Vertical Aerospace Announces Pricing of Upsized Underwritten Public Offering

Rhea-AI Summary

Vertical Aerospace (NYSE: EVTL) has announced the pricing of its upsized underwritten public offering of $90 million of units at $6.00 per unit. Each unit includes one ordinary share and two warrant components: one-half Tranche A warrant and one-half Tranche B warrant.

The Tranche A warrants, exercisable at $6.00 per share, will expire either 30 days after successful VX4 wing-borne flight demonstration and meeting specific price conditions, or after five years. Tranche B warrants, exercisable at $7.50 per share, have a five-year expiration.

The offering, expected to close around January 24, 2025, will be led by William Blair as lead bookrunner and Canaccord Genuity as joint bookrunner. Proceeds will fund VX4 development, testing and certification expansion, and general corporate purposes.

Positive

• Secured $90 million in new funding through public offering
• Structured offering includes warrants that could provide additional future funding
• Proceeds dedicated to VX4 development and certification process

Negative

• Potential dilution for existing shareholders through new share issuance
• Warrant exercise prices ($6.00 and $7.50) suggest premium expectations
• Additional capital raising indicates ongoing cash needs

Insights

Investment Banking Analyst

The $90 million public offering by Vertical Aerospace represents a critical financing move in the capital-intensive eVTOL sector. The sophisticated unit structure, priced at $6.00, combines equity with performance-linked warrants - a notable innovation in aerospace financing that aligns investor returns with technical milestones.

The Tranche A warrant structure is particularly noteworthy, linking exercisability to the achievement of wing-borne flight for the VX4 prototype. This milestone-based approach effectively creates a built-in catalyst for potential value creation, while the $7.50 exercise price on Tranche B warrants provides additional upside potential for investors.

The timing and pricing of this offering are strategic considerations. With a current market cap of approximately $660M, this offering represents roughly 13.6% dilution at the unit price, reflecting the challenging market conditions for pre-revenue aerospace companies. The decision to include warrants likely helped secure better pricing terms while offering investors participation in future upside.

For context, eVTOL development typically requires $700M-$1B to reach certification. This raise, while significant, suggests additional funding rounds may be necessary before commercialization. The participation of established underwriters William Blair and Canaccord Genuity adds credibility to the offering, though the decision not to list the warrants on an exchange could impact their liquidity.

LONDON--(BUSINESS WIRE)-- Vertical Aerospace (Vertical) (NYSE: EVTL) ("Vertical” or the “Company”), a global aerospace and technology company that is pioneering electric aviation, today announced that it has priced its underwritten public offering of $90 million of units at a public offering price of $6.00 per unit (the "Offering”). Each unit consists of one ordinary share and one-half of one Tranche A warrant and one-half of one Tranche B warrant. The ordinary shares and the warrants comprising the units are immediately separable and will be issued separately in the Offering. The Offering is expected to close on or about January 24, 2025, subject to customary closing conditions.

The Tranche A warrants will expire on the earlier of: (i) upon the satisfaction of both of the following conditions: (a) Vertical successfully demonstrating a wing-borne flight of its VX4 prototype aircraft and (b) the 10-day volume weighted average price of the Company’s ordinary shares, following the public disclosure of such successful wing-borne flight, being equal to or greater than, 103% of the exercise price of the warrants, the 30th day following the date of such disclosure; and (ii) the five-year anniversary of the date of issuance. The Tranche A warrants are exercisable at an exercise price of $6.00 per whole ordinary share. The Tranche B warrants will expire five years from the date of issuance and are exercisable at an exercise price of $7.50 per whole ordinary share.

William Blair is acting as lead bookrunner and Canaccord Genuity is acting as joint bookrunner for the Offering.

Vertical intends to use the net proceeds from the Offering to fund its research and development expenses as Vertical continues to develop the VX4 and its expenditures in the expansion of its testing and certification capacities, as well as for general working capital and other general corporate purposes.

The Company’s ordinary shares trade on the NYSE under the symbol “EVTL”. The offered warrants will not be listed on any exchange.

The Offering is being made only by means of a prospectus supplement to the Company’s registration statement on Form F-3 (File No. 333-275430) previously filed with the SEC on November 9, 2023 and declared effective by the SEC on November 16, 2023. Copies of the prospectus supplement relating to the Offering may be obtained from the SEC’s website, or from: William Blair & Company, L.L.C., Attention: Prospectus Department, 150 North Riverside Plaza, Chicago, IL 60606, by telephone at (800) 621-0687, or by email at prospectus@williamblair.com; or Canaccord Genuity LLC, Attention: Syndication Department, One Post Office Square, Suite 3000, Boston, MA 02109, by telephone at (800) 225-6104, or by email at prospectus@cgf.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Vertical Aerospace

Vertical Aerospace is a global aerospace and technology company pioneering electric aviation. Vertical is creating a safer, cleaner and quieter way to travel. Vertical’s VX4 is a piloted, four passenger, Electric Vertical Take-Off and Landing (eVTOL) aircraft, with zero operating emissions. Vertical combines partnering with leading aerospace companies, including GKN Aerospace, Honeywell and Leonardo, with developing its own proprietary battery and propeller technology to develop the world’s most advanced and safest eVTOL.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to our current expectations and views of future events. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements as contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any express or implied statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements, including, without limitation, statements regarding the expected closing of and use of proceeds from the transaction, our future results of operations and financial position, our plans for capital expenditures, the design and manufacture of the VX4, our business strategy and plans and objectives of management for future operations, including the building and testing of our prototype aircrafts on timelines projected, certification and the commercialization of the VX4 and our ability to achieve regulatory certification of our aircraft product on any particular timeline or at all, expectations surrounding pre-orders and commitments, the features and capabilities of the VX4, the transition towards a net-zero emissions economy, as well as statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate,” “will,” “aim,” “potential,” “continue,” “are likely to” and similar statements of a future or forward-looking nature. Forward-looking statements are neither promises nor guarantees, but involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation: market conditions and satisfaction of customary closing conditions related to the Offering; our limited operating history without manufactured non-prototype aircraft or completed eVTOL aircraft customer order; our history of losses and the expectation to incur significant expenses and continuing losses for the foreseeable future; the market for eVTOL aircraft being in a relatively early stage; our potential inability to produce, certify or launch aircraft in the volumes or timelines projected; the potential inability to obtain the necessary certifications for production and operation within any projected timeline, or at all; any accidents or incidents involving eVTOL aircraft could harm our business; our dependence on partners and suppliers for the components in our aircraft and for operational needs; the potential that certain strategic partnerships may not materialize into long-term partnership arrangements; all of the pre-orders received are conditional and may be terminated at any time and any pre-delivery payments may be fully refundable upon certain specified dates; the inability for our aircraft to perform at the level we expect and may have potential defects; any potential failure to effectively manage our growth; our inability to recruit and retain senior management and other highly skilled personnel, our ability to raise additional funds when we need or want them, or at all, to fund our operations; our limited cash and cash equivalents and recurring losses from our operations raise significant doubt (or raise substantial doubt as contemplated by PCAOB standards) regarding our ability to continue as a going concern; the fact that we have previously identified material weaknesses in our internal controls over financial reporting which if we fail to properly remediate, could adversely affect our results of operations, investor confidence in us and the market price of our ordinary shares; the fact that as a foreign private issuer, we follow certain home country corporate governance rules, are not subject to U.S. proxy rules and are subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company; and the other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 20-F filed with the SEC on March 14, 2024, as such factors may be updated from time to time in our other filings with the SEC. Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. We disclaim any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250123813330/en/

Vertical Aerospace Media

Justin Bates, Head of Communications

justin.bates@vertical-aerospace.com +44 7878 357 463



Investor Relations

Samuel Emden, Head of Investor Affairs

samuel.emden@vertical-aerospace.com +44 7816 459 904

Source: Vertical Aerospace

FAQ

What is the size and price of Vertical Aerospace's (EVTL) latest public offering?

Vertical Aerospace's public offering is sized at $90 million, with units priced at $6.00 each. Each unit consists of one ordinary share and two half-warrants.

When will EVTL's Tranche A warrants expire?

Tranche A warrants will expire either 30 days after successful VX4 wing-borne flight demonstration and meeting specific price conditions, or five years from issuance, whichever comes first.

What are the exercise prices for EVTL's new warrants?

The Tranche A warrants have an exercise price of $6.00 per ordinary share, while Tranche B warrants have an exercise price of $7.50 per ordinary share.

How will Vertical Aerospace use the proceeds from its $90M offering?

The proceeds will fund research and development of the VX4, expansion of testing and certification capacities, and general working capital purposes.

When is EVTL's public offering expected to close?

The offering is expected to close on or about January 24, 2025, subject to customary closing conditions.