” Id. ¶ 159. In

December 2023, Bell stated that “Rivada is great, but we don’t rely on Rivada . . . [o]ur business

model is we are no [sic] relying on them.” Id. ¶ 160. And in May 2024, when asked, “Evidently,

[Rivada] do not have all their financing in place . . . are there concerns that this whole thing could

fall apart, and have a major impact on your business operations in the future because the capital is

not available to pay for the build-out of the satellites for which you’ve contracted?” Bell stated,

“As far as Rivada goes, I can’t comment on what they have or don’t have. That’s a question for

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Rivada. On—but I can comment on, does it affect us. And, no, it doesn’t have any impact on

us going forward.” Id. ¶ 161.

These omissions—about ongoing cash constraints, the serious exploration of alternative

financing options, and the importance of the Rivada contract—could make Defendant’s statements

misleading, in that the statements would have significantly altered the total mix of information

available to a reasonable investor. See In re Jan. 2021 Short Squeeze Trading Litig., 620 F. Supp.

3d 1231, 1265 (S.D. Fla. 2022) (finding misleading the defendant’s denial of “any concerns about

liquidity despite internal and subsequent statements to the contrary”).

Based on this analysis, the Court concludes that the statements might be actionable as

materially misleading. The Court has doubt, however. On the one hand, if future revenue were

realized as Defendants had hoped, then there would have been no immediate liquidity issues and

no need for future capital raises or the sale of the company. On the other hand, there is the clear

and troubling juxtaposition, in hindsight, of Defendants’ repeated assurances about Terran

Orbital’s cashflow and what actually occurred: repeated capital raises and the sale of the company.

Because the Court has doubt, the Court does not reach a conclusion as to whether the

statements are sufficiently pled as materially misleading. The Court’s analysis above is for the

benefit of the parties and to inform any future briefing on this issue that may arise at a later stage

of the proceeding. The Court’s ruling on Defendant’s Motion, instead, is based upon the second

requirement for the statements to be legally actionable: scienter. The Court turns its analysis to

scienter now.

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2. Whether Plaintiffs Have Alleged Scienter

Defendants argue that Plaintiffs have failed to allege scienter. DE 58 at 26. The Court

agrees for three reasons. First, the Amended Complaint has not adequately alleged particularized

facts to support a strong inference of scienter for each defendant. Second, Plaintiffs’ pleading and

briefing do not sufficiently explain how the alleged circumstantial evidence connects to, and

reveals, each Defendant’s requisite state of mind. Third, when Plaintiffs have provided

particularized allegations of scienter, those allegations do not meet the Eleventh Circuit’s standard.

The Eleventh Circuit sets a high standard for establishing scienter, the “mental state

embracing intent to deceive, manipulate, or defraud.” Bryant, 187 F.3d at 1282 (quoting Ernst &

Ernst v. Hochfelder, 425 U.S. 185, 193 n.12 (1976)). To adequately plead scienter in the Eleventh

Circuit, Plaintiffs must “state with particularity facts giving rise to a strong inference” that each

Defendant acted “purposefully or with ‘severe recklessness.’” 15 U.S.C. § 78u-4(b)(2); Richard

Thorpe & Darrel Weisheit v. Walter Inv. Mgmt., Corp., 111 F. Supp. 3d 1336, 1359 (S.D. Fla.

2015) (quoting Thompson v. RelationServe Media, Inc., 610 F.3d 628, 634 (11th Cir. 2010)).

“Severe recklessness” requires a showing of “highly unreasonable omissions or misrepresentations

that involve not merely simple or even inexcusable negligence, but an extreme departure from the

standards of ordinary care,” such that they “present a danger of misleading buyers or sellers which

is either known to the defendant or is so obvious that the defendant must have been aware of it.”

Richard Thorpe, 111 F. Supp. 3d at 1359 (citation omitted). The inference of scienter “must be

more than merely plausible or reasonable—it must be cogent and at least as compelling as any

opposing inference of nonfraudulent intent,” and courts must “take into account plausible opposing

inferences” suggesting the absence of any wrongful intent. Tellabs, 551 U.S. at 309, 323.

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Plaintiffs ask the Court to infer scienter based on the following allegations: As discussed

above, see supra Part V.A.1.d., certain individual Defendants issued potentially material,

misleading statements. Terran Orbital prepared a Proxy, signed by Bell, that revealed Defendants’

knowledge of the severity and duration of Terran Orbital’s ongoing cashflow struggles. DE 37

¶¶ 191–97. Bell had frequent and regular contact with Rivada about the Rivada contract. Id.

¶¶ 198–201. Bell and Hobart had financial motives to hide Terran Orbital’s liquidity constraints.

Id. ¶¶ 202–08. Terran Orbital’s available cash balance was an existential issue for the company,

and the Rivada contract was at the core of the company’s business. Id. ¶¶ 209–13. Hobart was

abruptly removed and reassigned from his role as CFO shortly after the Board took action to

address Terran Orbital’s financial state, and Bell and Hobart were separated from the company

shortly after the Lockheed Martin acquisition. Id. ¶¶ 214–19. And Bell, Hobart, and Riffel filed

Sarbanes-Oxley Act (“SOX”) certifications. Id. ¶ 220–223.

The Court must examine “whether all of the facts alleged, taken collectively, give rise to a

strong inference of scienter.” Tellabs, 551 U.S. at 310 (emphasis in original). Crucially, Plaintiffs

must also “allege[] facts supporting a strong inference of scienter ‘for each defendant with respect

to each violation.’” Mizzaro, 544 F.3d at 1238 (quoting Phillips, 374 F.3d at 1016) (emphasis

added); see also Murdeshwar v. Search Media Holdings Ltd., No. 11-CIV-20549, 2011 WL

7704347, at *15 (S.D. Fla. Aug. 8, 2011) (“Plaintiffs’ reliance on group pleading to set forth nearly

all of the scienter allegations makes it impossible for the Court to determine if any of the Ideation

Defendants acted with scienter based upon these allegations.”); Durgin v. Mon, 659 F. Supp. 2d

1240, 1254 (S.D. Fla. 2009), aff’d, 415 F. App’x 161 (11th Cir. 2011) (“Significantly, the group

pleading doctrine does not apply to the scienter requirement.”).

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Plaintiffs have not sufficiently alleged facts to support strong inferences of scienter for

each defendant. To start, Plaintiffs’ more general allegations—those that pertain to Defendants in

the aggregate—do not give rise to a strong inference of scienter as to each Defendant. Plaintiffs

allege that Terran Orbital’s Proxy, prepared to secure votes to approve the Lockheed Martin

transaction, demonstrates that Defendants undeniably knew about Terran Orbital’s liquidity

problems throughout the class period and materially misled investors. DE 37 ¶ 191. But Plaintiffs

do not particularly allege how each Defendant is responsible for the statements in the Proxy, nor

how the statements in the Proxy correspond to and reveal fraudulent intent or severe recklessness

in the actions or statements by each Defendant. Plaintiffs also allege that the Proxy confirms that

Defendants acted with scienter by failing to disclose Terran Orbital’s liquidity problems. Yet

Plaintiffs do not dispute that during the relevant period, Terran Orbital’s SEC filings accurately

reflected the company’s cash position, revenue, and projections. DE 58 at 32; DE 75 at 9–10. That

is, Terran Orbital’s financial statements would have kept investors informed of the company’s

financial outlook and risk.

Plaintiffs’ other allegations about Defendants in the aggregate are also not probative of

scienter. Plaintiffs allege knowledge and motive, based on the “core operations doctrine,” from

the fact that the Rivada contract was at the core of the company’s business. But “merely alleging

that [Rivada] is a core operation does not lead to a conclusion that Defendants . . . acted with

scienter because the PSLRA requires more.” Richard Thorpe, 111 F. Supp. 3d at 1376. That Bell,

Hobart, and Riffel filed SOX certifications is also not probative. “[A] Sarbanes-Oxley certification

is only probative of scienter if the person signing the certification was severely reckless in

certifying the accuracy of the financial statements.” Mizzaro, 544 F.3d at 1252 (quoting Garfield

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v. NDC Health Corp., 466 F.3d 1255, 1266 (11th Cir. 2006)). A signor is severely reckless only

if the signor “should have suspected . . . that the financial statements contained material

misstatements or omissions,” which Plaintiffs do not allege. Id. (citation omitted).

Plaintiffs’ individualized allegations, considered together, also do not give rise to a strong

inference of scienter. To start, Plaintiffs have provided few specific allegations overall as to

Sclavos and Riffel. The allegations discuss Sclavos’s and Riffel’s non-actionable statements, their

positions within Terran Orbital, and the fact that Riffel filed SOX certifications. See supra Part

V.A.1.b–c. These allegations do not give rise to a strong inference of scienter as to Sclavos and

Riffel. See In re Flowers Foods, Inc. Sec. Litig., No. 7:16-CV-222 (WLS), 2018 WL 1558558, at

*14 (M.D. Ga. Mar. 23, 2018) (“While ‘scienter cannot be inferred merely from a defendant’s

position,’ scienter can be inferred when a defendant’s position and responsibilities establish other

particular facts probative of scienter.” (emphasis added)); see also Tellabs, 551 U.S. at 326

(holding that “omissions and ambiguities count against inferring scienter”).

Plaintiffs provide more individualized allegations about Bell and Hobart, but Plaintiffs’

pleading—and briefing—do not clearly delineate, with particularity, how the facts give rise to a

strong inference of fraudulent intent or severe recklessness. Plaintiffs allege that Bell was in

frequent contact with Rivada about the contract and was well informed about Rivada’s funding.

But Plaintiffs’ allegations about the nature of the contact—that Bell was texting with Rivada’s

CEO about a forthcoming payment, that conversations were “positive,” and that Rivada provided

information about funding sources—are not sufficient for the Court to infer that Bell or Defendants

acted with severe recklessness and knowledge that Rivada would be unable to satisfy its

contractual obligations. DE 37 ¶¶ 199–201. And Bell’s statement that Terran Orbital had

27

conducted “extreme due diligence on [Rivada’s] financials” would result in a finding, “[a]t most,”

of “inexcusable negligence,” not severe recklessness. In re Unicapital Corp. Sec. Litig., 149 F.

Supp. 2d 1353, 1371 (S.D. Fla. 2001); DE 37 ¶ 199.

Similarly, Plaintiffs have not delineated why Hobart’s reassignment and Hobart’s and

Bell’s departures occurred under suspicious circumstances. See Brophy v. Jiangbo Pharms., Inc.,

781 F.3d 1296, 1305 (11th Cir. 2015) (“Various courts have recognized that an executive officer’s

resignation can strengthen an inference of scienter when it occurs around the same time as an

investigation.”). Without allegations that connect Hobart’s and Bell’s departures to their

fraudulent or severely reckless behavior, Plaintiffs’ allegations are only speculative. To compare,

the court in In re Home Loan Servicing Solutions, Ltd. Securities Litigation found scienter as to a

defendant who was “at the epicenter” of the business, was “forced to resign,” and who, based on

regulatory documents, was “engaged in improper transactions.” No. 16-CV-60165, 2016 WL

10592320, at *7 (S.D. Fla. June 6, 2016).

Plaintiffs’ remaining allegation of scienter is that Bell and Hobart had motive to hide

Terran Orbital’s financial constraints because each had employment agreements “that rewarded

them handsomely for a ‘change in control’ transaction—rewards that would be unavailable if the

Company was unable to find a strategic partner and forced to file for bankruptcy.” DE 37 ¶ 202.

Motive and opportunity alone, however, are insufficient to plead scienter. See Bryant, 187 F.3d at

1287. Because Plaintiffs’ other allegations are insufficient to give rise to an inference of scienter

as to Bell and Hobart, the fact that Bell and Hobart stood to profit from the Lockheed Martin

acquisition, alone, is also insufficient.

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In sum, Plaintiffs’ scienter allegations are insufficient to give rise to a strong inference that

Defendants acted with severe recklessness. First, the Amended Complaint has not adequately

alleged particularized facts to support a strong inference of scienter for each defendant. See

Kosowsky v. Icahn Enters. L.P., 748 F. Supp. 3d 1303, 1322 (S.D. Fla. 2024) (“Because Plaintiffs

fail to clearly distinguish how each Individual Defendant acted purposefully or with severe

recklessness, the Court cannot meaningfully assess whether any of the Individual Defendants acted

with scienter[.]”). Second, Plaintiffs’ pleading and briefing do not sufficiently explain to the Court

how the alleged circumstantial evidence connects to, and reveals, the requisite state of mind behind

each of Defendant’s actions or statements. Third, where Plaintiffs have provided particularized

allegations of scienter, those allegations do not meet the Eleventh Circuit’s high standard of

scienter—that is, after “tak[ing] into account plausible opposing inferences,” the inference of

scienter is not “at least as compelling as any opposing inference of nonfraudulent intent.” Tellabs,

551 U.S. at 309, 323 (emphasis added). For example, Plaintiffs discuss in detail how Terran

Orbital’s Proxy demonstrates scienter, yet Plaintiffs do not persuasively respond to the fact that

Terran Orbital’s SEC filings and releases are consistent with the Proxy.

For these reasons, the Court dismisses Count I.

B. Count II – Section 20(a) of the Exchange Act

Because Plaintiffs failed to adequately plead a violation of Section 10(b) and Rule 10b-5,

Plaintiffs’ second claim, that the Individual Defendants are liable as “control persons” under

Section 20(a) of the Securities Exchange Act, necessarily fails as well. See KLX, Inc., 232 F. Supp.

3d at 1283.

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VI. RULING

For the foregoing reasons, it is ORDERED AND ADJUDGED that Defendant’s Motion

[DE 58] is GRANTED. Counts I and II are DISMISSED. Because this is the first dismissal

based on a Court order, the Court’s dismissals are WITH LEAVE TO AMEND. Plaintiffs shall

file any Second Amended Complaint within three weeks of the date of rendition of this Order.

DONE and ORDERED in Chambers, West Palm Beach, Florida, this 21st day of August,

2025. _ oY

\

| A A Hea A

ROBIN L. ROSENBERG

UNITED STATES DISTRICT JUDGE

Copies furnished to Counsel of Record

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