October 30, 2025
The raise includes $26 million to continue Surf Air’s development of its SurfOS software and $74 million to refinance existing debt.
Surf Air Mobility has entered a “transformative $100 million strategic transaction.”
The deal “accelerates the development and commercialization” of its proprietary SurfOS software.
It further strengthens its balance sheet and “positions the company for long-term profitable growth.”
CEO Deanna White says, “This strategic transaction marks a pivotal moment for Surf Air Mobility.”
It accelerates the company’s Transformation Plan, according to White.
It also provides capital for the continued development of SurfOS and significantly strengthens the balance sheet.
The transaction raises $26 million from new equity issuances to fund the development and commercialization of SurfOS.
According to the announcement:
‘One institutional investor and Surf Air Mobility’s co-founder, together with a related part,y have purchased 6,024,096 shares of the company’s common stock and warrants to purchase up to 6,024,096 shares of the company’s common stock exercisable at $3.32 per share, which is equal to Friday’s closing price per share, for an aggregate gross purchase price of $20 million. 3,975,901 shares and accompanying warrants were sold in a registered direct offering, and 2,048,195 shares and accompanying warrants were sold in a private placement. The warrants will be exercisable immediately and expire on the second anniversary of the original issuance date. The closing of the equity issuances is expected to occur on or about November 12, 2025, subject to the satisfaction of customary closing conditions. Subject to specified conditions, the company may force the holders to exercise the warrants at any time if the last reported sale price per share of the company’s common stock equals or exceeds 150% of the exercise price for the immediately preceding 20 consecutive trading days.’
Surf Air Mobility will issue $6 million of common stock to Palantir Technologies Inc. as part of the transaction.
It is a prepayment for continued access to Palantir software and services.
It follows the recent expansion of SurfOS’ Palantir partnership.
That included a joint commitment to teaming efforts and the continued integration of Palantir’s AI and Foundry platforms to enhance operational efficiency through more predictive and adaptive software.
Surf Air Co-founder and Board Member Sudhin Shahani says, “SurfOS aims to become the AI-enabled software for an industry at the start of its technology transition.”
He added, “We believe this financing will position us to be early to market with a best-in-class product designed for the rapidly evolving air mobility industry.”
Shahani continued, “SurfOS has the potential to define how the air mobility industry will leverage software at scale.”
The $26 million will support the development of its private aviation flight provider software.
There are three key products: BrokerOS, OperatorOS, and OwnerOS.
Funds will scale engineering and sales capabilities in advance of the 2026 commercial rollout, as well as support go-to-market execution, customer adoption, and partnership development.
Shahani purchased $1 million of stock in May.
At the same time, Surf Air Mobility completed the sale of a $74 million senior secured convertible note to an institutional investor in a private placement.
This note will not accrue interest except in the event of default and is convertible at a stock price of $3.98.
That represents a 20% premium to the transaction closing price.
The note is being sold at 87.8% of face value, resulting in aggregate gross proceeds of $65 million for Surf Air.
Surf Air will use a portion of the proceeds from the sale of the note to repay in full the $51 million in outstanding amounts due under its four-year credit agreement with affiliates of Comvest Partners and the $8 million in principal amount outstanding under its secured convertible note with Partners For Growth V, L.P.
In total, it will reduce cash interest expense by approximately $5.5 million on an annualized basis.
The new note will mature on October 31, 2028.
It is repayable at maturity at 105% of the face amount unless converted or repurchased.
The note can be redeemed by the company at par at any time, subject to specified conditions, unless accelerated.
The holder of the note will have the right to require cash redemption at 105% of the face amount of portions of the principal amount.
Surf Air may force the holder to convert the notes at any time under certain conditions.
That includes if the last reported sale price per share if common stock equals or exceeds 150% of the conversion price.
Price is based on the preceding 20 consecutive trading days.
Per the announcement:
‘This refinancing of the company’s interest-bearing debt complements the company’s recent efforts to redeem its GEM Global Yield LLC’s mandatory convertible security, which has been reduced from $39 million on December 31, 2024, to $8 million on the date of this announcement. In addition, a senior secured convertible promissory note has been reduced from $50 million on December 31, 2024, to $15 million on the date of this announcement.’
CFO Oliver Reeves said, “This transaction directs capital to initiatives we believe will create significant shareholder value and strengthen our balance sheet.”
Consolidated net debt load reduced by 37.3%.
It drops from $139.1 million on December 31, 2024, to $87.2 million after the transaction.
Reeves added, “We will continue to look for opportunities to optimize our balance sheet and invest in growth to unlock catalysts and deliver on our upside drivers of software and electrification.”
Surf Air also disclosed preliminary, unaudited financial results for the quarter ended September 30, 2025.
Revenue for the quarter is expected to exceed the previously announced guidance range of $27 million to $28.5 million.
Adjusted EBITDA is expected to be within the previously announced guidance range of negative $8.5 million to $10 million.
Complete financial results are expected for November 12, 2025.
Earlier this year, Surf Air revamped its guaranteed jet card program.
The jet card is one of the few with a turboprop option.
The program starts at 10 hours.
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