Business Context and Reporting Period
This Form 6-K filing by Vertical Aerospace Ltd. covers the month of April 2026, specifically focusing on a comprehensive financing package executed on April 20, 2026. The company, a developer of electric vertical takeoff and landing (eVTOL) aircraft, entered into agreements with Mudrick Capital Management L.P. and Yorkville (YA II PN, Ltd.) to secure capital for operations and development.
Key Financial Metrics and Liquidity
- Cash Position: As of March 31, 2026, the company held approximately £73 million ($96 million) in cash and cash equivalents.
- Debt Facility: A senior secured convertible notes facility of up to $50 million with Mudrick Capital. Notes carry a 10.00% / 12.00% PIK toggle interest rate and mature on December 15, 2030.
- Preferred Equity Facility: A facility of up to $250 million in Series A Convertible Preferred Shares with Yorkville. The initial tranche of $25 million was purchased at $960 per share.
- Equity Line of Credit: A Standby Equity Purchase Agreement (SEPA) with Yorkville for up to $500 million in ordinary shares over a three-year period.
- Commitment Fee: A total fee of $2 million (0.40% of the SEPA commitment) payable in ordinary shares.
Material Changes and Transaction Details
The filing details the execution of a term sheet announced on March 30, 2026, resulting in three distinct financing instruments:
- Convertible Notes Extension: The maturity date of existing Convertible Senior Secured Notes was extended to December 15, 2030 via a Third Supplemental Indenture.
- Convertible Note Terms: Mudrick Capital may convert additional notes into ordinary shares at a fixed price of $3.50 per share. Issuance is conditional on the company maintaining $50 million in liquidity and solvency for four months post-issuance.
- Preferred Share Terms: Series A Preferred Shares rank senior to ordinary shares but junior to the senior secured notes. They carry an 18% annual dividend payable in-kind (additional shares) upon the occurrence of a "Triggering Event" (e.g., suspension of trading, failure to pay dividends, or insolvency).
- SEPA Pricing: Shares under the equity line will be sold at 97% of the average daily VWAP, subject to a 4.99% beneficial ownership cap for Yorkville per advance.
Guidance, Risks, and Restrictions
The filing does not provide specific revenue guidance or operational outlook beyond the financing structure. However, it outlines significant covenants and risks:
- Dividend Restrictions: The company is prohibited from redeeming, repurchasing, or paying cash dividends on its capital stock, except as permitted under the Certificate of Designations.
- Indebtedness and Liens: The company is restricted from incurring new indebtedness or liens unless permitted under the new agreements.
- Fundamental Transactions: Mergers or business combinations are prohibited unless the successor assumes all obligations or redeems the Preferred Shares in full.
- Liquidity Conditions: Future drawdowns on the convertible notes require the company to demonstrate $50 million in liquidity and solvency.
Investor Verification Checklist
- Verify the company's current cash balance and burn rate to ensure it meets the $50 million liquidity threshold required for future note issuances.
- Review the "Triggering Events" in the Certificate of Designations to understand the conditions under which the 18% in-kind dividend on Preferred Shares would be activated.
- Assess the dilution impact of the $500 million equity line and the $250 million preferred equity facility, noting the 4.99% ownership cap per tranche.
- Confirm the status of the resale registration statement required for Yorkville to resell shares under the SEPA and Preferred Share agreements.
- Monitor the company's ability to maintain solvency for four months following any issuance of additional convertible notes.