VORB Virgin Orbit Holdings Inc

This Amendment No. 5 (this “Fifth Amendment”) amends the Schedule 13D filed with the U.S. Securities and Exchange Commission on January 10, 2022, as amended by Amendment No. 1 filed on November 8, 2022, Amendment No. 2 filed on December 19, 2022, Amendment No. 3 filed on January 30, 2023 and amended by Amendment No. 4 filed on March 2, 2023 (the “Initial Schedule 13D” and as amended by this Fifth Amendment, this “Schedule 13D”) on behalf of (i) Virgin Investments Limited (“VIL”), (ii) Corvina Holdings Limited, (iii) Virgin Group Holdings Limited, and (iv) Sir Richard Branson. This Schedule 13D relates to the common stock, par value $0.0001 per share (the “Common Stock”) of Virgin Orbit Holdings, Inc., a Delaware corporation (the “Issuer”) whose principal executive offices are located at 4022 E. Conant St., Long Beach, CA 90808.

Unless set forth below, all previous Items set forth in the Initial Schedule 13D remain unchanged. All capitalized terms used herein but not defined shall have the same meanings as set forth in the Initial Schedule 13D.

Item 3 is hereby amended and supplemented by adding the following:

On February 28, 2023, pursuant to the Subscription Agreement (as defined below), VIL purchased $10,900,000 aggregate principal amount of 12.00% Senior Secured Convertible Note due 2024 from the Issuer for cash consideration of $10,900,000. The source of funds used for the Subscription Agreement (as defined below) was working capital of VIL.

The information disclosed in this Item 3 does not purport to be complete and is qualified in its entirety by reference to the Subscription Agreement (as defined below), a copy of which is attached hereto as Exhibit 18, and which is incorporated herein by reference in its entirety.

Item 5 is hereby amended and supplemented by adding the following:

As of the date hereof, none of the Reporting Persons should be deemed to be the beneficial owner of shares of Common Stock issuable upon conversion of the Convertible Note (as defined below) because the Convertible Note (as defined below) is not currently convertible within sixty (60) days absent satisfaction of conditions that remain outside of the Reporting Persons’ control. Consequently, no shares of Common Stock potentially issuable upon conversion of the Convertible Note (as defined below) have been included in the number of Subject Shares reported as beneficially owned by the Reporting Persons on this Schedule 13D.

Item 6 is hereby amended and supplemented by adding the following:

On March 30, 2023 (the “Effective Date”), the Issuer sold and issued to VIL a senior secured convertible note (the “Convertible Note”) in the principal amount of $10.9 million, which is convertible into shares of the Issuer’s Common Stock or other Qualified Securities (as defined below), subject to certain conditions and limitations set forth in the Convertible Note. The Issuer sold and issued the Convertible Note pursuant to a subscription agreement, dated as of the Effective Date (the “Subscription Agreement”), among the Issuer, VIL and the Issuer’s domestic subsidiaries named therein that are jointly and severally guaranteeing the Issuer’s obligations under the Convertible Note (the “Guarantors”). The Issuer will use the net proceeds from the Convertible Note to fund severance and other costs related to its workforce reduction.

The Convertible Note contains customary events of default, bears interest at an annual rate of 12.0% (or 16.0% upon the occurrence and during the continuance of an event of default under the Convertible Note), payable in cash semi-annually, and has a maturity date of November 4, 2024 (the “Maturity Date”), unless earlier repurchased, converted or redeemed in accordance with its terms prior to such date. Subject to any limitations under the rules of the Nasdaq Stock Market, the Convertible Note will automatically convert into Qualified Securities (as defined below) at a conversion price equal to the purchase price paid by investors in the relevant Qualified Financing (as defined below) if, prior to the earliest to occur of the Maturity Date, any Fundamental Change Effective Date and the effective date of any Merger Event (each as defined in the Convertible Note), the Issuer consummates a bona fide third-party financing of its Common Stock or securities convertible into or exchangeable for the Issuer’s Common Stock for gross cash proceeds of at least $50.0 million (excluding any securities purchased by VIL or its affiliates) in one or more related and substantially similar and simultaneous transactions at the same price (a “Qualified Financing” and the securities sold in such Qualified Financing, the “Qualified Securities”). VIL will have the option to convert all or a portion of the Convertible Note in accordance with such terms in a financing by the Issuer that would have been a Qualified Financing but for the gross cash proceeds in such financing being less than $50.0 million, with such conversion effected as described above as if such financing were a Qualified Financing. Additionally, on or after October 15, 2024, VIL has the right to convert all or any portion of the Convertible Note into shares of Common Stock at an initial conversion rate of 345.5425 shares of Common Stock per $1,000 principal amount of the Convertible Note (subject to adjustments as provided in the Convertible Note, the “Fixed Conversion Rate”).

In the event of a Fundamental Change, a Merger Event (each as defined in the Convertible Note) or a redemption of the Convertible Note by the Issuer, or if any automatic conversion in connection with a Qualified Financing would be subject to limitations set forth in the relevant rules of the Nasdaq Stock Market, VIL has the right to convert the Convertible Note at the Fixed Conversion Rate. Prior to the Maturity Date, the Issuer may redeem all or part of the Convertible Note for cash at a redemption price equal to 100% of the principal amount of the Convertible Note to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (the “Redemption Price”) upon prior written notice provided in accordance with the Convertible Note. VIL may also require the Issuer to redeem for cash all or any portion of the Convertible Note at the Redemption Price upon prior written notice provided in accordance with the Convertible Note.

The Convertible Note contains a covenant that restricts the Issuer’s and the Guarantors’ ability to incur liens on the Issuer’s and the Guarantors’ assets and properties without VIL’s consent. If the Issuer undergoes a Fundamental Change (as defined in the Convertible Note), then, subject to certain conditions, VIL may require the Issuer to repurchase for cash all or any portion of the Convertible Note at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Note to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. Initially, a maximum of 3,766,413 shares of the common stock may be issued upon conversion of the Convertible Note at the Fixed Conversion Rate, subject to adjustment provisions included in the Convertible Note and subject to conversion in connection with a deemed Qualified Financing.

In connection with the Convertible Note, the Issuer and the Guarantors granted a first-priority security interest on substantially all of their respective assets, including all aircrafts, aircraft engines (including spare aircraft parts) and related assets, other than certain customary excluded assets and permitted liens described in the Convertible Note. Upon the occurrence and continuation of an event of default under the Convertible Note, VIL is entitled to, among other things, foreclose on the assets that are the subject of the security interest. The Subscription Agreement and the Convertible Note are each considered a “Note Document” under the Security Agreement dated as of January 30, 2023 among the Issuer, the other grantors party thereto and VIL, filed as Exhibit 10.2 to the Issuer’s Current Report on Form 8-K filed on February 1, 2023.

The Subscription Agreement contains customary registration rights, representations, warranties, covenants and indemnification obligations of the parties. The representations, warranties and covenants contained in the Subscription Agreement were made only for purposes of the Subscription Agreement and as of specific dates, were made solely for the benefit of the parties to such agreement and are subject to certain important limitations.

The information disclosed in this Item 6, including the foregoing descriptions of the Subscription Agreement, and Convertible Note are each qualified in their entirety by reference to the full text of the Subscription Agreement and Convertible Note, respectively, which are attached to this Schedule 13D as Exhibits 18 and 19 and incorporated herein by reference.

Item 7 is hereby amended and supplemented by adding the following:

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.