S-1/A: Surf Air Mobility Files Amendment No. 2 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 to allow a selling stockholder to resell up to 325 million shares of common stock.

Summary

• Surf Air Mobility Inc. filed an Amendment No. 2 to Form S-1 to register the resale of up to 325,000,000 shares of common stock by a selling stockholder.
• The shares may consist of outstanding shares, shares issuable under the Share Subscription Facility, and shares issuable upon conversion of the Mandatory Convertible Security.
• The selling stockholder will decide the timing, manner, and amount of any sales.
• 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 a last sale price of $0.31 per share on July 31, 2024.
• Surf Air Mobility is classified as an emerging growth company and a smaller reporting company, which allows for reduced public company reporting requirements.
• The company's Amended and Restated Bylaws and Certificate of Incorporation limit non-U.S. citizens' voting interest to 25.0% and total equity ownership to 49.0%.

Sentiment

Score: 4

Explanation: The document is primarily a registration statement for the resale of shares, which is neutral. However, the low stock price and the need for potential capital raising activities suggest some financial challenges, lowering the sentiment score.

Positives

• The registration allows the selling stockholder flexibility in selling shares.
• The company is an emerging growth company and a smaller reporting company, which allows for reduced reporting requirements.

Negatives

• The company will not receive any proceeds from the sale of shares by the selling stockholder.
• Sales of a large number of shares by the selling stockholder could negatively impact the stock price.
• The company's stock price was $0.31 on July 31, 2024, indicating potential financial challenges.
• The company's Amended and Restated Bylaws and Certificate of Incorporation limit non-U.S. citizens' voting interest to 25.0% and total equity ownership to 49.0%.

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.
• We may fail to qualify for continued listing on the NYSE, which could make it more difficult for our 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 is aiming to commercializing 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, which aligns 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 commercializing electrified powertrains for existing aircraft like the Cessna Caravan.

Corporate Governance

Stakeholder Impact

• Shareholders may experience dilution if the selling stockholder sells a large number of shares.
• The company's ability to execute its strategic plan depends on its access to capital, which could impact employees, customers, and suppliers.

Next Steps

• The selling stockholder will determine the timing and manner of selling the registered shares.
• The company intends to continue to draw upon the GEM Advances in 2024 to augment its capital resources to address its capital needs.
• The company is expecting FAA certification of its first product, a fully-electric powertrain STC for the Cessna Caravan to occur in early 2027, and its hybrid-electric Cessna Caravan STC to occur thereafter.

Key Dates

Keywords

common stock, resale, selling stockholder, share subscription facility, mandatory convertible security, emerging growth company, smaller reporting company, voting rights, NYSE, SRFM