SRFM Surf Air Mobility Inc

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 14, 2024

SURF AIR MOBILITY INC.

(Exact name of registrant as specified in its charter)

Delaware		001-41759		36-5025592
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

12111 S. Crenshaw Blvd.

Hawthorne, CA 90250

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code:

(424) 332-5480

(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 to Rule 425 under the Securities Act (17 CFR 230.425)

	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 2.02 Results of Operations and Financial Condition

On May 14, 2024, Surf Air Mobility Inc. (the “Company”) issued a press release announcing the Company’s financial results for the first quarter ended March 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated herein by reference.

The information in this Item 2.02, including Exhibit 99.1, are furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

 

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number		Exhibit Title or Description
99.1		Press Release dated May 14, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL)

1

---

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: May 14, 2024	By:	/s/ Oliver Reeves
	Name:	Oliver Reeves
	Title:	Chief Financial Officer

2

 

 

---

 

Surf Air Mobility Reports First Quarter Revenue Growth Above Guidance

and Announces CEO Transition

 

Deanna White, former CFO, will become

Chief Operating Officer and interim CEO, Stan Little to assume role of “Founder”

Q1 2024 Revenue of $30.6 million, up 9.5% Year-Over-Year on a Pro Forma Basis, Beats Guidance

LOS ANGELES – May 14, 2024 – Surf Air Mobility Inc. (NYSE: SRFM), a leading regional air mobility platform, today reported its first quarter 2024 results. Please visit the Surf Air Mobility investor relations website at investors.surfair.com for more information and to listen to the accompanying earnings call.

 

CEO Transition:

Surf Air Mobility Inc. today announced that Southern Airways founder and current Surf Air CEO Stan Little will transition to a “Founder’s” role. Former CFO and current Senior Advisor Deanna White will become Chief Operating Officer and interim CEO.

 

Deanna is a seasoned industry leader with a track record of success in the C-Suite of multiple innovative companies across the air mobility sector. Previously, Deanna was CEO of Bombardier Flexjet, a global leader in private aviation, which was ultimately sold to Directional Aviation Capital. Following that, she was COO of Kitty Hawk, an EVTOL startup, which was sold during her tenure to Boeing and has subsequently been rebranded as Wisk Aero.

 

Stan Little will remain an active participant in the company’s long-term strategy. “It was one of the high points of my career to build Southern Airways from the ground up with such a dedicated team, and I look forward to continuing to help Surf Air Mobility transform itself into the premier “green” commuter airline in the world,” said Little on Tuesday as he joined Purdue University officials in launching the first commuter service in a generation from the University to Chicago O’Hare.

 

---

 

 

“We are thrilled that Deanna has agreed to assume the role of Chief Operating Officer and interim CEO as the company turns its focus to profitability and efficiency across its flight operations,” said Carl Albert, Surf Air Mobility’s Chairman of the Board. “I would like to recognize Stan as the founder of Southern Airways for building that company from birth into the largest commuter airline by departure and largest operator of Cessna Caravans and we are pleased to continue to benefit from his experience as a Special Advisor to the company.”

 

First Quarter Financial Highlights:

 

Surf Air Mobility is providing unaudited results for the period ended March 31, 2024, on a quarterly basis, as well as unaudited pro forma results for the period ended March 31, 2023, which assumes the Southern acquisition closed as of the beginning of fiscal year 2023.

 

 

 

 

---

 

 

As of March 31, 2024, Surf Air Mobility had $1.3 million in cash on hand, with the ability to draw $90 million in committed draws and up to $296 million in follow-on draws subject to the terms of the GEM share subscription facility.

 

Developments on Key Initiatives:

 

 

“Once again, Surf Air Mobility achieved many of our goals in the first quarter, while also meeting or beating guidance. We worked with Congressional leaders on both sides of the aisle to help reform and expand the Essential Air Service program in a way that benefits passengers,

---

commuter air carriers, and taxpayers, while continuing our drive toward electrification, which benefits everyone,” said Stan Little, founder of Southern Airways.

 

 

Strategic Update:

 

To underpin the company’s ongoing efforts to balance growth with profitability, Surf Air Mobility is undertaking a strategic review that will ultimately result in cost reduction and other expense control measures aimed at returning airline operations to profitability.

Surf Air Mobility is also actively pursuing other strategic initiatives with partners and affiliates, including the creation of one or more joint ventures, to separately capitalize the company’s electrification and software efforts and maximize shareholder value creation from these substantial investments.

The company intends to provide a more comprehensive strategic update on these, and other, initiatives at its investor day that will now, in light of the CEO transition, be held in the third quarter of 2024.

Capital Structure Update:

Surf Air Mobility has retained a leading investment bank to more fully represent the company in its efforts to secure additional, non-dilutive or less-dilutive capital in the form of a credit facility.

“Management is continuously searching for ways to optimize our capital structure and reduce dilution to our shareholders,” said Oliver Reeves, CFO of Surf Air Mobility. “Our agreement with our banking partner formalizes these efforts and we look forward to updating the market of any success in due course.”

Second Quarter 2024 Financial Outlook:

 

---

Surf Air Mobility will provide full-year 2024 guidance at its Investor Day to be held in the third quarter of 2024.

 

Media Contacts

Press: press@surfair.com

Investors: investors@surfair.com

 

About Surf Air Mobility

Surf Air Mobility, headquartered in Los Angeles, is a pioneering regional air mobility platform dedicated to transforming regional air travel through electrification. As the largest commuter airline operator in the US, Surf Air Mobility partners with commercial leaders to develop innovative powertrain technology for smaller aircraft, facilitating the electrification of existing fleets and the widespread adoption of electric aircraft. Surf Air Mobility’s mission is to drive substantial cost reductions and environmental benefits to make regional flying more accessible and affordable. Backed by a management team with extensive expertise spanning aviation, electrification, and consumer technology, Surf Air Mobility is poised to advance the future of sustainable air travel.

 

Forward-Looking Statements

This Press Release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995, including statements regarding the anticipated benefits of the transaction; 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 and expand its business. Readers of this release should be aware of the speculative nature of forward-looking statements. These statements are based on the beliefs of Surf Air Mobility’s management as well as assumptions made by and information currently available to Surf Air Mobility and reflect Surf Air Mobility’s current views concerning future events. As such, they are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among many others: 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; 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 its advanced air mobility software platform, 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. These and other risks are discussed in detail in the periodic reports that Surf Air Mobility files with the SEC, and investors are urged to review those periodic reports and Surf Air Mobility’s other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, before making an investment decision. Surf Air Mobility assumes no obligation to update its forward-looking statements except as required by law.

 

Footnotes

Use of Non-GAAP Financial Measures: Surf Air Mobility uses Adjusted EBITDA to identify and target operational results which is beneficial to management and investors in evaluating operational effectiveness. Pro Forma Adjusted EBITDA is a supplemental measure of Surf Air Mobility’s performance that is not required by, or presented in accordance with, U.S. GAAP. Pro Forma Adjusted EBITDA is not a measurement of Surf Air Mobility’s financial performance under U.S. GAAP and should not be considered as an alternative to net income (loss) or any other performance measure derived in accordance with U.S. GAAP. Surf Air Mobility’s calculation of this non-GAAP financial measure may differ from similarly titled non-GAAP measures, if any, reported by other companies. This non-GAAP financial measure should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.

 

---

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

 

Surf Air Mobility presents Pro Forma Adjusted EBITDA because it considers this measure to be an important supplemental measure of its performance and believes it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in its industry. Management believes that investors’ understanding of Surf Air Mobility’s performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing its ongoing results of operations.

 

 

 

---

 

Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023:

		March 31, 2024				December 31, 2023
Assets:
Current assets:
Cash		$	1,278			$	1,720
Accounts receivable, net			4,710				4,965
Prepaid expenses and other current assets			10,725				11,051
Total current assets			16,713				17,736
Restricted cash			713				711
Property and equipment, net			46,706				45,991
Intangible assets, net			25,777				26,663
Operating lease right-of-use assets			12,263				12,818
Finance lease right-of-use assets			1,352				1,343
Other assets			5,262				5,727
Total assets		$	108,786			$	110,989
Liabilities and Shareholders’ Deficit:
Current liabilities:
Accounts payable		$	20,575			$	18,854
Accrued expenses and other current liabilities			72,233				59,582
Deferred revenue			18,122				19,011
Current maturities of long-term debt			5,080				5,177
Operating lease liabilities, current			4,837				4,104
Finance lease liabilities, current			249				215
SAFE notes at fair value, current			14				25
Convertible notes at fair value, current			7,852				7,715
Due to related parties, current			36,508				25,431
Total current liabilities			165,470				140,114
Long-term debt, net of current maturities			19,985				20,617
Operating lease liabilities, long term			4,666				5,507
Finance lease liabilities, long term			1,143				1,137
Due to related parties, long term			1,288				1,673
Other long-term liabilities			22,535				19,426
Total liabilities		$	215,087			$	188,474
Commitments and contingencies (Note 12)
Shareholders’ equity (deficit):
Common shares, $0.0001 par value; 800,000,000 shares authorized as of both March 31, 2024 and December 31, 2023; 81,917,187 shares issued and outstanding as of March 31, 2024 and 76,150,437 shares issued and outstanding as of December 31, 2023		$	8			$	8
Additional paid-in capital			533,191				525,042
Accumulated deficit			(639,500	)			(602,535	)
Total shareholders’ deficit		$	(106,301	)		$	(77,485	)
Total liabilities and shareholders’ deficit		$	108,786			$	110,989

 

 

---

 

Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and March 31, 2023: (in thousands, except share and per share data):

		Three Months Ended March 31,
		2024				2023
Revenue		$	30,624			$	5,507
Operating expenses:
Cost of revenue, exclusive of depreciation and amortization			28,489				6,650
Technology and development			7,009				812
Sales and marketing			3,009				1,394
General and administrative			24,609				8,441
Depreciation and amortization			1,978				258
Total operating expenses			65,094				17,555
Operating loss		$	(34,470	)		$	(12,048	)
Other income (expense):
Changes in fair value of financial instruments carried at fair value, net		$	(515	)		$	(8,096	)
Interest expense			(1,671	)			(171	)
Other expense			(355	)			(258	)
Total other income (expense), net		$	(2,541	)		$	(8,525	)
Loss before income taxes			(37,011	)			(20,573	)
Income tax benefit			46				—
Net loss		$	(36,965	)		$	(20,573	)
Net loss per share applicable to common shareholders, basic and diluted		$	(0.48	)		$	(1.46	)
Weighted-average number of common shares used in net loss per share applicable to common shareholders, basic and diluted			77,309,329				14,100,926

 

 

 

 

 

 

 

 

 

 

 

---

Unaudited Pro Forma Financial Measures; Reconciliation of Net Loss to Adjusted EBITDA for the Three Months Ended March 31, 2024 and Pro forma Net Loss to Pro forma Adjusted EBITDA for the Three Months Ended March 31, 2023 (in thousands):

 

		Three Months Ended March 31,
		2024				2023 (Proforma)
Net loss		$	(36,965	)		$	(15,511	)
Addback:
Depreciation and amortization			1,978				1,801
Interest expense			1,671				1,055
Income tax expense (benefit)			(46	)			(152	)
Stock-based compensation expense(1)			12,643				1,145
Changes in fair value of financial instruments(2)			515				—
Transaction costs(3)			588				—
Data license fees(4)			3,125				—
Adjusted EBITDA		$	(16,491	)		$	(11,662	)
(1)Represents non-cash expenses related to equity-based compensation programs, which vary from period to period depending on various factors including the timing, number, and the valuation of awards.
(2)Represents fluctuations in the fair value of financial instruments carried at fair value. The fair values of the convertible notes, preferred stock warrant liabilities, and derivative liabilities were based on the values of the notes, warrants, and derivatives upon conversion due to the weighted probability associated with certain events.
(3)Represents costs related to a public company transaction, including accounting, legal, and listing costs.
(4) Represents costs related to initial license fees under the Textron Licensing Agreement.

 

---

v3.24.1.1.u2

Cover	May 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 14, 2024
Entity File Number	001-41759
Entity Registrant Name	SURF AIR MOBILITY INC.
Entity Central Index Key	0001936224
Entity Tax Identification Number	36-5025592
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	12111 S. Crenshaw Blvd.
Entity Address, City or Town	Hawthorne
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90250
City Area Code	424
Local Phone Number	332-5480
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	SRFM
Security Exchange Name	NYSE
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

---