8-K
Surf Air Mobility Inc. (SRFM)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
July 27, 2023
SURF AIR MOBILITY INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41759 | 36-5025592 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
12111 S. Crenshaw Blvd.
Hawthorne, CA 90250
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code:
(310) 365-3675
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant<br>to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to<br>Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications<br>pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications<br>pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: |
|---|---|---|
| Common stock, par value $0.0001 per share | SRFM | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.01 Complete of Acquisition or Disposition of Assets.
On March 17, 2021, Surf Air Mobility Inc., a Delaware corporation (the “Company”), Surf Air Global Limited, a BVI business company formed under the laws of the British Virgin Islands (“SAGL”), Surf Air Inc., a Delaware Corporation (Surf Air Inc.”), SAC Merger Sub Inc., a Delaware corporation (“Merger Sub”), and Southern Airways Corporation, a Delaware corporation (“Southern”) entered into an Acquisition Agreement (as amended from time to time, the “Acquisition Agreement”). Pursuant to the Acquisition Agreement, Merger Sub merged with and into Southern, with Southern continuing as the surviving corporation and a wholly-owned subsidiary of the Company (the “Merger”).
The Acquisition Agreement and the transactions contemplated thereby, including the Merger, were previously described in the Registration Statement on Form S-1 and Form S-4, originally filed with the Securities and Exchange Commission (the “SEC”) on June 5, 2023 (Registration No. 333-272403), including exhibits, and as may be subsequently amended from time to time (the “Registration Statement”), which is hereby incorporated by reference. In addition, the above-referenced description included in any prospectus relating to the Registration Statement filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, shall be deemed to be incorporated by reference herein.
Pursuant to the Acquisition Agreement, and following the satisfaction or waiver of the conditions specified therein, on July 27, 2023, Merger Sub merged with an into Southern, with Southern surviving the Merger as a wholly-owned subsidiary of the Company.
At the effective time of the Merger (the “Effective Time”), (i) each share of common stock, par value $0.0001 per share, of Southern (“Southern Common Stock”) issued and outstanding immediately prior to the Effective Time was cancelled and extinguished and converted automatically into the right of the holder to receive a certain number of common stock of the Company, par value $0.0001 (“Company Common Stock”), (ii) each share of Series A preferred stock, par value $0.0001 per share, of Southern (“Series A Preferred Stock”) issued and outstanding immediately prior to the Effective Time was cancelled and extinguished and converted automatically into the right of the holder to receive a certain number of Company Common Stock, (iii) each share of Series A-1 preferred stock, par value $0.0001 per share, of Southern (“Series A-1 Preferred Stock”) issued and outstanding immediately prior to the Effective Time was cancelled and extinguished and converted automatically into the right of the holder to receive a certain number of Company Common Stock, (iv) each share of Series A-2 preferred stock, par value $0.0001 per share, of Southern (“Series A-2 Preferred Stock”) issued and outstanding immediately prior to the Effective Time was cancelled and extinguished and converted automatically into the right of the holder to receive a certain number of Company Common Stock, and (v) each share of Series B preferred stock, par value $0.0001 per share, of Southern (“Series B Preferred Stock” and collectively with Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock, “Southern Preferred Stock”) issued and outstanding immediately prior to the Effective Time was cancelled and extinguished and converted automatically into the right of the holder to receive a certain number of Company Common Stock. In each case the number of shares of Company Common Stock payable to the holders to Southern Common Stock and Southern Preferred Stock was determined in accordance with the respective rights of such holders under the organizational documents of Southern as in effect immediately prior to the Merger. No fractional shares of Southern Common Stock and/or Southern Preferred Stock were issued in connection with the Merger. At the Effective Time. Southern had no other equity securities or securities convertible or exchangeable for equity securities of Southern.
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Pursuant to the Acquisition Agreement, the holders of Southern Common Stock and Southern Preferred Stock were entitled to the right to receive a number of shares of Company Common Stock (the “Aggregate Merger Consideration”) equal to the greater of (a) shares of Company Common having an aggregate value equal to $81.25 million (based upon the opening price of shares of Company Common Stock on the New York Stock Exchange on July 27, 2023 when those shares were first listed and traded) and (b) 12.5% of shares of the Fully-Diluted Shares (as defined in the Acquisition Agreement). This amount based upon the $5.00 per share opening price was determined to be 16,250,00 shares of Company Common Stock. In total, 16,249,963 shares of Company Common Stock were allocated to Southern shareholders while the remaining amount was paid out in cash in lieu of fractional shares to those shareholders on a pro rata basis.
The foregoing summary does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Acquisition Agreement and all subsequent amendments, which are attached hereto as Exhibits 2.1, 2.2, 2.3, 2.4, 2.5 and 2.6, respectively, and are incorporated herein by reference.
The Acquisition Agreement has been attached as an exhibit to this report to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about Southern, the Company or the other parties thereto or to modify or supplement any factual disclosures about the Company in its public reports filed with the Securities and Exchange Commission. The Acquisition Agreement includes representations, warranties and covenants of Southern, the Company and the other parties thereto made solely for the purposes of the Acquisition Agreement and which may be subject to important qualifications and limitations agreed to by Southern, the company and the other parties thereto in connection with the negotiated terms of the Acquisition Agreement. Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to certain disclosures between the parties and a contractual standard of materiality different from those generally applicable to the Company’s SEC filings. In addition, the representations and warranties were made for purposes of allocating risk among the parties to the Acquisition Agreement and should not be relied upon as establishing factual matters.
Item 7.01 Regulation FD
On August 2, 2023, Company issued a press release announcing the consummation of the acquisition of Southern. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished with this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
The Company announces material information to its investors using filings with the Securities and Exchange Commission, the investor relations page on the Company’s website (www.surfair.com), press releases, public conference calls, and public webcasts. The information disclosed by the foregoing channels could be deemed to be material information. As such, the Company encourages investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels.
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Item 8.01. Other Events
In connection with the settlement of various SAFEs in connection with the Company’s previously disclosed internal reorganization and listing of the Company Common Stock, the Company issued 17,365,357 shares of Company Common Stock on July 27, 2023 to various SAFE investors. As of July 27, 2023, the Company had 69,742,981 million basic shares Company Common Stock outstanding and 71,603,186 million fully diluted shares of Company Common Stock outstanding. This number of shares issued and outstanding excludes any shares that may be issued in a future financing by the Company.
As of July 27, 2023, the Company had $34.7 million of cash on hand.
Item 9.01. Financial Statements and Exhibits.
(a) Financial statement of business acquired
To the extent required, the Company will provide the financial statements required to be filed by Item 9.01(a) of Form 8-K by amendment to this Current Report no later than the 71^st^ day after the required filing date for this Current Report.
(a) Financial statement of business acquired
To the extent required, the Company will provide the financial statements required to be filed by Item 9.01(a) of Form 8-K by amendment to this Current Report no later than the 71^st^ day after the required filing date for this Current Report.
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(d) Exhibits.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| SURF AIR MOBILITY INC. | ||
|---|---|---|
| Date: August 2, 2023 | By: | /s/ Deanna White |
| Name: | Deanna White | |
| Title: | Chief Financial Officer |
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Exhibit 99.1
Surf Air Mobility Announces the Successful Completion of its Acquisition of
Southern Airways
Combination Creates the Largest Commuter Airlinein the US^1^
Followingthe Close of the Transaction on July 27, 2023, Surf Air Mobility has 69.7 Million Basic Shares Outstanding and 71.6 Million Fully DilutedShares Outstanding
Surf Air Mobilityto Release Financial Results for the Second Quarter 2023 and Provide Full Year 2023 Outlook the week of August 14, 2023
Surf Air Mobility Inc. (“Surf Air Mobility” or “SAM”), a regional air mobility platform aiming to sustainably connect the world’s communities, announced today that the transaction between Surf Air Mobility and Southern Airways (“Southern”) closed immediately prior to the listing of Surf Air Mobility on the New York Stock Exchange under the ticker symbol “SRFM” on July 27, 2023. The combination of Surf Air Mobility and Southern will provide the basis for SAM’s anticipated expanded, nationwide regional air mobility platform. Following the close of the transaction on July 27, 2023, Surf Air Mobility has 69,742,981 basic shares outstanding and 71,603,186 fully diluted shares outstanding.
Operational and Financial Highlights, SurfAir and Southern together:
| ● | 450,000 passengers across 48 cities with over 75,000 departures in 2022 |
|---|---|
| ● | Revenue of $100.6 million for the<br>full year 2022, up 44.6% YoY on a combined basis^2^ |
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| ● | Operating loss of $(111.7) million for the full year 2022, inclusive of $(33.4) million one-time<br>transaction related expenses and $(38.2) million in stock based compensation |
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| ● | Cash on hand at July 27, 2023 of<br>$34.7 million, with the ability to draw $100 million in cash advances under the GEM share subscription facility^3^ |
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| ● | Aircraft financing facility with Jetstream for up to $450 million to finance further expansion |
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| ● | Fleet order with Textron Aviation Inc. to enable the growth of SAM’s fleet by up to 150 Cessna Grand<br>Caravans |
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| ● | Exclusive provider to Textron Aviation Inc. of battery electric and hybrid electric powertrain technology<br>for the Cessna Grand Caravan |
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Surf Air Mobility also announced that it will release its financial results for the second quarter of 2023 and provide outlook for the full year 2023 the week of August 14, 2023.
“Surf Air Mobility is building a regional air mobility platform to sustainably connect the world’s communities. We are thrilled to announce the completion of our transaction, combining Surf Air and Southern into Surf Air Mobility, the largest commuter airline in the US by scheduled departures. We are now well-positioned to build a platform that delivers accessible, affordable, and sustainable regional travel for our customers,” said Stan Little, CEO of Surf Air Mobility. “Our public listing is just the beginning, and we look forward to sharing our journey as we execute on our vision to advance the future of flight.”
Surf Air Mobility intends to accelerate the adoption of green flying by developing, together with its commercial partners, hybrid-electric and fully-electric powertrain technology to upgrade existing fleets. By creating a financing and services infrastructure to enable this transition at an industry-wide level, Surf Air Mobility believes it can bring electrified aircraft to market at scale and substantially reduce the cost and environmental impact of regional flying. Surf Air Mobility believes such cost and environmental impact reductions are achievable by the end of the decade, and that operating as a publicly-traded company and having efficient access to growth capital will enable and accelerate the implementation of its strategic plan.
Sudhin Shahani, co-founder of Surf Air Mobility, continued, “Our end-state is electrification, but our flywheel begins with flying more passengers via network expansion and providing solutions to operators via Aircraft-as-a-Service (ACaaS), which we believe will drive growth in the near- and mid-term. Surf Air Mobility is a scaled – and growing – regional air travel company today, and we believe our path to electrification via supplemental type certification (“STC”) will position us as a capital efficient, technology-enabled, first mover in the regional air ecosystem.”
ABOUT SURF AIR MOBILITY
Surf Air Mobility is a Los Angeles-based regional air mobility platform expanding the category of regional air travel to reinvent flying through the power of electrification. In an effort to substantially reduce the cost and environmental impact of flying and as the operator of the largest commuter airline in the US, Surf Air Mobility intends to develop powertrain technology with its commercial partners to electrify existing fleets and bring electrified aircraft to market at scale. The management team has deep experience and expertise across aviation, electrification, and consumer technology.
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Forward LookingStatements
The information in this press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among other things, statements about: Surf Air Mobility’s ability to anticipate the future needs of the air mobility market; future trends in the aviation industry, generally; Surf Air Mobility’s future growth strategy and growth rate and its ability to access its financings, grow its fleet. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “could”, “might”, “plan”, “possible”, “project”, “strive”, “budget”, “forecast”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. These forward-looking statements include, without limitation, statements regarding the satisfaction of required conditions for the listing of the Surf Air Mobility common stock. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: Surf Air Mobility’s future ability to pay contractual obligations and liquidity will depend on operating performance, cash flow and ability to secure adequate financing; Surf Air Mobility’s limited operating history and that Surf Air Mobility has not yet manufactured any hybrid-electric or fully-electric aircraft; the powertrain technology Surf Air Mobility plans to develop does not yet exist; the inability to maintain and strengthen Surf Air’s brand and its reputation as a regional airline; any accidents or incidents involving hybrid-electric or fully-electric aircraft; the inability to accurately forecast demand for products and manage product inventory in an effective and efficient manner; the dependence on third-party partners and suppliers for the components and collaboration in Surf Air Mobility’s development of hybrid-electric and fully-electric powertrains, and any interruptions, disagreements or delays with those partners and suppliers; the inability to execute business objectives and growth strategies successfully or sustain Surf Air Mobility’s growth; the inability of Surf Air Mobility’s customers to pay for Surf Air Mobility’s services; the inability of Surf Air Mobility to obtain additional financing or access the capital markets to fund its ongoing operations on acceptable terms and conditions; the outcome of any legal proceedings that might be instituted against Surf Air, Southern or Surf Air Mobility; changes in applicable laws or regulations, and the impact of the regulatory environment and complexities with compliance related to such environment; and other risks and uncertainties indicated in the prospectus. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Although Surf Air Mobility believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Surf Air Mobility cannot guarantee future results, level of activity, performance or achievements and there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking statements and financial projections. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Surf Air Mobility does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Additional information regarding these and other factors that could affect SAM’s results is included in SAM’s SEC filings, which may be obtained by visiting the SEC’s website at www.sec.gov or the investor relations page on SAM’s website at https://investors.surfair.com under the “Financials—SEC Filings” section. Information contained on, or that is referenced or can be accessed through, our website does not constitute part of this document and inclusions of any website addresses herein are inactive textual references only.
| ^1^ | Based on the number of scheduled flight departures during<br>2022 |
|---|---|
| ^2^ | Financial results are derived from the unaudited pro forma<br>condensed combined statements of operations for the year ended December 31, 2022, which combines the historical audited consolidated<br>statement of operations of Surf Air for the year ended December 31, 2022 and the historical audited consolidated statement of operations<br>of Southern for the year ended December 31, 2022 on a pro forma basis to reflect certain adjustments as described in SAM’s registration<br>statement on Form S-1/S-4 (333-272403) |
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| ^3^ | Please refer to further details in the company’s registration<br>statement available on the SEC’s website or the Company’s Investor Relations website at https://investors.surfair.com/. This<br>press release does not constitute an offer for the sale of securities. |
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For Press:
press@surfair.com
For Investors:
investors@surfair.com
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