Surf Air Mobility Inc. entered into a security purchase agreement of mandatory convertible security for the gross proceeds of $35.2 million on March 1, 2024. The transaction included participation from returning investor, GEM Global Yield Fund LLC SCS, a fund managed by, Global Emerging Markets. The Mandatory Convertible Security will mature on the fifth anniversary of the Closing Date, unless earlier converted or redeemed.

On the Maturity Date, the Company will pay to GEM, at the Company?s option, cash or Common Shares in an amount equal to the then outstanding par amount of the Security divided by the lesser of $4.45 and the average of the five lowest volume-weighted average prices for the Common Shares trading on the New York Stock Exchange during the thirty trading days immediately preceding the Maturity Date. Prior to the Maturity Date, GEM will have the option to convert any portion of the Mandatory Convertible Security into Common Shares at a conversion rate equal to the portion of the par amount to be converted into Common Shares divided by the lesser of the Fixed Conversion Price and the Floating Conversion Price. If, following the conversion by GEM of any portion of the Mandatory Convertible Security into 8,000,000 Common Shares at any time prior to the Maturity Date, any par amount of the Mandatory Convertible Security remains outstanding, the Company will have the option to increase the maximum number of Common Shares into which the Security may convert, with such increase to be at the Company?s sole discretion, pay to GEM an amount in cash equal to 115% of the remaining outstanding par amount or increase the remaining outstanding par amount by 15% of the amount outstanding immediately after issuance of the 8,000,000 Common Shares.

The transaction closing is currently expected to occur by the end of the second quarter of 2024.