(Bloomberg) -- Air taxi startup Vertical Aerospace Ltd is exploring alternative funding in order to continue the testing and development of its first model after founder Stephen Fitzpatrick missed a previously agreed deadline to inject a portion of cash he had promised, according to people familiar with the matter.
The Bristol-based company is in discussions with financiers and existing creditors about support in order to extend its cash runway through to next year, said the people, who asked not to be identified as the discussions are confidential. Without additional funding, Vertical risks running out of cash by March 2025, the people said.
Vertical had $84 million in cash and cash equivalents at the end of June, it said in a filing last month, in which it added that the remaining half of an agreed $50 million injection remains outstanding. Fitzpatrick said he remains “very invested” in Vertical and had no additional comment.
“Stephen remains fully supportive of the company,” Vertical said in a statement. “We have a new, experienced corporate finance team on board, and we are continuing to lay the groundwork for our fundraising as we progress through our piloted flight test program.”
Fitzpatrick, who stepped down as chief executive officer of Vertical in May, promised to provide the funding to the cash-strapped air taxi maker in exchange for additional shares and warrants, as well as the right to appoint four of the company’s seven directors and gain certain veto rights. The company received the first $25 million tranche in March, and the second tranche was due by August 14.
The board of directors “remains in ongoing discussions with the investor,” Vertical said in last month’s filing. “Unless and until an agreement with the investor is reached regarding the further investment, its status remains uncertain.”
Vertical has sought to raise vital cash in order to complete the certification and entry into commercial service of its battery powered VX4 model. The aircraft promises to fly four passengers and a pilot distances of up to 100 miles. The company, which went public via the SPAC route in 2021, has struggled to get its shares above the $1 threshold required by the New York Stock Exchange.
Prior to Fitzpatrick’s funding commitment, Vertical Aerospace projected last year that it would burn through its cash by September. Separate talks with investors on funding collapsed due to Fitzpatrick’s concern that his holding would be diluted too much at the current share price.
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