ScanTech AI Systems Inc. announced a non‑binding term sheet for a $20 million subordinated convertible note facility with ARC Group International Ltd. The term sheet provides for an initial tranche of up to $6 million upon closing of the first registration statement, with subsequent $2 million tranches available every forty‑five trading days, subject to customary conditions.
The convertible notes carry a 9% annual dividend and a 3% original issue discount. They are convertible into common stock at a price equal to 110% of the closing price of the common stock on the trading day prior to signing, with a $1.00 per share floor. The agreement also includes five‑year warrants representing up to 30% of each disbursed tranche, exercisable at the average closing price of the common stock for the five trading days preceding each tranche’s closing.
This financing complements the $50 million equity line of credit and $500,000 PIPE investment from ARC Group announced on October 10, 2025. ScanTech AI has been grappling with liquidity challenges, reporting a net loss of $23.89 million over the last twelve months as of November 3, 2025, and a current ratio of 0.14. Total debt stands at $23.27 million. The company also recently regained Nasdaq compliance after a deficiency notice and is restating its first two quarters of 2025 due to an accounting error.
CEO Dolan Falconer emphasized that the new facility will strengthen liquidity and support scaling of fixed‑gantry CT and AI platforms across aerospace, nuclear, and industrial sectors. He noted that the partnership with ARC Group builds on a track record of successful capital deployments, citing his recognition as Dealmaker of the Year in May 2025.
The term sheet is non‑binding and subject to due diligence, regulatory approvals, and shareholder consent. No funds have been drawn yet. The company expects the financing to provide flexibility for working capital, commercial deployments, and balance‑sheet strengthening.
While no immediate market reaction data is available, the move signals ongoing capital needs and a continued relationship with ARC Group, underscoring the company’s focus on growth amid financial headwinds.
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