Surf Air Mobility Inc. (NYSE: SRFM), a leading regional air mobility platform, announced plans to significantly reduce potential equity dilution by approximately 90%. This shift is part of the Company’s enhanced financing strategy, which emphasizes increased reliance on debt financing over equity. To implement this approach, Surf Air intends to amend its registration statement related to its share subscription facility with GEM Global Yield LLC (“GEM”). The proposed amendment, subject to Securities Exchange Commission review, will reduce the number of registered shares under the GEM facility by approximately 35.6 million.
The announcement follows Surf Air’s recent $50 million term loan, enabling the Company to advance its Transformation Plan without significant reliance on the GEM facility in the near term.
“This new financing strategy, combined with ongoing progress on our Transformation Plan, positions us to achieve profitability in our airline operations by 2025 while enhancing shareholder value,” said Deanna White, CEO of Surf Air Mobility. “The $50 million financing has allowed us to recalibrate our business plan, requiring less capital to reach profitability. This represents a substantially less dilutive outcome for our shareholders.”
Under the amended registration statement, Surf Air plans to limit its use of the GEM facility to no more than $15 million in 2025, equating to approximately 4.4 million shares at current prices. This adjustment represents a reduction of approximately 35.6 million shares initially planned for issuance under the GEM facility, resulting in a 90% reduction in potential dilution.
Additionally, Surf Air has strengthened its financial position by:
- Extending maturities on secured debt to December 31, 2028.
- Reducing costs through M&A synergies and discontinuing unprofitable routes.
- Addressing past liabilities, leading to a significantly lower cash burn rate.
As part of its 2025 initiatives, the Company plans to exit unprofitable routes, deploy four newly acquired aircraft for more efficient operations, address maintenance backlogs, and leverage its SurfOS software platform to improve efficiency. While prioritizing profitability over revenue growth, Surf Air expects 2025 revenue to exceed $100 million. The Company remains on track to achieve airline operational profitability in the same year.
This strategic recalibration underscores Surf Air’s commitment to building long-term shareholder value and advancing its mission to transform regional air mobility.