Electric vertical take-off and landing (eVTOL) aircraft developer Vertical Aerospace has a secured a $50 million cash injection from founder, majority owner and chief executive Stephen Fitzpatrick, effectively funding the business until the second quarter of 2025.
Fitzpatrick will commit an initial tranche of $25 million by March 2024, with the remainder to follow by 31 July this year.
His initial $25 million will see him gain a mixture of shares – valuing the company’s stock at $10 per share – and warrants with a $5 exercise price.
Since the beginning of the year, Vertical’s share price has not risen above $0.69 and has fallen as low as $0.50. When the company listed on the US stock market in December 2021, it was valued at over $12 per share.
But Fitzpatrick argues the progress shown by the company last year “is not reflected in our share price”.
The share price for the second $25 million tranche has yet to be determined. In addition, Fitzpatrick’s total promised investment may yet fall, with Vertical noting that the “second tranche [is] to be reduced by the amount of alternative equity funding secured by the company by that date [31 July]”.
In its third-quarter results, released in November last year, Vertical said it had cash and short-term deposits totaling £74 million ($94 million) and expected to spend £80 million over the following 12 months.
Vertical said it continued to seek “additional capital in 2023 to support its ongoing capital requirements, fund its future operations and remain as a going concern”.
Vertical says Fitzpatrick’s new cash injection “provides the platform for further funding rounds and extends Vertical’s projected cash runway into Q2 2025, supporting the continued development of the certification aircraft design following prototype testing this year”.
FlightGlobal understands that conversations with other potential backers continue, with that process to be aided as the VX4 programme reaches key development milestones.
An initial flight-test prototype was written off following a crash in August last year and its replacement, incorporating a number of improvements, is due to arrive during the first quarter of 2024, followed by a second example in the latter half of the year.
Vertical plans to perform multiple public flight demonstrations in 2024, including at the Farnborough air show. Service entry for the four-passenger VX4 is slated for late 2026.
