Flewber Global Files To Raise $8 Million In U.S. Micro-IPO

A Quick Take On Flewber Global Inc.

Flewber Global Inc. (FLYF) has filed to raise $8.05 million in an IPO of its common stock, according to an SEC S-1 registration statement.

The firm seeks to operate as a widely-used on-demand private air transportation company in the United States.

When we learn more IPO details, I’ll provide an update.

Flewber Overview

New York, NY-based Flewber Global Inc. was founded to acquire a certified air-taxi operation and provide users with the ability to reserve transportation via a mobile app between regional airports in the New York, New Jersey and Connecticut tri-state area.

The company's name, "Flewber," rhymes with "Uber," and is a clue to the firm’s aspirations to provide convenient regional aerial transportation services via a mobile app.

Management is headed by Chairman and CEO Marc Sellouk, who has been with the firm since its inception and was previously the founder and CEO of Transbeam, a provider of management data and voice services.

Customers use the firm's services for personal and business requirements.

As of March 31, 2023, Flewber has booked fair market value investment of $4.7 million in equity from investors, including I Financial Ventures Group and others.

Flewber - Customer Acquisition

The firm plans to acquire two Cirrus SF50 Vision Jets and to update its mobile app to enable fully automated booking of its services.

However, since its original app launch in 2019, the company has had "minimal" use of its app to book flights.

Sales and Marketing expenses as a percentage of total revenue have fluctuated as revenues have decreased, as the figures below indicate:

(Source - SEC.)

The Sales and Marketing efficiency multiple, defined as how many dollars of additional new revenue are generated by each dollar of Sales and Marketing expense, was negative (433.9x) in the most recent reporting period, as shown in the table below:

(Source - SEC.)

Flewber’s Market & Competition

According to a 2023 market research report by Georgia Tech, the regional air mobility market in the U.S. is seriously underserved.

Per the report, "out of 5,000 public airports with runways exceeding 3,000 feet, only 500 or just one in 10 are used by commercial air carriers..."

The Georgia Tech study, funded by NASA, concludes that "thanks to advances in aviation electric propulsion systems, a new market for regional air mobility could open up additional traveling options for U.S. travelers."

Also, autonomous operations will likely simplify aircraft operations and lower costs by reducing the number of pilots in the cockpit and improving energy efficiency.

The firm faces competition from a variety of direct and indirect competitors as consumers use other forms of transit in their region, including cars, vans, buses and trains.

Flewber Global Inc. Financial Performance

The company’s recent financial results can be summarized as follows:

• Sharply declining topline revenue

• Reduced gross profit and gross margin

• High operating losses and cash used in operations.

Below are relevant financial results derived from the firm’s registration statement:

(Source - SEC.)

As of March 31, 2023, Flewber had $168,854 in cash and $2.2 million in total liabilities.

Free cash flow during the twelve months ending March 31, 2023, was negative ($1.6 million).

Flewber Global Inc. IPO Details

Flewber intends to raise $8.05 million in gross proceeds from an IPO of its common stock, although the final amount may differ.

No existing shareholders have indicated an interest in purchasing shares at the IPO price.

Management says the firm qualifies as an "emerging growth company" as defined by the 2012 JOBS Act and may elect to take advantage of reduced public company reporting requirements; prospective shareholders would receive less information for the IPO and, in the future, as a publicly-held company within the requirements of the Act.

The company also claims to be a "smaller reporting company," meaning it may be exempt from the more stringent financial reporting requirements before and after an IPO. For a non-exhaustive comparison of emerging growth company and smaller reporting company reporting and related requirements, view a summary here.

Management says it will use the net proceeds from the IPO as follows:

approximately $3.1 million (regardless of whether or not the Representative exercises its over-allotment option) to purchase the First Cirrus Aircraft (which is expected to occur on or before August 15, 2023)); however, we are seeking alternative financing for all or a portion of the remaining purchase price for such purchase and to the extent we are successful in obtaining alternative financing prior to the completion of this offering, we will reduce the amount of net proceeds allocated to such purchase accordingly and will increase the amount of net proceeds allocated for working capital and other general corporate purposes;

to purchase the Second Cirrus Aircraft (which is expected to occur sometime prior to the end of 2023); however, we may seek alternative financing for all or a portion of the purchase price for such purchase and, if we do, we will reduce the amount of net proceeds allocated to such purchase accordingly and will increase the amount of net proceeds allocated for working capital and other general corporate purposes;

to hire additional staff and third-party consultants; and

the remainder for working capital and other general corporate purposes, including any net proceeds not used to purchase the First Cirrus Aircraft and/or the Second Cirrus Aircraft, as a result of our having obtained alternative financing to purchase either of such aircraft.

We believe that the net proceeds of this offering, together with our existing cash, will enable us to fund our operations for at least 12 months following the completion of this offering. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we expect.

(Source - SEC.)

Management’s presentation of the company roadshow is not available.

Regarding outstanding legal proceedings, management says "there is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such."

The listed bookrunners of the IPO are Maxim Group and Joseph Gunnar & Co.

Commentary About Flewber’s IPO

FLYF is seeking U.S. public capital market investment to fund the purchase of additional aircraft and for its general corporate growth initiatives.

The firm’s financials have produced dropping top line revenue, lower gross profit and gross margin and substantial operating losses and cash used in operations.

Free cash flow for the twelve months ending March 31, 2023, was negative ($1.6 million).

Sales and Marketing expenses as a percentage of total revenue have fluctuated as revenue has declined.

The firm currently plans to pay no dividends and to retain any future earnings for reinvestment back into the firm's growth and working capital requirements.

FLYF’s recent capital spending history indicates it has spent lightly on capital expenditures even as it has generated negative operating cash flow.

The market opportunity for providing regional air transportation services to the United States is large and potentially underserved.

Maxim Group is the lead underwriter, and the six IPOs led by the firm over the last 12-month period have generated an average return of negative (21.1%) since their IPO. This is a bottom-tier performance for all major underwriters during the period.

Business risks to Flewber Global Inc.’s outlook as a public company include the large capital requirements to build, market and operate an air taxi service.

When we learn more IPO details from management, I’ll provide a final opinion.

Expected IPO Pricing Date: To be announced.

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