Vertical Aerospace Ltd. (“Vertical” or the “Company”) (NYSE: EVTL; EVTLW), a global aerospace and technology company that is pioneering zero emission aviation, announces its financial results for the third quarter ended September 30, 2023. The Company has also issued a shareholder letter discussing its operating results and management commentary, which is posted to its investor relations website at investor.vertical-aerospace.com.

Stephen Fitzpatrick, Vertical Founder and CEO, said “This has been an excellent quarter for Vertical as we continue to progress against our certification, commercial, and testing programme. The build of our second, more advanced full-scale prototype is on track. This prototype will deliver an exciting programme of flight tests and public demonstrations in the coming months, including realising our intention to fly at Farnborough 2024.”

Third Quarter 2023 and Recent Operational Highlights

• The build of Vertical’s second full-scale prototype VX4 is underway and on track. This second, more sophisticated prototype includes more of Vertical’s certification aerospace partners’ technology, as well as its own in-house technology. For example, it will incorporate the next generation propeller design, and for the first time Vertical’s proprietary battery packs will be powering a prototype VX4. Vertical is on track to complete the build of this second prototype in Q1 2024.

• Vertical has announced its intensive flight test programme for 2024. Following the build and commissioning of the second prototype VX4, Vertical expects to receive its next Permit to Fly from the UK Civil Aviation Authority (CAA), and progress through crewed thrustborne, wingborne and transition flight test phases. It is expected that a pilot will be onboard through all flight tests. The culmination of this next prototype’s flight test programme includes public flight demonstrations: Vertical intends to fly at the Farnborough International Airshow, to and from Heathrow Airport, and from a Skyports vertiport. Further public flight demonstrations will be announced in due course.

• Vertical has continued to make progress with its certification activities with its CRI-A-1 being issued by the CAA in September. The CRI-A-1 includes SC-VTOL and is the basis on which Vertical needs to develop and certify the VX4. Vertical continues to target Type Certification in late 2026.

• After completing an initial Technical Familiarisation session with the CAA earlier this year, Vertical conducted separate in-depth sessions with both the Federal Aviation Agency and the European Union Aviation Safety Agency. Both sessions had specialists from the respective regulator present, allowing Vertical to present the VX4, providing a thorough description of the aircraft systems and structures. The objective of these sessions was to provide sufficient knowledge of the aircraft and establish the initial certification basis and respective certification and validation timelines. A further Technical Familiarisation is scheduled in December with the Japan Civil Aviation Bureau.

• With the Vertical Energy Centre in full operation, Vertical now has the in-house capability to design, develop and manufacture proprietary battery packs for our subsequent VX4 prototypes and the certification aircraft. Vertical has entered “Delta Build”, the final build cycle of its proprietary battery packs for its next prototype VX4.

• The Vertical Integrated Test Labs, aka ‘Iron Bird’, have been further enhanced in recent months by the addition of technology from the first VX4 prototype including its actuators, empennage and inceptors. This upgrade has significantly broadened its testing capabilities and elevated its level of integration. Vertical expects that these enhancements will generate further reliable test data and demonstrate smooth multisystem integration, enabling further flight clearance tests with subsequent prototypes and certification evidence.

• Vertical submitted its final incident report to the Air Accidents Investigation Branch (AAIB) on October 31 2023, which validated the conclusion of its preliminary incident report, identifying the root cause relating to a propeller. This early generation propeller had already been redesigned prior to the incident, with the issue fully resolved ahead of the next phase of testing. Vertical expects the AAIB to deliver its report in due course. Thereafter, Vertical intends to provide the industry with further information to share its new understanding, derived from the incident, to ensure the wider sector benefits.

Third Quarter 2023 Financial Highlights

• Vertical reported a net operating loss of £22m for the three months ended September 30, 2023, compared to a net operating loss of £19m for the three months ended September 30, 2022.

• As of September 30, 2023, Vertical had cash at bank and short-term deposits totalling £74m, which will be invested in the development of the Company’s test and certification activities and in the people, systems and processes that support the Company.

Financial Outlook

• In the next 12 months Vertical expects its net cash outflows to be used in operating activities to be approximately £80m.

• Net cash outflows incurred in the fourth quarter of the year will be primarily in relation to the advancement of Vertical’s second full-scale prototype VX4 aircraft.

• As previously announced, Vertical intends to raise additional capital in 2023 to support its ongoing capital requirements, fund its future operations and remain as a going concern.

The above forward-looking statements reflects Vertical’s expectations for the three months ending December 31, 2023 as of November 9, 2023, and are subject to substantial uncertainty. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.”