LOS ANGELES - Surf Air Mobility Inc. (NYSE:SRFM), a Los Angeles-based regional air mobility company, has announced the execution of a 1-for-7 reverse stock split, effective at 12:01 am Eastern Time on August 19, 2024. The move, approved by stockholders on June 25, 2024, and later determined by the Board of Directors, is aimed at realigning the company's share structure.
Every seven shares of issued and outstanding common stock will be consolidated into one new share. This action is intended to maintain the company's compliance with the New York Stock Exchange's minimum bid price requirements. The reverse split will not affect the number of authorized shares or the par value of the common stock. Shareholders who would end up with fractional shares will receive a cash payment instead, based on the closing price of the stock on August 16, 2024, adjusted for the split ratio.
The company's common stock will continue to trade on the NYSE under the ticker symbol SRFM, with post-split trading expected to commence on August 19, 2024. Following the reverse split, approximately 12,826,529 shares of common stock will be outstanding. The new CUSIP number for the common stock will be 868927 203.
Equiniti Trust Company, LLC, has been appointed as the exchange agent for the reverse split. Stockholders need not take any action as positions will be adjusted automatically to reflect the reverse split, subject to the procedures of their bank, broker, or nominee. Registered stockholders with certificated shares will be contacted with instructions on how to exchange their old certificates.
Surf Air Mobility, which aims to transform regional air travel through electrification, has not manufactured any fully-electric or hybrid-electric aircraft to date. The company plans to develop powertrain technology to electrify existing fleets and bring electrified aircraft to market at scale.
This restructuring step is part of the company's broader strategy and does not change the equity percentage ownership interests, except for adjustments due to fractional shares. The information regarding the reverse stock split is based on a press release statement from Surf Air Mobility Inc.
In other recent news, Surf Air Mobility Inc. has been navigating through a series of significant developments. The company recently received approval from its stockholders to expand its equity incentive plan by an additional 7.5 million shares, a move aimed at enhancing the compensation strategy for its employees, directors, and consultants. In addition, Surf Air Mobility announced the appointment of Jim Sullivan as President of Air Mobility, a role that will see him oversee air operations and commercial strategy for the company's brands.
On the innovation front, Surf Air Mobility has signed a memorandum of understanding with Asta Linhas Aéreas to upgrade up to four of Asta's Cessna Grand Caravan aircraft with electrified powertrains. This is part of the company's broader strategy to reduce emissions and operating costs, marking a step towards the adoption of electric propulsion technologies in the aviation sector. These are the latest developments in the company's journey.
InvestingPro Insights
As Surf Air Mobility Inc. (NYSE:SRFM) navigates through a period of structural change with its recent 1-for-7 reverse stock split, insights from InvestingPro provide a deeper understanding of the company's financial health and market position. With a market capitalization of $25.59 million, the company's valuation reflects the challenges it faces in the competitive air mobility space.
InvestingPro data highlights a significant revenue growth of 308.44% over the last twelve months as of Q1 2024. This surge is indicative of the company's aggressive expansion efforts, despite a lack of profitability in the same period. The gross profit margin stands at a lean 2.18%, underscoring the company's struggle to translate top-line growth into bottom-line results. The price of the stock, at the previous close, was $0.29, demonstrating the impact of recent market volatility on the company's share value.
InvestingPro Tips further reveal that Surf Air Mobility operates with a significant debt burden and may have trouble making interest payments on its debt. These factors are crucial considerations for shareholders and potential investors, especially given the company's ongoing cash burn and weak gross profit margins. Moreover, analysts do not anticipate the company will be profitable this year, which aligns with the broader financial data indicating a challenging road ahead for Surf Air Mobility.
For those interested in a more comprehensive analysis, InvestingPro offers additional tips on Surf Air Mobility's financial metrics and future outlook. These insights can be found at https://www.investing.com/pro/SRFM, providing investors with a resource to make more informed decisions.
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