Related Party Transactions |
12 Months Ended |
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Dec. 31, 2022 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Related Party Transactions The Company licenses our brand name from certain entities affiliated with VEL, a company incorporated in England. VEL is an affiliate of VIL. Under the trademark license agreement (“TMLA”), the Company has the exclusive and non-exclusive rights to use the brand name “Virgin Orbit” and the Virgin signature logo. On August 22, 2021, the TMLA was amended and restated and novated to Virgin Orbit in order for us to continue to have these certain rights to the “Virgin Orbit” name and brand and the Virgin signature logo following the Closing. Pursuant to the terms of the amended TMLA, we are obligated to pay VEL quarterly royalties equal to the greater of (a) 1% of revenue, or (b)(i) $40 thousand for each of four quarters prior to the Company’s first commercial launch, Tubular Bells, Part One, in June 2021; (b)(ii) $0.4 million for each of four quarters after the commercial launch date; (b)(iii) $0.8 million for each of the four quarters two years after commercial launch date. As of December 31, 2022, royalties payable was $0.8 million due to VEL. The royalties expense was $2.3 million for the year ended December 31, 2022. As of December 31, 2021, royalties payable was $72 thousand, which includes a prorated fee from the amended TMLA of $12 thousand. Based on the original TMLA dated March 1, 2017, royalties payable for the use of license were the greater of 1% of revenue, or $60 thousand per quarter, after the Company’s first commercial launch, Tubular Bells, Part One, in June 2021. Prior to this date, royalties payable for the use of license was the greater of 1% of revenue or $20 thousand per quarter.
On October 25, 2019, the Company entered into a transition services agreement (“TSA”) with Galactic Enterprises, LLC, f/k/a Virgin Galactic, LLC (“GEL”) primarily for certain operating and administrative services. The original agreement expired in October 2021, and a limited form of this agreement was extended through July 15, 2022. Under the original agreement, GEL provided pilot utilization services, finance and accounting services and insurance advisory services to the Company, and the Company provided propulsion engineering services, tank design support services, tank manufacturing services, and office space access and usage services, as well as business development and regulatory affairs services to GEL. Under the limited extension, GEL provides pilot utilization services and the use of office space, and the Company provides GEL with propulsion engineering services, tank design support services, tank manufacturing services, and office space access and usage. Costs incurred for the TSA were not material for the year ended December 31, 2022 and December 31, 2021. In addition to the TSA, the Company records direct charges from GEL for other general administrative expenses. There were $4.0 thousand in charges for the year ended December 31, 2022 and $91.0 thousand in reimbursements for the year ended December 31, 2021, which were recorded as a reduction of selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss.
The Company has a receivable of $32.0 thousand and a payable of $42.0 thousand as of December 31, 2022 and December 31, 2021, respectively, due to Virgin Galactic Holdings, Inc. (“VGH”), the parent of GEL.
As discussed in Note 10. Convertible Notes, on November 4, 2022 (the “November VIL Convertible Note”) and December 19, 2022 (the “December VIL Convertible Note” and, together with the November VIL Convertible Note, the “2022 VIL Convertible Notes”), the Company sold and issued to VIL a senior unsecured convertible note and a secured convertible note in the principal amounts of $25.0 million and $20.0 million, respectively, which are convertible into shares of the Company’s common stock or other Qualified Securities (as defined in Note 10. Convertible Notes).
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