Key Bullitt points on S1....
1. Growth Strategy
Re-enter the Market for Turnkey Solutions for Government Customers
Our CEO, Mr. Terry, has previously run, grown and sold two companies that provided turnkey commercial aviation services for government customers, namely Flight International and Orion Air Group Services (“Orion”). Upon the sale of Orion, which was founded by Mr. Terry, he entered into a non-compete agreement which has expired. Our management and employees retain extensive relationships in the previously restricted market.
2. Significant Barriers to Entry
Significant entry barriers exist in our business and market due to the knowledge, regulatory licensing and capital required to purchase, modify, and maintain specialized aircraft assets. Our management team maintains a deep knowledge of both the commercial aviation and U.S. government special mission aircraft industry, which allows us to mobilize customized solutions that meet the specifications of our customers. Our personnel have earned the security clearances required to support various agencies within the DoD and intelligence community. Our leasing model is well-positioned to be of benefit to U.S. government contractors that generally have not wanted to own or manage aircraft assets due to their unwillingness to carry high levels of capital assets. Traditional leasing firms do not hold the requisite expertise, market knowledge or security clearances to address the unique U.S. government end customer.
3. High Switching Costs for Customers
Our strategy is to integrate, and then provide ongoing operational services for, aircraft that will be subject to extensive non-flight-related modifications, including VIP passenger accommodations for commercial customers and surveillance and communication technology for U.S. government end users. These solutions are highly engineered and place high switching costs on the customer due to the modification costs, which can total up to 50% - 200% of the base value of the aircraft, and prolonged aircraft downtime, typically 6 to 18 months, associated with modifying and outfitting an aircraft with the desired equipment. The combination of additional cost and increased time on the ground mitigates contract recompete risk for us.
4. Air-to-air Refueling
On August 14, 2017, we announced that we have entered into a definitive purchase agreement for the acquisition of six Lockheed L-1011s formerly owned and operated by the Royal Air Force (RAF) of the United Kingdom. Four of these aircraft are specifically configured for air-to-air refueling (AAR) operations and the remaining two are configured for passenger and cargo operations only. Although the aircraft served the RAF and NATO for 30 years until their retirement in 2014, the aircraft have many years of service life remaining. The L-1011s have been in flyable storage in the UK since their retirement. The closing of the acquisition will take place following satisfactory inspection of the aircraft and associated log books and support equipment.
We intend to utilize three of the AAR configured aircraft while the additional three aircraft will be used as spare parts. Marketing of the aircraft for contractor owned/operated AAR operations will begin immediately with a focus on the US Navy, NATO, and other allied air forces which require hose and drogue AAR services. The aircraft are currently registered in the United States and will be ferried from the UK to an existing TAS base of operations in the continental USA upon acceptance and the completion of required maintenance.
5. Providing three Pilatus PC-12s with advanced ISR equipment for deployment in Africa, in 56 days.
6. We may seek to list on the NASDAQ Capital Market at some time in the future, and as a result, when practicable, we will seek to comply generally with NASDAQ corporate governance requirements on an ongoing basis.
