S-1: Surf Air Mobility Files for Resale of Up to 5.8 Million Shares by Palantir Technologies

Surf Air Mobility has filed a registration statement for the resale of up to 5,807,229 shares of its common stock by a selling stockholder, Palantir Technologies Inc.

Summary

• Surf Air Mobility Inc. has filed a Form S-1 registration statement with the SEC to register the resale of up to 5,807,229 shares of its common stock.
• The shares are currently held by a selling stockholder, Palantir Technologies Inc., who may choose to sell them from time to time.
• The company will not receive any proceeds from the sale of these shares.
• The common stock is listed on the New York Stock Exchange (NYSE) under the symbol SRFM.
• On May 31, 2024, the last sale price of the company's common stock as reported on the NYSE was $0.34 per share.
• Surf Air Mobility is classified as an emerging growth company and a smaller reporting company, which allows it to take advantage of reduced public company reporting requirements.
• The company's Amended and Restated Bylaws and Certificate of Incorporation limit the voting rights of certain foreign persons if they own more than 25% of the total voting interest.
• The company aims to commercialize green regional aviation at scale, targeting a market that could reach $75-115B by 2035.
• The company expects FAA certification of its first product, a fully-electric powertrain STC for the Cessna Caravan, to occur in early 2027.
• The company has a master agreement with Jetstream Aviation Capital, LLC to finance up to $450 million to fund the planned growth of its fleet of turboprop aircraft.

Sentiment

Score: 6

Explanation: The document is neutral. It is a registration statement for a stock resale, outlining both opportunities and risks without expressing strong positive or negative sentiment.

Positives

• The company aims to commercialize green regional aviation at scale, targeting a market that could reach $75-115B by 2035.
• The company has a master agreement with Jetstream Aviation Capital, LLC to finance up to $450 million for fleet growth.
• 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 bylaws restrict foreign ownership voting rights if it exceeds 25%.

Risks

• Investing in the company's common stock involves a high degree of risk, as detailed in the 2023 Form 10-K and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.
• The company's future ability to pay contractual obligations and liquidity will depend on operating performance, cash flow, and ability to secure adequate financing.
• The powertrain technology the company plans to develop does not yet exist and remains subject to approval by regulators.
• The company is dependent on third-party partners and suppliers for the components and collaboration in its development of fully-electric and hybrid-electric powertrains.

Future Outlook

The company aims to commercialize green regional aviation at scale and believes that electrified aircraft, with lower operating costs and emissions, could be the key to unlocking this electrified air-mobility market.

Industry Context

The company is positioning itself to capitalize on the growing market for electrified regional air mobility, which is estimated to reach $75-115B by 2035. The company's focus on upgrading existing aircraft fleets with fully-electric and hybrid-electric powertrain technology aligns with the industry's increasing focus on sustainability and reducing emissions.

Comparison to Industry Standards

• The document mentions McKinsey & Company's estimate that the electrified regional air-mobility market could reach $75-115B by 2035, requiring 18,000-36,000 new and retrofitted aircraft.
• The company's partnership with Textron Aviation, one of the largest general aviation original equipment manufacturers in the world by units sold, positions it well to capture a significant share of this market.
• The company's focus on the Cessna Caravan, one of the most prolific family of aircraft in the single engine turboprop category, provides a large target market for its electrification program.

Stakeholder Impact

• Shareholders: The resale of shares by Palantir Technologies Inc. may impact the stock price.
• Customers: The company aims to reduce the cost and environmental impact of regional flying, which could benefit customers.
• Suppliers: The company's electrification program will create opportunities for suppliers of fully-electric and hybrid-electric powertrain technology.
• Employees: The company's growth plans may create new job opportunities.

Next Steps

• The selling stockholder, Palantir Technologies Inc., may elect to sell its shares of common stock from time to time.
• The company expects FAA certification of its first product, a fully-electric powertrain STC for the Cessna Caravan, to occur in early 2027.
• The company plans to deploy capital to finance its current TAI fleet order and, once the EP1 powertrains are certified, to help operator-customers finance their EP1 upgrades and new aircraft purchases from TAI.

Key Dates

Keywords

Surf Air Mobility, common stock, resale, Palantir Technologies, electrification, regional air mobility, Cessna Caravan, emerging growth company, NYSE, SRFM