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Subsequent Events
 12 Months Ended
Dec. 31, 2022
Subsequent Events [Abstract]  
Subsequent Events Subsequent EventsOn January 30, 2023 (the “January 2023 VIL Convertible Note”) and February 28, 2023 (the “February 2023 VIL Convertible Note” and, together with the January 2023 VIL Convertible Note, the “2023 VIL Convertible Notes”), we sold and issued to VIL senior secured convertible notes in the principal amounts of $10.0 million and $5.0 million, respectively, which are convertible into shares of our common stock or other Qualified Securities, subject to certain conditions and limitations set forth in the 2023 VIL Convertible Notes. We sold and issued the 2023 VIL Convertible Notes pursuant to a subscription agreement between the Company, VIL and the Company’s domestic subsidiaries named therein that are jointly and severally guaranteeing the Company’s obligations under the
2023 VIL Convertible Notes. We agreed to use the net proceeds from the January VIL Convertible Note for working capital.
The 2023 VIL Convertible Notes contain customary events of default, bear interest at an annual rate of 12.0% (or 16.0% upon the occurrence and during the continuance of an event of default under the 2023 VIL Convertible Notes), payable in cash semi-annually, and have a maturity date of November 4, 2024, unless earlier repurchased, converted or redeemed in accordance with its terms prior to such date. Subject to any limitations under the rules of the Nasdaq Stock Market, the 2023 VIL Convertible Notes will automatically convert into Qualified Securities (as defined below) at a conversion price equal to the purchase price paid by investors in the relevant Qualified Financing (as defined below) if, prior to the earliest to occur of November 4, 2024, any Fundamental Change Effective Date and the effective date of any Merger Event (each as defined in the 2023 VIL Convertible Notes), the Company consummates a bona fide third-party financing of its common stock or securities convertible into or exchangeable for the Company’s common stock for gross cash proceeds of at least $50.0 million (excluding any securities purchased by VIL or its affiliates) in one or more related and substantially similar and simultaneous transactions at the same price. VIL will have the option to convert all or a portion of the 2023 VIL Convertible Notes in accordance with such terms in a financing by the Company that would have been a Qualified Financing but for the gross cash proceeds in such financing being less than $50.0 million, with such conversion effected as described above as if such financing were a Qualified Financing. Additionally, on or after October 15, 2024, VIL has the right to convert all or any portion of the 2023 VIL Convertible Notes into shares of common stock at an initial conversion rate of 345.5425 shares of common stock per $1,000 principal amount of the 2023 VIL Convertible Notes (subject to adjustments as provided in the 2023 VIL Convertible Notes, the “Fixed Conversion Rate”). In the event of a Fundamental Change, a Merger Event (each as defined in the 2023 VIL Convertible Note) or a redemption of the 2023 VIL Convertible Notes by the Company, or if any automatic conversion in connection with a Qualified Financing would be subject to limitations set forth in the relevant rules of the Nasdaq Stock Market, VIL has the right to convert the 2023 VIL Convertible Notes at the Fixed Conversion Rate. Prior to the Maturity Date, the Company may redeem all or part of the 2023 VIL Convertible Notes for cash at a redemption price equal to 100% of the principal amount of the 2023 VIL Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The 2023 VIL Convertible Notes contains a covenant that restricts the Company’s and the Guarantors’ ability to incur liens on the Company’s and the Guarantors’ assets and properties without VIL’s consent. If the Company undergoes a Fundamental Change (as defined in the 2023 VIL Convertible Notes), then, subject to certain conditions, VIL may require the Company to repurchase for cash all or any portion of the 2023 VIL Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2023 VIL Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. Initially, a maximum of an aggregate of 5,183,137 shares of the common stock may be issued upon conversion of the 2023 VIL Convertible Notes at the Fixed Conversion Rate, subject to adjustment provisions included in the 2023 VIL Convertible Notes and subject to conversion in connection with a deemed Qualified Financing. In connection with the 2023 VIL Convertible Notes, the Company and the Guarantors also entered into a Security Agreement (the “Security Agreement”) with VIL, pursuant to which the Company and the Guarantors granted a first-priority security interest on substantially all of their respective assets, including all aircrafts, aircraft engines (including spare aircraft parts) and related assets, other than certain customary excluded assets and permitted liens described in the 2023 VIL Convertible Notes. Upon the occurrence and continuation of an event of default under the 2023 VIL Convertible Notes, VIL is entitled to, among other things, foreclose on the assets that are the subject of the security interest. The Security Agreement also entitles VIL to exercise such rights in the event of the occurrence and continuation of an event of default under the convertible note sold and issued to VIL on November 4, 2022 in the principal amount of $25.0 million or the convertible note sold and issued to VIL on December 19, 2022 in the principal amount of $20.0 million.
In connection with the 2023 VIL Convertible Notes, the Company and VIL also entered into a Note Amendment (the “Note Amendment”), pursuant to which certain terms of (i) the convertible note sold and issued to VIL on November 4, 2022 in the principal amount of $25.0 million and the convertible note sold and issued to VIL on December 19, 2022 in the principal amount of $20.0 million (the “Existing Notes”) were amended for purposes of aligning such terms with those of the 2023 VIL Convertible Notes, and providing that VIL may also require the Company to
redeem for cash all or any portion of such Existing Note at the applicable redemption price upon prior written notice provided in accordance with such Existing Note.
On March 15, 2023, the Company announced a company-wide operational pause beginning on March 16, 2023, in order to conserve capital while the Company conducts discussions with potential funding sources and explores strategic opportunities. There can be no assurance that these discussions will result in any transaction. The Company does not currently intend to disclose further developments with respect to these discussions, unless and until its Board of Directors approves a specific transaction or other course of action requiring disclosure.
On March 21, 2023, the Company announced that it will initiate an incremental resumption of its operations beginning on Thursday, March 23, 2023, to work on preparations for its next mission. The operational pause for the remainder of its workforce is expected to continue through March 26, 2023. The Company is planning for a further resumption of operations on March 27, 2023.
On March 27, 2023, we entered into a securities purchase agreement (the “2023 Purchase Agreement”) with the Investor, pursuant to which we sold and issued to the Investor a convertible debenture (the “2023 Convertible Debenture”) on March 28, 2023 in the principal amount of $1.0 million, which is convertible into shares of common stock, subject to certain conditions and limitations set forth in the 2023 Purchase Agreement.

The 2023 Convertible Debenture bears interest at an annual rate of 6.0% and has a maturity date of March 26, 2024. The 2023 Convertible Debenture provides a conversion right, in which any portion of the principal amount of the 2023 Convertible Debenture, together with any accrued but unpaid interest, may be converted into our common stock at a conversion price equal to the lower of (i) $0.50 or (ii) 90% of the lowest daily volume weighted average price of the Common Stock during the three (3) trading days immediately preceding the date of conversion (but not lower than a certain floor price, currently set at $0.104, that is subject to further adjustment in accordance with the terms of the 2023 Convertible Debenture).

The 2023 Convertible Debenture may not be converted into common stock to the extent such conversion would result in the Investor and its affiliates having beneficial ownership of more than 9.99% of our then outstanding shares of common stock; provided that this limitation may be waived by the Investor upon not less than 65 days’ prior notice to us. The 2023 Convertible Debenture provides us, subject to certain conditions, with a redemption right pursuant to which we, upon three (3) business days’ prior notice to the Investor in the case of a partial redemption or ten (10) business days’ notice in the case of a full redemption, may redeem, in whole or in part, any of the outstanding principal and interest thereon at a redemption price equal to 5.0% of the principal amount being redeemed.

In connection with the Purchase Agreement, the Company and Investor entered into a registration rights agreement (the “2023 Registration Rights Agreement”) pursuant to which we are required to file a registration statement registering the resale by the Investor of any shares of our common stock issuable upon conversion of the 2023 Convertible Debenture under the Securities Act. Pursuant to the 2023 Registration Rights Agreement, we are required to meet certain obligations with respect to, among other things, the timeliness of the filing and effectiveness of the Registration Statement (as defined therein). We are required to file such registration statement no later than 30 days following March 27, 2023.
Between January 1, 2023 and March 27, 2023, YA II PN, Ltd. converted a total principal amount of $42.5 million and accrued interest of $1.8 million for 53,796,467 shares of common stock.
On March 30, 2023, the Company sold and issued to Virgin Investments Limited (“VIL”) a senior secured convertible note (the “March 2023 VIL Convertible Note”) in the principal amount of $10.9 million, which is convertible into shares of the Company’s common stock or other Qualified Securities, subject to certain conditions and limitations set forth in the March 2023 VIL Convertible Note. The Company sold and issued the March 2023 VIL Convertible Note pursuant to a subscription agreement, dated as of March 30, 2023, between the Company, VIL and the Company’s domestic subsidiaries named therein that are jointly and severally guaranteeing the Company’s obligations under the March 2023 VIL Convertible Note. The Company will use the net proceeds from the March 2023 VIL Convertible Note to fund severance and other costs related to the workforce reduction.
On April 2, 2023, in connection with the Company’s entry into the DIP Credit Agreement with VIL, the Company and Virgin Enterprises Limited (“VEL”) entered into a Termination and Debrand Agreement (the “Debrand
Agreement”), pursuant to which the trademark license agreement, dated December 29, 2021, between the Company and VEL (the “TMLA”) was terminated as of April 2, 2023 and the parties agreed to carry out a debranding plan with respect to the marks, rights and other matters subject to the TMLA. Under the terms of the TMLA, the Company possessed certain exclusive and non-exclusive rights to use the name and brand “Virgin Orbit” and the Virgin signature logo.
On April 4, 2023, the Company and its domestic subsidiaries, Virgin Orbit National Systems, LLC, Vieco USA, Inc., Virgin Orbit, LLC and JACM Holdings, Inc. (together with the Company, the “Debtors”), commenced voluntary proceedings under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Debtors have requested that the Chapter 11 proceedings be jointly administered under the caption In re Virgin Orbit Holdings, Inc., et al. (the “Chapter 11 Cases”). The Debtors continue to operate their business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors are seeking approval of a variety of “first day” motions containing customary relief intended to assure the Debtors’ ability to continue their ordinary course operations.
On April 4, 2023, a former employee of Virgin Orbit, LLC filed a class action lawsuit in the United States Bankruptcy Court for the District of Delaware. The complaint alleges that we violated the federal Worker Adjustment and Retraining Notification Act (“WARN Act”) and California WARN Act in connection with our termination of the employment of the plaintiff and other similarly situated employees by failing to provide adequate advance written notice of their terminations of employment. The plaintiff seeks to certify the action as a class action and seeks various other remedies on behalf of himself and others, including unpaid wages, salaries, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and other ERISA benefits, for up to 60 days, that would have been covered and paid under the then-applicable employee benefit plans had that coverage continued for that period all determined in accordance with the WARN Act.
On April 4, 2023, the Company was notified by the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) that Nasdaq had determined to commence proceedings to delist the Company’s common stock, par value $0.0001 par per share (the “Common Stock”), and the Company’s warrants to purchase Common Stock (the “Warrants”) from Nasdaq. Nasdaq reached its decision that the Company is no longer suitable for listing pursuant to Nasdaq Listing Rules 5101, 5110(b), and IM‑5101-1 as a result of the Company’s commencement of voluntary proceedings under Chapter 11 of the United States Bankruptcy Code on April 4, 2023. Nasdaq also asserted that the Company is not compliant with Listing Rule 5250(c)(1) because the Company has not yet filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Nasdaq informed the Company that its Common Stock and Warrants would be suspended at the opening of business on April 13, 2023.
On April 10, 2023, the Company announced that it intends to appeal Nasdaq’s decision to delist the Common Stock and Warrants, but pursuant to Nasdaq’s listing rules, such appeal will not impact the upcoming suspension of trading in the Common Stock and Warrants, and such suspension will remain in effect unless Nasdaq determines to reinstate the securities as part of the Company’s appeal. The Company can provide no assurance that its appeal will be successful.
If the appeal is unsuccessful, it is expected that Nasdaq would file a Form 25 with the Securities and Exchange Commission (the “SEC”), which would remove the Company’s Common Stock and Warrants from listing and registration on Nasdaq.
The Company has evaluated subsequent events from December 31, 2022 through April 17, 2023, the date at which the consolidated financial statements were available to be issued and concluded there were no other subsequent events to recognize in the consolidated financial statements.