Item 8.01 Other Events.
On August 4, 2022, Virgin Galactic Holdings, Inc. (the “Company”) entered into a distribution agency agreement (the “Distribution Agency Agreement”) with Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC (each, an “Agent” and collectively, the “Agents”) providing for the offer and sale of up to $300,000,000 of shares of the Company’s common stock, par value $0.0001 per share, from time to time by the Company through the Agents, acting as the Company’s sales agents, or directly to one or more of the Agents, acting as principal.
Sales of shares of the Company’s common stock, if any, as contemplated by the Distribution Agency Agreement, made through any Agent acting as sales agent or directly to any Agent acting as principal, will be made by any method permitted by law, including without limitation (i) by means of ordinary brokers’ transactions (whether or not solicited), (ii) to or through a market maker, (iii) directly on or through any national securities exchange or facility thereof, a trading facility of a national securities association, an alternative trading system or any other market venue, (iv) in the over-the-counter market, (v) in privately negotiated transactions or (vi) through a combination of any such methods.
None of the Agents is required to sell any specific number or dollar amount of shares of the Company’s common stock, but each has agreed, subject to the terms and conditions of the Distribution Agency Agreement, to use its commercially reasonable efforts, consistent with its normal trading and sales practices, to sell the shares of the Company’s common stock on the terms agreed upon by such Agent and the Company.
The Company will pay the applicable Agent a commission at a mutually agreed rate that will not (except as provided below) exceed 2.0% of the gross sales price of the shares of the Company’s common stock sold through the Agents, as the Company’s sales agents. The Company may also agree with any Agent to sell shares of the Company’s common stock in a manner that may constitute “distributions” within the meaning of Rule 100 of Regulation M under the Securities Exchange Act of 1934, as amended, in which case the Company and such Agent will agree to compensation for such Agent that is customary for such sales.
Under the terms of the Distribution Agency Agreement, the Company may also sell shares of its common stock to one or more of the Agents, as principal, at a price agreed upon at the time of sale. If the Company sells shares of its common stock to one or more of the Agents, as principal, the Company will enter into a separate terms agreement (a “Terms Agreement”) with such Agent or Agents, as applicable, setting forth the terms of the transaction. In any such sale to an Agent or Agents as principal, the Company may agree to pay the applicable Agent or Agents a commission or underwriting discount that may exceed 2.0% of the gross sales price of the Company’s common stock sold to such Agent or Agents, as principal.
The Company intends to use any net cash proceeds it receives from the issuance and sale by it of any shares of the Company’s common stock to or through the Agents for general corporate purposes, including working capital, general and administrative matters and development of its spaceship fleet and other infrastructure to scale its commercial operations.
The Distribution Agency Agreement (which includes, as an exhibit thereto, the form of Terms Agreement) is filed herewith as Exhibit 1.1. The description of the Distribution Agency Agreement and any Terms Agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the Distribution Agency Agreement (including such form of Terms Agreement included therein) filed herewith as an exhibit and incorporated herein by reference.