Virgin Galactic : 2025 Annual Report (04/21/2026)

Published: 2026-04-21 16:52:04 ET SPCE

Published on 04/21/2026 at 04:52 pm EDT

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38202

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

1700 Flight Way Tustin, California

(Address of principal executive offices)

85-3608069

(I.R.S. Employer Identification Number)

92782

(Zip Code)

(949) 774-7640

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on

Title of each class Trading Symbol(s) which registered

Common stock, $0.0001 par value per share SPCE New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 30, 2025, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the voting common stock held by non-affiliates, computed by reference to the closing sales price of $2.73 reported on The New York Stock Exchange, was approximately $147.6 million.

As of March 23, 2026, there were 81,408,715 shares of the registrant's common stock, $0.0001 par value per share, issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement relating to its annual meeting of stockholders to be held in 2026 (the "2026 Annual Meeting"), to be filed with the Securities and Exchange Commission (the "SEC") within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates, are incorporated herein by reference where indicated. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, such proxy statement is not deemed to be filed as part hereof.

‌VIRGIN GALACTIC HOLDINGS, INC.

TABLE OF CONTENTS

Page No.

Cautionary Note Regarding Forward-Looking Statements 2

Risk Factor Summary 3

Part I

Item 1. Business 4

Item 1A. Risk Factors 22

Item 1B. Unresolved Staff Comments 48

Item 1C. Cybersecurity 48

Item 2. Properties 49

Item 3. Legal Proceedings 49

Item 4. Mine Safety Disclosures 49

Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities..............................................................................................................................................................................

Item 6. [Reserved] ...............................................................................................................................................................

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations..........................

Item 7A. Quantitative and Qualitative Disclosures about Market Risk........................................................................

Item 8. Financial Statements and Supplementary Data..................................................................................................

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .........................

Item 9A. Controls and Procedures ....................................................................................................................................

Item 9B. Other Information...............................................................................................................................................

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ..........................................................

Part III

Item 10. Directors, Executive Officers and Corporate Governance ..............................................................................

Item 11. Executive Compensation .....................................................................................................................................

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ..

Item 13. Certain Relationships and Related Transactions, and Director Independence.............................................

Item 14. Principal Accountant Fees and Services ............................................................................................................

Part IV

Item 15. Exhibits and Financial Statement Schedules.....................................................................................................

Item 16. Form 10-K Summary...........................................................................................................................................

Signatures ............................................................................................................................................................................

Index to Consolidated Financial Statements and Supplementary Data ........................................................................

F-1

‌Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning us and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of management, as well as assumptions made by, and information currently available to management.

Forward-looking statements may be accompanied by words such as "achieve," "anticipate," "believe," "can," "continue," "could," "estimate," "expect," "future," "grow," "increase," "intend," "may," "opportunity," "plan," "possible," "potential," "predict," "project," "should," "strategy," "target," "will," "would," or similar words, phrases, or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside our control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following:

any delay in future commercial flights of our spaceflight fleet;

our ability to successfully develop and test our next-generation vehicles, and the time and costs associated with doing so;

the safety of our spaceflight systems;

the development of the markets for commercial spaceflight and commercial research and development payloads;

our ability to effectively market and sell spaceflights;

our ability to convert our backlog or inbound inquiries into revenue;

our anticipated full passenger capacity;

our ability to achieve or maintain profitability;

delay in development or the manufacture of spaceflight systems;

our ability to supply our technology to additional market opportunities;

our expected capital requirements, the availability of additional financing and our ability to continue as a going concern;

our ability to attract or retain highly qualified personnel;

the effect of terrorist activity, armed conflict, natural disasters or pandemic diseases on the economy generally, on our future financial or operational results, or our access to additional financing;

consumer preferences and discretionary purchasing activity, which can be significantly adversely affected by unfavorable economic or market conditions;

extensive and evolving government regulation that impact the way we operate, including the potential negative effects of changes in United States tariff and import/export regulations;

risks associated with international expansion;

our expectations regarding the resolution of certain legal proceedings, including anticipated settlement amounts and timing, which may be subject to change based on various factors, including court approvals and negotiations with involved parties;

our ability to maintain effective internal control over financial reporting and disclosure and procedures; and

our ability to continue to use, maintain, enforce, protect and defend our owned and licensed intellectual property, including the Virgin brand.

Additional factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1A. "Risk Factors" and Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" below and for the reasons described elsewhere in this Annual Report on Form 10-K. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our information may be incomplete or limited, and we cannot guarantee future results. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Each of the terms the "Company," "Virgin Galactic," "we," "our," "us" and similar terms used herein refer collectively to Virgin Galactic Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries, unless otherwise stated.

‌Risk Factor Summary

Your investment in our common stock will involve certain risks. Set forth below is only a summary of the principal risks associated with an investment in our common stock. You should consider carefully the following discussion of risks, as well as the discussion of risks included in this annual report, before you decide that an investment in our common stock is appropriate for you.

We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to achieve or maintain profitability.

The success of our business will be highly dependent on our ability to effectively market and sell spaceflights.

The market for commercial spaceflight is still emerging and may not achieve the growth potential we expect or may grow more slowly than expected.

Delays in the development of our next-generation spaceships would adversely impact our business, financial condition and results of operations.

Any inability to operate our spaceflight systems at our anticipated flight rate could adversely impact our business, financial condition and results of operations.

Unsatisfactory safety performance of our spaceflight systems or security incidents at our facilities could have a material adverse effect on our business, financial condition and results of operations.

Any delays in the manufacture, production and commercialization of additional spaceflight systems, including our next-generation spaceships and launch vehicles, may adversely impact our business, financial condition and results of operations.

We will require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on acceptable terms or at all. Management has concluded that there are conditions present in the aggregate that raise substantial doubt about our ability to continue as a going concern.

Failure of third-party contractors could adversely affect our business.

Our investments in developing new offerings and technologies and exploring the application of our existing proprietary technologies for other uses and those offerings, technologies or opportunities may never materialize.

The "Virgin" brand is not under our control, and negative publicity related to the Virgin brand name could materially adversely affect our business.

If we fail to adequately protect our proprietary intellectual property rights, our competitive position could be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights.

Failure to comply with a wide variety of extensive and evolving government laws and regulations could have a material adverse effect on our business.

Virgin Investments Limited has significant ability to control the direction of our business, which may prevent you and other stockholders from influencing significant decisions.

Changes to United States tariff and import/export regulations may have a negative effect on us.

‌Part I

‌Item 1. Business. Overview

Virgin Galactic is an aerospace and space travel company, pioneering human-first spaceflight for private individuals, researchers, and government agencies with its advanced and highly re-useable spaceships and high-altitude carrier aircraft. Built on the foundation of 20 years of experience, we are making human spaceflight repeatable and, therefore, more accessible for individuals. We are at the vanguard of a new industry dedicated to advancing human progress, innovation, understanding and collaboration through the transformative power of space travel. This industry is growing dramatically due to new products, new sources of private and government funding, and new technologies. Demand is emerging from new sectors and demographics, which we believe is broadening the total addressable market. We have embarked on this journey with a mission to put humans and research experiments into space and return them safely to Earth at an unprecedented frequency, with an industry-leading cost structure, and with the goal of driving scale and profitability with our next-generation vehicles.

We offer access to space for private individuals, researchers and government agencies. Our missions include flying passengers to space, as well as flying scientific payloads and researchers to space in order to conduct experiments for scientific and educational purposes. Our operations include the design and development, manufacturing, ground and flight testing, spaceflight operation, and post-flight maintenance of our spaceflight system. Our spaceflight system was developed using our proprietary technology and processes and is focused on providing space travel experiences for private astronauts, autonomous research flight opportunities and human-tended research flights. We have also leveraged our knowledge and expertise in manufacturing spaceships to occasionally perform engineering services for third parties.

We offer our customers a unique, human-first, spaceflight journey designed around each individual to maximize the transformative power of space travel, which includes a multi-day experience culminating in a spaceflight with several minutes of weightlessness and views of Earth from space. Our elegant and distinctive spaceflight system - which takes off and lands on a runway - has been designed for a superior astronaut experience, optimal safety and comfort. As part of our commercial operations, we have exclusive access to the Gateway to Space facility at Spaceport America located in New Mexico. Spaceport America is the world's first purpose-built commercial spaceflight launch site and training facility and is the base of our commercial spaceline operations. We believe the site provides us with a competitive advantage as it has a desert climate with relatively predictable weather conditions preferable to support our spaceflights, and it also has airspace that is restricted for surrounding general commercial air traffic.

In December 2018, we made history by flying our spaceship, VSS Unity, to space from Mojave, California. This represented the first flight of our spaceflight system, which was built to take humans into space routinely and safely, and designed with superior astronaut experience in mind. After relocating our operations to Spaceport America, we conducted the first flight to space from the state of New Mexico in May 2021. This flight also completed the data submission to the Federal Aviation Administration ("FAA"), resulting in the approval for the expansion of our commercial space transportation operator license to allow for the carriage of spaceflight participants. This marked the first time the FAA licensed a spaceline to fly customers and was further validation of the inherent safety of our system.

In July 2021 we completed the Unity-22 mission, the first spaceflight with a full crew of four mission specialists in the cabin, including our Founder, Sir Richard Branson.

In June 2023, 'Galactic 01,' marked the start of commercial service. This flight was a dedicated research mission funded by the Italian government, which tested 13 experiments and demonstrated our ability to use suborbital spaceflights to train astronauts for future orbital missions. 'Galactic 05' and 'Galactic 07' were also commercial research missions. These flights, along with the research experiments that were conducted on our previous test flights to space, demonstrated the capability of our spaceflight system to provide a groundbreaking research platform to researchers.

In January 2024, 'Galactic 06' marked the completion of our sixth commercial spaceflight in six months - a launch rate to space of a single vehicle that is both unprecedented and record-breaking. In June 2024, we completed our seventh commercial spaceflight, 'Galactic 07.' This marked the final commercial flight for our initial spaceship, VSS Unity.

We are currently developing our next-generation spaceflight vehicles, which include our next-generation spaceships and launch vehicles, both of which we expect will allow us to increase our annual flight rate. We expect to commence test flights of our next-generation spaceships in the third quarter of 2026, in advance of restarting commercial service which is expected to occur in the fourth quarter of 2026 with a research flight. We expect private astronaut spaceflights to commence six to eight weeks after our first commercial spaceflight. We recently completed an upgrade program for our current launch vehicle, which is now capable of flying on successive days, supporting our plan to ramp commercial service in 2027 to an average availability of three flights a week and enabling us to deliver a targeted rate of 125 space missions per year with our first two spaceships.

We believe the market for commercial human spaceflight is significant and untapped. As of December 31, 2025, we have reservations for spaceflights for approximately 675 future astronauts, which represent approximately $188 million in expected future spaceflight revenue upon completion of the spaceflights. Each ticket purchased delivers a unique, human-first spaceflight journey designed around each individual to maximize the transformative power of space travel. This includes a multi-day experience consisting of a comprehensive spaceflight training preparation program that culminates in a spaceflight that includes several minutes of weightlessness and views of Earth from space. Each ticket purchased also provides access to our astronaut community, which offers opportunities to attend global events and experiences.

We have developed an extensive portfolio of proprietary technologies embodied in the highly specialized assets that we have developed or leased to enable commercial spaceflight. These assets include:

Our next-generation of spaceships are in development and anticipated to enter commercial service in the fourth quarter of 2026. These ships are "production model" vehicles which build on the system and technology we have proven with our initial vehicles, designed and manufactured for easier maintenance, increased lifecycles and to deliver an unprecedented frequency of spaceflight and vehicle reusability across hundreds of missions. Importantly, they feature six passenger seats (50% more than VSS Unity) and are expected to fly twice per week in steady-state operations, which we expect will make them the highest-capacity and lowest-cost human-rated space vehicles ever created. In 2023, we completed preliminary design review and tooling began for our contractors to prepare for parts and materials fabrication. Following the 'Galactic 07' flight in June 2024, we paused Unity spaceflights in order to focus our resources on the acceleration of our next-generation spaceship program. We are assembling the spaceships at our spaceship factory in Arizona, which opened in July 2024. We expect to commence tests flights with our spaceships in the third quarter of 2026 in advance of commercial service, which is expected to begin in the fourth quarter of 2026 with a research flight. We expect to commence private astronaut spaceflights six to eight weeks later.

Our goal is to offer our customers an unmatched and safe journey to space without the need for any previous experience or significant prior training and preparation. We have worked diligently for over a decade to plan every aspect of the journey to become an astronaut, drawing on a world-class team with extensive experience with human spaceflight, high-end customer experience and reliable transportation system operations and safety. Upon completion of their spaceflight, astronauts will disembark and join family and friends to celebrate their achievements and receive their Virgin Galactic astronaut wings.

Our operations also include spaceflight opportunities for research and technology development. Researchers have historically utilized parabolic aircraft and drop towers to create moments of microgravity and conduct significant research activities utilizing the space-like environment. In most cases, these solutions offer only seconds of continuous microgravity time and do not offer access to the upper atmosphere or space itself. Researchers can also conduct experiments on sounding rockets, satellites or orbital platforms. These opportunities are high cost, infrequent and may impose highly limiting operational constraints. Our spaceflight system is intended to provide the scientific research community with low cost, repeatable access to space and the microgravity environment. Our suborbital platform is an end-to-end offering, which includes not only our vehicles, but also the hardware such as payload lockers that we provide to researchers that request them, along with the processes and facilities needed for a successful campaign. The platform offers a routine, reliable and responsive launch service allowing for experiments to be conducted rapidly and frequently and with the opportunity to be tended in-flight by one or more researchers. This capability will enable scientific experiments as well as educational and research programs to be carried out by a broader range of individuals, organizations and institutions than ever before. Our commitment to advancing research and science has been present in many of our spaceflights to date.

Our first four spaceflights during the flight test program carried payloads into space for research purposes through NASA's Flight Opportunities Program. 'Galactic 01' - our first commercial spaceflight - was a government-funded flight that supported over a dozen research experiments and carried three mission specialists from the Italian Air Force and the National Research Council of Italy, who conducted human-tended research experiments. VSS Unity's cabin served as a suborbital science lab to provide the environment for rack-mounted payloads and for the crew to interact with wearable payloads. The research focused on the fields of thermo-fluid dynamics, materials science and biomedicine. On 'Galactic 05,' two private researchers, one sponsored by the Southwest Research Institute (SwRI), and another sponsored by the International Institute for Astronautical Sciences (IIAS), conducted a total of five human-tended research experiments. On 'Galactic 07,' Purdue University and UC Berkeley, supported by NASA's Flight Opportunities Program, had autonomous payloads onboard designed to study propellant slosh in fuel tanks of maneuvering spacecraft and test a new type of 3D printing. 'Galactic 07,' also had an Axiom Space affiliated researcher astronaut, who conducted human-tended research experiments. In September 2025, we announced the continuation of our partnership with Purdue University in the form of a research mission scheduled for 2027. The Purdue University charter flight mission is expected to carry a five-person crew of Purdue faculty, students and alumni, along with a rack of research experiments. We remain under contract with NASA to provide space flights for research payloads and human-tended research missions. This 5-year contract is part of the NASA Flight Opportunities Program that began in September 2024. This is a continuation of the work Virgin Galactic has done for NASA's Flight Opportunities Program since 2018.

We have also leveraged our knowledge and expertise in manufacturing spaceships to occasionally perform engineering services, such as research, design, development, manufacturing and integration of advanced technology systems.

Commercial Space Industry

The commercial exploration of space represents one of the most exciting and important technological initiatives of our time. For the last six decades, crewed spaceflight missions commanded by the national space agencies of the United States, Russia and China have captured and sustained the attention of the world, inspiring countless entrepreneurs, scientists, inventors, ordinary citizens and new industries. Despite the importance of these missions and their cultural, scientific, economic and geopolitical influence, as of December 31, 2025, only approximately 700 humans have ever traveled above Earth's atmosphere into space. Overwhelmingly, these men and women have been government employees handpicked by government space agencies such as NASA and trained over many years at significant expense. While these highly capable government astronauts have inspired millions, individuals in the private sector have had extremely limited opportunities to fly into space, regardless of their wealth or ambitions.

Over the past decade, several trends have converged to invigorate the commercial space industry. Rapidly advancing technologies, decreasing costs, open innovation models with improved access to technology and greater availability of capital have driven explosive growth in the commercial space market. The growth in private investment in the commercial space industry has led to a wave of new companies reinventing parts of the traditional space industry, including human spaceflight, satellites, payload delivery and methods of launch, in addition to unlocking entirely new potential market segments. Government agencies have taken note of the massive potential and growing import of space and are increasingly relying on the commercial space industry to spur innovation and advance national space objectives. In the United States, this has been evidenced by notable policy initiatives and by commercial contractors' growing share of space activity.

As a result of these trends, we believe the exploration of space and the cultivation and monetization of space-related capabilities offers immense potential to create economic value and future growth. Further, we believe we are at the center of these industry trends and well-positioned to capitalize on them by bringing human spaceflight to a broader global population that dreams of traveling to space. We are initially focused on human spaceflight for personal exploration and research, but we believe our differentiated technology and unique capabilities can be leveraged to address numerous commercial and government opportunities in the commercial space industry.

We have developed an extensive set of integrated aerospace development capabilities for developing, manufacturing and testing aircraft, spacecraft, and related propulsion systems. These capabilities encompass preliminary systems and vehicle design and analysis, detail design, manufacturing, ground testing, flight testing and post-delivery support and maintenance. We believe our unique approach and rapid prototyping capabilities enable innovative ideas to be designed quickly, built and tested with process and rigor. In addition, we have expertise in configuration management and developing documentation needed to transition our technologies and systems to commercial applications. Further, we have developed a significant amount of know-how, expertise and capability that we believe we can leverage to capture growing demand for innovative, agile and low-cost development projects for third parties, including contractors, government agencies and commercial service providers.

Commercial Spaceflight

The market for commercial spaceflight for private individuals is new and virtually untapped. To date, private commercial space travel has been limited to a select group of individuals who were able to reach space only at great personal expense and risk. In 2001, Dennis Tito was the first private individual to purchase a ticket for space travel, paying an estimated $20 million for a ride to the International Space Station (the "ISS") on a Russian Soyuz rocket. Since then, only a limited number of individuals have purchased tickets and flown successful orbital and suborbital missions. Current prices for NASA spaceflights to the ISS are estimated to be in excess of $50 million per seat. Orbital missions offered by other private companies are estimated to be in excess of $30 million.

Historically, the privatization of human spaceflight has been limited primarily by cost and availability to private individuals. In the past, the technologies necessary to journey to space have been owned and controlled strictly by government space agencies. Government agencies have recently demonstrated interest in opening up access to the private sector for spaceflight. Because of the high cost of development, historically, there has been limited innovation to foster the commercial viability of spaceflight. For example, most spacecraft were developed as single-use vehicles; and while the Space Shuttle was built as a reusable vehicle, it required significant recovery and refurbishment between flights.

The interconnected dynamics of national security concerns, government funding, a lack of competing technologies and economies of scale, as well as the infrequency of flights, have all contributed to sustained high costs of spaceflight. In addition to the cost, privatization has also been limited by concerns surrounding the ability to safely transport untrained general members of the public into space. These obstacles have significantly limited the adoption of human space travel, until now.

Our Strategy

Using our proprietary and reusable flight system and supported by a distinctive, Virgin-branded customer experience, we are on a path to building a scaled and profitable business providing safe, reliable and regular transportation to space. To accomplish this, we intend to:

Our Competitive Strengths

We are a pioneer in commercial human spaceflight with a mission to transform access to space for the benefit of humankind; to reveal the wonder of space to more people than ever before. We believe that our collective expertise, coupled with the following strengths, will allow us to build our business and expand our market opportunity and addressable markets:

Horizontal take-off and landing using winged vehicles and traditional airplane runway infrastructure that enable a familiar airplane-like experience;

Use of our launch vehicle for the first stage of flight to air launch our spaceship, which is intended to maximize the safety and efficiency of our spaceflight system;

Pilot-designed and pilot-flown missions to aid safety and customer experience;

Carbon composite structures that are light, strong and durable;

High performing, controllable spaceship hybrid rocket motor propulsion system that can be safely shut down at any time during the flight;

Large cabin with multiple windows, allowing for an experience of weightlessness and easy access to views of Earth for all of our astronauts;

Unique "wing-feathering" system, designed to enable a safe, aerodynamically controlled re-entry into Earth's atmosphere on a repeated basis;

Versatile cabin provides the adaptability to operate research-focused flights with payload racks and researchers onboard as well as private astronaut flights with a full cabin of commercial passengers; and

Highly re-useable spaceflight system across hundreds of missions, with the exception of the rocket motor, which must be replaced after each flight.

Our Assets

We have developed an extensive portfolio of proprietary technologies that are embodied in the highly specialized vehicles that we have created to enable commercial spaceflight. These technologies underpin our carrier aircraft, the launch vehicle; our spaceships; our hybrid rocket motor; and our safety systems. Our astronauts will interact with these technologies at Spaceport America, the first purpose-built commercial spaceport, and our terminal hangar building, officially designated the "Virgin Galactic Gateway to Space."

The launch vehicle is a twin-fuselage, custom-built aircraft designed to carry spaceships to an altitude of approximately 45,000 feet, where the spaceship is released for its rocket-powered flight into space. Using an air launch system rather than a standard ground-launch rocket reduces the energy requirements of our spaceflight system as the spaceship does not have to ascend through the higher density atmosphere closest to Earth's surface. Air-launch systems have a well-established flight heritage, having first been used in 1947 for the Bell X-1, which was the first aircraft to break the speed of sound, and later on, the X-15 suborbital spaceplane, in Northrop Grumman's Pegasus rocket system and in earlier versions of our spaceflight system.

The launch vehicle's differentiating design features include its twin-boom configuration, its single-piece composite main wing spars, its reusability as the first stage in our space launch system, and its versatility as a flight training vehicle for our pilots and spaceships. The twin-boom configuration allows for a spacious central area between the two fuselages to accommodate a center wing launch pylon to which the spaceship can be attached. Both cabins of the launch vehicle are constructed using the same tooling and are identical in shape and size to the spaceship cabin. The commonality of cabin construction provides cost savings in production, as well as operational, maintenance and crew training advantages. The launch vehicle's all-composite material construction substantially reduces weight as compared to an all-metal design. The launch vehicle is powered by four Pratt and Whitney Canada commercial turbo-fan engines. Spare parts and maintenance support are readily available for these engines, which have reliably been in service on the launch vehicle since December 2008.

The launch vehicle's 140-foot main wing houses large air brakes that allow the launch vehicle to mimic the spaceship's aerodynamic characteristics in the gliding portions of the spaceship's flight. This provides our pilots with a safe, cost-effective and repeatable way to train for the spaceship's final approach and landing.

Our launch vehicle is designed to launch many hundreds of spaceship flights over its lifetime. As such, our spaceflight launch platform system offers a considerable economic advantage over other potential launch architectures. Additionally, our launch vehicle has a rapid turnaround time, enabling it to provide frequent spaceflight launch services for multiple spaceships.

The launch vehicle was designed with a view towards supporting our international expansion and has a range of up to 2,800 nautical miles. As a result, the launch vehicle can transport our spaceships virtually anywhere in the world to establish launch capabilities.

The launch vehicle has completed an extensive, multi-year test program that included a combination of ground and flight tests. As of December 31, 2025, it had completed approximately 360 flights, with more than 50 of those being dual tests with our spaceships. We recently completed an upgrade program for our current launch vehicle, which is now capable of flying on successive days, supporting our plan to ramp commercial service in 2027 to an average availability of three flights a week and enabling us to deliver a targeted rate of 125 space missions per year with our first two spaceships.

Following the completion of the non-recurring engineering work on our next-generation spaceships, we have redeployed some of our engineering resources to the design for our next-generation launch vehicle. In addition, we are exploring the opportunity to use a derivative model of our launch vehicle as a high-altitude, long-endurance ("HALE") aircraft, which we believe could be utilized for several types of government and research purposes. We are currently in the design phase of our next-generation launch vehicle, with a primary focus on developing a launch vehicle variant to support our spaceships. We also plan to design a potential government variant that could be used in research and defense applications.

Our spaceships are designed to be reusable across hundreds of missions with the capacity to carry pilots and private astronauts, research experiments and researchers that travel with their experiments for human-tended research flights, into space and return them safely to Earth. The spaceship is a rocket-powered winged vehicle designed to achieve a maximum speed of over Mach 3 and has a flight duration, measured from passenger boarding to the disembarkation, of approximately 90 minutes.

The spaceship begins each mission by being carried to an altitude of approximately 45,000 feet by the launch vehicle before being released. Upon release, the pilot ignites the hybrid rocket motor, which propels the spaceship on a near vertical trajectory into space. Once in space, astronauts enjoy amazing views and a weightless experience, and the pilots use the spaceship's unique "wing-feathering" feature in order to prepare the vehicle for re-entry. The feathering system works like a badminton shuttlecock, naturally orienting the spaceship into the desired re-entry position with minimal pilot input. This re-entry position uses the entire bottom of the spaceship to create substantial drag, thereby slowing the vehicle to a safe re-entry speed and reducing both heat and structural loads. Once the spaceship has descended back to an altitude of approximately 55,000 feet above sea level, the wings de-feather back to their normal position, and the spaceship glides back to the base for a runway landing, similar to NASA's Space Shuttle or any other glider. The spaceship's feathering system was originally developed and tested on SpaceShipTwo's smaller predecessor, SpaceShipOne.

Our spaceship's cabin has been designed to maximize customer safety and comfort. Twelve windows in the cabin line the sides and ceiling of the spaceship, offering astronauts the ability to view the black of space as well as stunning views of Earth below.

With the exception of the rocket motor, which must be replaced after each flight, our spaceships are designed with unprecedented reusability and are expected to fly more than 500 times during their lifetimes. Like the launch vehicle, our spaceship is constructed with all-composite material construction, providing beneficial weight and durability characteristics.

SpaceShipTwo, VSS Unity, has completed an extensive flight test program that began in March 2010 with the original SpaceShipTwo, VSS Enterprise, which was built by a third-party contractor. The final flight test was conducted in May 2023 with the Unity-25 spaceflight, culminating in more than 50 test flights of the SpaceShipTwo configuration throughout the program. VSS Unity commenced commercial service in June 2023 and successfully completed seven commercial spaceflights. We paused Unity spaceflights in mid-2024 and expect to commence flying with test flights of our next-generation spaceships in the third quarter of 2026. This is in advance of commercial service, which is expected to begin in the fourth quarter of 2026 with a research flight. We expect private astronaut spaceflights to commence six to eight weeks after our first commercial spaceflight. We are currently assembling our first two next-generation spaceships at our spaceship factory in Arizona. These next-generation vehicles are designed to fly twice a week, a major advancement from VSS Unity. This will enable us to ramp to a targeted rate of 125 space missions per year with our first two spaceships.

Our spaceship is powered by a hybrid rocket propulsion system that propels it on a trajectory into space. The term "hybrid" rocket refers to the fact that the rocket uses a solid fuel grain and a liquid oxidizer. The fuel cartridge is consumed over the course of a flight, meaning that each spaceship flight will require the installation of a new hybrid rocket motor. The assembly of this fuel cartridge with the hybrid rocket motor is designed to be efficient and to support high rates of commercial spaceflight. In 2018, our rocket motor set a Guinness world record as the most powerful hybrid rocket to be used in a crewed flight. In February 2019, it was accepted into the permanent collection of the National Air and Space Museum.

Our rocket motor has been designed to provide the required mission performance capability with a focus on safety, reliability and economy. Its design benefits from critical safety features, including its ability to be shut down safely at any time during flight and its limited number of moving parts, which increases reliability and robustness for human spaceflight. Furthermore, the motor is made from a benign substance that needs no special or hazardous storage.

Our in-house propulsion team is in the process of developing our rocket motor production plant in our spaceship factory to increase the production rate and to reduce the unit production cost to accommodate planned growth in the spaceship fleet and drive increasingly attractive per-flight economics.

Our rocket motor is elegantly simple and is designed to be replaced between flights within one to two days. The efficiency in our rocket motor replacement operation supports the fast turn-times of our rapid re-use spaceflight system and helps to drive down the cost per flight.

We have designed our spaceflight system with a fundamental focus on safety. Important elements of our safety design include:

Our astronauts' flight preparation and experience will take place at the Gateway to Space at Spaceport America, the first purpose-built commercial spaceport in the world. Spaceport America is located in New Mexico on more than 25 square miles of desert landscape and includes a space terminal, hangar facilities and a 12,000-foot runway. The facility has access to 6,000 square miles of restricted airspace running from the ground to space. The restricted airspace will facilitate frequent and consistent flight scheduling and the desert climate and its relatively predictable weather provide favorable launch conditions year-round. The development costs of Spaceport America were largely funded by the State of New Mexico. Our license from the FAA includes Spaceport America as a location from which we can launch and land our spaceflight system.

The terminal hangar building officially designated the "Virgin Galactic Gateway to Space," was designed to be functional and beautiful, matching our astronauts' high expectations of a Virgin-branded facility and delivering an aesthetic consistent with the Virgin Galactic experience. The form of the building in the landscape and its interior spaces capture the drama and mystery of spaceflight, reflecting the thrill of space travel for our astronauts. The LEED-Gold certified building has ample capacity to accommodate our staff and our current fleet of vehicles.

The Astronaut Journey

Our goal is to offer our astronauts an unmatched but affordable opportunity to experience spaceflight safely and without the need for any prior experience or training. We have worked diligently for over a decade to plan every aspect of the customer's journey to become an astronaut, drawing on a world-class team with extensive experience with human spaceflight, high-end customer experiences and reliable transportation system operations and safety. We have had the considerable advantage of building and managing our initial community of future astronauts, comprised of individuals from over 60 countries who have made reservations to fly on our spaceships. This community is actively engaged, allowing us to understand the style of customer service and experience expected before, during and after each flight. We have used customer input to ensure that each customer's journey with us, from end to end, will represent a pinnacle life experience and achievement.

The Virgin Galactic astronaut reservation process, honed and proven over many years, is personalized and consultative, but underpinned by a digital customer relationship management journey. It is designed to deliver a high-touch but efficient and scalable user experience. Once the reservation transaction is completed, the customer receives immediate access to our astronaut community and opportunities to attend events and experiences, visits to Virgin Galactic's facilities in New Mexico, Arizona and California, as well as space-readiness activities such as zero-gravity aircraft flights and high-g centrifuge training. Each customer is welcomed and on-boarded into the astronaut community via a call with our 'Astronaut Office.' Future astronauts are kept apprised of community activity and company news through a customer portal, which was launched in March 2026. This will be the principal tool by which we provide and receive necessary information from our future astronauts in preparation for their spaceflights.

Prior to traveling to Spaceport America to begin their journey, each astronaut will be required to complete a medical history questionnaire. In addition to completing this questionnaire, each astronaut will also undergo a medical assessment with an aerospace medical specialist, typically within six months of flight. Some astronauts may be asked for additional testing as indicated by their health status. Based on our observations in tests involving a large group of our future astronauts, we believe that the vast majority of people who want to travel to space in our program will not be prevented from doing so by health or fitness considerations.

Our astronauts participate in several days of pre-flight training. The spaceflight is expected to occur following the completion of training.

Pre-flight training includes briefings, mock-up training and time spent with the mission's fellow astronauts and crew. The purpose of this training is to ensure that the astronauts get the maximum enjoyment of their spaceflight experience while ensuring that they do so safely.

We have worked with training experts, behavioral health experts, experienced flight technicians and experienced government astronauts in order to customize training for our suborbital missions. This program includes training for emergency egress, flight communication systems, flight protocols, seat ingress and egress and meets all training requirements prescribed by applicable regulations.

The training program has been built on the philosophy that familiarization with the systems, procedures, equipment and personnel that will be involved in the actual flight will make the astronaut more comfortable and allow the customer to focus their attention on having the best possible experience. As a result, most training involves hands-on activities with real flight hardware or with high-fidelity mock-ups.

Although broadly similar for each flight, the training program and the flight schedule may vary slightly depending on the backgrounds, personalities, physical health of the astronauts and weather and other conditions. Additionally, we expect to continue to review, assess and modify the program regularly as we gain additional commercial experience.

On the morning of their flight to space, the astronauts will head out to the spaceport for their final flight briefings and preparation. The astronauts will then meet up with their fellow astronauts and board our spaceship, which will already be mated to the launch vehicle.

The spaceship cabin has been designed, like the spaceport interior, to deliver an aesthetic consistent with our brand values and optimize the flight experience. User experience features are expected to include strategically positioned high-definition video cameras and phase-sequenced cabin lighting. Virgin companies are renowned for their interior design, particularly in the aviation industry. That experience and reputation have been brought to bear on both spaceship and spaceport interiors to optimize the customer journey.

Once all astronauts are safely onboard and the pilots have coordinated with the appropriate regulatory and operational groups, the launch vehicle will take-off and climb to an altitude of approximately 45,000 feet. Once at altitude, the pilots will perform all necessary vehicle and safety checks and then will release the spaceship from the launch vehicle. Within seconds, the rocket motor will be ignited, producing acceleration forces of up to 4Gs as the spaceship undertakes a near vertical climb and achieves speeds of approximately Mach 3.

The rocket motor will fire for approximately 60 seconds, burning all of its propellant, and the spaceship will coast up to apogee. Our astronauts will be able to exit their seats and experience weightlessness, floating about the cabin and positioning themselves at one of the twelve windows around the cabin sides and top. The vehicle's two pilots will maneuver the spaceship to give the astronauts spectacular views of Earth and an opportunity to look out into the blackness of space. While the astronauts are enjoying their time in space, our spaceship's pilots will have reconfigured the spaceship into its feathered re-entry configuration.

After enjoying several minutes of weightlessness, our astronauts will maneuver back to their seats to prepare for re-entry. We have conducted seat egress and ingress testing in weightlessness to verify that our astronauts will be able to return to their seats quickly and safely. Our personalized seats, custom-designed to support each astronaut safely during each phase of flight, will cushion the astronauts as the spaceship rapidly decelerates upon re-entry. Our astronauts will enjoy the journey back into Earth's atmosphere, at which time the vehicle's wings will be returned to their normal configuration, and the spaceship will

glide back to the original runway from which the combined launch vehicle and spaceship pair had taken off less than two hours prior. Upon landing, astronauts will disembark and join family and friends to celebrate their achievements and receive their Virgin Galactic astronaut wings.

Sales and Marketing

In August 2021, following Sir Richard Branson's successful test flight, we reopened ticket sales to a select group and increased the pricing of our consumer offerings to a base price of $450,000 per seat. In 2023, we increased the pricing of our consumer offerings to a base price of $600,000 per seat. As of December 31, 2025, we have reservations for spaceflights for approximately 675 future astronauts, which represent approximately $188 million in expected future spaceflight revenue upon completion of the spaceflights. We have recently reopened ticket sales for a tranche of spaceflight reservations at a base price of

$750,000 per seat.

In preparation, we have a full rebuild of our digital presence underway with a particular focus on sales funnel progression and a dedicated astronaut portal. Given that sales of spaceflights are consultative and generally require a one-on-one sales approach, we are focused on developing different sales journeys to engage and educate interested individuals and to drive sales conversion in a scalable way. In addition, we intend to utilize third-party partnerships to reach and cultivate our target audience. This includes, for example, luxury travel agencies.

Research and Education Applications

In addition to the potential market for human space travel, we believe our existing technology has potential applications in additional markets, including scientific research and professional astronaut training. Historically, the ability to perform microgravity research has been limited by the same challenges facing human spaceflight, including the significant cost associated with traveling to space and the limited physical capacity available for passengers or other payloads. Additionally, the long launch lead times and the low launch rate for these journeys make it difficult to run an experiment quickly or to fly repeated experiments, and there has traditionally been a significant delay in a researcher's ability to obtain the data from the experiment once the journey was complete. As a result, researchers have used parabolic aircraft and drop towers to create moments of microgravity and conduct significant research activities. While these solutions help address cost concerns, they offer only seconds of continuous microgravity per flight. They do not offer access to the upper atmosphere or space, rapid re-flight or, in the case of drop towers and sounding rockets, the opportunity for the principal investigator to fly with the scientific payload. We believe our spaceflight system addresses many of these issues by providing:

Researchers the ability to accompany and tend to their experiments in space;

The ability to fly payloads repeatedly, which can enable lower cost and iterative campaigns;

Prompt access to experiments following landing;

Access to a large payload capacity; and

In the case of sounding rockets, gentler G-loading.

We believe the demand for access to suborbital research is likely to come from educational and commercial research institutions across a broad range of technical disciplines. Multiple government agencies and research institutions have expressed interest in contracting with us to launch research payloads to space and to conduct suborbital experiments. We have flown dozens of experiments for research-related missions, and we expect research missions to form an important part of our launch manifest in the future. Three of our commercial spaceflights were dedicated research missions: 'Galactic 01' was a government-funded flight that supported over a dozen research experiments and carried three mission specialists conducting human-tended research, 'Galactic 05' carried two privately-funded researchers who conducted human-tended research experiments, and 'Galactic 07' carried government-funded autonomous research payloads and one U.S. based commercial space company funded researcher who conducted human-tended research experiments. In September 2025, we announced the Purdue University charter flight, scheduled for 2027, which is expected to carry a five-person crew of Purdue faculty, students and alumni, along with a rack of research experiments. We remain under contract with NASA to provide space flights for research payloads and human-tended research missions. This contract is part of the NASA Flight Opportunities Program that began in September 2024 and is bound to an initial 5-year term. This is a continuation of the work Virgin Galactic has done for NASA's Flight Opportunities Program since 2018. We believe this demonstrates the broad implications and desirability of our offering.

Design, Development and Manufacturing

Our development and manufacturing team consists of talented and dedicated engineers, technicians and professionals with decades of combined design, engineering, manufacturing and flight test experience from a wide variety of the world's leading research, commercial and military aerospace organizations.

We have developed extensive capabilities for developing, manufacturing and testing aircraft, spacecraft and related propulsion systems. These capabilities encompass preliminary systems and vehicle design and analysis, detail design, manufacturing, ground testing, flight testing and post-delivery support and maintenance. We believe our unique approach that blends the speed of prototyping with the design stability required for production enables innovative ideas to be quickly designed, built, tested with process rigor and transitioned into service. In addition, we have expertise in configuration management and developing documentation needed to transition our technologies and systems to commercial applications. We believe our breadth of capabilities, experienced and cohesive team and culture would be difficult to re-create and can be easily leveraged on the future design, build and test of transformational aerospace vehicles.

The first vehicle we manufactured was VSS Unity, the second SpaceShipTwo vehicle. Leveraging the extensive design engineering invested in VSS Unity, we have designed and are currently assembling our new spaceships at a substantially lower cost. In addition, we manufacture rocket motors to support the growth of our commercial operations over time, which we plan to ramp to a targeted rate of 125 space missions per year with our first two spaceships.

Following the completion of the non-recurring engineering work on our next-generation spaceships, we have redeployed some of our engineering resources to the design phase for our next-generation launch vehicle.

Additionally, we have developed a significant amount of know-how, expertise and capabilities that we believe we can leverage to capture growing demand for innovative, agile and low-cost development projects for third parties, including contractors, government agencies and commercial service providers. We are exploring strategic relationships to develop new applications for our technologies and to support new aerospace technologies for commercial and transportation applications that we believe will accelerate progress within relevant industries and enhance our growth.

We are assembling our next-generation spaceships in Arizona at our new manufacturing and operating facility, which consists of approximately 150,000 square feet. Our rocket motor ground test facility is located in Mojave, California. Our Design and Engineering center is located in Tustin, California and encompasses approximately 100,000 square feet of office space and also functions as our corporate headquarters.

Additional Potential Applications of our Technology and Expertise

We believe we can leverage our robust platform of advanced technologies, significant design, engineering and manufacturing experience and thousands of hours of flight training to develop additional aerospace applications.

Our hybrid rocket motor is core to the success of our spaceflight systems, and we have established outstanding technology and infrastructure to maximize our propulsion system production and testing, while advancing our efforts to deliver cost-effective rocket motors at scale. This includes facilities to conduct full-scale "hot fire" tests - a comprehensive assessment of a rocket motor for performance qualification. Our Rocket Systems team will work to identify new business opportunities that leverage and expand this intellectual property and its commercial potential.

Our world-class electronic engineering team has built an unparalleled, pilot-friendly avionics system that simplifies complex data and serves as the central nervous system of our spaceship, including the propulsion system, flight control system, communication system and environmental control. Through our innovative experience designing and building spaceships, we believe we are uniquely positioned to apply this talent and intellectual property to develop avionics systems and solutions for other industry needs.

Although we are currently in the design phase of our next-generation launch vehicle, with a primary focus on developing a launch vehicle variant to support our spaceships, we also plan to design a potential government variant that could be used in research and defense applications.

Competition

The commercial spaceflight industry is still developing and evolving, but we expect it to be competitive. Our primary competitor in establishing a commercial suborbital human spaceflight offering is Blue Origin, a privately-funded company that had developed a vertically-launched, suborbital capsule. Blue Origin recently announced it was pausing its suborbital space tourism flights for at least two years.

We believe our ability to compete successfully as a commercial provider of human spaceflight does and will depend on several factors, including the price of our offerings, consumer confidence in the safety of our offerings, consumer satisfaction for the experiences we offer and the frequency and availability of our offerings. Our next-generation spaceships will have increased passenger capacity and the potential to fly multiple times per month. We believe that we compete favorably on the basis of these factors.

Intellectual Property

Our success depends in part upon our ability to protect our core technology and intellectual property. We attempt to protect our intellectual property rights, both in the United States and abroad, by using a combination of patent, trademark, copyright and trade secret laws, as well as nondisclosure and invention assignment agreements with our consultants and employees, and we seek to control access to and distribution of, our proprietary information through non-disclosure agreements with our vendors and business partners. Our engineers' ongoing research and development make important contributions to our business. We periodically evaluate these contributions, and we pursue patent protection when we believe it is possible and consistent with our overall strategy for safeguarding intellectual property.

We possess certain exclusive and non-exclusive rights to use the name and brand "Virgin Galactic" and the Virgin signature logo pursuant to an amended and restated trademark license agreement (the "Amended TMLA"). Our rights under the Amended TMLA are subject to certain reserved rights and pre-existing licenses granted by Virgin Enterprises Limited ("VEL") to third parties. In addition, for the term of the Amended TMLA, to the extent Virgin Investments Limited ("VIL") does not otherwise have a right to place a director on our board of directors, we agreed to provide VEL with the right to appoint one director to our board of directors, provided the designee is qualified to serve on the board under all applicable corporate governance policies and applicable regulatory and listing requirements.

Unless terminated earlier, the Amended TMLA will have an initial term of 25 years expiring October 2044, subject to up to two additional 10-year renewals by mutual agreement of the parties. The Amended TMLA may be terminated by VEL upon the occurrence of several specified events, including if:

we commit a material breach of our obligations under the Amended TMLA (subject to a cure period, if applicable);

we materially damage the Virgin brand;

we use the brand name "Virgin Galactic" outside of the scope of the activities licensed under the Amended TMLA (subject to a cure period);

we become insolvent;

we undergo a change of control to an unsuitable buyer, including to a competitor of VEL;

we fail to make use of the "Virgin Galactic" brand to conduct our business;

we challenge the validity or entitlement of VEL to own the "Virgin" brand; or

the commercial launch of our services does not occur by a fixed date or thereafter if we are unable to undertake any commercial flights for paying passengers for a specified period (other than in connection with addressing a significant safety issue).

Upon any termination or expiration of the Amended TMLA, unless otherwise agreed with VEL, we will have 90 days to exhaust, return or destroy any products or other materials bearing the licensed trademarks, and to change our corporate name to a name that does not include any of the licensed trademarks, including the Virgin name.

Pursuant to the terms of the Amended TMLA, we are obligated to pay VEL quarterly royalties equal to the greater of: (a) a low single-digit percentage of our gross sales; and, (b) (i) prior to the first spaceflight for paying future astronauts, a mid-five figure amount in dollars; and, (ii) from our first spaceflight for paying future astronauts, a low-six figure amount in dollars, which increases to a low-seven figure amount in dollars over a four-year ramp up and thereafter increases in correlation with the consumer price index. In relation to certain sponsorship opportunities, a higher, mid-double-digit percentage royalty on related gross sales applies.

The Amended TMLA also contains, among other things, customary mutual indemnification provisions, representations and warranties, information rights of VEL and restrictions on our and our affiliates' ability to apply for or obtain registration for any confusingly similar intellectual property to that licensed to us pursuant to the Amended TMLA. Furthermore, VEL is generally responsible for the maintenance, enforcement and protection of the licensed intellectual property, including the Virgin brand, subject to our step-in rights in certain circumstances.

All Virgin and Virgin-related trademarks are owned by VEL and our use of such trademarks is subject to the terms of the Amended TMLA, including our adherence to VEL's quality control guidelines and granting VEL customary audit rights over our use of the licensed intellectual property.

Regulatory

Regulations, policies and guidance issued by the FAA apply to the use and operation of our spaceflight system. When we operate our spaceflight system as "launch vehicles," meaning a vehicle built to operate in, or place a payload or human beings in, outer space, the FAA's Commercial Space Transportation requirements apply. Operators of launch vehicles are required to have proper licenses, permits and authorizations from the FAA and comply with the FAA's financial responsibility requirements for third-party liability. Congress enacted a "learning period" limiting the FAA until January 1, 2028 from regulating human occupants on launch vehicles such as our spaceships. During this period, the FAA retains limited authority to regulate the design or operation of a vehicle to protect the health and safety of crew, government astronauts and spaceflight participants under certain conditions. It is uncertain whether the learning period will be extended further, but we may face increased and more expensive regulation from the FAA relating to our spaceflight activities when it expires.

In 2020, the FAA consolidated multiple regulatory regimes into one set of requirements for all vehicle types. Our previous operations were covered under a 14 CFR Part 431 license, which expired for all commercial spaceflight operators on March 10, 2026, as planned under the FAA's streamlining launch and reentry license requirements, consolidated under 14 CFR Part 450. We expect to submit a 14 CFR Part 450 license application no later than the second quarter of 2026. The FAA has up to 180 days to review our license application, which we expect to occur ahead of resuming spaceflights with our next generation vehicles, anticipated to launch in the fourth quarter of 2026.

When not operating as launch vehicles, our spaceflight system vehicles are regulated as experimental aircraft by the FAA. The FAA is responsible for the regulation and oversight of matters relating to experimental aircraft, the control of navigable air space, the qualification of flight personnel, flight training practices, compliance with FAA aircraft certification and maintenance, and other matters affecting air safety and operations. We work closely with the FAA to report any matters that arise during flight.

Failure to comply with the FAA's aviation or space transportation regulations may result in civil penalties or private lawsuits, or the suspension or revocation of licenses or permits, which would prevent us from operating our spaceflight system.

Our commercial human spaceflight operations and any third-party claims that arise from our operation of spaceflights are subject to federal and state laws governing informed consents and waivers of claims, including under the Commercial Space Launch Act ("CSLA"), the Commercial Space Launch Amendments Act of 2004 ("CSLAA") and the New Mexico Space Flight Informed Consent Act ("SFICA").

Under U.S. federal law and the CSLAA, operators of spaceflights are required to obtain informed consent from both participants and members of the crew for any commercial human spaceflight. In addition, the CSLAA requires that an operator must obtain any spaceflight participant's informed consent before receiving compensation or making an agreement to fly. While compensation is not defined in regulation or statute, the FAA does not consider refundable deposits for future spaceflight to be compensation. Moreover, the CSLA established a three-tiered indemnification system for a portion of claims by third parties for death, bodily injury, damage or loss and by the U.S. government for damage or loss to U.S. government property that result from licensed commercial spaceflight activity. Under the first tier, all operators with an FAA license for launch activities are required to demonstrate financial responsibility with either an insurance policy or other demonstration of financial responsibility in amounts up to the maximum probable loss ("MPL") level likely to occur in the event of an accident. The MPL is determined by the FAA for each licensed launch activity. The second tier occurs in the instance of third party claims liability for funds in excess of the MPL amount for which the CSLA provides that the FAA will draft a compensation plan and, subject to successful congressional appropriations, the federal government will pay up to a maximum prescribed amount ($1.5 billion adjusted for inflation since January 1, 1989) to indemnify covered claims above the MPL amount. Under the third tier, any excess liability beyond the first and second tiers would revert to the operator.

Additionally, the SFICA offers spaceflight companies protection in New Mexico, where we conduct our commercial operations, from lawsuits from passengers on space vehicles where spaceflight participants provide informed consent and a waiver of claims. This law generally provides coverage to operators, manufacturers and suppliers and requires operators to maintain at least $1.0 million in insurance for all spaceflight activities.

At this time, we are not aware that any claim regarding liability to third parties or informed consent provisions have been brought in New Mexico or in federal courts. We are unable to determine whether the indemnity provided by the CSLA, CSLAA, or the SFICA or other applicable laws or regulations would be upheld by the U.S. or foreign courts. The various federal and state regulations regarding informed consent for suborbital commercial spaceflight are evolving and we continue to monitor these developments. However, we cannot predict the timing, scope or terms of any other state, federal or foreign regulations relating to informed consent and waivers of claims relating to commercial human spaceflight.

Our spaceflight business is subject to, and we must comply with, stringent U.S. import and export control laws, including the International Traffic in Arms Regulations ("ITAR") and the U.S. Export Administration Regulations ("EAR"). The ITAR generally restricts the export of hardware, software, technical data and services that have defense or strategic applications. The EAR similarly regulates the export of hardware, software and technology that has commercial or "dual-use" applications (i.e., for both military and commercial applications) or that have less sensitive military or space-related applications that are not subject to the ITAR. The regulations exist to advance the national security and foreign policy interests of the United States.

The U.S. government agencies responsible for administering the ITAR and the EAR have significant discretion in the interpretation and enforcement of these regulations. The agencies also have significant discretion in approving, denying, or conditioning authorizations to engage in controlled activities. Such decisions are influenced by the U.S. government's commitments to multilateral export control regimes, particularly the Missile Technology Control Regime with respect to the spaceflight business.

Many different types of internal controls and safeguards are required to maintain compliance with such export control rules. In particular, we are required to maintain a registration under the ITAR; determine the proper licensing jurisdiction and classification of products, software and technology; and obtain licenses or other forms of U.S. government authorizations to engage in certain activities, including the performance of services for foreign persons, related to and that support our spaceflight business. The authorization requirements include the need to obtain permission to release controlled technology to foreign persons, including foreign person employees under the EAR's License Exception Strategic Trade Authorization for certain exports, re-exports and transfers in-country. The inability to secure and maintain necessary licenses and other authorizations could negatively affect our ability to compete successfully or to operate our spaceflight business as planned. Any changes in the export control regulations or U.S. government licensing policy, such as that necessary to implement U.S. government commitments to multilateral control regimes, may restrict our operations.

Failure by us to comply with applicable export control laws and regulations could result in reputational harm as well as significant civil or criminal penalties, fines, more onerous compliance requirements, loss of export privileges, debarment from government contracts, or limitations on our ability to enter into contracts with the U.S. government. Further, even investigations of suspected or alleged violations can be expensive and disruptive. Thus, violations (or allegations of violations) of applicable export control laws and regulations could adversely affect our reputation, business, financial condition and results of operations.

Human Capital

As of December 31, 2025, we had 694 employees across the globe. We believe our future prospects will depend, in part, on our ability to continue to attract, motivate, develop and retain a sufficient number of highly skilled personnel. Virgin Galactic strives to offer competitive compensation, benefits and services that meet the needs of its employees, including short-term and long-term incentive programs, defined contribution plans, healthcare benefits and wellness and employee assistance programs. Management monitors market compensation and benefits to attract, retain and promote high-performing employees and reduce turnover and associated costs. In addition, Virgin Galactic's incentive programs are designed to reward the achievement of short- and long-term business results and aligned with the interests of our stockholders.

Available Information

We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC's website at www.sec.gov. Our SEC filings are also available free of charge on the Investor Information page of our website at virgingalactic.com as soon as reasonably practicable after they are filed with or furnished to the SEC. Our website and the information contained on or through that site are not incorporated into this Annual Report on Form 10-K.

‌Item 1A. Risk Factors

Our operations and financial results are subject to various risks and uncertainties, including those described below. Investors should consider carefully the risks and uncertainties described below, in addition to the other information contained in this Annual Report on Form 10-K, including our consolidated financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks or others not specified below materialize, our business, financial condition and results of operations could be materially and adversely affected. In that case, the trading price of our common stock could decline.

Risks Related to Our Business

We have incurred significant losses since inception. We incurred net losses of $278.9 million and $346.7 million for the years ended December 31, 2025 and 2024, respectively. We have generated limited revenue from our commercial spaceflight operations, which commenced in June 2023, and were subsequently paused in mid-2024, flying payloads into space, scientific research services, and access fees related to our astronaut community and related events. It is difficult for us to predict our future operating results as we develop our next-generation spaceships. As a result, our losses may be larger than anticipated, and we may not achieve profitability when expected, or at all, and even if we do, we may not be able to maintain or increase profitability.

We expect our operating expenses to increase over the next several years as we scale our spaceflight operations, continue to attempt to streamline our manufacturing process, develop our next-generation spaceflight vehicles, which include our next-generation spaceships and launch vehicles, ultimately increase our flight cadence, hire more employees and continue research and development efforts relating to new products and technologies. These efforts may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving or maintaining profitability or positive cash flow or continuing our business operations. Furthermore, if our future growth and operating performance fail to meet investor or analyst expectations, or if we have future negative cash flow or losses resulting from our investment in acquiring future astronauts or expanding our operations, this could have a material adverse effect on our business, financial condition and results of operations.

We have generated only limited revenue from spaceflight, and we expect that our business will be highly dependent, especially in the foreseeable future, on our ability to effectively market and sell spaceflight experiences. We have limited experience in marketing and selling spaceflights, which we refer to as our astronaut experience. If we are unable to utilize our current sales organization effectively, or to expand our sales organization as needed, to adequately target and engage our potential astronauts, our business may be adversely affected. To date, we have primarily sold the reservations for our astronaut experience through direct sales and have sold a limited number of seats each year. Our success depends, in part, on our ability to attract new astronauts in a cost-effective manner. While we had a backlog of approximately 675 future astronauts as of December 31, 2025, we are making, and we expect that we will need to continue to make, significant investments in order to attract new astronauts. Our sales growth depends on our ability to implement strategic initiatives and these initiatives may not be effective in generating sales growth. In addition, marketing campaigns, which we have not historically utilized, can be expensive and may not result in the acquisition of new astronauts in a cost-effective manner, if at all. Further, as our brand becomes more widely known, future marketing campaigns or brand content may not attract new astronauts at the same rate as past campaigns or brand content. If we are unable to attract new astronauts, our business, financial condition and results of operations will be harmed.

The market for commercial spaceflight has not been established with precision and is still emerging. Our estimates for the total addressable market for commercial spaceflight are based on a number of internal and third-party estimates, including our current backlog, the number of consumers who have expressed interest in our astronaut experience, assumed prices at which we can offer our astronaut experience, assumed flight cadence, our ability to leverage our current manufacturing and operational processes and general market conditions. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct. The conditions supporting our assumptions or estimates may

change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, our estimates of the annual total addressable market for our astronaut experience, as well as the expected growth rate for the total addressable market for that experience, may prove to be incorrect.

We are currently developing our next-generation spaceflight system, which includes our next-generation spaceships and launch vehicles, which we expect will allow us to increase our annual flight rate. Although we commenced commercial operations with our Unity spaceflight system in June 2023, we paused Unity spaceflights in mid-2024 and currently expect our next-generation spaceships flight test program to commence in the third quarter of 2026 in advance of our first commercial spaceflight which is expected to occur in the fourth quarter of 2026 with a research flight. We currently expect private astronaut spaceflights to commence six to eight weeks after our first commercial spaceflight.

If we do not complete the development of our next-generation spaceflight system in our anticipated timeframes or at all, our ability to grow our business will be adversely affected. The successful development of our spaceflight systems and related technology involves many uncertainties, some of which are beyond our control, including:

timing in finalizing spaceflight systems design and specifications;

successful completion of flight test programs, including flight safety tests;

our ability to obtain additional applicable approvals, licenses or certifications from regulatory agencies, if required, and maintain current approvals, licenses or certifications;

performance of our manufacturing facilities despite risks that disrupt production, such as natural disasters and hazardous materials;

performance of a limited number of suppliers for certain raw materials and supplied components;

performance of our third-party contractors that support our research and development activities;

performance of our third-party contractors to design and manufacture our next-generation carrier aircraft as well as manufacture key subassemblies for our next-generation spaceships;

our ability to maintain rights from third parties for intellectual properties critical to our research and development activities;

our ability to continue funding and maintain our current research and development activities; and

the impact of an outbreak of a highly infectious or contagious disease or other health concerns, on us, our customers, suppliers and distributors, and the global economy.

Historically, we were dependent on a single spaceflight system consisting of a spaceship, VSS Unity, and launch vehicle, VMS Eve. We are currently developing our next-generation spaceflight vehicles, which include our next-generation spaceships and launch vehicles, which we expect will allow us to increase our annual flight rate. In light of such development, we paused Unity spaceflights in mid-2024, and we currently expect our next-generation spaceships flight test program to commence in the third quarter of 2026 in advance of our first commercial spaceflight which is expected to occur in the fourth quarter of 2026 with a research flight. We currently expect private astronaut spaceflights to commence six to eight weeks after our first commercial spaceflight.

To be successful once we begin flying again with our next-generation spaceships, we will need to maintain a sufficient flight rate, which will be negatively impacted if we are not able to operate our spaceflight systems for any reason. In addition to the pause on Unity spaceflights, we may be unable to operate our spaceflight systems at our anticipated flight rate for a number of other reasons outside of our control, including, but not limited to, unexpected weather patterns, maintenance issues, pilot error, design and engineering flaws, natural disasters, epidemics or pandemics, changes in governmental regulations or in the status of our regulatory approvals or applications or other events that force us to cancel or reschedule flights. Our spaceflight systems are highly sophisticated and depend on complex technology, and we require them to meet rigorous performance goals that may

from time to time necessitate that we replace critical components or hardware. Our ability to operate in airspace may also be superseded by the U.S. Department of Defense priority missions. In the event we need to replace any components or hardware of our spaceflight system, there are limited numbers of replacement parts available, some of which have significant lead time associated with procurement or manufacture, so any failure of our systems or their components or hardware could result in reduced numbers of flights and significant delays to our planned growth.

We manufacture and operate highly sophisticated spaceflight systems and offer a specialized astronaut experience that depends on complex technology. While we have built operational processes to ensure that the design, manufacture, performance and servicing of our spaceflight systems meet rigorous performance goals, there can be no assurance that we will not experience operational or process failures and other problems, including through manufacturing or design defects, pilot error, natural disasters, cyber-attacks, or other intentional acts, that could result in potential safety risks.

In addition, we may experience threats to the security of our facilities and employees or threats from terrorist or other acts. We work cooperatively with our suppliers, subcontractors, venture partners and other parties, such as our lessors, to address and prepare for these risks, but in some instances, we must rely on safeguards put in place by these third parties, some of which we may not control. There can be no assurance that our preparations, or those of third parties, will be able to prevent any such incidents.

Any actual or perceived safety issues may result in significant reputational harm to our businesses, in addition to tort liability, maintenance, increased safety infrastructure and other costs that may arise. Such issues with our spaceflight systems, facilities, or customer safety could result in delaying or cancelling planned flights, increased regulation or other systemic consequences. Our inability to meet our safety standards or adverse publicity affecting our reputation as a result of accidents, mechanical failures, damages to customer property or medical complications could have a material adverse effect on our business, financial condition and results of operation.

As of December 31, 2025, our backlog represents orders from approximately 675 future astronauts for which we have not yet recognized spaceflight revenue. While many of these orders were accompanied by a significant deposit, the deposits are largely refundable, and the reservations may be cancelled under certain circumstances without penalty. As a result, we may not receive revenue from these orders and deposits, and any order backlog or other deposits we report may not be indicative of our future revenue.

In addition to our pause of Unity spaceflights in mid-2024, many other events may cause a delay in our ability to fulfill reservations or cause planned spaceflights to not be completed at all, some of which may be out of our control, including unexpected weather patterns, maintenance issues, natural disasters, epidemics or pandemics, changes in governmental regulations or in the status of our regulatory approvals or applications or other events that may force us to cancel or reschedule flights. If we further delay spaceflights or if future astronauts reconsider their astronaut experience, those individuals may seek to cancel their planned spaceflight and may obtain a full or partial refund.

While we have successfully completed seven commercial flights with our Unity spaceflight system, we are continuing to develop our next-generation spaceships, and we currently expect our first commercial spaceflight, a research flight, to occur in the fourth quarter of 2026, followed by the commencement of private astronaut spaceflights six to eight weeks later. We have not yet tested flights of our next-generation spaceships at their full passenger capacity of six people. The success of our spaceflight operations will depend on our achieving and maintaining a sufficient level of passenger capacity on our spaceflights. We have not yet tested flights with this full cabin, and it is possible that the number of passengers per flight may not meet our expectations for a number of factors, including maximization of the passenger experience and satisfaction. Any decrease from our assumptions in the number of passengers per flight could adversely impact our ability to generate revenue at the rate we anticipate.

We have previously experienced, and may experience in the future, delays or other complications in the design, manufacture, launch, production, delivery and servicing ramp of new spaceflight systems and related technology, as well as other factors. For example, in the second half of 2025, we experienced extended lead times for parts deliveries in connection with the development of our next-generation spaceships, which caused the completion dates of our subassemblies to shift modestly out. If delays like this arise or recur, in particular in connection with the development of our next-generation spaceships and launch vehicles, if our remediation measures and process changes do not continue to be successful or if we experience issues with planned manufacturing improvements or design and safety, we could experience issues in sustaining the ramp of our spaceflight system, delays in increasing production further or commencing commercial service on our expected timeframes or at all.

If we encounter difficulties in scaling our delivery or servicing capabilities, if we fail to develop and successfully commercialize spaceflight technologies, if we fail to develop such technologies before our competitors, or if such technologies fail to perform as expected, are inferior to those of our competitors or are perceived as less safe than those of our competitors, our business, financial condition and results of operations could be materially and adversely impacted.

The success of our business depends in part on manufacturing more spaceflight systems, operating a sufficient number of spaceflights to meet customer demand and providing an astronaut experience that meets or exceeds expectations. If for any reason we are unable to manufacture new spaceflight systems or are unable to schedule spaceflights as planned, this could have a material adverse effect on our business, financial condition and results of operations. If our future spaceflight systems do not meet expected performance or quality standards, including with respect to customer safety, this could cause delays. Further, flight operations within restricted airspace require advance scheduling and coordination with government range owners and other users, and any high priority national defense assets will have priority in the use of these resources, which may impact our cadence of spaceflight operations or could result in cancellations or rescheduling. Any operational or manufacturing delays or other unplanned changes to our ability to operate spaceflights could have a material adverse effect on our business, financial condition and results of operations.

If our operations grow as planned, of which there can be no assurance, we will need to expand our sales and marketing, research and development, customer and commercial strategy, products and services, supply, and manufacturing and distribution functions. We will also need to leverage our manufacturing and operational systems and processes, and there is no guarantee that we will be able to scale the business and the manufacture of spacecraft as currently planned or within the planned timeframe. The expansion of our business may also require additional manufacturing and operational facilities, as well as space for administrative support, and there is no guarantee that we will be able to find suitable locations or partners for the manufacture and operation of our spaceflight systems. For example, in July 2024, we announced the opening of a new spaceship manufacturing facility in Arizona and the related anticipated scaling of our team to produce our next-generation spaceships. However, in November 2023, we announced a workforce reduction of approximately 185 employees, constituting approximately 18% of our workforce, in order to decrease costs and strategically realign our resources.

Our growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in hiring, training and managing an increasing number of employees, finding manufacturing capacity to produce our spaceflight systems and related equipment, and delays in production and spaceflights. These difficulties may result in the erosion of our brand image, divert the attention of management and key employees and impact financial and operational results. In addition, in order to continue to expand our fleet of spacecraft and increase our presence around the globe, we expect to incur substantial expenses as we continue to attempt to streamline our manufacturing process, increase our flight cadence, hire more employees, and continue research and development efforts relating to new products and technologies and expand internationally. If we are unable to drive commensurate growth, these costs, which include lease commitments, headcount and capital assets, could result in decreased margins, which could have a material adverse effect on our business, financial condition and results of operations.

Because our business is currently concentrated on a single, discretionary product category, commercial spaceflight, we are vulnerable to changes in consumer preferences or other market changes. The global economy has in the past, and will in the future, experience recessionary periods and periods of economic instability. During such periods, our potential astronauts may choose not to make discretionary purchases or may reduce overall spending on discretionary purchases, which may include not scheduling spaceflight experiences or cancelling existing reservations for spaceflight experiences. There could be a number of other effects from adverse general business and economic conditions on our business, including insolvency of any of our third-party suppliers or contractors, decreased consumer confidence, decreased discretionary spending and reduced consumer demand for spaceflight experiences. Moreover, future shifts in consumer spending away from our spaceflight experience for any reason, including decreased consumer confidence, adverse economic conditions or heightened competition, could have a material adverse effect on our business, financial condition and results of operations. If such business and economic conditions are experienced in future periods, this could reduce our sales and adversely affect our profitability, as demand for discretionary purchases may diminish during economic downturns, which could have a material adverse effect on our business, financial condition and results of operations.

We are at risk of adverse publicity stemming from any public incident involving our company, our people or our brand. If our personnel or one of our spaceflight systems, the personnel or spacecraft of one of our competitors or the personnel, aircraft or other vehicle of a commercial airline, governmental agency or other specialty adventure company, were to be involved in a public incident, accident or catastrophe, this could create an adverse public perception of spaceflight and result in decreased customer demand for spaceflight experiences, which could cause a material adverse effect on our business, financial conditions and results of operations. Incidents and any corresponding media coverage that showcases the risks associated with space travel could negatively impact consumer preferences, thereby giving rise to potential material adverse effects on our business, financial condition, and results of operations. Further, if our personnel or our spaceflight systems were to be involved in a public incident, accident or catastrophe, we could be exposed to significant reputational harm or potential legal liability. Any reputational harm to our business could cause future astronauts with existing reservations to cancel their spaceflights and could significantly impact our ability to make future sales. The insurance we carry may be inapplicable or inadequate to cover any such incident, accident or catastrophe. In the event that our insurance is inapplicable or not adequate, we may be forced to bear substantial losses from an incident or accident.

Spaceflight is an inherently risky activity that can lead to accidents or catastrophes impacting human life. For example, on October 31, 2014, VSS Enterprise, an earlier model of SpaceShipTwo manufactured and operated by a third-party contractor, had an accident during a rocket-powered test flight. The pilot was seriously injured, the co-pilot was fatally injured and the vehicle was destroyed. As part of its 2015 accident investigation report, the National Transportation Safety Board (the "NTSB") determined that the probable cause of the accident related to the failure by a third-party contractor to consider and protect against the possibility that a single human error could result in a catastrophic hazard to the vehicle. After the accident, we assumed responsibility for the completion of the flight test program and submitted a report to the NTSB that listed the actions we were taking to reduce the likelihood and effect of human error. This included modification of the feather lock control mechanism to add automatic inhibits that would prevent inadvertent operation during safety critical periods of flight. We have implemented and repeatedly demonstrated the efficacy of these actions, including implementing more rigorous protocols and procedures for safety-critical aircrew actions, requiring additional training for pilots that focuses on response protocols for safety critical actions, and eliminating certain single-point human performance actions that could potentially lead to similar accidents. We believe the steps we have taken are sufficient to address the issues noted in the NTSB's report; however, it is impossible to completely eliminate the potential for human error, and there is a possibility that other accidents may occur in the future as a result of human error or for a variety of other reasons, some of which may be out of our control. Any such accident could result in substantial losses to us, including reputational harm and legal liability, and, as a result, could have a material adverse effect on our business, financial condition and results of operations.

We may be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. For example, unfavorable economic conditions, whether related to inflation, interest rates or otherwise have resulted in, and may continue to result in, significant disruption and volatility of global financial markets that could adversely impact our ability to access capital. We may sell equity securities (including through our "at-the-market offering" program) or debt securities in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities, our current investors may be materially diluted. Any debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures. We believe that we may not have sufficient cash and marketable securities to maintain our planned operations for the next twelve months following the issuance date of the consolidated financial statements and have concluded that there are conditions present in the aggregate that raise substantial doubt about our ability to continue as a going concern.

As part of our growth strategy, we may utilize additional spaceports outside the United States. Construction of a spaceport or other facilities in which we conduct our operations may require significant capital expenditures to develop, and in the future we may be required to make similar expenditures to expand, improve or construct adequate facilities for our spaceflight operations. While Spaceport America was funded by the State of New Mexico and we intend to pursue similar arrangements in the future, we cannot assure that such arrangements will be available to us on terms similar to those we have with the State of New Mexico or at all. If we cannot secure such an arrangement, we would need to use cash flows from operations or raise additional capital in order to construct additional spaceports or facilities. In addition, as Spaceport America and any other facilities we may utilize mature, our business will require capital expenditures for the maintenance, renovation and improvement of such existing locations to remain competitive and maintain the value of our brand standard. This creates an ongoing need for capital, and, to the extent we cannot fund capital expenditures from cash flows from operations, we will need to borrow or otherwise obtain funds. If we cannot access the capital we need, we may not be able to execute our growth strategy, take advantage of future opportunities or respond to competitive pressures. If the costs of funding new locations or renovations or enhancements at existing locations exceed budgeted amounts or the time for building or renovation is longer than anticipated, our business, financial condition and results of operations could be materially adversely affected.

Our ability to produce our current and future spaceflight systems and other components of operation is dependent upon sufficient availability of raw materials and supplied components, such as nitrous oxide, valves, tanks, special alloys, helium and carbon fiber, which we secure from a limited number of suppliers. These suppliers may be affected by various factors that could impede their ability to meet our demand, including, but not limited to, global supply shortages, labor disputes, and political destabilization in supply regions. Our reliance on suppliers to secure these raw materials and supplied components exposes us to volatility in the prices and availability of these materials. We may not be able to obtain sufficient supply of raw materials or supplied components, on favorable terms or at all, which could result in delays in manufacture of our spacecraft or increased costs. For example, there are only a few nitrous oxide plants around the world and if one or more of these plants were to experience a slowdown in operations or to shutdown entirely, we may need to qualify new suppliers or pay higher prices to maintain the supply of nitrous oxide needed for our operations.

In addition, we have in the past and may in the future experience delays in manufacture or operation as we go through the requalification process with any replacement third-party supplier, as well as the limitations imposed by the International Traffic in Arms Regulations ("ITAR") and other restrictions on transfer of sensitive technologies. Additionally, the imposition of tariffs on such raw materials or supplied components could have a material adverse effect on our operations. Prolonged disruptions in the supply of any of our key raw materials or components, difficulty qualifying new sources of supply, implementing use of replacement materials or new sources of supply or any volatility in prices could have a material adverse effect on our ability to operate in a cost-efficient, timely manner and could cause us to experience cancellations or delays of scheduled spaceflights, customer cancellations or reductions in our prices and margins, any of which could harm our business, financial condition and results of operations.

Our growth strategy depends in part on the successful and timely manufacture of our next-generation spaceships. Each spaceflight system has a limited useful life, which is driven by the number of cycles that the system undertakes. While the vehicle is designed for a certain number of cycles, known as the design life, there can be no assurance as to the actual operational life of a spaceflight system or that the operational life of individual components will be consistent with its design life. A number of factors impact the useful lives of the spaceflight systems, including, among other things, the quality of their design and construction, the durability of their component parts and availability of any replacement components, the actual combined environment experienced compared to the assumed combined environment for which the spaceflight systems were designed and tested and the occurrence of any anomaly or series of anomalies or other risks affecting the spaceflight systems during launch, flight and re-entry. In addition, we are continually learning, and as our engineering and manufacturing expertise and efficiency increases, we aim to leverage this learning to be able to manufacture our spaceflight systems and related equipment using less of our currently installed equipment, which could render our existing material obsolete. Any continued improvements in spaceflight technology may make obsolete our existing spaceflight systems or any component of our spacecraft prior to the end of its life. If the spaceflight systems and related equipment have shorter useful lives than we currently anticipate, this may lead to greater maintenance costs than previously anticipated such that the cost to maintain the spacecraft and related equipment may exceed their value, which would have a material adverse effect on our business, financial condition and results of operations.

We are dependent on various third-party contractors and suppliers to develop and provide critical technology, systems and components required for our spaceflight system. For example, each spaceflight currently requires replenishment of certain components of our rocket motor propulsion system that we obtain from third-party contractors and suppliers. Should we experience complications with any of these components which are critical to the operation of our spacecraft, we may need to delay or cancel scheduled spaceflights. We face the risk that any of our contractors and suppliers may not fulfill their contracts and deliver their products or services on a timely basis, or at all. We have experienced, and may in the future experience, operational complications with our contractors and suppliers. The ability of our contractors and suppliers to effectively satisfy our requirements could also be impacted by their financial difficulty or damage to their operations caused by fire, terrorist attack, military conflict, natural disaster, pandemic, or other events. The failure of any contractors and suppliers to perform to our expectations could result in shortages of certain manufacturing or operational components for our spacecraft or delays in spaceflights and harm our business. In addition, the failure of third-party providers to design and manufacture our next-generation carrier aircraft as well as manufacture key subassemblies for our next-generation spaceships in accordance with our expectations could result in delays to our next-generation vehicles service dates and adversely impact our future flight rate. Our reliance on contractors and suppliers and inability to fully control any operational difficulties with our third-party contractors and suppliers could have a material adverse effect on our business, financial condition and results of operations.

The commercial spaceflight industry is still developing and evolving, but we expect it to be competitive. Our primary competitor in establishing a commercial suborbital human spaceflight offering is Blue Origin, a privately funded company founded in 2000. Blue Origin recently announced it was pausing its suborbital space tourism flights for at least two years. In addition, we are aware of several large, well-funded, public and private entities actively engaged in developing products within the aerospace industry. While these companies are currently focused on providing fundamentally different products than ours, such as orbital spaceflights at a substantially higher cost than our offerings, we cannot provide assurance that one or more of these companies will not shift their focus to include suborbital spaceflight and directly compete with us in the future. Additionally, if one or more of these companies significantly reduce prices for their current products, they may indirectly compete for our customer base.

Many of our current and potential competitors are larger and have substantially greater resources than we have and expect to have in the future. They may also be able to devote greater resources to the development of their current and future technologies or the promotion and sale of their offerings or offer lower prices. Our current and potential competitors may also establish cooperative or strategic relationships amongst themselves or with third parties that may further enhance their resources and offerings. Further, it is possible that domestic or foreign companies or governments, some with greater experience in the aerospace industry or greater financial resources than we possess, will seek to provide products or services that compete directly or indirectly with ours in the future. Any such foreign competitor, for example, could benefit from subsidies from, or other protective measures by, its home country.

Disclaimer

Virgin Galactic Holdings Inc. published this content on April 21, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 21, 2026 at 20:47 UTC.