Cai von Rumohr: Great, but with, I guess, not to beat a harsh, but with Virgin Orbit basically gone. How come you don’t increase prices? And when you talk about the longer-term, at what point, what would cause you to raise the price? I mean, when you then raise it that all going to go from $7.5 million to $8 million, how should I think about how that that works? And how does it take into account inflation?
Adam Spice: I will let, Pete weighs in on this one.
Peter Beck: Yes, I mean, we have – we kind of have a standard escalation for that to deal with inflation year-on-year. And certain missions, not all missions have the same kind of Adam’s point, as when we do some of the very complicated government and hypersonic missions, they command a much higher price then mission, we’re flying, someone’s bought six rockets from us, and we’re flying the same satellite again and again. So there’s, kind of variability. And I would say that we test the market pretty fairly, on that pricing range, it’s still tried to provide, the right price for the product and services that they’re expecting from us.
Cai von Rumohr: Thank you. I just have one last one. So out of the 22 launches, how many are from Virginia?
Adam Spice: I believe right now, I think there are…
Peter Beck: Sold the heist mission…
Adam Spice: Yes. There is least 2 or maybe 3 launches currently manifested for Virginia.
Cai von Rumohr: Got it. Thank you.
Operator: Thank you. Your next question comes from the line of Suji Desilva with ROTH MKM. Please go ahead.
Suji Desilva: Hi, Peter. Hi, Adam. My questions are on the space systems. And thanks for the 1Q guidance there. The increase in 1Q versus 4Q is that primarily the GSAT MDA program ramping up? Or is that the second customer contributing any color there on the increase guided for 1Q will be helpful?
Adam Spice: Yes, there’s a few things contributing to that, obviously, the higher launch cadence, as we as we kind of get back to the pad, as Pete said, on November 28. So it’s really coming across the board, we’ve got strength and Electron that’s coming through and contributing on the space system side, there’s a few things that are going on there. But the biggest element is really as the MDA Globalstar vehicles, again, start coming off the production line, we have a much clearer line of sight to the revenue recognition, as you know, as bill materials are pulled to the production floor, to assemble the spacecraft to the testing and so forth so. It’s a there was a bit of uncertainty as we progress through 2023, because you have milestones for when you get through key program reviews like PDRs and CDRs. And you really can’t progress Suji, you get through those, once you have that, and it’s a much more nothing is easy in this business.
But there is a much more kind of predictable formulaic, you’ve got almost a day for day schedule of how you can kind of start to assemble based on the labor that you have or the bomb that you’ve received ordered and when it’s scheduled to arrive. Because it’s a much easier thing to predict once you get past those key properties and you move into AIT. So, I would say that the majority of the step up and the biggest piece of it, so, maybe not. The majority of the biggest piece of the step up in Q1 is coming from that Globalstar-MDA contract, but there is contribution from our other satellite programs as well.
Suji Desilva: Okay. Great. And then my other question is on the satellite part of – manufacturing part of space systems as well. With the MDA contract with the 17 satellites and then the second customer coming on, I am wondering what framework we should think about – you should think about the capacity per quarter of the number of satellites you can make if that’s the right way to think about how that business grow overtime?
Peter Beck: Yes. I mean I wouldn’t necessarily just think about capacity because the kind of spacecraft projects we take on are – they are not just sort of cheap and cheerful, easy metal bending kind of jobs, we are going to Mars and we have got the MDA-Globalstar is a great example, is a very deeply complicated mission in a horrible radiation environment. So, I wouldn’t be necessarily tracking just the volume of spacecraft, but also, the complexity of the missions because ultimately that that drives a lot of value and even the latest mission that we announced here today, the latest spacecraft that is not – it’s not an easy build. So, we tend to be very successful and do very well and create a lot of value in those. There is much, higher fidelity, much, much trickier missions to do. So, wouldn’t you just use a volume kind of metric to kind of measure us.
Suji Desilva: Okay. Understood Peter. Thanks guys.
Peter Beck: Cool.
Operator: Thank you. Your next question comes from the line of Jason Gursky with Citi. Please go ahead.
Jason Gursky: Yes. Hey there. Good afternoon everybody. And really quickly on the balance sheet, what are the current thoughts or expectations around, not a million that’s gone current here, are we looking to re-fly that or we are going to be taking some cash off the balance sheet to address that? We just want to figure that out from a modeling perspective.
Peter Beck: Yes. No, we are actively in the process of looking to refinance that. And we have got several options. We are pretty far down the path with a few different providers and they range from doing equipment lines to kind of similar structures to term loans that the Hercules loan represented. But no, that we are looking to refinance that. I think we are hopeful that, we will get that done, in hopefully the next few weeks and again almost certainly before the end of the year.
Jason Gursky: Okay. Great. And then I want to make sure that I fully understand the comments on Electron for next year. Are you at this point fully sold out, or if you had a couple of customers that wanted a quick turn mission, would you have the launch vehicles available to do that or are you just kind of telling customers, okay, we are sold out for ‘24, got to look to ‘25?
Peter Beck: Well, look, we will always look for opportunistic opportunities. I mean it’s fair to say that production will be at near full capacity next year as we deliver on those. But also we as you guys see and we experience some customers slip out and it’s very easy for a customer to have an issue. And the [indiscernible] and shipped out six months, which would create an open opportunity. So, we never say no to customers and although yes, the manifest is essentially full, it doesn’t mean that there is not going to be an opportunity open through the year. So, yes, we always keep that in our discretion.
