Vertical Aerospace Lines Up US$100M for Valo Certification

LONDON — Vertical Aerospace has assembled an approximately US$100 million financing package to advance its Valo electric vertical takeoff and landing aircraft, but the headline amount combines completed, underwritten, and still-nonbinding components.

The company plans to direct the proceeds toward Critical Design Review, certification-conforming aircraft, expanded battery production, future UK manufacturing capacity, and a hybrid-electric prototype retrofit.

Those priorities come after Vertical's piloted transition-flight demonstrations at the Farnborough International Airshow. They also mark a more capital-intensive stage: turning a flying demonstrator into a certifiable design and manufacturing repeatable conforming aircraft.

Three Components, Three Sets of Terms

Vertical describes the package as approximately US$100 million across Mudrick Capital notes, an underwritten offering of shares and warrants, and a preferred-equity issuance to Yorkville Advisors.

Mudrick's portion has a stated value of US$40 million. It includes a recently closed US$5 million draw and a proposed US$35 million accelerated draw under an existing convertible-note facility.

The additional US$35 million is not yet a binding commitment. Vertical's agreement in principle with Mudrick is nonbinding, remains subject to definitive documents, due diligence, and other conditions, and was targeted for August 12. Vertical cautioned that the parties may not complete it on the contemplated terms or at all.

If executed, the arrangement would also reset the conversion price on all Mudrick convertible senior secured notes from US$3.50 to US$1.30 per ordinary share. A lower conversion price means more shares can be issued for the same principal amount if the notes convert.

The second component is a registered offering of $35 million in units priced at $1.05 each. Vertical expected the underwritten transaction to close August 11, subject to customary conditions, and estimated net proceeds of approximately US$32.55 million after underwriting discounts and expenses.

Each unit contains one ordinary share and one warrant. At the announced price, the deal represents approximately 33.3 million new shares and the same number of warrants. The warrants are immediately exercisable at US$2 per share and expire after four years, subject to their terms and adjustment provisions.

The third component is described by Vertical as a US$25 million issuance from its Yorkville preferred-equity facility. The filing shows the cash economics more precisely: Yorkville bought 25,000 preferred shares carrying US$25 million in aggregate liquidation preference for US$24 million in cash. A portion of the conversion formula uses a fixed price of US$1.26, while other terms are set out in the governing documents.

Approximately US$100M Does Not Mean US$100M in Cash Today

The distinction among those components matters. At announcement, the US$5 million Mudrick draw had closed, the $35 million unit offering had priced but had not yet closed, and Yorkville had agreed to provide US$24 million in cash. The additional US$35 million Mudrick draw remained nonbinding.

That puts about US$64 million of purchase price or gross proceeds in the closed, settling, or underwritten group before fees, with the remaining US$35 million contingent on a definitive Mudrick agreement. Vertical's approximately US$100 million figure uses the US$25 million liquidation preference of the Yorkville securities rather than their US$24 million cash purchase price.

The package also draws on financing facilities announced earlier in 2026. It should not be read as US$100 million of wholly separate, unrestricted capital already sitting on Vertical's balance sheet.

Vertical reported preliminary, unaudited cash and cash equivalents of approximately £50 million, or US$66 million, at June 30. The company said it will provide updated cash and liquidity guidance with its half-year results on August 13. Until then, the new package does not establish a verified new runway date.

The Equity Comes With Meaningful Dilution

Vertical reported 138,390,307 ordinary shares outstanding at June 30. Against that base, the approximately 33.3 million shares in the unit offering equal about 24% of the previously outstanding count.

If every accompanying warrant were eventually exercised, approximately 33.3 million more shares could be issued and Vertical would receive the corresponding exercise proceeds. Whether that happens depends in part on the share price and the warrant terms.

That simple comparison is not a fully diluted ownership calculation. Mudrick's convertible notes and Yorkville's preferred shares can create additional shares, and their ultimate effect depends on conversion mechanics, prices, limits, and future events.

For investors, the financing therefore trades dilution and secured or preferred claims for more capital to reach the next engineering and industrial milestones.

Critical Design Review Is the Next Technical Gate

Vertical says the financing will support Valo's Critical Design Review, which is intended to establish the certifiable design baseline and enable construction and testing of certification-conforming aircraft.

Completing that review would be a major program milestone, but it would not itself constitute aircraft certification. Vertical would still have to build conforming aircraft, complete the required ground and flight testing, show compliance with the applicable requirements, and receive approval from regulators.

The company also plans to open an expanded Energy Centre that it says will triple battery-production capacity, develop future UK production capabilities, and retrofit its third prototype for hybrid-electric flight testing in the first half of 2027.

Vertical has paired those plans with government and industry initiatives. It says it is in advanced discussions with the UK government for up to £10 million in support for production facilities, has expanded its defense work through a partnership with Near Earth Autonomy, and joined Honeywell's VERTI-GO European airspace-integration program. Those announcements indicate partner interest but do not replace certification or convert proposed government support into awarded funding.

Flight Demonstrations Build Momentum, Not Certification Credit by Themselves

Vertical says it became the second company to complete a piloted transition flight in a full-scale tiltrotor eVTOL and subsequently flew five demonstrations in five days at Farnborough, including public piloted transition flights.

The flights showed the prototype moving between vertical and wing-borne flight modes in public view. They are still distinct from testing a certification-conforming aircraft against an agreed compliance program.

That is why the financing's most important measure will not be the announcement total alone. Investors and prospective operators will be watching whether Vertical closes the remaining components, reaches Critical Design Review, builds the conforming aircraft, and updates its cash runway without further near-term financing pressure.

The immediate checkpoints arrive quickly: expected closing of the underwritten offering on August 11, the targeted Mudrick draw on August 12, and Vertical's half-year liquidity update on August 13.