Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 30, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Virgin Galactic Holdings, Inc. | |
Entity Central Index Key | 0001706946 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | SPCE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | true | |
Entity Common Stock, Shares Outstanding | 82,478,822 |
CONDENSED BALANCE SHEET
CONDENSED BALANCE SHEET - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 48,489 | $ 462,162 |
Prepaid expenses | 74,258 | 45,339 |
Total Current Assets | 122,747 | 507,501 |
Marketable securities held in Trust Account | 677,167,505 | 704,250,272 |
Total Assets | 677,290,252 | 704,757,773 |
Current Liabilities | ||
Accounts payable and accrued expenses | 5,479,951 | 200,529 |
Advances from related party | 1,725,813 | 381,675 |
Total Current Liabilities | 7,205,764 | 582,204 |
Deferred underwriting fees | 24,150,000 | 24,150,000 |
Total Liabilities | 31,355,764 | 24,732,204 |
Commitments | ||
Class A ordinary shares subject to possible redemption, 61,738,641 and 66,136,664 shares at redemption value at September 30, 2019 and December 31, 2018, respectively | 640,934,487 | 675,025,568 |
Shareholders' Equity | ||
Preferred shares, $0.0001 par value; 5,000,000 authorized; none issued and outstanding | 0 | 0 |
Retained earnings | 4,997,927 | 4,997,990 |
Total Shareholders' Equity | 5,000,001 | 5,000,001 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 677,290,252 | 704,757,773 |
Common Class A | ||
Shareholders' Equity | ||
Common Stock, Value, Issued | 349 | 286 |
Common Class B | ||
Shareholders' Equity | ||
Common Stock, Value, Issued | $ 1,725 | $ 1,725 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Class A | ||
Temporary Equity, Shares Subscribed but Unissued | 61,738,641 | 66,136,664 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 3,490,181 | 2,863,336 |
Common Stock, Shares, Outstanding | 3,490,181 | 2,863,336 |
Common Class B | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 17,250,000 | 17,250,000 |
Common Stock, Shares, Outstanding | 17,250,000 | 17,250,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||||
CONDENSED STATEMENTS OF OPERATIONS | ||||||||
Operating costs | $ 4,211,109 | $ 224,827 | $ 7,008,314 | $ 1,216,144 | ||||
Loss from operations | (4,211,109) | (224,827) | (7,008,314) | (1,216,144) | ||||
Other income: | ||||||||
Interest income on marketable securities held in Trust Account | 3,470,728 | 3,401,636 | 12,025,143 | 8,757,384 | ||||
Unrealized gain (loss) on marketable securities held in Trust Account | 258,197 | (139,893) | (11,825) | (305,184) | ||||
Other income, net | 3,728,925 | 3,261,743 | 12,013,318 | 8,452,200 | ||||
Net (loss) income | $ (482,184) | $ 3,036,916 | $ 5,005,004 | $ 7,236,056 | ||||
Weighted average shares outstanding, basic and diluted | [1] | 20,350,919 | 20,107,675 | 20,192,094 | 20,068,828 | |||
Basic and diluted loss per ordinary share | $ (0.20) | [2] | $ 0 | $ (0.32) | [2] | $ (0.04) | [2] | |
[1] | Excludes an aggregate of up to 61,738,641 and 66,133,484 shares subject to redemption at September 30, 2019 and 2018, respectively. | |||||||
[2] | Net loss per ordinary share - basic and diluted excludes income attributable to ordinary shares subject to redemption of $3,529,428 and $11,370,605 for the three and nine months ended September 30, 2019, respectively, and $3,126,381 and $8,101,434 for the three and nine months ended September 30, 2018, respectively. |
CONDENSED STATEMENTS OF OPERA_2
CONDENSED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
CONDENSED STATEMENTS OF OPERATIONS | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 61,738,641 | 66,133,484 | ||
Interest on Convertible Debt, Net of Tax | $ 3,529,428 | $ 3,126,381 | $ 11,370,605 | $ 8,101,434 |
CONDENSED STATEMENT OF CHANGES
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Common Stock [Member]Common Class A | Common Stock [Member]Common Class B | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2017 | $ 278 | $ 1,725 | $ 3,667,278 | $ 1,330,720 | $ 5,000,001 |
Balance (in shares) at Dec. 31, 2017 | 2,780,258 | 17,250,000 | |||
Change in value of ordinary shares subject to possible redemption | $ 4 | $ 0 | (1,758,028) | 0 | (1,758,024) |
Change in value of ordinary shares subject to possible redemption (in shares) | 37,441 | ||||
Net (loss) income | $ 0 | 0 | 0 | 1,758,024 | 1,758,024 |
Balance at Mar. 31, 2018 | $ 282 | $ 1,725 | 1,909,250 | 3,088,744 | 5,000,001 |
Balance (in shares) at Mar. 31, 2018 | 2,817,699 | 17,250,000 | |||
Balance at Dec. 31, 2017 | $ 278 | $ 1,725 | 3,667,278 | 1,330,720 | 5,000,001 |
Balance (in shares) at Dec. 31, 2017 | 2,780,258 | 17,250,000 | |||
Net (loss) income | 7,236,056 | ||||
Balance at Sep. 30, 2018 | $ 287 | $ 1,725 | 0 | 4,997,989 | 5,000,001 |
Balance (in shares) at Sep. 30, 2018 | 2,866,516 | 17,250,000 | |||
Balance at Mar. 31, 2018 | $ 282 | $ 1,725 | 1,909,250 | 3,088,744 | 5,000,001 |
Balance (in shares) at Mar. 31, 2018 | 2,817,699 | 17,250,000 | |||
Change in value of ordinary shares subject to possible redemption | $ 4 | $ 0 | (1,909,250) | (531,870) | (2,441,116) |
Change in value of ordinary shares subject to possible redemption (in shares) | 39,976 | ||||
Net (loss) income | $ 0 | 0 | 0 | 2,441,116 | 2,441,116 |
Balance at Jun. 30, 2018 | $ 286 | $ 1,725 | 0 | 4,997,990 | 5,000,001 |
Balance (in shares) at Jun. 30, 2018 | 2,857,675 | 17,250,000 | |||
Change in value of ordinary shares subject to possible redemption | $ 1 | $ 0 | 0 | (3,036,917) | (3,036,916) |
Change in value of ordinary shares subject to possible redemption (in shares) | 8,841 | 0 | |||
Net (loss) income | $ 0 | $ 0 | 0 | 3,036,916 | 3,036,916 |
Balance at Sep. 30, 2018 | $ 287 | $ 1,725 | 0 | 4,997,989 | 5,000,001 |
Balance (in shares) at Sep. 30, 2018 | 2,866,516 | 17,250,000 | |||
Balance at Dec. 31, 2018 | $ 286 | $ 1,725 | 0 | 4,997,990 | 5,000,001 |
Balance (in shares) at Dec. 31, 2018 | 2,863,336 | 17,250,000 | |||
Change in value of ordinary shares subject to possible redemption | $ 0 | $ 0 | 0 | (4,042,995) | (4,042,995) |
Change in value of ordinary shares subject to possible redemption (in shares) | (3,921) | ||||
Net (loss) income | $ 0 | 0 | 0 | 4,042,995 | 4,042,995 |
Balance at Mar. 31, 2019 | $ 286 | $ 1,725 | 0 | 4,997,990 | 5,000,001 |
Balance (in shares) at Mar. 31, 2019 | 2,859,415 | 17,250,000 | |||
Balance at Dec. 31, 2018 | $ 286 | $ 1,725 | 0 | 4,997,990 | 5,000,001 |
Balance (in shares) at Dec. 31, 2018 | 2,863,336 | 17,250,000 | |||
Net (loss) income | 5,005,004 | ||||
Balance at Sep. 30, 2019 | $ 349 | $ 1,725 | 0 | 4,997,927 | 5,000,001 |
Balance (in shares) at Sep. 30, 2019 | 3,490,181 | 17,250,000 | |||
Balance at Mar. 31, 2019 | $ 286 | $ 1,725 | 0 | 4,997,990 | 5,000,001 |
Balance (in shares) at Mar. 31, 2019 | 2,859,415 | 17,250,000 | |||
Change in value of ordinary shares subject to possible redemption | $ 24 | $ 0 | 0 | (1,444,217) | (1,444,193) |
Change in value of ordinary shares subject to possible redemption (in shares) | 241,504 | ||||
Net (loss) income | $ 0 | 0 | 0 | 1,444,193 | 1,444,193 |
Balance at Jun. 30, 2019 | $ 310 | $ 1,725 | 0 | 4,997,966 | 5,000,001 |
Balance (in shares) at Jun. 30, 2019 | 3,100,919 | 17,250,000 | |||
Change in value of ordinary shares subject to possible redemption | $ 39 | $ 0 | 0 | 482,145 | 482,184 |
Change in value of ordinary shares subject to possible redemption (in shares) | 389,262 | ||||
Net (loss) income | $ 0 | 0 | 0 | (482,184) | (482,184) |
Balance at Sep. 30, 2019 | $ 349 | $ 1,725 | $ 0 | $ 4,997,927 | $ 5,000,001 |
Balance (in shares) at Sep. 30, 2019 | 3,490,181 | 17,250,000 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net (loss) income | $ 5,005,004 | $ 7,236,056 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Interest earned on marketable securities held in Trust Account | (12,025,143) | (8,757,384) |
Unrealized loss on marketable securities held in Trust Account | 11,825 | 305,184 |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (28,919) | 190,515 |
Accounts payable and accrued expenses | 5,279,422 | 227,253 |
Net cash used in operating activities | (1,757,811) | (798,376) |
Cash flows from investing activities: | ||
Cash withdrawn from Trust Account in connection with redemptions | 39,096,085 | 0 |
Net cash provided by investing activities | 39,096,085 | 0 |
Cash flows from financing activities: | ||
Receipt of amounts due from underwriter | 0 | 657,138 |
Advances from related party | 1,344,138 | 376,068 |
Redemption of common shares | (39,096,085) | 0 |
Repayment of advances from related party | 0 | (126,378) |
Net cash (used in) provided by financing activities | (37,751,947) | 906,828 |
Net change in cash | (413,673) | 108,452 |
Cash at beginning of period | 462,162 | 696,382 |
Cash at ending of period | 48,489 | 804,834 |
Non-cash investing and financing activities: | ||
Change in value of ordinary shares subject to possible redemption | $ 5,005,004 | $ 7,236,056 |
ORGANIZATION AND PLAN OF BUSINE
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | 9 Months Ended |
Sep. 30, 2019 | |
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | |
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS | NOTE 1. ORGANIZATION AND PLAN OF BUSINESS OPERATIONS As of September 30, 2019, Social Capital Hedosophia Holdings Corp. (the “Company”) was a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). All activity from May 5, 2017 (inception) through September 30, 2019 related to the Company’s formation, the Company’s initial public offering of 69,000,000 units (the “Public Offering”), the simultaneous sale of 8,000,000 warrants (“Private Placement Warrants”) in a private placement (the “Private Placement”) at a price of $1.50 per warrant to SCH Sponsor Corp. (the “Sponsor”), identifying a target company for a Business Combination and activities in connection with the Virgin Galactic Business Combination (as defined below), as more fully described in Note 5. On September 9, 2019, in connection with its Extraordinary General Meeting held on September 9, 2019, the Company’s shareholders approved to extend the period of time for which the Company is required to consummate a Business Combination from September 18, 2019 to December 18, 2019. In connection therewith, the shareholders elected to redeem an aggregate of 3,771,178 shares of the Company’s Class A ordinary shares. As a result, an aggregate of approximately $39,100,000 (or approximately $10.367 per share) was removed from the Company’s Trust Account to pay such shareholders, leaving approximately $677,200,000 in the Trust Account. On October 25, 2019, the Company filed a notice of deregistration with the Cayman Islands Registrar of Companies and concurrently filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which the Company was domesticated and continues as a Delaware corporation, changing its name to “Virgin Galactic Holdings, Inc.” (the “Domestication”). In connection with the Domestication, each issued and outstanding Class A ordinary share, par value $0.0001 per share, of the Company was converted, on a one-for-one basis, into a share of common stock, par value $0.0001 per share. Each of issued and outstanding Class B ordinary share, par value $0.0001 per share, of the Company was converted, on a one-for-one basis, into a share of common stock; provided, however, that with respect to the Class B ordinary shares of the Company held by the Sponsor, the Sponsor instead received upon the conversion of the Class B ordinary shares held by it 15,750,000 shares of common stock. In connection with the mergers of the Merger Subs (as defined below) with the VG Companies (as defined below), all outstanding shares of common stock or limited liability company interests were cancelled in exchange for the right to receive 130,000,000 shares of the Company’s common stock for an aggregate merger consideration of $1.3 billion. Vieco US elected for the Company to repurchase 5,209,562 shares of the Company’s common stock from Vieco US at a purchase price of $10.00 per share. |
LIQUIDITY
LIQUIDITY | 9 Months Ended |
Sep. 30, 2019 | |
LIQUIDITY | |
LIQUIDITY | NOTE 2. LIQUIDITY As of September 30, 2019, the Company had principally financed its operations from inception using proceeds from the sale of its equity securities to its shareholders prior to the Public Offering and such amount of proceeds from the Public Offering that were placed in an account outside of the Trust Account (as defined below) for working capital purposes. In connection with the closing of the Offering and the Private Placement on September 18, 2017, an amount of $690,000,000 (or $10.00 per Class A ordinary share sold to the public in the Offering included in the Units) from the sale of the Units and Private Placement Warrants was placed in a trust account (the “Trust Account”). As of September 30, 2019, the Company had $48,489 in its operating bank accounts, $677,167,505 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and a working capital deficit of $7,083,017, which includes the deferral of approximately $1,726,000 of payments until the consummation of a Business Combination. Until the consummation of a Business Combination, the Company used the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. 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, 2018 as filed with the SEC on March 18, 2019, which contains the audited financial statements and notes thereto, as well as the Company’s Current Report on Form 8-K and Current Report on Form 8-K/A, each filed on October 29, 2019, relating to the consummation of the Virgin Galactic Business Combination. The financial information as of December 31, 2018 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Use of Estimates The preparation of financial statements in conformity with GAAP requires 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect 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 actual results could differ from those estimates. Net Loss per Ordinary Share Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption at September 30, 2019 and 2018, which were not then redeemable and not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Public Offering and Private Placement to purchase 31,000,000 Class A ordinary shares in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted loss per ordinary share is the same as basic loss per ordinary share for the periods presented. Reconciliation of Net Loss per Ordinary Share The Company’s net income is adjusted for the portion of income that is attributable to ordinary shares subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per ordinary share is calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net (loss) income $ (482,184) $ 3,036,916 $ 5,005,004 $ 7,236,056 Less: Income attributable to ordinary shares subject to possible redemption (3,529,428) (3,126,381) (11,370,605) (8,101,434) Adjusted net loss $ (4,011,612) $ (89,465) $ (6,365,601) $ (865,378) Weighted average shares outstanding, basic and diluted 20,350,919 20,107,675 20,192,094 20,068,828 Basic and diluted net loss per ordinary share $ (0.20) $ — $ (0.32) $ (0.04) Recent accounting pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 4. RELATED PARTY TRANSACTIONS Advance from Related Party During the nine months ended September 30, 2019 and the year ended December 31, 2018, a related party advanced an aggregate of $1,344,138 and $381,675, respectively, for working capital purposes. The advances are non-interest bearing, unsecured and due on demand. As of September 30, 2019, and December 31, 2018, outstanding advances amounted to $1,725,813 and $381,675, respectively. The advances from related party were repaid in connection with the consummation of the Virgin Galactic Business Combination. Administrative Services Agreement The Company entered into an agreement whereby, commencing on September 18, 2017 through the earlier of the consummation of a Business Combination or the Company’s liquidation, the Company will pay an affiliate of the Sponsor a monthly fee of $10,000 for office space and administrative and support services. For each of the three and nine months ended September 30, 2019 and 2018, the Company incurred $30,000 and $90,000 in fees for these services. At September 30, 2019 and December 31, 2018, fees amounting to $245,000 and $155,000, respectively, are included in accounts payable and accrued expenses in the accompanying condensed balance sheets. Related Party Loans In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, the Company’s Sponsor or an affiliate of 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 (other than the Sponsor’s commitment to provide the Company an aggregate of $200,000 in loans in order to finance transaction costs in connection with a Business Combination). In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants of the post business combination entity at a price of $1.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. All outstanding loans were repaid in connection with the consummation of the Virgin Galactic Business Combination. |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2019 | |
COMMITMENTS | |
COMMITMENTS | NOTE 5. COMMITMENTS The underwriters of the Company’s Public Offering were entitled to a deferred fee of three and one-half percent (3.5%) of the gross proceeds of the Public Offering, or $24,150,000, payable upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement entered into in connection with the Public Offering. At completion of the Virgin Galactic Business Combination, the Company paid the deferred underwriting commission. The underwriters agreed to reimburse the Company for an amount equal to 10% of the discount paid to the underwriters for financial advisory services provided by Connaught (UK) Limited in connection with the Public Offering, of which $1,000,000 was paid at the closing of the Public Offering and $2,415,000 was paid at the closing of the Virgin Galactic Business Combination. As of September 30, 2019, the Sponsor, the holders of the Private Placement Warrants (or underlying Class A ordinary shares) and the holders of any warrants (or underlying Class A ordinary shares) issued upon conversion of working capital loans made by the Company’s Sponsor, officers, directors or their affiliates, if any such loans are issued, were entitled to registration rights with respect to their securities pursuant to an agreement dated as of September 13, 2017. The holders of 30% of the registrable securities were entitled to demand that the Company register these securities. In addition, the holders had certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a Business Combination. No working capital loans were converted to warrants in connection with the consummation of the virgin Galactic Business Combination. Merger Agreement On July 9, 2019, as amended on October 2, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Vieco USA, Inc., a Delaware corporation (“Vieco US”), Vieco 10 Limited, a company limited by shares under the laws of the British Virgin Islands (“V10”), Foundation Sub 1, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub A”), Foundation Sub 2, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub B”), Foundation Sub LLC, a Delaware limited liability company and a direct wholly owned subsidiary of the Company (“Merger Sub LLC” and, collectively with Merger Sub A and Merger Sub B, the “Merger Subs”), TSC Vehicle Holdings, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Vieco US (“Company A”), Virgin Galactic Vehicle Holdings, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Vieco US (“Company B”), and VGH, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of Vieco US (“Company LLC” and, collectively with Company A and Company B, the “VG Companies”). On October 25, 2019, as contemplated by the Merger Agreement and following approval by the Company’s shareholders at an extraordinary general meeting held October 23, 2019: · the Company filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of the State of Delaware, under which the Company was domesticated and continues as a Delaware corporation, changing its name to “Virgin Galactic Holdings, Inc.” (the “Domestication”); · all outstanding shares of common stock or limited liability company interests, as applicable, of each of the VG Companies were cancelled in exchange for the right to receive 130,000,000 shares of the Company’s common stock (at a deemed value of $10.00 per share) for an aggregate merger consideration of $1.3 billion (the “Aggregate Merger Consideration”) and (x) Merger Sub A merged with and into Company A, the separate corporate existence of Merger Sub A ceasing and Company A being the surviving corporation and a wholly owned subsidiary of the Company, (y) Merger Sub B, merged with and into Company B, the separate corporate existence of Merger Sub B ceasing and Company B being the surviving corporation and a wholly owned subsidiary of the Company and (z) Merger Sub LLC merged with and into Company LLC, the separate company existence of Merger Sub LLC ceasing and Company LLC being the surviving company and a wholly owned subsidiary of the Company (collectively referred to as the “Mergers” and together with the Domestication, the “Virgin Galactic Business Combination”); and · Vieco US elected for the Company to repurchase 5,209,562 shares of the Company’s common stock from Vieco US at a purchase price of $10.00 per share (the “Repurchase”). In connection with the consummation of the Virgin Galactic Business Combination, each issued and outstanding Class A ordinary share, par value $0.0001 per share, of the Company was converted, on a one-for-one basis, into a share of common stock, par value $0.0001 per share. Each of issued and outstanding Class B ordinary share, par value $0.0001 per share, of the Company was converted, on a one-for-one basis, into a share of common stock; provided, however, that with respect to the Class B ordinary shares of the Company held by the Sponsor, the Sponsor instead received upon the conversion of the Class B ordinary shares held by it 15,750,000 shares of common stock. Purchase Agreement Pursuant to the Purchase Agreement entered into on July 9, 2019, as supplemented by the Assignment, Consent and Waiver Agreement, dated as of October 2, 2019, by and among Chamath Palihapitiya, Vieco US, the Company and V10 (the “Purchase Agreement”), Chamath Palihapitiya, the chief executive officer of the Company prior to the consummation of the Virgin Galactic Business Combination, purchased (concurrently with the consummation of the Mergers) 10,000,000 shares of common stock of the Company from Vieco US at a price of $10.00 per share in cash. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2019 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | NOTE 6. SHAREHOLDERS’ EQUITY Preferred Shares As of September 30, 2019 the Company was authorized to issue 5,000,000 preferred shares with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. As of September 30, 2019 and December 31, 2018, there were no preferred shares issued or outstanding. The certificate of incorporation filed in connection with the consummation of the Virgin Galactic Business Combination authorizes 10,000,000 shares of preferred stock, par value $0.0001 per share, with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. Ordinary Shares As of September 30, 2019, the Company was authorized to issue 500,000,000 Class A ordinary shares and 50,000,000 Class B ordinary shares, both with a par value of $0.0001 per share. At September 30, 2019 and December 31, 2018, there were 3,490,181 and 2,863,336 Class A ordinary shares issued and outstanding, excluding 61,738,641 and 66,136,664 Class A ordinary shares subject to possible redemption, respectively. At September 30, 2019 and December 31, 2018, 17,250,000 Class B ordinary shares were issued and outstanding. The certificate of incorporation filed in connection with the consummation of the Virgin Galactic Business Combination authorizes 700,000,000 shares of common stock, par value $0.0001 per share. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2019 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 7. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: 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. The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at September 30, 2019 and December 31, 2018, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: September 30, December 31, Description Level 2019 2018 Assets: Marketable securities held in Trust Account 1 $ 677,167,505 $ 704,250,272 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 8. SUBSEQUENT EVENTS The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed financial statements were issued. Other than as described in Note 1, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. 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, 2018 as filed with the SEC on March 18, 2019, which contains the audited financial statements and notes thereto, as well as the Company’s Current Report on Form 8-K and Current Report on Form 8-K/A, each filed on October 29, 2019, relating to the consummation of the Virgin Galactic Business Combination. The financial information as of December 31, 2018 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect 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 actual results could differ from those estimates. |
Net Loss per Ordinary Share | Net Loss per Ordinary Share Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding for the period. The Company applies the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption at September 30, 2019 and 2018, which were not then redeemable and not redeemable at fair value, have been excluded from the calculation of basic loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Public Offering and Private Placement to purchase 31,000,000 Class A ordinary shares in the calculation of diluted loss per share, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted loss per ordinary share is the same as basic loss per ordinary share for the periods presented. Reconciliation of Net Loss per Ordinary Share The Company’s net income is adjusted for the portion of income that is attributable to ordinary shares subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per ordinary share is calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net (loss) income $ (482,184) $ 3,036,916 $ 5,005,004 $ 7,236,056 Less: Income attributable to ordinary shares subject to possible redemption (3,529,428) (3,126,381) (11,370,605) (8,101,434) Adjusted net loss $ (4,011,612) $ (89,465) $ (6,365,601) $ (865,378) Weighted average shares outstanding, basic and diluted 20,350,919 20,107,675 20,192,094 20,068,828 Basic and diluted net loss per ordinary share $ (0.20) $ — $ (0.32) $ (0.04) |
Recent accounting pronouncements | Recent accounting pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of basic and diluted loss per ordinary share | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net (loss) income $ (482,184) $ 3,036,916 $ 5,005,004 $ 7,236,056 Less: Income attributable to ordinary shares subject to possible redemption (3,529,428) (3,126,381) (11,370,605) (8,101,434) Adjusted net loss $ (4,011,612) $ (89,465) $ (6,365,601) $ (865,378) Weighted average shares outstanding, basic and diluted 20,350,919 20,107,675 20,192,094 20,068,828 Basic and diluted net loss per ordinary share $ (0.20) $ — $ (0.32) $ (0.04) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets measured at fair value on a recurring basis | September 30, December 31, Description Level 2019 2018 Assets: Marketable securities held in Trust Account 1 $ 677,167,505 $ 704,250,272 |
ORGANIZATION AND PLAN OF BUSI_2
ORGANIZATION AND PLAN OF BUSINESS OPERATIONS (Details) | Oct. 25, 2019USD ($)$ / sharesshares | Sep. 09, 2019USD ($)$ / sharesshares | May 05, 2017$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Dec. 31, 2018$ / sharesshares |
Sale of Stock, Number of Shares Issued in Transaction | 69,000,000 | 69,000,000 | ||||
Cash withdrawn from Trust Account in connection with redemptions | $ | $ 39,096,085 | $ 0 | ||||
Subsequent Events | Merger Agreement | ||||||
Right to receive shares of common stock | 130,000,000 | |||||
Aggregate merger consideration | $ | $ 1,300,000,000 | |||||
Number of shares repurchased or redeemed | 5,209,562 | |||||
Price per share | $ / shares | $ 10 | |||||
Ordinary share, par value | $ / shares | 0.0001 | |||||
Private Placement Warrants [Member] | ||||||
Class of Warrant or Right, Numbers Issued | 8,000,000 | 8,000,000 | ||||
Class of Warrant or Right, Per Warrant | $ / shares | $ 1.50 | $ 1.50 | ||||
Common Class A | ||||||
Cash withdrawn from Trust Account in connection with redemptions | $ | $ 39,100,000 | |||||
Cash withdrawn from Trust Account in connection with redemptions (in dollars per share) | $ / shares | $ 10.367 | |||||
Amount held in trust account | $ | $ 677,200,000 | |||||
Number of shares repurchased or redeemed | 3,771,178 | |||||
Ordinary share, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Common Stock, Shares, Issued | 3,490,181 | 2,863,336 | ||||
Common Stock, Shares, Outstanding | 3,490,181 | 2,863,336 | ||||
Common Class A | Subsequent Events | Merger Agreement | ||||||
Ordinary share, par value | $ / shares | $ 0.0001 | |||||
Conversion ratio | 1 | |||||
Common Class B | ||||||
Ordinary share, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Common Stock, Shares, Issued | 17,250,000 | 17,250,000 | ||||
Common Stock, Shares, Outstanding | 17,250,000 | 17,250,000 | ||||
Common Class B | Subsequent Events | Merger Agreement | ||||||
Ordinary share, par value | $ / shares | $ 0.0001 | |||||
Conversion ratio | 1 | |||||
Common Stock, Shares, Issued | 15,750,000 | |||||
Common Stock, Shares, Outstanding | 15,750,000 |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) | 1 Months Ended | ||||
Sep. 18, 2017 | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Cash and Cash Equivalents, at Carrying Value | $ 48,489 | $ 462,162 | $ 804,834 | $ 696,382 | |
Marketable Securities, Current | 677,167,505 | ||||
Working Capital | 7,083,017 | ||||
Business Combination Of Deferral Payment | $ 1,726,000 | ||||
Common Class A | |||||
Proceeds from Issuance Initial Public Offering | $ 690,000,000 | ||||
Sale of Stock, Price Per Share | $ 10 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Net (loss) income | $ (482,184) | $ 1,444,193 | $ 4,042,995 | $ 3,036,916 | $ 2,441,116 | $ 1,758,024 | $ 5,005,004 | $ 7,236,056 | ||||
Less: Income attributable to ordinary shares subject to possible redemption | (3,529,428) | (3,126,381) | (11,370,605) | (8,101,434) | ||||||||
Adjusted net loss | $ (4,011,612) | $ (89,465) | $ (6,365,601) | $ (865,378) | ||||||||
Weighted average shares outstanding, basic and diluted | [1] | 20,350,919 | 20,107,675 | 20,192,094 | 20,068,828 | |||||||
Basic and diluted net loss per ordinary share | $ (0.20) | [2] | $ 0 | $ (0.32) | [2] | $ (0.04) | [2] | |||||
[1] | Excludes an aggregate of up to 61,738,641 and 66,133,484 shares subject to redemption at September 30, 2019 and 2018, respectively. | |||||||||||
[2] | Net loss per ordinary share - basic and diluted excludes income attributable to ordinary shares subject to redemption of $3,529,428 and $11,370,605 for the three and nine months ended September 30, 2019, respectively, and $3,126,381 and $8,101,434 for the three and nine months ended September 30, 2018, respectively. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | Sep. 30, 2019shares |
Common Class A | |
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 31,000,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | May 05, 2017 | Sep. 18, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Due to Related Parties, Current | $ 1,725,813 | $ 1,725,813 | $ 381,675 | ||||
Sponsor Monthly Fee Payable | $ 10,000 | ||||||
Services Fee | 30,000 | $ 90,000 | 30,000 | $ 90,000 | |||
Notes Payable, Related Parties, Current | 1,725,813 | $ 1,725,813 | 381,675 | ||||
Private Placement Warrants [Member] | |||||||
Class of Warrant or Right, Per Warrant | $ 1.50 | $ 1.50 | |||||
Maximum | |||||||
Convertible Debt | 1,500,000 | $ 1,500,000 | |||||
Sponsor [Member] | |||||||
Long-term Line of Credit | 200,000 | 200,000 | |||||
Accounts Payable and Accrued Liabilities [Member] | |||||||
Due to Related Parties, Current | 245,000 | 245,000 | 155,000 | ||||
Notes Payable, Other Payables [Member] | |||||||
Debt Instrument, Face Amount | $ 1,344,138 | $ 1,344,138 | $ 381,675 |
COMMITMENTS (Details)
COMMITMENTS (Details) | Oct. 25, 2019USD ($)$ / sharesshares | Oct. 02, 2019$ / sharesshares | Sep. 09, 2019shares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Deferred Underwriting Fees | $ | $ 24,150,000 | $ 24,150,000 | |||
Underwriters deferred fee (in percent) | 3.50% | ||||
Underwriting Discount, Percentage | 10.00% | ||||
Refunds From Underwriting Discount | $ | $ 2,415,000 | ||||
Registrable Securities Holders, Percentage | 30.00% | ||||
Proceeds from Refund of Underwriting Discount | $ | $ 1,000,000 | ||||
Common Class A | |||||
Number of shares repurchased or redeemed | 3,771,178 | ||||
Ordinary share, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||
Common Stock, Shares, Issued | 3,490,181 | 2,863,336 | |||
Common Stock, Shares, Outstanding | 3,490,181 | 2,863,336 | |||
Common Class B | |||||
Ordinary share, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||
Common Stock, Shares, Issued | 17,250,000 | 17,250,000 | |||
Common Stock, Shares, Outstanding | 17,250,000 | 17,250,000 | |||
Subsequent Events | Merger Agreement | |||||
Number of shares repurchased or redeemed | 5,209,562 | ||||
Price per share | $ / shares | $ 10 | ||||
Right to receive shares of common stock | 130,000,000 | ||||
Aggregate merger consideration | $ | $ 1,300,000,000 | ||||
Ordinary share, par value | $ / shares | $ 0.0001 | ||||
Subsequent Events | Merger Agreement | Common Class A | |||||
Ordinary share, par value | $ / shares | $ 0.0001 | ||||
Conversion ratio | 1 | ||||
Subsequent Events | Merger Agreement | Common Class B | |||||
Ordinary share, par value | $ / shares | $ 0.0001 | ||||
Conversion ratio | 1 | ||||
Common Stock, Shares, Issued | 15,750,000 | ||||
Common Stock, Shares, Outstanding | 15,750,000 | ||||
Subsequent Events | Purchase Agreement | |||||
Number of shares repurchased or redeemed | 10,000,000 | ||||
Price per share | $ / shares | $ 10 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Virgin Galactic Business Combination [Member] | ||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 700,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | |
Common Class A | ||
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares, Issued | 3,490,181 | 2,863,336 |
Common Stock, Shares, Outstanding | 3,490,181 | 2,863,336 |
Temporary Equity, Shares Subscribed but Unissued | 61,738,641 | 66,136,664 |
Common Class B | ||
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares, Issued | 17,250,000 | 17,250,000 |
Common Stock, Shares, Outstanding | 17,250,000 | 17,250,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Marketable securities held in Trust Account | $ 677,167,505 | $ 704,250,272 |