(Reuters) – UK-based Vertical Aerospace said on Monday founder and CEO Stephen Fitzpatrick would invest $50 million in the electric vertical take-off and landing (eVTOL) aircraft maker to extend its cash runway until the second quarter of the following year.
Fitzpatrick will commit an initial tranche of $25 million by March 2024 through a mixture of shares at $10-a-piece and warrants with a $5 exercise price and the remaining amount through ordinary shares at an undetermined price.
U.S.-listed shares of the company rose 5.2% to 61 cents in premarket trade.
The eVTOL sector has gotten investor attention as a potential eco friendly and cheaper alternative to helicopter services.
But technological challenges such as making powerful batteries and regulatory hurdles have limited its appeal.
Vertical is targeting ‘Type Certification’ – which signifies the airworthiness of a particular category of aircraft – towards the end of 2026 for its multi-rotor VX4 eVTOL aircraft.
The company, which had cash and cash equivalents totaling 74 million pounds ($94.17 million) as of Sept. 30, is yet to generate any revenue, as per LSEG data.
It has pre-orders for 1,500 of its VX4 aircraft worth over $5 billion from more than a dozen customers worldwide.
Vertical on Dec.1 received a continued listing standard notice from the New York Stock Exchange as its minimum average closing price for its ordinary shares was below $1 over the preceding 30 consecutive trading days. Vertical has said it intends to regain compliance.
(Reporting by Aatreyee Dasgupta and Abhijith Ganapavaram in Bengaluru; Editing by Tasim Zahid)