S-1/A: Surf Air Mobility Files Amendment No. 1 to Form S-1 Registration Statement for Resale of Up to 325 Million Shares

Surf Air Mobility has filed an amendment to its registration statement for the resale of up to 325 million shares of common stock by a selling stockholder.

Summary

• Surf Air Mobility Inc. filed an amendment to its Form S-1 registration statement on July 11, 2024, relating to the resale of up to 325,000,000 shares of its common stock.
• The shares are to be resold by a stockholder, GEM Global Yield LLC SCS, and may consist of outstanding shares, shares issuable under a Share Subscription Facility, and shares issuable upon conversion of a Mandatory Convertible Security.
• The selling stockholder may sell shares from time to time at prevailing market prices or in privately negotiated transactions.
• Surf Air Mobility will not receive any proceeds from the sale of these shares.
• The company's common stock is listed on the NYSE under the symbol SRFM, with the last sale price on July 10, 2024, at $0.35 per share.
• Surf Air Mobility is classified as an emerging growth company and a smaller reporting company, which allows for reduced public company reporting requirements.
• Non-citizens' voting rights are restricted if they own more than 25% of the total voting interest, with permitted holders' voting rights reduced pro rata if their combined ownership exceeds 25.0%.

Sentiment

Score: 4

Explanation: The document is largely factual and descriptive, but the low stock price and potential delisting concerns contribute to a slightly negative sentiment.

Positives

• The registration allows the selling stockholder to potentially monetize its investment in Surf Air Mobility.
• The company is an established regional air-mobility platform providing scheduled and on-demand regional flights to passengers across the U.S.
• The company has relationships with industry leaders across the value chain, which it believes provide significant competitive advantages as it pursues the implementation of its electrification program.
• The company has a partnership with SkyWest Airlines, Inc. to provide a pilot hiring and training pathway.

Negatives

• The company will not receive any proceeds from the sale of shares by the selling stockholder.
• The company's stock price is low, trading at $0.35 per share as of July 10, 2024.
• The company is subject to restrictions on foreign ownership and voting rights.
• The company may fail to qualify for continued listing on the NYSE, which could make it more difficult for stockholders to sell their shares.

Risks

• The company may not have access to the full amount available under the Share Subscription Facility, or may not be able to draw down under the Share Subscription Facility in a timely manner (or at all) in order to meet its existing obligations.
• The purchase price per share to be paid by GEM for the shares of our Common Stock that we may elect to sell to GEM under the Share Subscription Facility pursuant to the GEM Advances or draw downs, if any, will fluctuate based on the volume weighted average trading price of our Common Stock during the applicable period for each purchase made pursuant to the Share Subscription Facility.
• Sales to GEM by us in order to utilize the GEM Advance will, and any future draw downs under the Share Subscription Facility could, result in substantial dilution to the interests of other holders of its shares of our Common Stock.
• Depending on market liquidity at the time, resales of those shares by GEM may cause the public trading price of our Common Stock to decrease.
• The company may fail to qualify for continued listing on the NYSE, which could make it more difficult for stockholders to sell their shares.

Future Outlook

The company expects the combination of its legacy networks will provide the basis for its expanded, nationwide regional air mobility platform and aims to commercialize green regional aviation at scale.

Industry Context

The document highlights Surf Air Mobility's position in the regional air mobility market and its efforts to develop electrified powertrain technology, aligning with the broader industry trend towards sustainable aviation.

Comparison to Industry Standards

• The document mentions McKinsey & Company estimates that the electrified regional air-mobility market could reach $75-115B by 2035 and require 18,000-36,000 new and retrofitted aircraft.
• Surf Air Mobility aims to be a key player in this market by developing and certifying fully-electric and hybrid-electric powertrains for existing aircraft like the Cessna Caravan.

Stakeholder Impact

• Shareholders may experience dilution due to the potential sale of a large number of shares.
• Employees may be affected by the company's financial performance and ability to execute its strategic plan.
• Customers may benefit from the company's efforts to develop more sustainable and cost-effective air travel options.

Next Steps

• The selling stockholder may elect to sell shares of common stock from time to time.
• The company intends to continue to draw upon the GEM Advances in 2024 to augment its capital resources.
• The company is working towards FAA certification of its first fully-electric powertrain STC for the Cessna Caravan, expected in early 2027.

Key Dates

Keywords

common stock, resale, registration statement, share subscription facility, mandatory convertible security, selling stockholder, emerging growth company, smaller reporting company, voting rights, NYSE, SRFM, GEM Global Yield LLC SCS, Surf Air Mobility