Business Context and Reporting Period
Vertical Aerospace Ltd. filed this Form 6-K for December 2021. The filing reports the closing of its previously announced business combination with Broadstone Acquisition Corp. and the acquisition of Vertical Aerospace Group Ltd. on December 16, 2021.
Vertical became a wholly owned subsidiary of the Company. The Company’s ordinary shares and public warrants began trading on the New York Stock Exchange on December 16, 2021 under the symbols EVTL and EVTLW, respectively.
Key Financial and Capitalization Metrics
- PIPE financing: Investors purchased 9,400,000 ordinary shares at $10.00 per share for aggregate proceeds of $94.0 million.
- Convertible senior secured notes: Mudrick Capital purchased notes with an aggregate principal amount of $200.0 million for a purchase price of $192.0 million.
- Convertible note warrants: The Company issued Mudrick 4,000,000 warrants exercisable at $11.50 per ordinary share.
- Post-combination shares: 165,539,667 ordinary shares were issued and outstanding following completion of the business combination.
- Public-share redemptions: 28,958,892 Broadstone Class A ordinary shares were redeemed; 1,571,409 remaining Class A shares converted into Company ordinary shares.
- Public warrants: 15,265,150 public warrants remained outstanding and converted into warrants to purchase Company ordinary shares.
The filing does not provide revenue, operating profit, net income, cash flow, margin, cash balance, or other period-specific operating results.
Material Changes Versus the Prior Comparable Period
- The Company transitioned from a pre-business-combination structure to a publicly traded operating company.
- Broadstone merged with a wholly owned subsidiary of the Company, with Broadstone surviving as a wholly owned subsidiary.
- The Company acquired all outstanding shares of Vertical Aerospace Group Ltd., making Vertical a wholly owned subsidiary.
- The Company raised $94.0 million through the PIPE financing and issued $200.0 million principal amount of convertible senior secured notes for $192.0 million in cash proceeds before transaction-related effects.
- Microsoft Corporation and Rocket Internet SE transferred 12,893 Company Loan Note Shares of Vertical in exchange for 15,701,035 Company ordinary shares.
- American Airlines transferred 5,804 Class Z ordinary shares of Vertical in exchange for 6,125,000 Company ordinary shares.
- The Company entered into new warrant, lock-up, registration rights, and director indemnification arrangements.
Guidance, Outlook, Risks, and Unusual Items
- The filing provides no operating guidance, revenue outlook, profitability forecast, or management discussion of expected financial performance.
- The $200.0 million convertible notes are senior secured and convertible, creating material debt, security, interest, conversion, and potential dilution considerations. The filing excerpt does not state the notes’ interest rate, maturity, conversion price, or other detailed terms.
- Outstanding public, investor, and strategic warrants may result in future share dilution if exercised.
- Lock-up agreements restrict transfers by specified shareholders, including Vertical shareholders, the Sponsor, Avolon Warrantholders, American Airlines, the Loan Note Holders, and Virgin Atlantic, subject to their terms.
- Specified holders received registration rights that may facilitate future sales of their securities.
- 28,958,892 Class A shares were redeemed in connection with the transaction, materially affecting the final capitalization.
- The filing incorporates detailed transaction terms by reference to the Company’s Form F-4 registration statement; those terms should be reviewed for complete debt, warrant, lock-up, and registration-rights conditions.
Important Facts for Investors to Verify
- Verify the final capitalization, including ordinary shares, public warrants, convertible-note warrants, and other strategic warrants.
- Review the complete terms of the $200.0 million senior secured convertible notes, including maturity, interest, conversion mechanics, collateral, covenants, and default provisions.
- Reconcile the $94.0 million PIPE financing and $192.0 million note purchase price with the Company’s eventual cash balance and transaction expenses.
- Review the redemption, lock-up, and registration-rights provisions for potential effects on liquidity and future share sales.
- Consult subsequent filings for audited financial statements, operating results, cash burn, liquidity, and updated guidance, none of which are provided in this Form 6-K.