{"url_path":"/sec/spce/10-q/2026/cover-page","section_key":"cover-page","section_title":"Cover Page","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1706946/0001706946-26-000068-index.html","accession_number":"0001706946-26-000068","cik":"0001706946","ticker":"SPCE","issuer_name":"Virgin Galactic Holdings, Inc","edgar_url":"https://www.sec.gov/Archives/edgar/data/1706946/0001706946-26-000068-index.html","primary_entity_key":"0001706946","primary_entity_name":"Virgin Galactic Holdings, 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STATES\n\nSECURITIES AND EXCHANGE COMMISSION\n\nWashington, D.C. 20549\n\nFORM 10-Q\n\n(Mark One)\n\n☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\nFor the quarterly period ended March 31, 2026\n\nOR\n\n☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934\n\nFor the transition period from to\n\nCommission File No. 001-38202\n\nVirgin Galactic Holdings, Inc.\n\n(Exact name of registrant as specified in its charter)\n\nDelaware\n85-3608069\n\n(State or other jurisdiction of\n\nincorporation or organization)\n\n(I.R.S. Employer\n\nIdentification No.)\n\n1700 Flight Way\n\nTustin, California\n92782\n\n(Address of Principal Executive Offices)(Zip Code)\n\n(949) 774-7640\n\n(Registrant’s telephone number, including area code)\n\nN/A\n\n(Former name, former address and former fiscal year, if changed since last report)\n\nSecurities registered pursuant to Section 12(b) of the Act:\n\nTitle of each class\n\nTrading Symbol(s)\nName of each exchange on which registered\n\nCommon stock, $0.0001 par value per share\n\nSPCE\n\nNew York Stock Exchange\n\nIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐\n\nIndicate 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 ☐\n\nIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.\n\nLarge accelerated filer☐Accelerated filer☐\n\nNon-accelerated filer☒Smaller reporting company☒\n\nEmerging growth company☐\n\nIf 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. ☐\n\nIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒\n\nAs of May 7, 2026, there were 100,683,438 shares of the Company’s common stock outstanding.\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nTABLE OF CONTENTS\n\nPage\n\n[PART I - FINANCIAL INFORMATION](#i1138475f8b1845b1a57eb663a0938d4b_13)\n\n[Cautionary Note Regarding Forward-Looking Statements](#i1138475f8b1845b1a57eb663a0938d4b_10)\n\n[2](#i1138475f8b1845b1a57eb663a0938d4b_10)\n\n[Item 1.](#i1138475f8b1845b1a57eb663a0938d4b_16)\n\n[Financial Statements](#i1138475f8b1845b1a57eb663a0938d4b_16) (Unaudited)\n\n[4](#i1138475f8b1845b1a57eb663a0938d4b_16)\n\n[Condensed Consolidated Balance Sheets](#i1138475f8b1845b1a57eb663a0938d4b_19)\n\n[4](#i1138475f8b1845b1a57eb663a0938d4b_19)\n\n[Condensed Consolidated Statements of Operations and Comprehensive Loss](#i1138475f8b1845b1a57eb663a0938d4b_22)\n\n[5](#i1138475f8b1845b1a57eb663a0938d4b_22)\n\n[Condensed Consolidated Statements of Stockholders’ Equity](#i1138475f8b1845b1a57eb663a0938d4b_25)\n\n[6](#i1138475f8b1845b1a57eb663a0938d4b_25)\n\n[Condensed Consolidated Statements of Cash Flows](#i1138475f8b1845b1a57eb663a0938d4b_31)\n\n[7](#i1138475f8b1845b1a57eb663a0938d4b_31)\n\n[Notes to Condensed Consolidated Financial Statements](#i1138475f8b1845b1a57eb663a0938d4b_34)\n\n[8](#i1138475f8b1845b1a57eb663a0938d4b_34)\n\n[Item 2.](#i1138475f8b1845b1a57eb663a0938d4b_88)\n\n[Management’s Discussion and Analysis of Financial Condition and Results of Operations](#i1138475f8b1845b1a57eb663a0938d4b_88)\n\n[23](#i1138475f8b1845b1a57eb663a0938d4b_88)\n\n[Item 3.](#i1138475f8b1845b1a57eb663a0938d4b_109)\n\n[Quantitative and Qualitative Disclosures about Market Risk](#i1138475f8b1845b1a57eb663a0938d4b_109)\n\n[29](#i1138475f8b1845b1a57eb663a0938d4b_109)\n\n[Item 4.](#i1138475f8b1845b1a57eb663a0938d4b_112)\n\n[Controls and Procedures](#i1138475f8b1845b1a57eb663a0938d4b_112)\n\n[29](#i1138475f8b1845b1a57eb663a0938d4b_112)\n\n[PART II - OTHER INFORMATION](#i1138475f8b1845b1a57eb663a0938d4b_115)\n\n[Item 1.](#i1138475f8b1845b1a57eb663a0938d4b_118)\n\n[Legal Proceedings](#i1138475f8b1845b1a57eb663a0938d4b_118)\n\n[30](#i1138475f8b1845b1a57eb663a0938d4b_118)\n\n[Item 1A.](#i1138475f8b1845b1a57eb663a0938d4b_121)\n\n[Risk Factors](#i1138475f8b1845b1a57eb663a0938d4b_121)\n\n[30](#i1138475f8b1845b1a57eb663a0938d4b_121)\n\n[Item 2.](#i1138475f8b1845b1a57eb663a0938d4b_124)\n\n[Unregistered Sales of Equity Securities and Use of Proceeds](#i1138475f8b1845b1a57eb663a0938d4b_124)\n\n[30](#i1138475f8b1845b1a57eb663a0938d4b_124)\n\n[Item 3.](#i1138475f8b1845b1a57eb663a0938d4b_127)\n\n[Defaults Upon Senior Securities](#i1138475f8b1845b1a57eb663a0938d4b_127)\n\n[30](#i1138475f8b1845b1a57eb663a0938d4b_127)\n\n[Item 4.](#i1138475f8b1845b1a57eb663a0938d4b_130)\n\n[Mine Safety Disclosures](#i1138475f8b1845b1a57eb663a0938d4b_130)\n\n[30](#i1138475f8b1845b1a57eb663a0938d4b_130)\n\n[Item 5.](#i1138475f8b1845b1a57eb663a0938d4b_133)\n\n[Other Information](#i1138475f8b1845b1a57eb663a0938d4b_133)\n\n[30](#i1138475f8b1845b1a57eb663a0938d4b_133)\n\n[Item 6.](#i1138475f8b1845b1a57eb663a0938d4b_136)\n\n[Exhibits](#i1138475f8b1845b1a57eb663a0938d4b_136)\n\n[30](#i1138475f8b1845b1a57eb663a0938d4b_136)\n\n[Signatures](#i1138475f8b1845b1a57eb663a0938d4b_139)\n\n[32](#i1138475f8b1845b1a57eb663a0938d4b_139)\n\n1\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nCautionary Note Regarding Forward-Looking Statements\n\nThis Quarterly Report on Form 10-Q contains forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning us and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of management, as well as assumptions made by, and information currently available to management.\n\nForward-looking statements may be accompanied by words such as “achieve,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “future,” “grow,” “increase,” “intend,” “may,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or similar words, phrases, or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside our control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the following:\n\n•any delay in future commercial flights of our spaceflight fleet;\n\n•our ability to successfully develop and test our next-generation vehicles, and the time and costs associated with doing so;\n\n•the safety of our spaceflight systems;\n\n•the development of the markets for commercial spaceflight and commercial research and development payloads;\n\n•our ability to effectively market and sell spaceflights;\n\n•our ability to convert our backlog or inbound inquiries into revenue;\n\n•our anticipated full passenger capacity;\n\n•our ability to achieve or maintain profitability;\n\n•delay in development or the manufacture of spaceflight systems;\n\n•our ability to supply our technology to additional market opportunities;\n\n•our expected capital requirements, the availability of additional financing and our ability to continue as a going concern;\n\n•our ability to attract or retain highly qualified personnel;\n\n•the effect of terrorist activity, armed conflict, natural disasters or pandemic diseases on the economy generally, on our future financial or operational results, or our access to additional financing;\n\n•consumer preferences and discretionary purchasing activity, which can be significantly adversely affected by unfavorable economic or market conditions;\n\n•extensive and evolving government regulations that impact the way we operate, including the potential negative effects of changes in United States tariff and import/export regulations;\n\n•risks associated with international expansion;\n\n•our expectations regarding the resolution of certain legal proceedings, including anticipated settlement amounts and timing, which may be subject to change based on various factors, including court approvals and negotiations with involved parties;\n\n2\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\n•our ability to maintain effective internal control over financial reporting and disclosure and procedures; and\n\n•our ability to continue to use, maintain, enforce, protect and defend our owned and licensed intellectual property, including the Virgin brand.\n\nAdditional factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1.“Business,” Part I, Item 1A. “Risk Factors,” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Annual Report on Form 10-K”) and in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our information may be incomplete or limited, and we cannot guarantee future results. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.\n\nEach of the terms the “Company,” “Virgin Galactic,” “we,” “our,” “us” and similar terms used herein refer collectively to Virgin Galactic Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries, unless otherwise stated.\n\n3\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nPART I. FINANCIAL INFORMATION\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nCondensed Consolidated Balance Sheets\n\n(Unaudited; in thousands, except share and per share amounts)\n\nMarch 31, 2026December 31, 2025\n\nAssets\n\nCurrent assets:\n\nCash and cash equivalents$124,837 $144,727 \n\nRestricted cash30,634 30,988 \n\nMarketable securities\n95,054 162,313 \n\nOther current assets32,931 34,870 \n\nTotal current assets283,456 372,898 \n\nProperty, plant and equipment, net426,713 388,730 \n\nOther non-current assets40,060 41,551 \n\nTotal assets$750,229 $803,179 \n\nLiabilities and Stockholders’ Equity\n\nCurrent liabilities:\n\nAccounts payable$17,041 $15,163 \n\nCurrent portion of long-term debt\n117,041 47,830 \n\nCustomer deposits77,954 78,535 \n\nOther current liabilities70,578 67,795 \n\nTotal current liabilities282,614 209,323 \n\nNon-current liabilities:\n\nLong-term debt\n202,695 276,362 \n\nOther long-term liabilities\n41,191 43,530 \n\nTotal liabilities526,500 529,215 \n\nCommitments and contingencies (Note 14)\n\nStockholders’ Equity\n\nPreferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding\n— — \n\nCommon stock, $0.0001 par value; 700,000,000 shares authorized; 81,409,340 and 73,326,504 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively\n8 7 \n\nAdditional paid-in capital3,040,171 3,025,604 \n\nAccumulated deficit(2,816,494)(2,751,779)\n\nAccumulated other comprehensive income44 132 \n\nTotal stockholders’ equity\n223,729 273,964 \n\nTotal liabilities and stockholders’ equity\n$750,229 $803,179 \n\nSee accompanying notes to condensed consolidated financial statements.\n\n4\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nCondensed Consolidated Statements of Operations and Comprehensive Loss\n\n(Unaudited; in thousands, except per share amounts)\n\nThree Months Ended March 31,\n\n20262025\n\nRevenue$227 $461 \n\nOperating expenses:\n\nSpaceline operations29,640 20,826 \n\nResearch and development6,712 33,310 \n\nSelling, general and administrative25,551 30,550 \n\nDepreciation and amortization3,916 4,223 \n\nTotal operating expenses65,819 88,909 \n\nOperating loss(65,592)(88,448)\n\nInterest income2,701 7,215 \n\nInterest expense(1,828)(3,240)\n\nOther income, net34 34 \n\nLoss before income taxes(64,685)(84,439)\n\nIncome tax expense30 48 \n\nNet loss(64,715)(84,487)\n\nOther comprehensive loss:\n\nForeign currency translation adjustment(3)(4)\n\nUnrealized loss on marketable securities\n(85)(176)\n\nTotal comprehensive loss$(64,803)$(84,667)\n\nNet loss per share:\n\nBasic and diluted$(0.81)$(2.38)\n\nWeighted-average shares outstanding:\n\nBasic and diluted79,482 35,440 \n\nSee accompanying notes to condensed consolidated financial statements.\n\n5\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nCondensed Consolidated Statements of Stockholders’ Equity    \n\n(Unaudited; in thousands, except share amounts)\n\nCommon StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive\nIncome (Loss)Total\n\nSharesAmount\n\nBalance at December 31, 2024\n32,995,822$3 $2,794,871 $(2,472,872)$278 $322,280 \n\nNet loss— — — (84,487)— (84,487)\n\nOther comprehensive loss— — — — (180)(180)\n\nStock-based compensation for equity-classified awards— — 4,833 — — 4,833 \n\nIssuance of common stock pursuant to stock-based awards, net of withholding taxes49,040 — (50)— — (50)\n\nIssuance of common stock pursuant to at-the-market offering6,946,164 1 30,729 — — 30,730 \n\nTransaction costs— — (955)— — (955)\n\nBalance at March 31, 2025\n39,991,026 4 2,829,428 (2,557,359)98 272,171 \n\nCommon StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive\nIncome (Loss)Total\n\nSharesAmount\n\nBalance at December 31, 2025\n73,326,504$7 $3,025,604 $(2,751,779)$132 $273,964 \n\nNet loss — — — (64,715)— (64,715)\n\nOther comprehensive loss— — — — (88)(88)\n\nStock-based compensation for equity-classified awards— — 3,928 — — 3,928 \n\nIssuance of common stock pursuant to stock-based awards, net of withholding taxes 6,140 — (8)— — (8)\n\nIssuance of common stock pursuant to at-the-market offering3,970,640 — 10,961 — — 10,961 \n\nExercises of Pre-Funded Warrants\n4,106,056 1 — — — 1 \n\nTransaction costs — — (314)— — (314)\n\nBalance at March 31, 2026\n81,409,340 8 3,040,171 (2,816,494)44 223,729 \n\nSee accompanying notes to condensed consolidated financial statements.\n\n6\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nCondensed Consolidated Statements of Cash Flows\n\n(Unaudited; in thousands)\n\nThree Months Ended March 31,\n\n20262025\n\nCash flows from operating activities:\n\nNet loss$(64,715)$(84,487)\n\nStock-based compensation4,121 4,769 \n\nDepreciation and amortization3,916 4,223 \n\nAmortization of debt issuance costs511 569 \n\nAccretion of marketable securities purchased at a discount(406)(2,193)\n\nOther non-cash items(11)(14)\n\nChange in operating assets and liabilities:\n\nOther current and non-current assets\n1,300 5,749 \n\nAccounts payable\n840 (751)\n\nCustomer deposits(581)(2,296)\n\nOther current and non-current liabilities\n1,524 (1,487)\n\nNet cash used in operating activities(53,501)(75,918)\n\nCash flows from investing activities:\n\nCapital expenditures(39,807)(46,047)\n\nPurchases of marketable securities(33,516)(104,607)\n\nProceeds from maturities and calls of marketable securities101,099 158,121 \n\nOther investing activities\n— 8 \n\nNet cash provided by investing activities\n27,776 7,475 \n\nCash flows from financing activities:\n\nPayments of long-term debt\n(4,967)— \n\nPayments of finance lease obligations(59)(46)\n\nProceeds from issuance of common stock pursuant to at-the-market offering\n10,961 30,730 \n\nTransaction costs related to issuance of common stock pursuant to at-the-market offering\n(301)(922)\n\nTransaction costs related to issuance of common stock and equity-classified warrants pursuant to registered offering\n(145)— \n\nWithholding taxes paid on behalf of employees on net settled stock-based awards(8)(50)\n\nNet cash provided by financing activities5,481 29,712 \n\nNet decrease in cash, cash equivalents and restricted cash\n(20,244)(38,731)\n\nCash, cash equivalents and restricted cash at beginning of period175,715 210,885 \n\nCash, cash equivalents and restricted cash at end of period$155,471 $172,154 \n\nCash and cash equivalents$124,837 $140,763 \n\nRestricted cash30,634 31,391 \n\nCash, cash equivalents and restricted cash$155,471 $172,154 \n\nSee accompanying notes to condensed consolidated financial statements.\n\n7\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n(1)    Description of Business and Basis of Presentation\n\nVirgin Galactic Holdings, Inc., together with its consolidated subsidiaries (“Virgin Galactic” or the “Company”), is an aerospace and space travel company focused on the development, manufacture and operation of spaceships and related technologies. The Company provides access to space for private individuals, researchers and government agencies. The Company’s missions include flying passengers to space, as well as flying scientific payloads and researchers to space in order to conduct experiments for scientific and educational purposes.\n\nThe accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Certain information and footnote disclosures, normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to such rules and regulations. However, in management’s opinion, the condensed consolidated financial statements reflect all adjustments, including those of a normal recurring nature, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented.\n\nThe operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the entire fiscal year. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no changes to the significant accounting policies presented in the audited consolidated financial statements contained in the Annual Report on Form 10-K that would have a material impact on the accompanying condensed consolidated financial statements.\n\nThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.\n\n(2)    Liquidity and Financial Condition\n\nThe accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern and will be able to realize its assets and satisfy its liabilities in the normal course of business.\n\nThe Company is currently in the pre-commercial service phase and accordingly has no spaceflight revenue. The Company has recently used significant cash for operating activities and capital expenditures primarily related to the development of its next-generation spaceships and expects to continue to incur significant operating expenses and capital expenditures to complete the production of these spaceships and place them into commercial operation.\n\nIn preparation of the condensed consolidated financial statements, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the date the condensed consolidated financial statements are issued, in accordance with the requirements of the Financial Accounting Standards Board's Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements - Going Concern (“ASC 205-40”).\n\nFactors, among others, that are included in management’s evaluation are:\n\n•cash, cash equivalents, and marketable securities on hand as of the date the condensed consolidated financial statements are issued;\n\n•all company costs that are forecasted to be incurred over the upcoming twelve months from the date the condensed consolidated financial statements are issued, including costs expected to be incurred in completing fabrication and testing of the next-generation spaceships and costs expected to be incurred in the ramp-up to, and commercial operation of, spaceflights; and\n\n8\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n•all contractual debt payments due within the next twelve months are assumed to be settled in cash.\n\nItems that are planned or expected by management, but the execution of which may not be fully under management’s control, are not included in management’s evaluation in accordance with ASC 205-40. Factors, among others, excluded from management’s evaluation include:\n\n•Revenues: any revenues or cash receipts, from spaceflights or otherwise, planned during the upcoming twelve months.\n\n•Capital Market Transactions: any proceeds from capital market transactions, whether from debt issuance, equity issuance, or otherwise.\n\n•Debt Repayment Terms: any change of contractual debt repayment schedules or settlement methods.\n\nManagement’s evaluation, which excluded the items that are not within its control (i.e., Revenues, Capital Market Transactions, and Debt Repayment Terms), resulted in the determination that the Company may not have sufficient cash and marketable securities to maintain its planned operations for the next twelve months following the issuance date of the condensed consolidated financial statements and has concluded that there are conditions present in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern pursuant to ASC 205-40.\n\nManagement’s plans that are intended to mitigate the conditions or events that raise substantial doubt include implementing some or all of the following initiatives:\n\n•Commencing commercial service in the fourth quarter of 2026, as currently planned.\n\n•Generating significant cash from the current backlog of future astronauts as their final payments become due in advance of their spaceflight.\n\n•Offering the sale of a limited number of early spaceflights at a premium to historical prices.\n\n•Increasing cash on hand through additional debt or equity financing, including use of the Company’s existing “at-the-market” equity offering program.\n\n•Partnering with third parties to fund and accelerate the pace of future space vehicle development.\n\n•Settling debt through the issuance of equity and/or extending maturities of certain debt payments that are due within the period.\n\nThe plans discussed above are subject to market conditions and, while management intends to apply its best efforts to the execution of these plans, they are not fully within the Company’s control and therefore cannot be deemed to be probable in accordance with ASC 205-40, and as a result, management has concluded that its plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern for twelve months after the date that the condensed consolidated financial statements are issued.\n\nThe accompanying condensed consolidated financial statements do not include any adjustments related to the carrying amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.\n\n9\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n(3)    Cash, Cash Equivalents and Marketable Securities\n\nThe Company maintains certain cash balances restricted as to withdrawal or use. Restricted cash consists of cash deposits received from future astronauts that are contractually restricted for operational use until the condition of carriage is signed or the deposits are refunded.\n\nThe amortized cost, unrealized gain and estimated fair value of the Company’s cash, cash equivalents and marketable securities are as follows:\n\nMarch 31, 2026\n\nAmortized Cost\nGross Unrealized Loss\nFair Value\n\n(In thousands)\n\nCash and cash equivalents:\n\nCash and restricted cash$17,910 $— $17,910 \n\nMoney market137,561 — 137,561 \n\nMarketable securities:\n\nU.S. treasuries59,610 (6)59,604 \n\nCorporate bonds35,472 (22)35,450 \n\n$250,553 $(28)$250,525 \n\nDecember 31, 2025\n\nAmortized Cost\nGross Unrealized Gain\nFair Value\n\n(In thousands)\n\nCash and cash equivalents:\n\nCash and restricted cash$7,687 $— $7,687 \n\nMoney market168,028 — 168,028 \n\nMarketable securities:\n\nU.S. treasuries9,884 14 9,898 \n\nCorporate bonds152,372 43 152,415 \n\n$337,971 $57 $338,028 \n\nInterest receivable of $1.0 million and $2.0 million is included in other current assets in the accompanying condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively.\n\nThe Company recognizes amortization and accretion of purchase premiums and discounts on its marketable securities in interest income in the accompanying condensed consolidated statements of operations and comprehensive loss. The Company recognized $0.4 million and $2.2 million in accretion income for its marketable securities for the three months ended March 31, 2026 and 2025, respectively.\n\n10\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n(4)    Property, Plant and Equipment, Net\n\nProperty, plant and equipment consists of the following:\n\nMarch 31, 2026December 31, 2025\n\n(In thousands)\n\nLand$1,302 $1,302 \n\nBuildings10,111 10,111 \n\nFlight vehicles and rotables5,177 4,331 \n\nMachinery and equipment45,311 44,913 \n\nInformation technology software and equipment55,839 52,130 \n\nLeasehold improvements78,118 77,853 \n\nConstruction in progress339,337 302,726 \n\n535,195 493,366 \n\nLess: accumulated depreciation and amortization\n108,482 104,636 \n\n$426,713 $388,730 \n\n(5)    Leases\n\nThe components of expense related to leases are as follows:\n\nThree Months Ended March 31,\n\n20262025\n\n(In thousands)\n\nOperating lease cost$2,911 $3,399 \n\nVariable lease cost693 707 \n\nFinance lease cost:\n\nAmortization of assets under finance leases\n56 51 \n\nInterest on finance lease liabilities11 15 \n\nTotal finance lease cost67 66 \n\nTotal lease cost$3,671 $4,172 \n\n11\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\nThe components of supplemental cash flow information related to leases are as follows:\n\nThree Months Ended March 31,\n\n20262025\n\n(In thousands, except term and rate data)\n\nCash Flow Information:\n\nOperating cash flows for operating leases$3,579 $3,455 \n\nOperating cash flows for finance leases$11 $15 \n\nFinancing cash flows for finance leases\n$59 $46 \n\nNon-cash Activity:\n\nAssets acquired in exchange for lease obligations:\n\nOperating leases$2 $— \n\nFinance leases$— $5 \n\nOther Information:\n\nWeighted-average remaining lease term:\n\nOperating leases (in years)6.88.5\n\nFinance leases (in years)2.02.4\n\nWeighted-average discount rates:\n\nOperating leases12.4 %12.2 %\n\nFinance leases13.8 %13.3 %\n\nThe supplemental balance sheet information related to leases is as follows:\n\nMarch 31, 2026December 31, 2025\n\n(In thousands)\n\nOperating Leases:\n\nLong-term right-of-use assets$35,430 $36,882 \n\nShort-term operating lease liabilities$8,726 $8,475 \n\nLong-term operating lease liabilities39,964 42,279 \n\nTotal operating lease liabilities$48,690 $50,754 \n\nRight-of-use assets are included in other non-current assets, and lease liabilities are included in other current liabilities and other long-term liabilities in the accompanying condensed consolidated balance sheets.\n\n12\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n(6)    Other Current Liabilities\n\nThe components of other current liabilities are as follows:\n\nMarch 31, 2026December 31, 2025\n\n(In thousands)\n\nAccrued compensation$33,969 $31,951 \n\nAccrued manufacturing sub-contractor and contract labor costs10,350 9,601 \n\nOther26,259 26,243 \n\n$70,578 $67,795 \n\n(7)    2025 Capital Realignment Transactions\n\nIn December 2025, the Company completed privately negotiated repurchase agreements (the “2027 Notes Repurchase Agreements”) with a limited number of holders of its 2.50% convertible senior notes due 2027 (“2027 Notes”), pursuant to which the Company repurchased $354.6 million in aggregate principal amount of its 2027 Notes (the “Repurchases”) with cash proceeds received from the Registered Offering (as defined below) and the Private Placement (as defined below).\n\nConcurrently with the Repurchases, the Company completed the issuance and sale for cash in a registered direct offering, pursuant to separate, privately negotiated subscription agreements with certain investors, of (i) 2.2 million shares of its common stock, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 8.4 million shares of its common stock (collectively, the “Registered Offering”). In connection with the Registered Offering, the Company received cash proceeds of $45.6 million.\n\nAs of March 31, 2026, all Pre-Funded Warrants had been exercised and 8.4 million shares of common stock had been issued in connection with the exercise of the Pre-Funded Warrants.\n\nConcurrently with the Registered Offering, the Company issued and sold for cash, in a private placement, (i) $212.5 million aggregate principal amount of a new series of its 9.80% First Lien Notes due 2028 (“2028 Notes”) and (ii) warrants to purchase 31.7 million shares of its common stock (the “Purchase Warrants”), with an exercise price equal to $6.696 per share. The Purchase Warrants are exercisable at any time on or after June 18, 2026 until December 18, 2030. The Purchase Warrants are exercisable only for cash and are subject to appropriate adjustment in the event of cash or share dividends, share splits, share repurchases, reorganizations or similar events affecting the Company’s common stock.\n\n(8)    Long-Term Debt\n\nA summary of the components of long-term debt is as follows:\n\nMarch 31, 2026December 31, 2025\n\n( In thousands)\n\n2028 Notes$212,496 $212,496 \n\n2027 Notes70,421 70,421 \n\nTotal contractual debt outstanding\n282,917 282,917 \n\nUnamortized debt premium\n40,724 45,691 \n\nUnamortized debt issuance costs\n(3,905)(4,416)\n\nLong-term debt\n319,736 324,192 \n\nLess: current portion of long-term debt117,041 47,830 \n\nNon-current portion of long-term debt\n$202,695 $276,362 \n\n13\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\nDuring the three months ended March 31, 2026 and 2025, the Company recognized $1.8 million and $3.2 million of interest expense related to long-term debt, respectively. Interest expense included $0.5 million and $0.6 million of amortized debt issuance costs during the three months ended March 31, 2026 and 2025, respectively.\n\nDuring the three months ended March 31, 2026, the Company recognized $5.0 million of amortization of debt premium in connection with certain interest payments. This amount has been presented as a payment of long-term debt in the accompanying condensed consolidated statement of cash flows for the three months ended March 31, 2026.\n\n2028 Notes\n\nIn connection with the Private Placement, the Company issued $212.5 million aggregate principal amount of the 2028 Notes. The 2028 Notes bear interest at a rate of 9.80% per year, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. The 2028 Notes mature on December 31, 2028, unless earlier redeemed or repurchased.\n\nThe Company is required to redeem $30.4 million of the 2028 Notes on or before September 30, 2026, and beginning on December 31, 2027 and at every calendar quarter end thereafter, the Company is required to redeem $10.1 million of the outstanding 2028 Notes. In addition, the Company is required to repurchase a portion of the 2028 Notes upon certain asset sales and capital raises. The Company may also redeem any or all of the 2028 Notes at par plus accrued and unpaid interest at any time. Any such mandatory or optional redemptions may be made using cash, or subject to certain conditions, shares of common stock or a combination thereof.\n\nThe 2028 Notes are secured on a first-priority basis by liens on substantially all of the assets of the Company and its domestic subsidiaries, subject to customary exceptions, including customer deposits, pursuant to a security agreement and related collateral documents.\n\n2027 Notes\n\nIn January 2022, the Company completed an offering of $425 million aggregate principal amount of the 2027 Notes. The 2027 Notes are senior, unsecured obligations of the Company, and bear interest at a fixed rate of 2.50% per year. Interest is payable in cash semi-annually in arrears on February 1 and August 1 of each year. The 2027 Notes mature on February 1, 2027 unless earlier repurchased, redeemed or converted. Following the Repurchases, $70.4 million in aggregate principal amount of the 2027 Notes remained outstanding as of March 31, 2026.\n\n(9)    Stockholders’ Equity\n\nIn November 2024, the Company entered into an open market sale agreement with Jefferies LLC (“Jefferies”) providing for the offer and sale of up to $300 million of shares of the Company’s common stock from time to time through Jefferies, acting as sales agent, or directly to Jefferies, acting as principal, through an “at-the-market offering” program (the “2024 ATM Program”).\n\nDuring the three months ended March 31, 2026, the Company sold 4.0 million shares of common stock under the 2024 ATM Program and generated $11.0 million in gross proceeds, before deducting $0.3 million in commissions and other expenses.\n\nAs of March 31, 2026, the Company had sold a total of 41.6 million shares of common stock under the 2024 ATM Program, generating $161.7 million in gross proceeds since its inception, before deducting $4.7 million in commissions and other expenses.\n\n14\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n(10)    Stock-Based Compensation\n\nEquity Incentive Plans\n\nThe Company maintains two equity incentive plans -- the Third Amended and Restated Virgin Galactic Holdings, Inc. 2019 Incentive Award Plan (the “Third A&R Plan”) and the Second Amended and Restated Virgin Galactic Holdings, Inc. 2023 Employment Inducement Incentive Award Plan (the “Second A&R Inducement Plan”).\n\nThe Second A&R Inducement Plan was adopted by the Company’s board of directors and became effective in March 2026. The Second A&R Inducement Plan increased the number of shares available by 555,000 shares to an aggregate of 1,695,000 shares reserved for issuance under the Second A&R Inducement Plan.\n\nPursuant to the Third A&R Plan and related predecessor plans, the Company has granted equity incentive awards, including time-based stock options, performance-based stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”). Pursuant to the Second A&R Inducement Plan and related predecessor plans, the Company has granted RSUs and PSUs.\n\nEmployee Stock Purchase Plan\n\nThe Virgin Galactic Holdings, Inc. 2025 Employee Stock Purchase Plan (the “ESPP”) was adopted by the Company’s board of directors in April 2025, subject to the approval of the Company’s stockholders, and became effective upon the approval of the Company’s stockholders in June 2025.\n\nStock-Based Compensation\n\nA summary of stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss is as follows:\n\nThree Months Ended March 31,\n\n20262025\n\n(In thousands)\n\nSpaceline operations$958 $435 \n\nResearch and development121 402 \n\nSelling, general and administrative3,042 3,932 \n\nTotal stock-based compensation expense4,121 4,769 \n\nLess: stock-based compensation expense for liability-classified awards193 (64)\n\nStock-based compensation expense for equity-classified awards$3,928 $4,833 \n\nAs of March 31, 2026, the Company had unrecognized stock-based compensation expense of $32.6 million and $1.8 million for RSUs and PSUs, respectively, which are expected to be recognized over weighted-average periods of 1.8 years and 2.8 years, respectively.\n\n(11)    Income Taxes\n\nIncome tax expense was $30,000 and $48,000 for the three months ended March 31, 2026 and 2025, respectively. The effective income tax rate was nil for each of the three months ended March 31, 2026 and 2025. The effective tax rate differs from the U.S. statutory rate primarily due to a full valuation allowance against net deferred tax assets where it is more likely than not that some or all of the deferred tax assets will not be realized.\n\n15\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n(12)    Earnings Per Share\n\nThe following table presents net loss per share and related information:\n\nThree Months Ended March 31,\n\n20262025\n\n(In thousands, except per share amounts)\n\nBasic and diluted:\n\nNet loss$(64,715)$(84,487)\n\nWeighted-average common shares outstanding\n79,482 35,440 \n\nBasic and diluted net loss per share$(0.81)$(2.38)\n\nBasic and diluted net loss per share is computed using the weighted-average number of shares of common stock outstanding during the period. The computation of diluted net loss per share excludes the effect of all potential common shares outstanding as their impact would have been anti-dilutive.\n\nThe Company has excluded stock-based awards and shares issuable upon conversion of the 2027 Notes from the diluted loss per share calculation because their effect was anti-dilutive. The total number of shares excluded for the three months ended March 31, 2026 and 2025 were 12.8 million and 7.0 million, respectively.\n\n(13)    Fair Value Measurements\n\nAssets and liabilities subject to fair value measurements are required to be disclosed within a fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair value. Accordingly, assets and liabilities carried at fair value are classified within the fair value hierarchy in one of the following categories:\n\n• Level 1 inputs — Quoted prices in active markets for identical assets or liabilities.\n\n• Level 2 inputs — Inputs other than Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.\n\n• Level 3 inputs — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.\n\nThe following tables present the Company’s financial assets that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy:\n\nMarch 31, 2026\n\nLevel 1Level 2Level 3Total\n\n(In thousands)\n\nAssets:\n\nMoney market$137,561 $— $— $137,561 \n\nU.S. treasuries59,604 — — 59,604 \n\nCorporate bonds— 35,450 — 35,450 \n\nTotal assets at fair value$197,165 $35,450 $— $232,615 \n\n16\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\nDecember 31, 2025\n\nLevel 1Level 2Level 3Total\n\n(In thousands)\n\nAssets:\n\nMoney market$168,028 $— $— $168,028 \n\nU.S. treasuries9,898 — — 9,898 \n\nCorporate bonds— 152,415 — 152,415 \n\nTotal assets at fair value$177,926 $152,415 $— $330,341 \n\nThe following tables present the Company’s financial liabilities that are recorded at amortized cost, segregated among the appropriate levels within the fair value hierarchy:\n\nMarch 31, 2026\n\nLevel 1Level 2Level 3Total\n\n(In thousands)\n\nLiabilities:\n\n2028 Notes\n$— $170,687 $— $170,687 \n\n2027 Notes— 55,192 — 55,192 \n\nTotal liabilities at fair value$— $225,879 $— $225,879 \n\nDecember 31, 2025\n\nLevel 1Level 2Level 3Total\n\n(In thousands)\n\nLiabilities:\n\n2028 Notes\n$— $173,184 $— $173,184 \n\n2027 Notes— 57,592 — 57,592 \n\nTotal liabilities at fair value$— $230,776 $— $230,776 \n\nThe estimated fair values of the 2028 Notes and 2027 Notes, which are classified as Level 2 financial instruments, were determined based on the estimated or actual bid prices of the respective notes in an over-the-counter market on the last business day of the period, if available, or indicative pricing from market information.\n\n17\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n(14)    Commitments and Contingencies\n\nLeases\n\nFuture minimum lease payments under noncancelable operating leases and future minimum finance lease payments as of March 31, 2026 are as follows:\n\nOperating LeasesFinance Leases\n\n(In thousands)\n\n2026 (for the remaining period)\n$10,623 $160 \n\n202713,951 115 \n\n20289,790 50 \n\n20297,265 15 \n\n20307,152 2 \n\nThereafter24,799 — \n\nTotal payments73,580 342 \n\nLess: present value discount/imputed interest24,890 43 \n\nPresent value of lease liabilities$48,690 $299 \n\nLegal Proceedings\n\nFrom time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. The Company applies accounting for contingencies to determine when and how much to accrue for and disclose related to legal and other contingencies. Accordingly, the Company discloses contingencies deemed to be reasonably possible and accrues loss contingencies when, in consultation with legal advisors, it is concluded that a loss is probable and reasonably estimable. Although the ultimate aggregate amount of monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, management believes that any monetary liability or financial impact to the Company from these matters, individually and in the aggregate, beyond that provided at March 31, 2026, would not be material to the Company’s consolidated financial position, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from legal proceedings, lawsuits and other claims could differ materially from those projected.\n\nLavin v. the Company\n\nOn May 28, 2021, a putative class action complaint was filed against the Company in the Eastern District of New York captioned Lavin v. Virgin Galactic Holdings, Inc., Case No. 1:21-cv-03070. In September 2021, the Court appointed Robert Scheele and Mark Kusnier as co-lead plaintiffs for the purported class. Co-lead plaintiffs amended the complaint in December 2021, asserting violations of Sections 10(b), 20(a) and 20A of the Exchange Act of 1934 against the Company and certain of its current and former officers and directors on behalf of a putative class of investors who purchased the Company’s common stock between July 10, 2019 and October 14, 2021.\n\nThe amended complaint alleged, among other things, that the Company and certain of its current and former officers and directors made false and misleading statements and failed to disclose certain information regarding the safety of the Company’s ships and success of its commercial flight program. Co-lead plaintiffs seek damages, interest, costs, expenses, attorneys’ fees, and other unspecified equitable relief. The defendants moved to dismiss the amended complaint and, on November 7, 2022, the Court granted in part and denied in part the defendants’ motion and gave the plaintiffs leave to file a further amended complaint.\n\nPlaintiffs sought leave to file a second amended complaint on December 12, 2022, and subsequently filed that complaint on February 9, 2023. The second amended complaint contains many of the same allegations as in the first amended complaint. The defendants moved to dismiss the second amended complaint and, on August 8, 2023, the Court granted in part and denied in part the defendants’ motion and did not give plaintiffs leave to file a further\n\n18\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\namended complaint. Plaintiffs moved for reconsideration of the Court’s dismissal order and, on December 19, 2023, the Court denied plaintiffs’ motion. On March 27, 2024, the defendants moved for judgment on the pleadings as to the remaining Section 10(b) insider trading claim alleged against Branson. On April 2, 2024, the Court stayed briefing on defendants’ motion for judgment on the pleadings pending resolution of plaintiffs’ anticipated motion for leave to add a new representative plaintiff, which plaintiffs’ subsequently filed on May 1, 2024. The Court granted plaintiffs’ motion on July 2, 2024. On July 8, 2024, defendants withdrew their motion for judgment on the pleadings.\n\nOn August 21, 2024, plaintiffs filed a third amended complaint in which Xinqiang Cui, Justin Carlough, Jennifer Ortiz, Richard O’Keefe-Jones, Vipul Gupta, Maria Josephine Rosales, and Hesham Ibrahim (previously named plaintiffs), were designated by plaintiffs as lead plaintiffs (in addition to Robert Scheele and Mark Kusnier), and an additional named plaintiff, Montgomery Brantley, was added. The third amended complaint contains substantively the same allegations as in the second amended complaint. On September 11, 2024, defendants filed an answer to plaintiffs’ third amended complaint.\n\nOn October 12, 2024, plaintiffs filed a motion to certify their proposed class. The defendants filed an opposition to plaintiffs’ motion on December 20, 2024, plaintiffs filed their reply on January 24, 2025, and defendants filed a sur-reply on March 21, 2025. On February 27, 2026, the Court entered an order denying the motion as moot in light of the parties’ settlement (see below).\n\nOn February 12, 2025, plaintiffs submitted a letter request to the Court seeking permission to file a motion for leave to file a Fourth Amended Complaint. On March 17, 2025, the Court granted plaintiffs’ request to file a motion for leave to amend, which plaintiffs did on March 26, 2025. Defendants filed their opposition on April 11, 2025, and plaintiffs filed their reply on April 23, 2025. On June 12, 2025, the Court issued an order allowing plaintiffs to file a fourth amended complaint. On June 26, 2025, plaintiffs filed their fourth amended complaint.\n\nOn July 18, 2025, plaintiffs and defendants (“Parties”) executed a Memorandum of Understanding (“MOU”) outlining the terms of a settlement to resolve all claims in the above-referenced action. In connection with the MOU, the Company recorded the expected net settlement of $2.25 million and included it in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2025. Pursuant to the MOU, the Company agreed to pay $8.5 million, of which the Company expected $6.25 million to be covered and paid directly by the Company’s insurers pursuant to insurance policies. The Company accrued a liability for the gross settlement amount and also recorded a receivable for the portion of the settlement that was expected to be covered directly by insurance. On November 4, 2025, plaintiffs asked the Court to preliminarily approve the Parties’ settlement. On March 11, 2026, the Court entered an order granting preliminary approval of the settlement. On March 12, 2026, the Court set a hearing on final approval of the settlement for July 9, 2026. The Company made all payments related to the settlement in April 2026 and expects the Court to provide final approval of the settlement and judgment later in 2026.\n\nSpiteri, Grenier, Laidlaw, St. Jean, and Gera derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors\n\nOn February 21, 2022, March 1, 2022, September 21, 2022, December 13, 2022, and July 11, 2024, five alleged shareholders filed separate derivative complaints purportedly on behalf of the Company against certain of the Company’s current and former officers and directors in the Eastern District of New York captioned Spiteri v. Branson et al., Case No. 1:22-cv-00933 (“Spiteri Action”), Grenier v. Branson et al., Case No. 1:22-cv-01100 (“Grenier Action”), Laidlaw v. Branson et al., Case No. 1:22-cv-05634 (“Laidlaw Action”), St. Jean v. Branson et al., Case No. 1:22-cv-7551 (“St. Jean Action”), and Gera v. Branson et al., Case No. 1:24-cv-04795 (“Gera Action”), respectively. On May 4, 2022, the Spiteri and Grenier Actions were consolidated and recaptioned In re Virgin Galactic Holdings, Inc. Derivative Litigation, Case No. 1:22-cv-00933 (“Consolidated Derivative Action”). On September 30, 2023, the Laidlaw Action was consolidated into the Consolidated Derivative Action. On September 12, 2024, the Gera Action was consolidated into the Consolidated Derivative Action. Collectively, the complaints assert violations of Sections 10(b), 14(a), and 21D of the Exchange Act of 1934 and claims of breach of fiduciary duty, aiding and abetting breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, contribution and indemnification, and unjust enrichment arising from substantially similar allegations as those contained in the securities class action\n\n19\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\ndescribed above. The complaints seek an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief.\n\nOn March 20, 2026, the parties in the Consolidated Derivative Action and the St. Jean Action reached a settlement in principle to resolve both actions. On April 23, 2026, the Parties executed a stipulation of settlement, which, if approved, will resolve all claims pending in the Consolidated Derivative Action and the St. Jean Action, and will also release all claims that were or could have been asserted on behalf of the Company, derivatively, by plaintiffs or any of the Company’s stockholders that are related to or based upon any of the allegations in the Consolidated Derivative Action and the St. Jean Action.\n\nThe proposed settlement, if approved, will result in the adoption of certain corporate reforms and a monetary payment of $2.75 million by the Company’s insurers to the Company, half of which the Company will retain and the other half of which the Company shall pay to counsel for plaintiffs in the Consolidated Derivative Action and St. Jean Action, collectively, for their attorneys’ fees and costs. On April 23, 2026, Plaintiffs asked the Court to preliminarily approve the Parties’ settlement. The proposed settlement remains subject to approval by the Court.\n\nAbughazaleh derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors\n\nOn February 13, 2023, alleged shareholder Yousef Abughazaleh filed a derivative complaint purportedly on behalf of the Company against certain of the Company’s current and former officers and directors in the District of Delaware captioned Abughazaleh v. Branson et al., Case No. 23-156-MN (“Abughazaleh Action”). The complaint asserts violations of Section 14(a) of the Exchange Act of 1934 and SEC Rule 14a-9, and claims of breach of fiduciary duty, contribution and indemnification, and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above.\n\nThe complaint seeks an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief. The Abughazaleh Action is presently stayed.\n\nMolnar and Tubbs derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors\n\nOn April 9, 2024, alleged shareholders Crystal Molnar and Cleveland Tubbs filed a derivative complaint purportedly on behalf of the Company against certain of the Company’s current and former officers and directors in the Central District of California captioned Molnar v. Branson et al., Case No. 8:24-cv-775. The complaint asserts violations of Section 10(b) and 21D of the Exchange Act of 1934, and claims of breach of fiduciary duty and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above.\n\nThe complaint seeks an unspecified sum of damages, restitution, expenses, attorneys’ fees, and other equitable relief.\n\nOn July 11, 2025, the Court entered an order to show cause regarding dismissal for lack of prosecution. In response, on July 16, 2025, plaintiffs filed a joint stipulation of voluntary dismissal without prejudice indicating their intention to participate in the Espinosa action pending in Delaware Chancery Court. On July 17, 2025, the Court granted plaintiffs’ stipulation and entered an order of dismissal.\n\nEspinosa derivatively on behalf of the Company vs. Certain Current and Former Officers and Directors\n\nOn September 3, 2024, alleged shareholder Kimberly Espinosa filed a derivative complaint purportedly on behalf of the Company against certain of the Company’s current and former officers and directors (the “Individual Defendants”) in the Delaware Court of Chancery captioned Espinosa v. Branson et al., Case No. 2024-0895-JTL. The complaint asserts claims of breach of fiduciary duty and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above.\n\nThe complaint seeks an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief. On August 12, 2025, the Court granted plaintiff Crystal Molnar’s unopposed motion to intervene in the Espinosa action. On August 14, 2025, the Company and the Individual Defendants filed a motion to dismiss the complaint. In response to the motion to dismiss, plaintiffs Espinosa and Molnar communicated their intent to file an\n\n20\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\namended complaint. Per Court order adopting the parties’ stipulation, plaintiffs filed an amended complaint on October 29, 2025. On December 23, 2025, the Company and the Individual Defendants filed a motion to dismiss the amended complaint.\n\nOn February 3, 2026, in light of settlement discussions in the Consolidated Derivative and St. Jean Actions, the parties filed a stipulation seeking to stay the Espinosa Action, including remaining briefing on the Company’s and the Individual Defendants’ motion to dismiss the amended complaint, for 120 days following the Court’s entry of the stay. The Court entered the stipulated stay on February 4, 2026. On April 7, 2026, the parties filed a joint status report notifying the Court of the settlement in principle in the Consolidated Derivative and St. Jean Actions, and requested a continued stay of the Espinosa action pending settlement proceedings in the Consolidated Derivative and St. Jean Actions.\n\n(15)    Related Party Transactions\n\nThe Company licenses its brand name from certain entities affiliated with Virgin Enterprises Limited (“VEL”), a company incorporated in England. VEL is an affiliate of the Company. Under the trademark license, the Company has the exclusive right to operate under the brand name “Virgin Galactic” worldwide. Royalties payable, excluding sponsorship royalties, are the greater of (a) a low single-digit percentage of gross sales and (b) (i) prior to the first spaceflight for paying astronauts, a mid-five figure amount in dollars and (ii) from the first spaceflight for paying astronauts, a low-six figure amount in dollars, which increases to a low-seven figure amount in dollars over a four-year ramp up and thereafter increases in correlation with the consumer price index. Royalties payable on sponsorships are based on a mid-double-digit percentage of the related gross sales. During the three months ended March 31, 2026 and 2025, the Company incurred royalty expenses of $0.8 million and $0.5 million, respectively.\n\n(16)    Supplemental Cash Flow Information\n\nThree Months Ended March 31,\n\n20262025\n\n(In thousands)\n\nSupplemental disclosure of cash flow information:\n\nCash payments for:\n\nIncome taxes$79 $— \n\nInterest1,872 — \n\nSupplemental disclosure of non-cash investing and financing activities:\n\nUnpaid purchases of property, plant and equipment$10,380 $9,276 \n\nIssuance of common stock through RSUs vested19 173 \n\n21\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)\n\nVIRGIN GALACTIC HOLDINGS, INC.\n\nNotes to Condensed Consolidated Financial Statements\n\n(17)     Subsequent Events\n\nOn April 30, 2026, the Company issued a notice of redemption to redeem up to $10 million of the 2028 Notes, plus accrued and unpaid interest thereon, on May 18, 2026. Pursuant to the indenture governing the 2028 Notes (as amended by the supplemental indenture), the redemption price will be paid by the Company by issuing shares of its common stock to the holders of the 2028 Notes. The amount of 2028 Notes redeemed and the number of shares issued will be determined based on the volume-weighted average price of the Company’s common stock over the ten-day observation period, as specified in the indenture. In the event the volume-weighted average price of the Company’s common stock on any day during the ten-day observation period is less than the floor price set forth in the indenture, the Company has elected to not redeem the related amount of 2028 Notes.\n\nDuring April 2026, the Company sold 18.1 million shares of common stock under the 2024 ATM Program and generated $51.6 million in gross proceeds, before deducting $1.4 million in commissions and other expenses.\n\n22\n\n[Table of Contents](#i1138475f8b1845b1a57eb663a0938d4b_7)"}