☒QUARTERLY 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

~~(Issuer’s~~Registrant’s telephone number, including area ~~code)~~code: (714) 465-5737

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

Indicate by check mark whether the ~~issuer~~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 ~~past~~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”,~~filer,” “accelerated ~~filer”,~~filer,” “smaller reporting ~~company”,~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒☐ No ☐☒

As of May ~~24, 2021, 32,000,000 Class A ordinary~~11, 2022, the registrant had 463,803,788 shares of common stock, $0.0001 par value per share, outstanding.

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” for purposes of the federal securities laws. The information included in this Quarterly Report on Form 10-Q has been provided by us and ~~8,000,000 Class B ordinary shares, $0.0001 par value, were issued~~our management, and ~~outstanding.~~

such forward-looking statements include statements relating to the expectations, hopes, beliefs, intentions or strategies regarding the future of Rocket Lab USA, Inc. (the “Company”) and its management team. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “could,” “expect,” “intends,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on Rocket Lab. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described below and under the heading “Risk Factors.”

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and/or any response to such an outbreak and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the Securities and Exchange Commission (the “SEC”) as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. All forward-looking statements are qualified in their entirety by this cautionary statement.

~~VECTOR ACQUISITION CORPORATION~~You should also note that we may announce material business and financial information to our investors using our website (including at https://investors.rocketlabusa.com), filings with the SEC, webcasts, press releases, and conference calls. We use these mediums, as well as our official corporate accounts on social media outlets such as Twitter, Facebook, LinkedIn and YouTube, to broadcast our launches and other significant events, and to communicate with the public about our company, our products, and other matters. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website and through our other official social media channels. The information contained on, or that can be accessed through, our website or our social media channels is not a part of this Quarterly Report on Form 10-Q.

Unless the context requires otherwise, references in this Quarterly Report to “Rocket Lab,” “Company,” “we,” “us” and “our” refer to Rocket Lab USA, Inc. and our subsidiaries.

The accompanying notes are an integral part of these ~~unaudited~~ condensed consolidated financial statements.

CONDENSED ~~STATEMENT~~CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

The accompanying notes are an integral part of these ~~unaudited~~ condensed consolidated financial statements.

CONDENSED ~~STATEMENT~~CONSOLIDATED STATEMENTS OF CHANGES IN ~~SHAREHOLDERS’~~REDEEMABLE CONVERTIBLE

The accompanying notes are an integral part of these ~~unaudited~~ condensed consolidated financial statements.

~~Note 1 — Description of Organization~~(unaudited; in thousands, except share and ~~Business Operations~~per share data)

SIGNIFICANT ACCOUNTING POLICIES

Principals of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

~~Note 2 — Summary of Significant Accounting Policies~~

Consolidation and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements ~~have been prepared~~are presented in ~~accordance~~conformity with accounting ~~principles~~standards generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information and ~~in accordance with~~include the ~~instructions to Form 10-Q~~accounts of Rocket Lab USA, Inc. and ~~Article 8~~its wholly owned subsidiaries after elimination of ~~Regulation S-X of the Securities~~intercompany accounts and ~~Exchange Commission (the “SEC”). Certain~~transactions. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or ~~footnote disclosures normally included in~~omitted. These condensed consolidated financial statements ~~prepared in accordance with GAAP~~ have been ~~condensed or omitted, pursuant to~~prepared on the ~~rules~~same basis as the annual consolidated financial statements and, regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. Inin the opinion of management, ~~the accompanying unaudited condensed financial statements include~~reflect all adjustments, consisting only of a normal recurring ~~nature,~~adjustments, which are necessary for athe fair ~~presentation~~statement of the Company’s financial ~~position, operating results and cash flows for the period presented.~~

~~VECTOR ACQUISITION CORPORATION~~
~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~
~~MARCH 31, 2021~~
~~(Unaudited)~~

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2021, as amended by Amendment No. 1 thereto, filed with the SEC on May 3, 2021. Theinformation. These interim results ~~for the three months ended March 31, 2021~~ are not necessarily indicative of the results to be expected for the fiscal year ending December 31, ~~2021~~2022, or for any other interim period or for any other future ~~periods.~~year.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the ~~auditor~~independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, ~~of 2002,~~ reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and ~~shareholder~~stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial ~~statement~~statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of ~~condensed~~ financial statements in conformity with U.S. GAAP requires ~~the Company’s~~ management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

~~Making~~On an ongoing basis, our management evaluates estimates ~~requires~~and assumptions including those related to revenue recognition, contract costs, loss reserves, valuation of warrants and stock-based compensation and deferred tax valuation allowances. We based our estimates on historical data and experience, as well as various other factors that our management believes to ~~exercise significant judgment. It is at least reasonably possible that~~be reasonable under the ~~estimate~~circumstances, the results of which form the ~~effect~~basis for making judgments about the carrying value of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actualassets and liabilities. Actual results could differ ~~significantly~~ from ~~those estimates.~~

~~Cash~~these estimates and ~~Cash Equivalents~~

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2021 and December 31, 2020.

~~Marketable Securities Held in Trust Account~~

The Company classifies its U.S. Treasury and equivalent securities as held-to-maturity in accordance with ASC Topic 320 “Investments — Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying balance sheets and adjusted for the amortization or accretion of premiums or discounts.

~~Liquidity~~

The Company does not have sufficient liquidity to meet its anticipated obligations over the next year from the date of issuance of these financial statements. In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company has access to funds from the Sponsor that are sufficient to fund the working capital needs of the Company until one year from the date of issuance of these financial statements.

8assumptions.

Other Significant Accounting Policies

~~VECTOR ACQUISITION CORPORATION~~
~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~
~~MARCH 31, 2021~~
~~(Unaudited)~~

~~Warrant Liabilities~~

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexedThere have been no significant changes to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The initial fair value of the warrants was estimated using a Monte Carlo simulation approach (see Note 9) while the March 31, 2021 and December 31, 2020 fair value of the warrants was based on the public trading price of the warrants.

~~Class A Ordinary Shares Subject to Possible Redemption~~

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at March 31, 2021 and December 31, 2020, Class A ordinary shares subject to possible redemption is presented as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheets.

~~Income Taxes~~

~~ASC Topic 740,~~ ~~Income Taxes~~, prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2021 and December 31, 2020, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant ~~payments, accruals or material deviation from its position.~~

The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented.

~~VECTOR ACQUISITION CORPORATION~~
~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~
~~MARCH 31, 2021~~
~~(Unaudited)~~

~~Net Loss Per Ordinary Share~~

~~The Company complies with~~ accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per ordinary share is computed by dividing net loss by the weighted average number of Class A ordinary shares outstanding for the period. The calculation of diluted loss per ordinary share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) Private Placement Warrants since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The warrants are exercisable to purchase 16,266,667 shares of Class A ordinary shares in the aggregate.

The Company’s statements of operations includes a presentation of income (loss) per ordinary share for ordinary shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income per ordinary share, basic and diluted, for Class A redeemable ordinary shares is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net loss per ordinary share, basic and diluted, for Class B non-redeemable ordinary shares is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable ordinary shares, by the weighted average number of Class B non-redeemable ordinary shares outstanding for the period. Class B non-redeemable ordinary shares includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.

~~The following table reflects the calculation of basic and diluted net loss per ordinary share (in dollars, except per share amounts):~~

Three Months Ended March 31, 2021
Redeemable Class A Ordinary Shares
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares
Interest Income $ 4,810

Net Earnings $ 4,810
Denominator: Weighted Average Redeemable Class A Ordinary Shares
Redeemable Class A Ordinary Shares, Basic and Diluted 32,000,000
Earnings/Basic and Diluted Redeemable Class A Ordinary Shares $ 0.00

Non-Redeemable Class B Ordinary Shares
Numerator: Net Loss minus Redeemable Net Earnings
Net Loss $ (23,560,263 )
Redeemable Net Earnings $ (4,810 )

Non-Redeemable Net Loss $ (23,565,073 )
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares
Non-Redeemable Class B Ordinary Shares, Basic and Diluted(1) 8,000,000
Loss/Basic and Diluted Non-Redeemable Class B Ordinary Shares $ (2.95 )

~~As of March 31, 2021 and December 31, 2020, basic and diluted shares are the same as there are no non-redeemable securities that are dilutive to the shareholders.~~

~~Concentration of Credit Risk~~

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

~~VECTOR ACQUISITION CORPORATION~~
~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~
~~MARCH 31, 2021~~
~~(Unaudited)~~

~~Fair Value of Financial Instruments~~

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the Company’s condensed balance sheet, primarily due to their short-term nature.

As of March 31, 2021 and December 31, 2020, the carrying values of cash, accounts payable and accrued expenses approximate their fair values due to the short-term nature of the instruments. The Company’s portfolio of marketable securities held in the Trust Account is comprised of investments in U.S. Treasury securities with an original maturity of 185 days or less. The fair value for trading securities is determined using quoted market prices in active markets.

~~Recent Accounting Standards~~

~~Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements.~~

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

~~Note 3 — Initial Public Offering~~

Pursuant to the Initial Public Offering, the Company sold 30,000,000 Units, at a purchase price of $10.00 per Unit. In connection with the underwriters’ partial exercise of the over-allotment option on October 20, 2020, the Company sold an additional 2,000,000 Units, at a purchase price of $10.00 per Unit (see Note 8). Each Unit consists of one Class A ordinary share and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share (see Note 8).

~~Note 4 — Private Placement~~

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 5,333,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $8,000,000. In connection with the underwriters’ partial exercise of the over-allotment option on October 20, 2020, the Company sold an additional 266,667 Private Placement Warrants, at a purchase price of $1.50 per Private Placement Warrants, for an aggregate purchase price of $400,000 (see Note 8). Each Private Placement Warrant is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

~~VECTOR ACQUISITION CORPORATION~~
~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~
~~MARCH 31, 2021~~
~~(Unaudited)~~

~~Note 5 — Related Party Transactions~~

~~Founder Shares~~

On July 30, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 8,625,000 Class B ordinary shares (the “Founder Shares”). The Founder Shares included an aggregate of up to 1,125,000 shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option was exercised, so that the number of Founder Shares would equal, on an as-converted basis, approximately 20% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. In connection with the underwriters’ partial exercise of the over-allotment option and the forfeiture of the remaining over-allotment option, 625,000 Founder Shares were forfeited and 500,000 Founder Shares are no longer subject to forfeiture resulting in an aggregate of 8,000,000 Founder Shares outstanding at October 20, 2020.

The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earliest of: (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

~~Administrative Services Agreement~~

The Company entered into an agreement, commencing on September 24, 2020, to pay an affiliate of the Sponsor up to $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or its liquidation, the Company will cease paying these monthly fees. Forpolicies during the three months ended March 31, 2022. Refer to Note 2 - Significant Accounting Policies disclosed in the “Notes to Consolidated Financial Statements” in the Company’s Form 10-K filed with the SEC on March 24, 2022.

REVENUES

The following table provides information about revenue by recognition model during the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
Revenues by recognition model	2022		2021
Point-in-time	$	28,237	$	17,035
Over-time		12,466		1,157
Total revenue by recognition model	$	40,703	$	18,192

The timing of revenue recognition, billings, and cash collections results in billed accounts receivable, unbilled receivables (presented within contract assets) and customer advances and deposits (presented within contract liabilities) on the condensed consolidated balance sheets, where applicable. Amounts are generally billed as work progresses in accordance with agreed-upon milestones. These individual contract assets and liabilities are reported in a net position on a contract-by-contract basis on the condensed consolidated balance sheets at the end of each reporting period.

The following table presents the balances related to enforceable contracts as of March 31, 2022 and December 31, 2021:


	March 31, 2022			December 31, 2021
Contract balances
Accounts receivable	$	32,990		$	13,957
Contract assets		5,853			2,490
Contract liabilities		(97,116	)		(59,749	)

Changes in contract liabilities were as follows:


Contract liabilities, at December 31, 2021	$	59,749
Contract liabilities assumed at acquisition		26,714
Customer advances received		22,673
Recognition of unearned revenue		(12,020	)
Contract liabilities, at March 31, 2022	$	97,116

The revenue recognized from the contract liabilities consisted of the Company satisfying performance obligations during the normal course of business.

The amount of revenue recognized from changes in the transaction price associated with performance obligations satisfied in prior years during the three months ended March 31, 2022 and 2021 was not material.

Remaining unsatisfied performance obligations represent the total dollar value of work to be performed on contracts awarded and in progress. The amount of remaining unsatisfied performance obligations increases with new contracts or additions to existing contracts and decreases as revenue is recognized on existing contracts. Contracts are included in the amount of remaining unsatisfied performance obligations when an enforceable agreement has been reached. Remaining unsatisfied performance obligations totaled $545,914 as of March 31, 2022, of which approximately 41% is expected to be recognized within 12 months, with the remaining 59% to be recognized beyond 12 months.

BUSINESS COMBINATIONS

ASI

On October 12, 2021, the Company ~~incurred $30,000~~completed the acquisition of Advanced Solutions, Inc. (“ASI”) pursuant to a membership interest purchase agreement (the “ASI Purchase Agreement”) with ASI Aerospace LLC (“ASI LLC”), Willis Vern Holdings, Inc., the shareholders of ASI LLC, and John A. Cuseo, as shareholder representative. ASI is an engineering company that develops flight software, simulation systems and guidance, navigation and control systems. ASI’s customers include agencies within the Defense Department, Air Force, NASA, other aerospace prime contractors, commercial spacecraft developers and space startups. ASI will be part of the Company’s Space Systems operating segment and continue to serve its current customers and support the Company’s Photon missions, spacecraft components, and space and ground software capabilities.

Acquisition Consideration

The acquisition-date consideration transferred consisted of cash of $29,935. The ASI Purchase Agreement also included an additional potential earn out payment of up to $5,500 based on achievement of certain performance metrics for the business in ~~fees for these services. At March 31, 2021 and~~its fiscal year ending December 31, ~~2020, $62,000~~2021. The contingent cash consideration was classified as a liability and ~~$32,000, respectively, of such fees are~~ included in accrued expenses on the Company’s consolidated balance sheet. To estimate the fair value of the contingent consideration liability, management valued the earn-out based on the likelihood of reaching targets contained in the ~~accompanying condensed~~ASI Purchase Agreement. At the acquisition date, the fair value of the contingent consideration payable was determined to be $5,500. At March 31, 2022, there were no material changes in the range of expected outcomes and the fair value of the contingent consideration from the acquisition date. The contingent consideration of $5,500 was paid on April 4, 2022.

The following table presents estimates of the preliminary fair value of the assets acquired and the liabilities assumed by the Company in the acquisition:


Description	Amount
Cash and cash equivalents	$	2,245
Accounts receivable		1,920
Intangible assets		15,900
Employee benefits payable		(1,310	)
Other assets and liabilities, net		21
Identifiable net assets acquired		18,776
Goodwill		16,659
Total purchase price	$	35,435

The following is a summary of preliminary identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets:


Type	Estimated Life in Years	Fair Value
Developed technology	7	$	11,400
In-process technology	N/A		300
Customer relationships	10		3,100
Trademark and tradenames	7		1,100
Total identifiable intangible assets acquired		$	15,900

Goodwill of $16,659 was recorded for the ASI acquisition, representing the excess of the purchase price over the fair value of the identifiable net assets. Goodwill recognized primarily represents the future revenue and earnings potential and certain other assets which were acquired, but that do not meet the recognition criteria, such as assembled workforce. Goodwill is expected to be deductible for income tax purposes.

Compensation Arrangements

In connection with the acquisition, the Company deposited $12,015 with an escrow agent pursuant to the ASI Purchase Agreement for key ASI employees which was included in prepaid and other current assets and other non-current assets on the Company’s consolidated balance ~~sheets.~~sheet. The employees must stay employed with the Company through each vesting date to be eligible to receive the performance reserve payments, and non-vested payments are forfeited if employment with the Company ceases. The performance reserve vests quarterly beginning with January 1, 2022 through October 1, 2023. In addition, under the agreement, the Company will make payment for a partial tax gross up. Due to the continuing employment requirement of the performance reserve, the costs associated with the performance reserve are recognized as post-combination compensation expense primarily recognized in operating expenses in the consolidated statements of operations and comprehensive loss.

~~Related Party Loans~~

~~In order to finance transaction costs~~The Company recognized $1,895 in connection with ~~a Business Combination,~~ the ~~Sponsor or an affiliate of~~performance reserve payments during the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.50 per warrant. Such warrants would be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. As ofthree months ended March 31, ~~2021 and December 31, 2020, the Company had no outstanding borrowings under the Working Capital Loans.~~2022.

~~Note 6 — Commitments and Contingencies~~PSC

~~Risks and Uncertainties~~

Management continues to evaluate the impact of the COVID-19 global pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~VECTOR ACQUISITION CORPORATION~~
~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~
~~MARCH 31, 2021~~
~~(Unaudited)~~

~~Registration and Shareholders Rights~~

Pursuant to a registration and shareholder rights agreement entered into on September 24, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans) will be entitled to registration rights. The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period.

~~Underwriting Agreement~~

Pursuant to the underwriting agreement, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $11,200,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

~~Rocket Lab Business Combination~~

On ~~March 1,~~November 30, 2021, the Company ~~entered into~~completed the acquisition pursuant to an Agreement and Plan of Merger ~~(as amended~~(the “PSC Merger Agreement”), by ~~Amendment No. 1 thereto dated as of May 7, 2021,~~ and asamong the ~~same may be further amended or supplemented, the “Merger Agreement”) with Rocket Lab USA,~~Company, Platinum Merger Sub, Inc. (“~~Rocket Lab”~~PSC Merger Sub”), Planetary Systems Corporation (“PSC”), and ~~Prestige USA~~Michael Whalen as shareholder representative, which provides for, among other things, the merger of PSC Merger Sub ~~Inc.,~~with and into PSC, with PSC being the surviving corporation of the merger and a ~~Delaware corporation and a~~direct, wholly owned subsidiary of ~~Rocket Lab (“~~the Company. Pursuant to the terms of the PSC Merger ~~Sub”~~Agreement, all of the issued and outstanding shares of PSC will be cancelled in exchange for aggregate consideration of up to approximately $42,000 in cash, 1,720,841 shares of the Company’s common stock, and up to 956,023 shares of the Company’s common stock that are subject to a performance based earn-out, subject to customary adjustments at closing for cash, working capital, transaction expenses and indebtedness, and amounts held back by the Company (the “PSC Acquisition”). The PSC Merger Agreement contains representations, warranties and indemnification provisions customary for transactions of this kind. In connection with the PSC Acquisition, the Company has entered into customary offer letters or employment agreements with certain key employees of PSC.

Acquisition Consideration

The acquisition-date consideration transferred consisted of cash of $42,400 and stock consideration valued at $11,568. The purchase agreement also includes an additional potential earn out payment of up to $10,000 based on achievement of certain performance metrics for the business in its fiscal year ending December 31, 2022 and 2023. The contingent consideration, to be paid in common stock, was classified as a liability and included in other non-current liabilities on the Company’s consolidated balance sheet. To estimate the fair value of the contingent consideration liability, management valued the earn-out based on the likelihood of reaching targets contained in the purchase agreement. At the acquisition date, the fair value of the contingent consideration payable was determined to be $1,800. At March 31, 2022, the fair value of the contingent consideration payable was determined to be $4,300.

The following table presents estimates of the preliminary fair value of the assets acquired and the ~~transactions contemplated thereby (the “Rocket Lab Business Combination”) were unanimously approved~~liabilities assumed by the ~~boards of directors of each~~Company in the acquisition:


Description	Amount
Cash and cash equivalents	$	3,655
Accounts receivable		2,543
Inventories		7,088
Intangible assets		33,000
Employee benefits payable		(1,212	)
Contract liabilities (1)		(5,352	)
Other current liabilities		(1,683	)
Non-current deferred tax liabilities		(6,762	)
Other assets and liabilities, net		1,040
Identifiable net assets acquired		32,317
Goodwill		23,451
Total purchase price	$	55,768

_________________________

(1) Contract liabilities was recorded under ASC 606 in accordance with ASU No. 2021-08; therefore a reduction in contract liabilities related to the estimated fair values of the ~~Company~~acquired contract liabilities was not required.

The following is a summary of preliminary identifiable intangible assets acquired and ~~Rocket Lab.~~the related expected lives for the finite-lived intangible assets:


Type	Estimated Life in Years	Fair Value
Developed technology	8	$	23,500
In-process technology	N/A		1,500
Customer relationships	15		3,400
Backlog	1		400
Trademark and tradenames	15		4,200
Total identifiable intangible assets acquired		$	33,000

~~In contemplation~~Goodwill of $23,451 was recorded for the PSC acquisition, representing the excess of the ~~Rocket Lab~~purchase price over the fair value of the identifiable net assets. Goodwill recognized primarily represents the future revenue and earnings potential and certain other assets which were acquired, but that do not meet the recognition criteria, such as assembled workforce. None of the goodwill is expected to be deductible for income tax purposes.

Compensation Arrangements

In connection with the acquisition, the Company issued 1,720,841 shares of the Company’s common stock to the seller upon closing of the acquisition, of which 991,466 shares are held by key PSC employees. The shares are subject to a holdback agreement which restricts the transferability of the shares. The Company’s repurchase right lapses in eight equal quarterly installments over the two-year period subsequent to the acquisition date as the seller continues to provide service as an employee, such that at the end of the two-year period following the acquisition date, the shares will be fully transferable, and the Company will no longer have a right to repurchase the shares. Therefore, the shares are accounted for as post-combination compensation expense for services as an employee over the two-year vesting period following the acquisition date. Due to the continuing employment requirement of the shares issued upon closing of the transaction and the earnout shares, the costs associated with the shares are recognized as post-combination compensation expense recognized in operating expenses in the consolidated statements of operations and comprehensive loss.

The Company recognized $2,144 of stock-based compensation during the three months ended March 31, 2022 in connection with the holdback agreement shares.

SolAero

On January 18, 2022, the Company closed on the acquisition (the “SolAero Acquisition”) of SolAero Holdings, Inc. (“SolAero”) pursuant to an Agreement and Plan of Merger (the “SolAero Merger Agreement”), dated as of December 10, 2021, by and among the Company, Supernova Acquisition Corp. (“SolAero Merger Sub”), SolAero, and Fortis Advisors LLC as stockholder representative, which provides for, among other things, the merger of SolAero Merger Sub with and into SolAero, with SolAero being the surviving corporation of the merger and a direct, wholly owned subsidiary of the Company. Pursuant to the terms of the SolAero Merger Agreement, all of the issued and outstanding shares of SolAero were cancelled in exchange for aggregate consideration of $80,000 in cash, subject to customary adjustments at closing for cash, working capital, transaction expenses and indebtedness, and amounts held back by the Company (the “SolAero Merger Consideration”). In addition, $3,600 of the SolAero Merger Consideration was placed into escrow by the Company in order to secure recovery of any Adjustment Amount (as defined in the SolAero Merger Agreement) and as security against indemnity claims. In connection with the SolAero Acquisition, the Company entered into customary employment or consulting agreements with certain key employees of SolAero.

Acquisition Consideration

The acquisition-date consideration transferred consisted of cash of $76,696. The following table presents estimates of the preliminary fair value of the assets acquired and the liabilities assumed by the Company in the acquisition:


Description	Amount
Cash and cash equivalents	$	7,815
Accounts receivable		12,322
Inventories		19,614
Prepaids and other current assets		2,475
Property and equipment		29,822
Intangible assets, net		32,900
Right-of-use assets - operating leases		1,128
Right-of-use assets - finance leases		16,174
Restricted cash		3,293
Trade payables		(10,432	)
Accrued expenses		(9,154	)
Contract liabilities (1)		(26,714	)
Non-current operating lease liabilities		(1,128	)
Non-current finance lease liabilities		(15,874	)
Other assets and liabilities, net		(1,033	)
Identifiable net assets acquired		61,208
Goodwill		15,488
Total purchase price	$	76,696

_________________________

The following is a summary of preliminary identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets:


Type	Estimated Life in Years	Fair Value
Developed technology	14	$	10,000
In-process technology	N/A		800
Capitalized software	3		5,400
Customer relationships	12		9,000
Trademark and tradenames	12		4,700
Backlog	2		3,000
Total identifiable intangible assets acquired		$	32,900

Goodwill of $15,488 was recorded for the SolAero Acquisition, representing the excess of the purchase price over the fair value of the identifiable net assets. Goodwill recognized primarily represents the future revenue and earnings potential and certain other assets which were acquired, but that do not meet the recognition criteria, such as assembled workforce. The goodwill is expected to be deductible for income tax purposes.

The Company’s condensed consolidated statements of operations for the three months ended March 31, 2022 includes revenues and operating loss of $20,103 and $931, respectively, related to the SolAero acquisition. The Company recognized $218 of acquisition and integration related costs that were expensed for the three months ended March 31, 2022. These costs are included in the consolidated statement of operations in the line item entitled “Selling, General and Administrative Expense.”

Unaudited Pro Forma Information

The unaudited consolidated financial information summarized in the following table gives effect to the 2022 and 2021 acquisitions assuming they occurred on January 1, 2021. These unaudited consolidated pro forma operating results do not assume any impact from revenue, cost or other operating synergies that are expected as a result of the acquisitions. These unaudited consolidated pro forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the acquisitions occurred on January 1, 2021, nor does the information project results for any future period.


	As Reported			Acquisitions Pro-Forma (Unaudited)			Consolidated Pro-Forma (Unaudited)
Three Months Ended March 31, 2022
Revenues	$	40,703		$	2,454		$	43,157
Net loss		(26,709	)		(1,062	)		(27,771	)
Three Months Ended March 31, 2021
Revenues	$	18,192		$	24,579		$	42,771
Net loss		(15,882	)		(3,431	)		(19,313	)

FAIR VALUE OF FINANCIAL INSTRUMENTS

As of March 31, 2022 and December 31, 2021 the following financial assets and liabilities are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as follows:


	March 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	542,406	$	0	$	—	$	542,406
Total	$	542,406	$	0	$	—	$	542,406
Liabilities:
Other current liabilities:
Contingent consideration	$	—	$	—	$	5,500	$	5,500
Other non-current liabilities:
Contingent consideration		—		—		4,300		4,300
Total	$	—	$	—	$	9,800	$	9,800


	December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market accounts	$	635,269	$	—	$	—	$	635,269
Total	$	635,269	$	—	$	—	$	635,269
Liabilities:
Other non-current liabilities:
Public and Private Warrants (Note 11)	$	58,227	$	—	$	0	$	58,227
Total	$	58,227	$	—	$	0	$	58,227

The estimated fair value amounts shown above are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or ability to dispose of the financial instrument.

There were 0 transfers between fair value measurement levels during the three months ended March 31, 2022.

INVENTORIES

Inventories as of March 31, 2022 and December 31, 2021 consisted of the following:


	March 31, 2022		December 31, 2021
Raw materials	$	25,691	$	21,517
Work in process		48,826		24,166
Finished goods		3,371		2,221
Total inventories	$	77,888	$	47,904

PREPAIDS AND OTHER CURRENT ASSETS

Prepaids and other current assets as of March 31, 2022 and December 31, 2021 consisted of the following:


	March 31, 2022		December 31, 2021
Prepaid expenses	$	17,906	$	14,787
Government grant receivables		3,635		2,563
Other current assets		4,766		2,104
Total prepaids and other current assets	$	26,307	$	19,454

Property, plant and equipment, NET

Property, plant and equipment, net, as of March 31, 2022 and December 31, 2021 consisted of the following:


	March 31, 2022			December 31, 2021
Buildings and improvements	$	36,126		$	25,075
Machinery, equipment, vehicles and office furniture		50,594			24,848
Computer equipment, hardware and software		6,970			5,617
Launch site assets		12,212			9,611
Construction in process		19,276			22,379
Property, plant and equipment—gross		125,178			87,530
Less accumulated depreciation and amortization		(25,624	)		(22,191	)
Property, plant and equipment—net	$	99,554		$	65,339

Depreciation expense recorded in the condensed consolidated statements of operations and comprehensive loss during the three months ended March 31, 2022 and 2021 consisted of the following:


	Three Months Ended March 31,
Depreciation expense	2022		2021
Cost of revenues	$	2,506	$	1,361
Research and development		245		96
Selling, general and administrative		342		300
Total depreciation expense	$	3,093	$	1,757

10.

LOAN AGREEMENT

Hercules Capital Secured Term Loan

On June 10, 2021, the Company entered into a $100,000 secured term loan agreement with Hercules Capital, Inc. (the “Hercules Capital Secured Term Loan”) and borrowed the full amount under the secured term loan agreement. The term loan has a maturity date of June 1, 2024 and is secured by substantially all of the assets of the Company. Payments due for the term loan are interest-only until the maturity date with interest payable monthly in arrears. The outstanding principal bears (i) cash interest at the greater of (a) 8.15% or (b) 8.15% plus the prime rate minus 3.25% and (ii) payment-in-kind interest of 1.25% which is accrued and added to the outstanding principal balance. Prepayment of the outstanding principal is permitted under the loan agreement and subject to certain prepayment fees. In connection with the secured term loan, the Company paid an initial facility charge of $1,000 and the Company will be required to pay an end of term charge of $3,250 upon repayment of the loan. The secured term loan agreement contains customary representations, warranties, non-financial covenants, and events of default. The Company is in compliance with all debt covenants related to its long-term borrowings as of March 31, 2022. As of March 31, 2022, there was $100,813 outstanding under the Hercules Capital Secured Term Loan, of which $2,846 is classified as current in the Company’s condensed consolidated balance sheets, with the remainder classified as long-term borrowing. As of March 31, 2022, the Company had no availability under the Hercules Capital Secured Term Loan.

11.

PUBLIC AND PRIVATE WARRANTS

As part of the closing of the Business Combination, the Company ~~will domesticate as a Delaware corporation (the “Domestication”~~assumed Public Warrants and ~~the company following the Domestication, “Vector Delaware”) and, in connection therewith, (a) the Class A ordinary~~Private Warrants to purchase up to 10,666,666 shares and ~~the Class B ordinary shares issued and outstanding immediately prior to the Domestication will convert into an equal number of~~5,600,000 shares of ~~Class A~~ common stock par value $0.0001 per share, and Class B common stock, par value $0.0001 per share, of Vector Delaware, respectively (such shares of Class A common stock and Class B common stock, together the “Vector Delaware Common Stock”); (b) Company’s warrants to purchase Class A ordinary shares issued and outstanding immediately prior to the Domestication will convert into an equal number of warrants to purchase Vector Delaware Class A common stock (the “Vector Delaware Warrants”) and (c) the Company’s units that have not been separated into Class A ordinary shares and warrants issued and outstanding immediately prior to the Domestication will convert into an equal number of units of Vector Delaware (the “Vector Delaware Units”).

~~The Merger Agreement further contemplates that the Rocket Lab Business Combination will be effected through the following transactions:~~

●

concurrently with the Domestication, Rocket Lab will amend and restate its certificate of incorporation (the “Charter Amendment”), and in connection therewith, among other things, (i) each issued and outstanding share of preferred stock, par value $0.0001 per share, of Rocket Lab will convert into shares of common stock, par value $0.0001 per share, of Rocket Lab (the “Rocket Lab Common Stock”), in accordance with the terms thereof; (ii) each issued and outstanding share of Rocket Lab Common Stock (after giving effect to the conversion contemplated by clause (i)) will convert automatically into a number of shares of Rocket Lab Common Stock equal to the Exchange Ratio (as defined below) and (iii) each then issued and outstanding Rocket Lab warrant will convert into a new warrant of Rocket Lab (a “Rocket Lab New Warrant”) for a number of shares of Rocket Lab Common Stock and with the applicable exercise price per share determined in accordance with the Merger Agreement;

~~VECTOR ACQUISITION CORPORATION~~
~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~
~~MARCH 31, 2021~~
~~(Unaudited)~~

●

Rocket Lab will enter into redemption agreements with certain members of its management pursuant to which Rocket Lab will redeem from such individuals shares of Rocket Lab Common Stock (the “Management Redemption Shares”) for an aggregate purchase price not to exceed $40,000,000;

●

immediately following the Domestication, Merger Sub will merge with and into Vector Delaware, with Vector Delaware surviving the merger as a wholly owned subsidiary of Rocket Lab (the “First Merger”), and in connection therewith, (a) the shares of Vector Delaware Common Stock (other than any treasury shares, shares held by Vector Delaware or any dissenting shares) issued and outstanding immediately prior to the effective time of the First Merger (the “First Effective Time”) will convert into an equal number of shares of Rocket Lab Common Stock; (b) the Vector Delaware Warrants that are outstanding and unexercised immediately prior to the First Effective Time will convert into an equal number of warrants to purchase Rocket Lab Common Stock (the “Assumed Warrants”) and (c) the Vector Delaware Units that are outstanding immediately prior to the First Effective Time will convert into an equal number of units of Rocket Lab (the “Assumed Units”); and

●

immediately following the First Effective Time, Rocket Lab will merge with and into Vector Delaware, with Vector Delaware surviving the merger (Vector Delaware as the surviving corporation, “New Rocket Lab” and such merger, the “Second Merger”), and in connection therewith, among other things, (i) the shares of Rocket Lab Common Stock (other than any treasury shares, shares held by Rocket Lab or dissenting shares) issued and outstanding immediately prior to the effective time of the Second Merger (the “Second Effective Time”) will convert into an equal number of shares of common stock, par value $0.0001 per share, of New Rocket Lab (the “New Rocket Lab Common Stock”); (ii) the Rocket Lab New Warrants and the Assumed Warrants outstanding and unexercised immediately prior to the Second Effective Time will convert into an equal number of warrants to purchase New Rocket Lab Common Stock; and (iii) each Assumed Unit that is outstanding immediately prior to the Second Effective Time will automatically be converted into a New Rocket Lab unit that, upon the closing of the Rocket Lab Business Combination (the “Closing”), will be cancelled and will entitle the holder thereof to one share of New Rocket Lab Common Stock and one-third of one warrant, with each whole warrant representing the right to purchase one share of New Rocket Lab Common Stock.

In addition to the above consideration, if the closing price of New Rocket Lab Common Stock is equal to or greater than $20.00 for a period of at least 20 days out of 30 consecutive trading days during the period commencing on the 90th day following the Closing and ending on the 180th day following the Closing, the Rocket Lab stockholders will be entitled to receive additional shares of New Rocket Lab Common Stock equal to 8% of the Aggregate Share Consideration (as defined below) (computed without the deduction for the Management Redemption Shares). For purposes of the Merger Agreement, the “Exchange Ratio” equals the quotient obtained by dividing (i) the Aggregate Share Consideration by (ii) the aggregate number of shares of Rocket Lab Common Stock outstanding immediately prior to the Charter Amendment on a fully diluted basis (other than the Management Redemption Shares). The “Aggregate Share Consideration” means the quotient obtained by dividing (i) an amount equal to $4,000,000,000 minus the Management Redemption Amount by (ii) (x) an amount equal to $10.00 plus (y) an amount equal to (a) the interest earned on funds held in the Company’s trust account divided by (b) the number of Class A ordinary shares outstanding immediately prior to the Closing.

~~The Rocket Lab Business~~Post Combination ~~is expected to close in the third quarter of 2021, subject to the satisfaction of certain customary closing conditions.~~

~~Concurrently with the execution of the Merger Agreement, the~~ Company, ~~entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to~~respectively, which the PIPE Investors agreed to subscribe for and purchase, and we agreed to issue and sell to such PIPE Investors, immediately prior to Closing, an aggregate of 46,700,000 shares of New Rocket Lab Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $467,000,000 (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Rocket Lab Business Combination.

~~VECTOR ACQUISITION CORPORATION~~
~~NOTES TO CONDENSED FINANCIAL STATEMENTS~~
~~MARCH 31, 2021~~
~~(Unaudited)~~

~~Note 7 — Shareholders’ Equity~~

~~Preference Shares~~ — The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At March 31, 2021 and December 31, 2020, there were ~~no preference shares issued or outstanding.~~

~~Class A Ordinary Shares~~ ~~— The Company is authorized to issue 450,000,000 Class A ordinary shares, with a par value of $0.0001~~exercisable at $11.50 per share. Holders of Class A ordinary shares are entitled to one vote for each share. At March 31, 2021 and December 31, 2020, there were 6,330,293 and 3,974,267 Class A ordinary shares issued and outstanding, excluding 25,669,707 and 28,025,733 Class A ordinary shares subject to possible redemption, respectively.

~~Class B Ordinary Shares~~ — The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class B ordinary shares are entitled to one vote for each share. At March 31, 2021 and December 31, 2020, there were 8,000,000 Class B ordinary shares issued and outstanding.

Only holders of the Class B ordinary shares will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares and Class B ordinary shares will vote together as a single class on all other matters submitted to a vote of shareholders, except as required by law.

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of a Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the Company’s management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one-to-one.

~~Note 8 - Derivative Warrant Liabilities~~

Until settlement, Public Warrants ~~may~~could only be exercised for a whole number of shares. NoNaN fractional shares ~~will~~would be issued upon exercise of the Public Warrants. The Public Warrants ~~will become~~became exercisable on ~~the later of (a) 30 days after the completion of a Business Combination and (b)~~September 29, 2021, one year from the closing of the ~~Initial~~Vector initial public offering.

Warrant Redemption

On December 22, 2021, the Company announced the planned redemption of all of its Public ~~Offering.~~ Warrants and Private Warrants. On January 20, 2022, the Company extended the redemption date of its public warrants to January 31, 2022. In connection with the redemption, Public Warrants were to be exercised by holders prior to January 31, 2022 either (i) in cash, at an exercise price of $11.50 per share of the Company’s common stock or (ii) on a cashless basis, for 0.2843 shares of common stock per Private Warrant and Public Warrant.

During the three months ended March 31, 2022, an aggregate of 10,383,077 Public Warrants were exercised on a cashless basis in exchange for the issuance of 2,951,781 shares and 10,969 Public Warrants were exercised for an aggregate of 10,969 shares of Company common stock at an exercise price of $11.50 per share, for aggregate cash proceeds to the Company of $126. At the conclusion of the redemption notice period on January 31, 2022, the remaining 270,470 Public Warrants issued and outstanding were redeemed at a price of $0.10 per warrant for aggregate cash payment from the Company of $27. On January 31, 2022, the Public Warrants were delisted from Nasdaq. In addition, during the three months ended March 31, 2022, the 5,600,000 Private Warrants were exercised on a cashless basis for an aggregate of 1,592,080 shares of the Company’s common stock.

The Public Warrants ~~will expire five years from the completion~~and Private Warrants were remeasured to fair value as of ~~a Business Combination or earlier upon redemption or liquidation.~~

~~The Company will not be obligated to deliver any Class A ordinary shares pursuant to~~ the exercise or redemption date, resulting in a gain of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise$13,482 for three months ended March 31, 2022.

Table of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.Contents

13.

LEASES

The Company has operating and finance leases for properties, vehicles and equipment. The Company’s leases have remaining lease terms of one year to twenty-eight years, some of which include options to extend the lease term, and some of which include options to terminate the lease prior to the end of the agreed upon lease term. For purposes of calculating lease liabilities, lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

In connection with the SolAero acquisition, the Company assumed finance leases in the aggregate of $16,174. There have been no other material changes in the Company’s lease portfolio since December 31, 2021.

14.

COMMITMENTS AND CONTINGENCIES

Litigation and Claims

The Company is, and from time to time may be, a party to claims and legal proceedings generally incidental to its business that are principally covered under contracts with its customers and insurance policies. In the opinion of management, there are no legal matters or claims likely to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Other Commitments

The Company has commitments under its lease obligations (see Note 13).

Contingencies

The Company records a contingent liability when it is both probable that a loss has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions.

On May 23, 2016, the Company entered into a launch services agreement with a customer to provide three commercial dedicated launches which would deliver the customer’s payloads over the period of 2017 through 2020. Per the terms of the agreement, each dedicated launch shall have a firm fixed price below current launch vehicle costs. During the year ended December 31, 2018, the Company determined that it was probable that the costs to provide the services as stipulated by the launch services agreement would exceed the fixed firm price of each launch. As such, the Company recorded a provision for contract loss for these three dedicated launches. During the year ended December 31, 2020, one of the three launches occurred. On April 21, 2021, the launch services agreement was amended, resulting in one additional launch and the potential for price increases on the second and third launches dependent on the customer’s desired payload configuration. The provision for contract losses outstanding as of March 31, 2022, which primarily is related to the remaining three remaining launches, was $6,207.

15.

INCOME TAXES

Income tax provision and the effective tax rate for the three months ended March 31, 2022 and 2021 were as follows:


	Three Months Ended March 31,
	2022			2021
Income tax provision	$	(4,388	)	$	(264	)
Effective tax rate		(19.7	)%		(1.7	)%

The tax provisions for the three months ended March 31, 2022 and 2021 were computed using the estimated effective tax rates applicable to each of the domestic and international taxable jurisdictions for the full year. The Company’s tax rate is subject to management’s quarterly review and revision, as necessary.

The annual effective tax rate differs from the federal statutory rate due primarily to a full valuation allowance in the United States and partially offset by recurring items such as foreign taxes based on local country statutory rates, the effect of stock-based compensation, and foreign withholding taxes, as well as by discrete items that may occur in any given year but are not consistent from year to year.

The Company is not currently under examination by the IRS, foreign or state and local tax authorities. Due to the net operating loss carryforwards, the Company remains subject to examination for U.S. federal and state jurisdictions for all years beginning with the year ended March 31, 2016. The Company’s foreign subsidiaries are generally subject to examination within four years from the end of the tax year during which the tax return was filed.

No significant changes in the Company’s unrecognized tax benefits are expected to occur within the next 12 months.

16.

NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during each period. While outstanding, each series of Preferred Stock was considered to be a participating security. Therefore, the Company applies the two-class method in calculating its net loss per share for periods when the Company generates net income. Net losses are not allocated to the Preferred Stockholders, as they were not contractually obligated to share in the Company’s losses.

The holder of each share of common stock has the right to one vote for each share and is entitled to notice of any stockholders’ meeting and to vote upon certain events.

Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common and dilutive common equivalent shares outstanding for the period using the treasury-stock method or the as-converted method, or two-class method for participating securities, whichever is more dilutive. Potentially dilutive shares are comprised of Preferred Stock, Preferred Stock warrants, common stock warrants, restricted stock units, stock options, and Earnout Shares issuable upon the achievement of the Stock Price Target (see Note 1). For the three months ended March 31, 2022 and 2021, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss and potentially dilutive shares being anti-dilutive.

The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
	2022			2021
Numerator
Net loss attributable to common stockholders-basic and diluted	$	(26,709	)	$	(15,882	)
Denominator
Weighted average common shares outstanding-basic and diluted		456,495,288			78,826,075
Net loss per share attributable to common stockholders-basic and diluted	$	(0.06	)	$	(0.20	)

The following equity shares were excluded from the calculation of diluted net loss per share attributable to common stockholders because their effect would have ~~required adjustment~~been anti-dilutive:


	March 31,
	2022		2021
Legacy Rocket Lab preferred stock		0		283,843,764
Legacy Rocket Lab preferred stock warrants		0		1,123,959
Legacy Rocket Lab common stock warrants		0		585,399
Stock options and restricted stock units		30,144,103		21,052,981

18.

RELATED PARTY TRANSACTIONS

There are three members of our board of directors that are affiliated with three separate entities that are invested in our common stock, two of which individually hold greater than 5% beneficial ownership. Each entity was granted one seat on our board which is filled by a partner of the affiliated entity. On September 14, 2018 and through subsequent closings, Rocket Lab sold an aggregate of 39,575,426 shares of its Series E convertible preferred stock for an aggregate purchase price of $137,739. In connection with this transaction, these entities acquired 3,028,345 of Series E convertible preferred stock for $10,539 and Rocket Lab entered into certain Amended and Restated Investors’ Rights Agreement, Amended and Restated Voting Agreement, and Amended and Restated First Refusal and Co-Sale Agreement with each of the purchasers of Rocket Lab’s Series E convertible preferred stock, and certain other Rocket Lab stockholders (collectively, the “Investor Agreements”). Such Investor Agreements were subsequently amended and restated in connection with Rocket Lab’s Series E-1 convertible preferred stock financing on May 18, 2020 whereby Rocket Lab sold an aggregate of 5,890,047 shares of its Series E-1 convertible preferred stock for an aggregate purchase price of $20,500. These entities with an affiliated director purchased 1,292,931 shares of Series E-1 convertible preferred stock for $4,499. In connection with the Business Combination, all of the convertible preferred stock was converted into shares of common stock.

As of March 31, 2022 and December 31, 2021, there are 0 amounts due to or from related parties.

~~ITEM~~

Item 2. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Vector Acquisition Corporation. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Vector Acquisition Partners, L.P. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

~~Special Note Regarding Forward-Looking Statements~~

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’sManagement’s Discussion and Analysis of Financial Condition and Results of ~~Operations” regarding the Company’s financial position, business strategy, the plans~~Operations.

The following discussion and ~~objectives~~analysis provides information that management believes is relevant to an assessment and understanding of ~~management for future~~our condensed consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. For additional context with which to understand our ability to complete our business combination with Rocket Lab USA, Inc. (“Rocket Lab”), are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations thereof and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performancefinancial condition and results ~~discussed in~~of operations, see the ~~forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking~~audited consolidated financial statements ~~please refer to Part I, Item 1A. Risk Factors~~and accompanying notes contained therein as of December 31, 2021 and 2020 and related notes in the Company’s Annual Report on Form 10-K ~~for the year ended December 31, 2021,~~as filed with the ~~Securities and Exchange Commission (the “SEC”)~~SEC on March 24, 2022. Certain amounts may not foot due to rounding. Certain information in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q contains forward-looking statements that involve numerous risks and uncertainties, including, but not limited to, those described under the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and Part II, Item 1A. “Risk Factors” included in this Quarterly Report on Form 10-Q and under the heading “Risk Factors” in our Annual Report on Form 10-K as filed with the SEC on March 24, 2022. We assume no obligation to update any of these forward-looking statements. Actual results may differ materially from those contained in any forward-looking statements.

Overview

Rocket Lab is an end-to-end space company with an established track record of mission success. We deliver reliable launch services, spacecraft design services, spacecraft components, spacecraft manufacturing and other spacecraft and on-orbit management solutions that make it faster, easier and more affordable to access space.

While our business has historically been centered on the development of small-class launch vehicles and the related sale of launch services, we are currently innovating in the areas of medium-class launch vehicles and launch services, space systems design and manufacturing, on-orbit management solutions, and space data applications. Each of these initiatives addresses a critical component of the end-to-end solution and our value proposition for the space economy:

•

Launch Services is the design, manufacture, and launch of orbital rockets to deploy payloads to various Earth orbits and interplanetary destinations.

•

Space Systems is the design and manufacture of spacecraft components and spacecraft program management services, space data applications and mission operations.

Electron is our orbital small launch vehicle that was designed from the ground up to accommodate a high launch rate business model to meet the growing and dynamic needs of our customers for small launch services. Since its maiden launch in 2017, Electron has become the leading small spacecraft launch vehicle delivering 110 spacecraft to orbit for government and commercial customers across 21 successful missions through March 31, 2022. In 2021, Electron was the second most frequently launched rocket by companies operating in the United States and established Rocket Lab as the fourth most frequent launcher globally. Our launch services program has seen us develop many industry-leading innovations, including 3D printed electric turbo-pump rocket engines, fully carbon composite first stage fuel tanks, a private orbital launch complex, a rocket stage that can be configured to convert into a highly capable spacecraft on orbit, and the potential ability to successfully recover a stage from space, providing a path to reusability.

In March 2021, we announced plans to develop our reusable-ready medium-capacity Neutron launch vehicle which will increase the payload capacity of our space launch vehicles to approximately 13,000 kg for launches to low Earth orbit and lighter payloads into higher orbits. Neutron will be tailored for commercial and U.S. government constellation launches and capable of human space flight, enabling us to provide crew and cargo resupply to the International Space Station. Neutron will also provide a dedicated service to orbit for larger civil, defense and commercial payloads that need a level of schedule control and high-flight cadence not available on large and heavy lift rocket rideshare programs. Neutron is expected to have the capability of launching nearly all of the spacecraft that we expect to be launched through 2029 and we expect to be able to leverage Electron’s flight heritage, various vehicle subsystems designs, launch complexes and ground station infrastructure.

Our space systems initiative is supported by the design and manufacture of a range of components, software and services for spacecraft, including reaction wheels, star trackers, magnetic torque rods, separation systems, solar solutions, command and control software and batteries, the Photon family of small spacecraft and has additional products in development to serve a wide variety of sub-system functions. We entered this market with our acquisition of leading spacecraft components manufacturer Sinclair Interplanetary, and have since expanded our market participation with the acquisitions of Planetary Systems Corporation, SolAero Holdings, Inc. and aerospace engineering firm Advanced Solutions, Inc., which brought incremental vertically-integrated capabilities for our own spacecraft and also enabled Rocket Lab to deliver high-volume manufacturing of critical spacecraft components and software solutions at scale prices to the broader spacecraft merchant market. The Photon family of small spacecraft, which are configurable for a range of low Earth orbit, medium Earth orbit, geosynchronous orbit and interplanetary missions enable us to offer an end-to-end mission solution encompassing launch, spacecraft, ground services and mission operations to provide customers with streamlined access to orbit with Rocket Lab as a single mission partner.

Recent Developments

SolAero Acquisition

On January 18, 2022, we closed on the acquisition (the “SolAero Acquisition”) of SolAero Holdings, Inc. (“SolAero”) pursuant to an Agreement and Plan of Merger (the “SolAero Merger Agreement”), dated as of December 10, 2021, by and among the Company, Supernova Acquisition Corp. (“SolAero Merger Sub”), SolAero, and Fortis Advisors LLC as stockholder representative, which provides for, among other things, the merger of SolAero Merger Sub with and into SolAero, with SolAero being the surviving corporation of the merger and a direct, our wholly owned subsidiary. Pursuant to the terms of the SolAero Merger Agreement, all of the issued and outstanding shares of SolAero were cancelled in exchange for aggregate consideration of $80.0 million in cash (the “SolAero Merger Consideration”). In addition, $3.6 million of the SolAero Merger Consideration was placed into escrow by us in order to secure recovery of any Adjustment Amount (as defined in the SolAero Merger Agreement) and as security against indemnity claims. In connection with the SolAero Acquisition, we entered into customary employment or consulting agreements with certain key employees of SolAero.

Neutron Production Complex

We broke ground on the construction of a state-of-the-art rocket production complex where our Neutron launch vehicle will be manufactured.

The 250,000 square foot Neutron production complex is being constructed on a 28-acre site adjacent to the NASA Wallops Flight Facility and Mid-Atlantic Regional Spaceport on Virginia’s Eastern Shore. The complex will support Neutron production, assembly, and integration, and is expected to bring up to 250 highly-skilled roles to the region. Construction will also soon begin on a launch pad for Neutron at the southern end of Wallops Island, near our existing launch pad for the Electron rocket.

Reorganization and Public Company Costs

Rocket Lab USA, Inc. entered into a merger agreement (the “Agreement”) with Vector Acquisition Corporation (“Vector”), on March 1, 2021, as amended by Amendment No. 1 thereto, filed with the SEC on May 3, 2021 (as so amended, the “Form 10-K”), as well as the “Risk Factors” section that will be included in the Company’s Registration Statement on Form S-4 relating to the Company’s business combination with Rocket Lab. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

~~Overview~~

We are a blank check company incorporated on July 28, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the sale of the private placement warrants, our shares, debt or a combination of cash, equity and debt.

~~We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.~~

~~Rocket Lab Business Combination~~

~~On March 1, 2021, we entered into an Agreement and Plan of Merger (as amended by Amendment No. 1 thereto~~ dated ~~as of~~ May 7, 2021 and as the same may be further amended or supplemented, the “Merger Agreement”) with Rocket Lab, and Prestige USA Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Rocket Lab (“Merger Sub”).Amendment No. 2 thereto, dated June 25, 2021. The ~~Merger Agreement and the~~ transactions contemplated ~~thereby~~by the terms of the Agreement were completed on August 25, 2021 (the “Business Combination”) ~~were unanimously approved by the boards of directors of each of the Company and~~, in conjunction with which Vector changed its name to Rocket ~~Lab.~~Lab USA, Inc.

~~In contemplation~~As a consequence of the Business Combination, we ~~will domesticate~~are a Nasdaq listed company, which requires us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a ~~Delaware corporation (the “Domestication” and the~~public company following the Domestication, “Vector Delaware”) and, in connection therewith, (a) the Class A ordinary shares and the Class B ordinary shares issued and outstanding immediately prior to the Domestication will convert into an equal number of shares of Class A common stock, par value $0.0001 per share, and Class B common stock, par value $0.0001 per share, of Vector Delaware, respectively (such shares of Class A common stock and Class B common stock, together the “Vector Delaware Common Stock”); (b) our warrants to purchase Class A ordinary shares issued and outstanding immediately prior to the Domestication will convert into an equal number of warrants to purchase Vector Delaware Class A common stock (the “Vector Delaware Warrants”) and (c) our units that have not been separated into Class A ordinary shares and warrants issued and outstanding immediately prior to the Domestication will convert into an equal number of units of Vector Delaware (the “Vector Delaware Units”).

~~The Merger Agreement further contemplates that the Business Combination will be effected through the following transactions:~~

●

concurrently with the Domestication, Rocket Lab will amend and restate its certificate of incorporation (the “Charter Amendment”), and in connection therewith, among other things, (i) each issued and outstanding share of preferred stock, par value $0.0001 per share, of Rocket Lab will convert into shares of common stock, par value $0.0001 per share, of Rocket Lab (the “Rocket Lab Common Stock”), in accordance with the terms thereof; (ii) each issued and outstanding share of Rocket Lab Common Stock (after giving effect to the conversion contemplated by clause (i)) will convert automatically into a number of shares of Rocket Lab Common Stock equal to the Exchange Ratio (as defined below) and (iii) each then issued and outstanding Rocket Lab warrant will convert into a new warrant of Rocket Lab (a “Rocket Lab New Warrant”) for, ~~a number of shares of Rocket Lab Common Stock and with the applicable exercise price per share determined in accordance with the Merger Agreement;~~

●	Rocket Lab will enter into redemption agreements with certain members of its management pursuant to which Rocket Lab will redeem from such individuals shares of Rocket Lab Common Stock (the “Management Redemption Shares”) for an aggregate purchase price not to exceed $40,000,000;

●

immediately following the First Effective Time, Rocket Lab will merge with and into Vector Delaware, with Vector Delaware surviving the merger (Vector Delaware as the surviving corporation, “New Rocket Lab” and such merger, the “Second Merger”), and in connection therewith, among other things, (i) the shares of Rocket Lab Common Stock (other than any treasury shares, shares held by Rocket Lab or dissenting shares) issued and outstanding immediately prior to the effective time of the Second Merger (the “Second Effective Time”) will convert into an equal number of shares of common stock, par value $0.0001 per share, of New Rocket Lab (the “New Rocket Lab Common Stock”); (ii) the Rocket Lab New Warrants and the Assumed Warrants outstanding and unexercised immediately prior to the Second Effective Time will convert into an equal number of warrants to purchase New Rocket Lab Common Stock; and (iii) each Assumed Unit that is outstanding immediately prior to the Second Effective Time will automatically be converted into a New Rocket Lab unit that, upon the closing of the Business Combination (the “Closing”), will be cancelled and will entitle the holder thereof to one share of New Rocket Lab Common Stock and one-third of one warrant, with each whole warrant representing the right to purchase one share of New Rocket Lab Common Stock.

~~The Business Combination is expected to close in the third quarter of 2021, subject to the satisfaction of certain customary closing conditions.~~

Concurrently with the execution of the Merger Agreement, we entered into subscription agreements (the “Subscription Agreements”) with certain investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to subscribe for and purchase, and we agreed to issue and sell to such PIPE Investors, immediately prior to Closing, an aggregate of 46,700,000 shares of New Rocket Lab Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $467,000,000 (the “PIPE Financing”). The closing of the PIPE Financing is contingent upon, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

Additionally, we expect our capital and operating expenditures will increase significantly in connection with ongoing activities as we:

•

increase our investment in marketing, advertising, sales and distribution infrastructure for our existing and future products and services;

•

develop additional new products and enhancements to existing products;

•

obtain, maintain and improve our operational, financial and management performance;

•

hire additional personnel;

•

obtain, maintain, expand and protect our intellectual property portfolio; and

•

operate as a public company.

Key Metrics and Select Financial Data

We monitor the ~~substantially concurrent consummation of the Business Combination.~~

~~Results of Operations~~

~~We have neither engaged~~following key financial and operational metrics that assist us in any operations nor generated any revenues to date. Our only activities from inception to March 31, 2021 were organizational activities, those necessary to prepare for the initial public offering, described below, and, after the initial public offering, identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion ofevaluating our business, ~~combination.~~ measuring our performance, identifying trends and making strategic decisions.

Launch Vehicle Build-Rate and Launch Cadence

We ~~generate non-operating income~~built approximately eight launch vehicles in ~~the form of interest income on marketable securities held~~2020 and approximately eight launch vehicles in ~~the trust account.~~2021. We ~~incur expenses~~anticipate we will build approximately twelve to fifteen launch vehicles in 2022. Although we experienced a negative impact in 2020 and 2021 as a result of the COVID-19 shutdowns and restrictions on our operations discussed in more detail below under “Key Factors Affecting Our Performance—Covid-19 Considerations,” we believe that the projected growth in build rate subsequent to such COVID-19 restrictions is a positive indicator of our ability to scale our manufacturing operations in support of our anticipated growth rate in revenue in the coming years.

We launched seven vehicles in 2020 and six vehicles in 2021. We have launched one vehicle through the three months ended March 31, 2022 and launched three vehicles through May 16, 2022. The number of launches is an indicator of our ability to convert mission awards into revenue in a timely manner and demonstrate the scalability of our launch operations. Growth rates between launches and total launch service revenue are not perfectly correlated because our total revenue is affected by other variables, such as the revenue per launch, which can vary considerably based on factors such as unique orbit and insertion requirements, payload handling needs, launch location, time sensitivity of mission completion and other factors. Although we experienced a negative impact in 2021 as a result of the COVID-19 shutdowns and restrictions on our operations discussed in more detail below under “Key Factors Affecting Our Performance—Covid-19 Considerations,” we believe that the projected growth in launch rate subsequent to such COVID-19 restrictions is a positive indicator of our ability to scale our launch operations in support of our anticipated growth rate in revenue in the coming years.

Revenue Growth

Three Months Ended March 31, 2022 and 2021

We generated $40.7 million and $18.2 million in revenue for the three months ended March 31, 2022 and 2021, respectively, representing a year-on-year increase in revenue of approximately 124%. This year-on-year increase primarily resulted from acquisitions that closed in the fourth quarter of 2021 and first quarter of 2022 and strength in our organic space system products and services.

Revenue Value Per Launch

Revenue value per launch represents the average revenue per launch contract attributable to launches that occurred during a period, regardless of when the revenue was recognized. Revenue value per launch can be a useful metric to provide insight into general competitiveness and price sensitivity in the marketplace. Revenue value per launch can vary considerably, based on factors such as unique orbit and insertion requirements, payload handling needs, launch location, time sensitivity of mission completion and other factors, and as such may not provide absolute clarity with regards to pricing and competitive dynamics in the marketplace.

Three Months Ended March 31, 2022 and 2021

In the three months ended March 31, 2022 and 2021, our revenue value per launch was $6.3 million and $7.8 million, respectively. Meanwhile, cost per launch was $7.5 million and $5.6 million for the three months ended March 31, 2022 and 2021, respectively. The increase in cost per launch in the three months ended March 31, 2022 was driven by stock-based compensation charges as well as lower manufacturing absorption.

Backlog

Backlog represents future revenues that we would recognize in connection with the completion of all contracts and purchase orders that have been entered into by our customers, excluding any customer options for future products or services that have not yet been exercised. Contracts for launch services and spacecraft builds typically include termination rights that may be exercised by customers upon advanced notice and payment of a specified termination fee. As of March 31, 2022, our backlog totaled $545.9 million. We expect to recognize approximately 41% of our backlog over the next 12 months and the remainder recognized thereafter.

Key Factors Affecting Our Performance

COVID-19 Considerations

In December 2019, COVID-19 surfaced in Wuhan, China. In response, the World Health Organization (“WHO”) declared a global emergency on January 30, 2020, and several countries initiated travel restrictions, closed borders and implemented social distancing directives, including “shelter-in-place” orders. On March 11, 2020, the WHO declared the COVID-19 outbreak a pandemic. As a result of the pandemic, the United States and New Zealand governments shut down various sectors of their respective economies. In the United States, we were deemed an essential service and were not required to shut down our United States’ based operations. In New Zealand, we had to delay certain scheduled launches to a later date. In addition to existing travel restrictions, some locales have imposed and continue to impose prolonged quarantines and further restrict travel, which has, at certain times, significantly impacted the ability of our employees to get to their places of work to produce products, made it such that we are unable to obtain certain long lead time components on a timely basis or at a cost-effective price, and significantly hampered our customers from traveling to our launch facilities to prepare payloads for launch. In response to the COVID-19 pandemic, and with the health and safety of all our employees and their families in mind, we took and continue to take precautionary measures intended to help minimize the risks of the virus, including temporarily requiring some employees to work remotely and implementing social distancing protocols for all work conducted onsite. In addition, we suspended non-essential travel worldwide for employees and is discouraging employee attendance at other gatherings.

The extent of COVID-19’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. At this time, it is not possible to determine the magnitude of the overall impact of COVID-19 on our business. However, it could have a material adverse effect on our business, financial condition, liquidity, results of operations and cash flows.

Rocket Lab has significant operations in Auckland, New Zealand, and while some employees were able to continue their work remotely, certain business operations that require direct labor and physical presence, such as vehicle integration and testing, were suspended during this and will be again under any other Level 4 Alerts. On December 2, 2021, New Zealand replaced the Alert Level system with the COVID-19 Protection Framework. The COVID-19 Protection Framework settings allow businesses to open and operate with greater flexibility while minimizing the virus’ spread. The extent of the COVID-19 pandemic’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are uncertain and difficult to predict considering the rapidly evolving landscape.

Ability to sell additional launch services, space systems service and spacecraft components to new and existing customers

Our results will be impacted by our ability to sell our launch services, space systems services, and spacecraft components to new and existing customers. We have successfully launched Electron 21 times delivering 110 spacecraft to orbit through March 31, 2022. Our spacecraft components have flown on more than 100 spacecraft and our family of Photon spacecraft has been selected for missions to the Moon, Mars and Venus. Our growth opportunity is dependent on our ability to expand our addressable launch services market with larger volumetric and higher mass payloads capabilities of our recently announced medium-capacity Neutron launch vehicle, which will address large commercial and government constellation launch opportunities. Our growth opportunity is also dependent on our ability to win spacecraft constellation missions and expand our portfolio of strategic spacecraft components. Our ability to sell additional products to existing customers is a key part of our success, as follow-on purchases indicate customer satisfaction and decrease the likelihood of competitive substitution. To sell additional products and services to new and existing customers, we will need to continue to invest significant resources in our products and services.

Ability to improve profit margins and scale our business

We intend to continue to invest in initiatives to improve our operating leverage and significantly ramp production. We believe continued reduction in costs and an increase in production volumes will enable the cost of launch vehicles to decline and expand our gross margins. Our ability to achieve our production-efficiency objectives could be negatively impacted by a variety of factors including, among other things, lower-than-expected facility utilization rates, manufacturing and production cost overruns, increased purchased material costs and unexpected supply-chain quality issues or interruptions.

Government expenditures and private enterprise investment into the space economy

Government expenditures and private enterprise investment has fueled the growth in our target markets. We expect the continued availability of government expenditures and private investment for our customers to help fund purchases of our products and services will remain. This is an important factor in our company’s growth prospects.

Components of Results of Operations

Revenue

Our revenues are derived from a combination of long-term fixed price contracts for launch services and spacecraft builds, and purchase order spacecraft components sales. Revenues from long-term contracts are recognized using either the “point-in-time” or “over-time” method of revenue recognition. Point-in-time revenue recognition results in cash payments being initially accrued to the balance sheet as deferred revenue as contractual milestones are accomplished and then recognized as revenue once the final contractual obligation is completed. Over-time revenue recognition is based on an input measure of progress based on costs incurred compared to estimated total costs at completion. Each project has a contractual revenue value and an estimated cost. The over-time revenue is recognized based on the percentage of the total project cost that has been realized.

Estimating future revenues and associated costs and profit is a process requiring a high degree of management judgment, including management’s assumptions regarding our future operational performance as well as general economic conditions. Frequently, the period of performance of a contract extends over a long period of time and, as such, revenue recognition and our profitability from a particular contract may be affected to the extent that estimated costs to complete are revised, delivery schedules are delayed, performance-based milestones are not achieved or progress under a contract is otherwise impeded. Accordingly, our recorded revenues and operating profit from period to period can fluctuate significantly depending on when the point-in-time or over-time contractual obligations are achieved. In the event cost estimates indicate a loss on a contract, the total amount of such loss is recorded in the period in which the loss is first estimated.

Cost of Revenues

Cost of revenues consists primarily of direct material and labor costs, manufacturing overhead, other personnel-related expenses, which include salaries, bonuses, benefits and stock-based compensation expense, reserves for estimated warranty costs, freight expense and depreciation expense. Cost of revenues also includes charges to write-down the carrying value of inventory when it exceeds its estimated net realizable value, including on-hand inventory that is either obsolete or in excess of forecasted demand. We expect our cost of revenues to increase in absolute dollars in future periods as we sell more launch services, space systems and components. As we grow into our current capacity and execute on cost-reduction initiatives, we expect our cost of revenues as a percentage of revenue to decrease over time.

Because direct labor costs and manufacturing overhead comprise more than 60% of cost of revenues, increasing our production rate resulting in greater absorption of these costs is our most critical cost reduction initiative. Increasing our production rate is a cross-functional effort involving manufacturing, engineering, supply chain and finance.

Operating Expenses

Our operating expenses consist of research and development and selling, general and administrative expenses.

Research and Development, net

Research and development expense consists primarily of personnel-related expenses, consulting and contractor expenses, validation and testing expense, prototype parts and materials and depreciation expense. We intend to continue to make significant investments in developing new products and enhancing existing products. Research and development expense will be variable relative to the number of products that are in development, validation or testing. However, we expect it to decline as a percentage of total revenue over time.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of personnel-related expenses for our sales, marketing, supply chain, finance, legal, human resources and administrative personnel, as well as the costs of customer service, information technology, professional services insurance, travel, allocated overhead and other marketing, communications and administrative expenses. We will continue to actively promote our products and therefore we expect to incur expenses related to sales and marketing. We also expect to further invest in our corporate organization and incur additional expenses associated with operating as a public company, ~~(for~~including increased legal ~~financial reporting,~~and accounting costs, investor relations costs, higher insurance premiums and ~~auditing compliance)~~compliance costs. As a result, we expect that selling, general and administrative expenses will increase in absolute dollars in future periods but decline as a percentage of total revenue over time.

Interest Expense, Net

Interest expense, net consists primarily of interest expense incurred on debt and interest income earned on our cash and cash equivalents and short-term investments balances.

Gain (Loss) on Foreign Exchange

Gain (loss) on foreign exchange relates to currency fluctuations that generate foreign exchange gains or losses on invoices denominated in currencies other than the United States (“U.S.”) Dollar.

Change in Fair Value of Liability Classified Warrants

Change in fair value of liability classified warrants relates to changes in the fair value of warrant liabilities.

Results of Operations

The following table sets forth our consolidated statements of operations information and data as a percentage of revenue for each of the periods indicated (in thousands, except percentages):


	Three Months Ended
	March 31, 2022						March 31, 2021
	$			%			$			%
Revenues	$	40,703			100.0	%	$	18,192			100.0	%
Cost of revenues		36,968			90.8	%		16,781			92.2	%
Gross profit		3,735			9.2	%		1,411			7.8	%
Operating expenses:
Research and development, net		13,477			33.1	%		7,078			38.9	%
Selling, general and administrative		23,078			56.7	%		6,624			36.4	%
Total operating expenses		36,555			89.8	%		13,702			75.3	%
Operating loss		(32,820	)		(80.6	)%		(12,291	)		(67.5	)%
Other income (expense):
Interest expense, net		(2,989	)		(7.3	)%		(127	)		(0.7	)%
Loss on foreign exchange		(20	)		0.0	%		(279	)		(1.5	)%
Change in fair value of liability classified warrants		13,482			33.1	%		(3,030	)		(16.7	)%
Other income, net		26			0.1	%		109			0.6	%
Total other income (expense), net		10,499			25.9	%		(3,327	)		(18.3	)%
Loss before income taxes		(22,321	)		(54.7	)%		(15,618	)		(85.8	)%
Provision for income taxes		(4,388	)		(10.8	)%		(264	)		(1.5	)%
Net loss	$	(26,709	)		(65.5	)%	$	(15,882	)		(87.3	)%

Comparison of the Three Months Ended March 31, 2022 and March 31, 2021

Revenues


	Three Months Ended March 31,
(in thousands, except percentages)	2022		2021		$ Change		% Change
Revenues	$	40,703	$	18,192	$	22,511		124	%

Revenue increased by $22.5 million, or 124%, for the three months ended March 31, 2022 as ~~well~~compared to the three months ended March 31, 2021. Launch services revenue was $6.6 million for the three months ended March 31, 2022, a decrease of $9.9 million, or 60%, primarily due to a lower launch cadence. Space systems revenue was $34.1 million for the three months ended March 31, 2022, an increase of $32.4 million, or 1,873% primarily due to full quarter contribution from PSC and ASI acquisitions that closed in the fourth quarter of 2021 and nearly full quarter contribution from SolAero that closed in the first quarter of 2022 and strength in our organic space system products and services.

Cost of Revenues


	Three Months Ended March 31,
(in thousands, except percentages)	2022		2021		$ Change		% Change
Cost of revenues	$	36,968	$	16,781	$	20,187		120	%

Cost of revenues increased by $20.2 million, or 120%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021. Launch Service cost of revenues was $7.3 million in the three months ended March 31, 2022, a decrease of $8.5 million or 54%, primarily due to a lower launch cadence. Space systems cost of revenue was $29.6 million in the three months ended March 31, 2022, an increase of $28.7 million or 3,138%, primarily driven by the acquisitions that closed in the fourth quarter of 2021 and first quarter of 2022. Cost of revenues were also impacted by an increase in stock-based compensation of $3.0 million. Cost of revenues for ~~due diligence expenses in connection with completing a business combination.~~the three months ended March 31, 2022 decreased to 91% of total revenue during the three months ended March 31, 2022 as compared to 92% during the three months ended March 31, 2021.

~~For~~Research and Development, Net


	Three Months Ended March 31,
(in thousands, except percentages)	2022		2021		$ Change		% Change
Research and development, net	$	13,477	$	7,078	$	6,399		90	%

Research and development expense increased by $6.4 million, or 90%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021, ~~we had~~primarily due to a ~~net loss of $23,560,263, which consisted of formation~~$4.6 million increase in stock-based compensation, Neutron development, and ~~operating expenses of $1,930,406 offset~~increased labor and prototype spend focused on broadening our spacecraft component product portfolio.

Selling, General and Administrative


	Three Months Ended March 31,
(in thousands, except percentages)	2022		2021		$ Change		% Change
Selling, general and administrative	$	23,078	$	6,624	$	16,454		248	%

Selling, general and administrative expense increased by ~~interest income on marketable securities held in~~$16.5 million, or 248%, for the ~~trust account of $4,810 and the change in fair value of warrant liabilities of $21,634,667.~~

~~Liquidity and Capital Resources~~

On September 29, 2020, we consummated our initial public offering of 30,000,000 units, at a price of $10.00 per unit, generating gross proceeds of $300,000,000. Simultaneously with the closing of our initial public offering, we consummated the sale of 5,333,333 private placement warrantsthree months ended March 31, 2022 as compared to ~~our Sponsor at a price of $1.50 per private placement warrant generating gross proceeds of $8,000,000.~~

On October 20, 2020, in connection with the underwriters’ election to partially exercise of their over-allotment option, we consummated the sale of an additional 2,000,000 units and the sale of an additional 266,667 private placement warrants, generating total gross proceeds of $20,400,000.

Following our initial public offering, the partial exercise of the over-allotment option and the sale of the private placement warrants, a total of $320,000,000 was placed in the trust account. We incurred $18,252,382 in transaction costs, including $6,400,000 of underwriting fees, $11,200,000 of deferred underwriting fees and $652,382 of other offering costs.

~~For~~ the three months ended March 31, 2021, primarily due to a $3.2 million increase in stock-based compensation, increased costs associated with being a public company including higher staff costs, facility related expense and third party services and a $2.5 million contingent consideration expense due to an adjustment in the estimated fair value of the earnout payment related to our recent PSC acquisition.

Interest Expense, Net


	Three Months Ended March 31,
(in thousands, except percentages)	2022			2021			$ Change			% Change
Interest expense, net	$	(2,989	)	$	(127	)	$	(2,862	)		2,254	%

Interest expense increased by $2.9 million, or 2,254%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021, primarily due to borrowings under our secured term loan agreement.

Loss on Foreign Exchange


	Three Months Ended March 31,
(in thousands, except percentages)	2022			2021			$ Change		% Change
Loss on foreign exchange	$	(20	)	$	(279	)	$	259		(93	)%

Loss on foreign exchange decreased by $0.3 million, or 93%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021, primarily due to fluctuations in the foreign exchange of the New Zealand Dollar and Canadian Dollar as compared to the U.S. Dollar.

Change in Fair Value of Liability Classified Warrants


	Three Months Ended March 31,
(in thousands, except percentages)	2022		2021			$ Change		% Change
Change in fair value of liability classified warrants	$	13,482	$	(3,030	)	$	16,512		(545	)%

Change in fair value of liability classified warrants income increased by $16.5 million, or 545%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021, primarily as a result of the change in fair value of liability classified warrants assumed in connection with the Business Combination and the preferred stock warrants which were exercised in 2021.

Other Income, Net


	Three Months Ended March 31,
(in thousands, except percentages)	2022		2021		$ Change			% Change
Other income, net	$	26	$	109	$	(83	)		(76	)%

Other income decreased by $0.1 million, or 76%, for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021.

Provision for Income Taxes


	Three Months Ended March 31,
(in thousands, except percentages)	2022			2021			$ Change			% Change
Provision for income taxes	$	(4,388	)	$	(264	)	$	(4,124	)		1,562	%

We recorded income tax provision of $4.4 million for the three months ended March 31, 2022 and a tax provision of $0.3 million for the three months ended March 31, 2021. The annual effective tax rate was (19.7)% for the three months ended March 31, 2022, compared to (1.7)% for the three months ended March 31, 2021. The annual effective tax rate differs from the federal statutory rate due primarily to a full valuation allowance in the U.S. and was partially offset by recurring items such as foreign taxes based on local country statutory rates, the effect of share-based compensation, and foreign withholding taxes, as well as by discrete items that may occur in any given year but are not consistent from year to year.

Liquidity and Capital Resources

Since inception, we have funded our operations with proceeds from sales of our capital stock, bank debt, research and development grant proceeds, and cash flows from the sale of our products and services. As of March 31, 2022, we had $603.1 million of cash and cash equivalents. Our primary requirements for liquidity and capital are investment in new products and technologies, the expansion of existing manufacturing facilities, working capital, debt service, acquisitions of complementary businesses, products or technologies and general corporate needs. Historically, these cash requirements have been met through the net proceeds we received through private sales of equity securities, borrowings under our credit facilities, net proceeds received in the Business Combination and payments received from customers.

We believe that our existing cash and cash equivalents and payments from customers will be sufficient to meet our working capital and capital expenditure needs for at least the next twelve months, although we may choose to take advantage of opportunistic capital raising or refinancing transactions at any time. We will continue to invest in increasing production and expanding our product offerings through acquisitions.

Our future capital requirements will depend on many factors, including our launch cadence, traction in the market with our space systems offerings, the expansion of sales and marketing activities, the timing and extent of spending to support product development efforts, the introduction of new and enhanced products, the continuing market adoption of our products, the timing and extent of additional capital expenditures to invest in existing and new office spaces and the number of acquisitions of complementary businesses, products or technologies we pursue, if any. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued product innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.

Indebtedness

Hercules Capital Secured Term Loan

On June 10, 2021, the Company entered into a $100 million secured term loan agreement with Hercules Capital, Inc. (the “Hercules Capital Secured Term Loan”) and borrowed the full amount under the secured term loan agreement. The term loan has a maturity date of June 1, 2024 and is secured by substantially all of the assets of the Company. Payments due for the term loan are interest-only until the maturity date with interest payable monthly in arrears. The outstanding principal bears (i) cash interest at the greater of (a) 8.15% or (b) 8.15% plus the prime rate minus 3.25% and (ii) payment-in-kind interest of 1.25% which is accrued and added to the outstanding principal balance. Prepayment of the outstanding principal is permitted under the loan agreement and subject to certain prepayment fees. In connection with the secured term loan, the Company paid an initial facility charge of $1 million and the Company will be required to pay an end of term charge of $3.25 million upon repayment of the loan. The secured term loan agreement contains customary representations, warranties, non-financial covenants, and events of default. The Company is in compliance with all debt covenants related to its long-term borrowings as of March 31, 2022. As of March 31, 2022, there was $100.8 million outstanding under the Hercules Capital Secured Term Loan, of which $2.8 million was classified as current in the Company’s condensed consolidated balance sheets, with the remainder classified as a long-term borrowing. As of March 31, 2022, the Company had no availability under the Hercules Capital Secured Term Loan.

Cash Flows

The following table summarizes our cash flows for the periods presented:


	Three Months Ended March 31,
(in thousands)	2022			2021
Net cash provided by (used in):
Operating activities	$	(26,339	)	$	(15,479	)
Investing activities		(71,830	)		(4,046	)
Financing activities		14,444			414
Effect of exchange rate changes		(574	)		517
Net decrease in cash, cash equivalents, and restricted cash	$	(84,299	)	$	(18,594	)

Cash Flows from Operating Activities

Net cash used in operating activities was ~~$440,450, which~~$26.3 million for the three months ended March 31, 2022 consisted of ~~our net~~$26.7 million in operating loss, ~~of $23,560,263 offset by a noncash charge derived from the change~~$6.9 million in ~~warrant liability of $21,634,667, interest earned on investment held~~non-cash expense and $6.6 million in cash used in operating assets and liabilities. Included in the ~~trust account of $4,810~~non-cash expense are $13.5 million in liability-classified warrant income, $12.0 million in stock-based compensation expense and ~~changes~~$6.1 million in depreciation and amortization. Included in the cash used in operating assets and liabilities ~~which provided $1,489,956 of cash~~are $9.1 million increase in inventory and a $5.6 million increase in accounts receivable, offset by a $10.7 million increase in contract liabilities.

Cash Flows from ~~operating activities.~~Investing Activities

~~As of~~Cash used in investing activities for the three months ended March 31, ~~2021, we had~~2022 of $71.8 million was primarily driven by cash paid for SolAero of $65.6 million and capital equipment and infrastructure investments ~~held~~of $6.2 million. These investments included the build-out of secure office and spacecraft manufacturing lab areas in ~~the trust account of $320,009,656. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account,~~our Long Beach, California headquarters, which interest shall be net of taxes payable and excluding deferred underwriting commissions, to complete our business combination. We may withdraw interest from the trust account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a business combination, the remaining proceeds held in the trust account will be used ~~as working capital~~ to ~~finance~~support classified government programs, Launch Complex 1 in Mahia, New Zealand, where we have now completed our second launch pad and are in process of adding additional support facilities to support launch operations and safety, and our propulsion development and test facility near Auckland, New Zealand, which consolidates and supports all Curie engine development and hot fire testing.

Cash Flows from Financing Activities

Cash provided by financing activities for the ~~operations of the target business or businesses, make other acquisitions and pursue our growth strategies.~~

Atthree months ended March 31, ~~2021, we had cash~~2022 of ~~$425,453 held outside~~$14.4 million was primarily related to $23.2 million of the trust account. We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. In the event that a business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts, but no proceeds from sale of employees restricted stock units to cover taxes, stock options and employee stock purchase plan, offset by $8.8 million of minimum tax withholdings paid on behalf of employees for restricted stock units.

Critical Accounting Policies and Estimates

There have been no material changes to our ~~trust account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant, at~~critical accounting policies and estimates as disclosed in our audited financial statements included in our Form 10-K filed with the ~~option of~~Securities and Exchange Commission on March 24, 2022.

Off-Balance Sheet Arrangements

We did not have during the ~~lender. The warrants would be identical to the private placement warrants.~~

Weperiods presented, and we do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a business combination are less than the actual amount necessary to do so, we maycurrently have, insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon completion of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination.

~~Off-Balance Sheet Financing Arrangements~~

~~We have no obligations, assets or liabilities, which would be considered~~any off-balance sheet arrangements, as of March 31, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

~~Contractual Obligations~~

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay our Sponsor a monthly fee of $10,000 for office space, administrative and support services, provided to the Company. We began incurring these fees on September 24, 2020 and will continue to incur these fees monthly until the earlier of the completion of a business combination or the Company’s liquidation.

The underwriters are entitled to a deferred fee of $0.35 per unit, or $11,200,000 in the aggregate (see Note 6). The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that we complete a business combination, subject to the terms of the underwriting agreement.

~~Critical Accounting Policies~~

The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have not identified any critical accounting policies.

~~Warrant Liability~~

~~We account for the warrants issued in connection with our initial public offering in accordance with the guidance contained in ASC 815-40~~defined under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The initial fair value of the warrants was estimated using a Monte Carlo simulation approach.applicable SEC rules.

~~Class A Ordinary Shares Subject to Possible Redemption~~

We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption is presented as temporary equity, outside of the shareholders’ equity section of our condensed balance sheets.

~~Net Income (Loss) Per Ordinary Share~~

We apply the two-class method in calculating earnings per share. Net income per ordinary share, basic and diluted for Class A redeemable ordinary shares is calculated by dividing the interest income earned on the trust account by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net loss per ordinary share, basic and diluted for Class B non-redeemable ordinary shares is calculated by dividing the net income (loss), less income attributable to Class A redeemable ordinary shares, by the weighted average number of Class B non-redeemable ordinary shares outstanding for the periods presented.

~~Recent Accounting Standards~~

~~Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.~~

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. We are currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

~~ITEM~~Item 3. ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in foreign currency exchange rates and interest rates.

Foreign Currency Exchange Risk

Our reporting currency is the U.S. dollar, and the functional currency of each of our subsidiaries is either its local currency. The assets and liabilities of each of our subsidiaries are translated into U.S. dollars at exchange rates in effect at each balance sheet date and operations accounts are translated using the average exchange rate for the relevant period. Decreases in the relative value of the U.S. dollar to other currencies may negatively affect revenue and other operating results as expressed in U.S. dollars. Foreign currency translation adjustments are accounted for as a component of accumulated other comprehensive income (loss) within stockholders’ equity. Gains or losses due to transactions in foreign currencies are reflected in the condensed consolidated statements of operations under the line item “Gain (Loss) in Foreign Exchange.” Materially all of our revenues are denominated in U.S. dollars and we have not engaged in the hedging of foreign currency risk to date, although we may choose to do so in the future. As such, a 10% or greater move in exchange rates versus the U.S. dollar could have a material impact on our financial results and position.

Interest Rate Risk

We had cash and cash equivalents of $603.1 million as of March 31, ~~2021,~~2022, comprised of operating accounts and money market instruments. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure.

Emerging Growth Company Status

In April 2012, the JOBS Act was enacted. Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, we ~~were~~will not be subject to ~~any market~~the same implementation timing for new or ~~interest rate risk. Following the consummation~~revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our ~~initial~~financials to those of other public offering, the net proceeds of our initial public offering, including amounts in the trust account, have been invested in U.S. government treasury obligations with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.companies more difficult.

Item 4. Controls and Procedures

~~ITEM 4. CONTROLS AND PROCEDURES~~

~~Evaluation~~Evaluation of Disclosure Controls and Procedures

~~Disclosure~~We maintain “disclosure controls ~~are~~and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed ~~with the objective of ensuring~~to ensure that information required to be disclosed in ~~our~~the reports ~~filed~~that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time ~~period~~periods specified in the SEC’s rules and ~~forms.~~forms and (2) accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Disclosure controls ~~are also~~and procedures include, without limitation, controls and procedures designed ~~with the objective of ensuring~~to ensure that such information is accumulated and communicated to our management, including ~~the chief~~our Chief Executive Officer (our principal executive ~~officer~~officer) and ~~chief~~Chief Financial Officer (our principal financial ~~officer,~~officer), as appropriate to allow timely decisions regarding required ~~disclosure. In connection with this Quarterly Report on Form 10-Q,~~disclosures.

As required by paragraph (b) of Rules 13a-15 and 15d-15 under the Exchange Act, our management, ~~evaluated,~~ with the participation of our ~~chief~~principal executive officer and ~~chief~~principal financial officer, ~~(our “Certifying Officers”),~~evaluated the effectiveness of our disclosure controls and procedures as of ~~March 31, 2021, pursuant to Rule 13a-15(b) under~~ the ~~Exchange Act.~~end of the period covered by this Quarterly Report on Form 10-Q. Based upon ~~that~~such evaluation, our principal executive officer and in light of the “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”) promulgated by the SEC on April 12, 2021 (the “SEC Staff Statement”), our Certifying Officersprincipal financial officer have concluded that ~~solely due to our restatement of our audited financial statements for the period from July 28, 2020 (inception) through December 31, 2020 to reclassify our warrants as described therein,~~ our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) were not effective as of March 31, ~~2021.~~

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives2022 as a result of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitationsmaterial weaknesses discussed below.

Previously Identified Material Weaknesses in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

~~Management’s Report on~~ Internal ~~Controls Over~~Control over Financial Reporting

In connection with the audit of Rocket Lab as of and for the year ended December 31, 2020, we previously identified material weaknesses in our internal control over financial reporting. The material weaknesses were related to management’s review of schedules and reconciliations, sufficiency of accounting resources and review, oversight of third-party specialists and controls over the segregation of duties and access to relevant financial reporting systems.

~~This Quarterly Report on Form 10-Q does not include~~In response to the material weaknesses, management completed the following remediation actions:

•

We began a ~~report of management’s~~formal risk assessment ~~regarding~~process to identify and evaluate risks relevant to financial reporting objectives.

•

We implemented a training program addressing internal control over financial reporting, ~~or an attestation report~~including educating control owners regarding the requirements of each control.

We determined that the material weaknesses continued to exist as of December 31, 2021. We have begun the process of, and we are focused on, designing and implementing effective internal controls measures to improve our internal control over financial reporting and remediate the material weakness. Our efforts include a number of actions:

•

We are actively recruiting additional personnel, in addition to engaging and utilizing third party consultants and specialists to supplement our internal resources and segregate key functions within our business processes, if appropriate;

•

We are designing and implementing additional review procedures within our accounting and finance department to provide more robust and comprehensive internal controls over financial reporting that address the relative financial statement assertions and risks of material misstatement within our business processes; and

•

We are designing and implementing information technology and application controls in our financially significant systems to address our relative information processing objectives.

While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement of our ~~independent registered public accounting firm due~~internal controls over financial reporting and will continue to ~~a transition period established by rules of the SEC for newly public companies.~~diligently review our internal control over financial reporting.

Changes in Internal Control over Financial Reporting

~~There were~~Other than as discussed above with respect to the remediation efforts for identified material weaknesses, there was no ~~changes~~change in our internal control over financial reporting ~~(as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)~~that occurred during the ~~most recent fiscal quarter~~period covered by this Quarterly Report on Form 10-Q that ~~have~~has materially affected, or ~~are~~is reasonably likely to materially affect, our internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, and have followed previous guidance and generally accepted accounting practices in accounting for our warrants, given the recent change in the SEC’s interpretation and guidance as set forth in the SEC Staff Statement, we plan to enhance these processes to better evaluate our research and understanding

Table of the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.Contents

PART ~~II -~~ II—OTHER INFORMATION

Item 1. Legal Proceedings

~~ITEM 1. LEGAL PROCEEDINGS.~~

ToFrom time to time, we may become involved in litigation relating to claims arising from the ~~knowledge~~ordinary course of ~~our~~business. Our management believes that there isare currently no ~~litigation currently~~claims or actions pending ~~or contemplated~~ against us, ~~any~~the ultimate disposition of which could have a material adverse effect on our ~~officers~~results of operations or ~~directors in their capacity as such or against any of our property.~~financial condition.

Item 1A. Risk Factors

~~ITEM 1A. RISK FACTORS.~~

~~Factors that could cause our actual results to differ materially~~There have been no material changes from ~~those in this report include~~ the risk factors ~~described~~previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, as filed with the ~~SEC on March 31, 2021, as amended by Amendment No. 1 thereto, filed with the SEC on May 3, 2021and the below risk factors. Any~~SEC.

Item 2. Recent Sales of ~~those factors could result in a significant or material adverse effect on our results~~Unregistered Securities and Use of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this report, other than as described below, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, as amended by Amendment No. 1 thereto. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.Proceeds

None.

Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results and thus may have an adverse effect on the market price of our securities.

On April 12, 2021, the SEC Staff issued the SEC Staff Statement. In the SEC Staff Statement, the SEC Staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our 10,666,667 Public Warrants and 5,600,000 Private Placement Warrants, and determined to classify the warrants as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings. As a result, included on our condensed balance sheet as of March 31, 2021 contained elsewhere in this Quarterly Report are derivative liabilities related to embedded features contained within our warrants. ASC 815, ~~Derivatives and Hedging~~, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities.

We have identified a material weakness in our internal control over financial reporting as of March 31, 2021. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

Following the issuance of the SEC Staff Statement, after consultation with our independent registered public accounting firm, management identified a material weakness in our internal control over financial reporting related to the accounting for the warrants issued in connection with our Initial Public Offering. Our internal control over financial reporting did not result in the proper accounting classification of the warrants, which, due to its impact on our financial statements, we determined to be a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

~~We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.~~

As a result of such material weakness, the change in accounting for our warrants, and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the material weakness in our internal control over financial reporting and the preparation of our financial statements. As of the date of this report, we have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a Business Combination.

~~ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.~~

On March 1, 2021, concurrently with the execution of the Merger Agreement, we entered into the Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors agreed to subscribe for and purchase, and we agreed to issue and sell to such PIPE Investors, immediately prior to Closing, an aggregate of 46,700,000 shares of New Rocket Lab Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $467,000,000. The closing of the PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination.

The securities that may be issued in connection with the Subscription Agreements will not be registered under the Securities Act, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

Item 3. Defaults Upon Senior Securities

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES.~~None.

~~None.~~

Item 4. Mine Safety Disclosures

~~ITEM 4. MINE SAFETY DISCLOSURES.~~None.

~~Not applicable.~~

Item 5. Other Information

~~ITEM 5. OTHER INFORMATION.~~None.

~~None.~~

~~ITEM~~Item 6. ~~EXHIBITS~~Exhibits



Exhibit Number	Description
31.1*	Certification of Principal Executive Officer pursuant to Exchange Act rules 13a-14 or 15d-14.

31.2*	Certification of Principal Financial Officer pursuant to Exchange Act rules 13a-14 or 15d-14.

32.1*†	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Exchange Act rules 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350.

101.INS*	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH*	Inline XBRL Taxonomy Extension Schema Document

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

† The ~~following exhibits are filed as part of, or incorporated by reference into,~~certification furnished in Exhibit 32.1 hereto is deemed to be furnished with this Quarterly Report on Form ~~10-Q.~~10-Q and will not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the Registrant specifically incorporates it by reference.

~~No.~~		~~Description of Exhibit~~
~~2.1~~		~~Agreement and Plan of Merger, dated as of March 1, 2021, among Vector Acquisition Corporation, Rocket Lab USA, Inc. and Prestige USA Merger Sub, Inc.~~⁽¹⁾
~~3.1~~		~~Second Amended and Restated Memorandum and Articles of Association~~ ⁽²⁾
~~4.1~~		~~Specimen Unit Certificate.~~⁽³⁾
~~4.2~~		~~Specimen Class A Ordinary Share Certificate.~~⁽³⁾
~~4.3~~		~~Specimen Warrant Certificate.~~⁽³⁾
~~4.4~~		~~Warrant Agreement, dated as of September 24, 2020, between Continental Stock Transfer & Trust Company and Vector Acquisition Corporation.~~⁽²⁾
~~10.1~~		~~Sponsor Letter Agreement, dated as of March 1 , 2021, between Vector Acquisition Corporation and Vector Acquisition Partners, L.P.~~⁽¹⁾
~~10.2~~		~~Form of Subscription Agreement.~~⁽¹⁾
~~10.3~~		~~Form of Transaction Support Agreement.~~⁽¹⁾
31.1*		~~Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
31.2*		~~Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
32.1**		~~Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~
32.2**		~~Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~
101.INS*		~~XBRL Instance Document~~
101.CAL*		~~XBRL Taxonomy Extension Calculation Linkbase Document~~
101.SCH*		~~XBRL Taxonomy Extension Schema Document~~
101.DEF*		~~XBRL Taxonomy Extension Definition Linkbase Document~~
101.LAB*		~~XBRL Taxonomy Extension Labels Linkbase Document~~
101.PRE*		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

*	~~Filed herewith.~~
**	~~Furnished.~~
⁽¹⁾	~~Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on March 1, 2021.~~
⁽²⁾	~~Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on September 30, 2020.~~
⁽³⁾	~~Incorporated by reference to the Company’s Amendment No. 1 to Registration Statement on Form S-1, filed with the SEC on September 18, 2020.~~

SIGNATURES

~~SIGNATURES~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	~~VECTOR ACQUISITION CORPORATION~~

~~Date: May 24, 2021~~		~~/s/~~ ~~Alex Slusky~~ ROCKET LAB USA, INC.
	~~Name:~~	~~Alex Slusky~~
May 16, 2022	~~Title:~~	By:	/s/ Peter Beck
			Peter Beck
			President, Chief Executive Officer and Chairman
			(Principal Executive Officer)

~~Date:~~ May ~~24, 2021~~16, 2022		By:	/s/ ~~David Baylor~~Adam Spice
	~~Name:~~	~~David Baylor~~	Adam Spice
	~~Title:~~		Chief Financial Officer
			(Principal Financial and Accounting Officer)

~~Cayman Islands~~		~~98-1550340~~

Delaware	98-1550340
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~One Market Street~~ ~~Steuart Tower, 23rd Floor~~ ~~San Francisco, CA~~		~~94105~~

3881 McGowen Street Long Beach, California	90808
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
~~Units, each consisting of one Class A Ordinary Share, $0.0001~~ Common Stock, par value ~~and one-third of one redeemable warrant~~$0.0001 per share	~~VACQU~~ RKLB	The ~~NASDAQ~~Nasdaq Stock Market LLC
~~Class A Ordinary Shares included as part of the units~~	~~VACQ~~	~~The NASDAQ Stock Market LLC~~
~~Redeemable warrants included as part of the units, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50~~	~~VACQW~~	~~The NASDAQ Stock Market LLC~~

			~~Page~~
~~PART I – FINANCIAL INFORMATION~~
			Page
~~Item 1.~~ PART I.	~~Financial Statements~~FINANCIAL INFORMATION		1 5
Item 1.	Condensed ~~Balance Sheet (unaudited)~~Consolidated Financial Statements		1 5
	Condensed ~~Statement~~Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	5
	Condensed Consolidated Statements of Operations ~~(unaudited)~~and Comprehensive Loss (Unaudited) for the Three Months Ended March 31, 2022 and 2021		2 6
	Condensed ~~Statement~~Consolidated Statements of Changes in ~~Shareholders’~~Redeemable Convertible Preferred Stock and Stockholders’ Equity ~~(unaudited)~~(Deficit) (Unaudited) for the Three Months Ended March 31, 2022 and 2021		3 7
	Condensed ~~Statement~~Consolidated Statements of Cash Flows ~~(unaudited)~~(Unaudited) for the Three Months Ended March 31, 2022 and 2021		4 8
	Notes to Condensed Consolidated Financial Statements ~~(unaudited)~~(Unaudited)		5 9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20 24

Item 3.	Quantitative and Qualitative Disclosures ~~about~~About Market Risk		25 32
Item 4.	Controls and Procedures		33
~~Item 4.~~ PART II.	~~Control and Procedures~~OTHER INFORMATION		25 35
Item 1.	Legal Proceedings		35
~~PART II – OTHER INFORMATION~~ Item 1A.	Risk Factors	35

~~Item 1.~~	~~Legal Proceedings~~		26

~~Item 1A.~~	~~Risk Factors~~		26

Item 2.	Unregistered Sales of Equity Securities ~~and Use of Proceeds~~		26 35

Item 3.	Defaults Upon Senior Securities		26 35

Item 4.	Mine Safety Disclosures		26 35
Item 5.	Other Information		35
Item 5.6.	~~Other Information~~Exhibits		26 35
Signatures
~~Item 6.~~	~~Exhibits~~		27

~~SIGNATURES~~			28 36

	March 31, 2021			December 31, 2020
	(Unaudited)

ASSETS
Current assets
Cash	$	425,453		$	865,903
Prepaid expenses		352,250			366,647

Total Current Assets		777,703			1,232,550
Investment held in Trust Account		320,009,656			320,004,846

TOTAL ASSETS	$	320,787,359		$	321,327,396

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accrued expenses	$	1,692,954		$	217,395
Total current liabilities		1,692,954			217,395
Warrant liabilities		46,197,334			24,562,667
Deferred underwriting fee payable		11,200,000			11,200,000

Total Liabilities		59,090,288			35,980,062

Commitments and Contingencies

Class A ordinary shares subject to possible redemption, 25,669,707 and 28,025,733 shares at March 31, 2021 and December 31, 2020 (at $10.00 per share), respectively		256,697,070			280,257,330

Shareholders’ Equity
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Class A ordinary shares, $0.0001 par value; 450,000,000 shares authorized; 6,330,293 and 3,974,267 shares issued and outstanding (excluding 25,669,707 and 28,025,733 shares subject to possible redemption) at March 31, 2021 and December 31, 2020, respectively		633			397
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 8,000,000 shares issued and outstanding at March 31, 2021 and December 31, 2020		800			800
Additional paid-in capital		40,900,782			17,340,758
Accumulated deficit		(35,902,214	)		(12,341,951	)

Total Shareholders’ Equity		5,000,001			5,000,004

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	320,787,359		$	321,327,396

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Table of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.Contents

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Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒


Formation and operating costs	$	1,930,406

Loss from operations		(1,930,406	)

Other income:
Interest earned on investment held in Trust Account		4,810
Change in fair value of warrant liabilities		(21,634,667	)

Net loss	$	(23,560,263	)

Weighted average shares outstanding of Class A redeemable ordinary shares		32,000,000

Basic and diluted net loss per share, Class A redeemable ordinary shares	$	(0.00	)

Weighted average shares outstanding of Class B non-redeemable ordinary shares		8,000,000

Basic and diluted net loss per share, Class B non-redeemable ordinary shares	$	(2.95	)

	Class A Ordinary Shares				Class B Ordinary Shares				Additional Paid in		Accumulated			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance — January 1, 2021		3,974,267	$	397		8,000,000	$	800	$	17,340,758	$	(12,341,951	)	$	5,000,004
Change in value Class A ordinary shares subject to possible redemption		2,356,026		236		—		—		23,560,024		—			23,560,260
Net loss		—		—		—		—		—		(23,560,263	)		(23,560,263	)

Balance — March 31, 2021		6,330,293	$	633		8,000,000	$	800	$	40,900,782	$	(35,902,214	)	$	5,000,001


	Redeemable Convertible Preferred Stock				Common Stock				Additional Paid-In		Accumulated			Other Comprehensive
	Shares		Amount		Shares		Amount		Capital		Deficit			Income		Total
December 31, 2021		0	$	0		450,180,479	$	45	$	1,002,106	$	(305,011	)	$	1,308	$	698,448
Net loss		—		—		—		—		—		(26,709	)		—		(26,709	)
Issuance of common stock under equity plans		—		—		7,883,569		1		1,019		—			—		1,020
Stock-based compensation		—		—		—		—		14,116		—			—		14,116
Common stock issued upon exercise of Public and Private Warrants		—		—		4,554,830		—		44,844		—			—		44,844
Issuance of common stock for acquisition		—		—		123,934		—		—		—			—		—
Other comprehensive income		—		—		—		—		—		—			876		876
March 31, 2022		0	$	0		462,742,812	$	46	$	1,062,085	$	(331,720	)	$	2,184	$	732,595

Cash Flows from Operating Activities:
Net loss	$	(23,560,263	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrant liabilities		21,634,667
Interest earned on investment held in Trust Account		(4,810	)
Changes in operating assets and liabilities:
Prepaid expenses		14,397
Accrued expenses		1,475,559

Net cash used in operating activities		(440,450	)

Net Change in Cash		(440,450	)
Cash — Beginning		865,903

Cash — Ending	$	425,453

Non-Cash Investing and Financing Activities:

Change in value of Class A ordinary shares subject to possible redemption	$	23,560,260

	Three Months Ended March 31, 2021
Redeemable Class A Ordinary Shares
Numerator: Earnings allocable to Redeemable Class A Ordinary Shares
Interest Income	$	4,810

Net Earnings	$	4,810
Denominator: Weighted Average Redeemable Class A Ordinary Shares
Redeemable Class A Ordinary Shares, Basic and Diluted		32,000,000
Earnings/Basic and Diluted Redeemable Class A Ordinary Shares	$	0.00

Non-Redeemable Class B Ordinary Shares
Numerator: Net Loss minus Redeemable Net Earnings
Net Loss	$	(23,560,263	)
Redeemable Net Earnings	$	(4,810	)

Non-Redeemable Net Loss	$	(23,565,073	)
Denominator: Weighted Average Non-Redeemable Class B Ordinary Shares
Non-Redeemable Class B Ordinary Shares, Basic and Diluted(1)		8,000,000
Loss/Basic and Diluted Non-Redeemable Class B Ordinary Shares	$	(2.95	)


Balance at December 31, 2021	$	43,308
Acquisition		15,488
Goodwill adjustment on acquisition		(29	)
Balance at March 31, 2022	$	58,767


	March 31, 2022
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Finite-Lived Intangible Assets
Developed Technology	$	55,065	$	(4,661	)	$	50,404
Capitalized software		9,240		(3,346	)		5,894
Customer relationships		16,173		(779	)		15,394
Non-compete		224		(108	)		116
Capitalized intellectual property		375		(93	)		282
Trademarks and tradenames		10,112		(305	)		9,807
Backlog		3,491		(475	)		3,016
Patents		104		0			104
Indefinite-Lived Intangible Assets
In-process Technology		2,600		0			2,600
Total	$	97,384	$	(9,767	)	$	87,617


2022 (for the remaining period)	$	9,956
2023		12,567
2024		10,942
2025		9,072
2026		8,903
Thereafter		33,577
Total	$	85,017

	~~Level 1:~~	Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

	~~Level 2:~~	Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

	~~Level 3:~~	~~Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.~~

Description	Level	March 31, 2021		December 31, 2020
Assets:
Cash and marketable securities held in Trust Account	1	$	320,009,656	$	320,004,846

Liabilities:
Warrant Liability – Public Warrants	1	$	30,293,334	$	16,106,667
Warrant Liability – Private Placement Warrants	2	$	15,904,000	$	8,456,000

	Private Placement		Public		Warrant Liabilities
January 1, 2021	$	8,456,000	$	16,106,667	$	24,562,667
Change in valuation inputs or other assumptions		7,448,000		14,186,667		21,634,667
Fair value as of March 31, 2021		15,904,000		30,293,334		46,197,334