Surf Air Mobility to Go Public Through $1.42 Billion Merger With Tuscan Holdings Corp. II, Accelerating the Rollout of Industry Leading Hybrid Electric Aircraft

• Surf Air Mobility (“SAM” or the “Company”) provides a regional air mobility platform with scheduled routes and on demand charter flights operated by third-party Part 135 charter operators. The Company intends to accelerate the adoption of green flying and develop proprietary powertrain technology to electrify existing fleets, reducing operating costs and emissions.

• SAM has entered into a 3 party agreement with AeroTEC, a premier aircraft development and integration company and magniX, a leader in electric propulsion; AeroTEC to develop proprietary powertrain technology for SAM and magniX to supply electric propulsion units (“EPUs”) for SAM’s launch product, a hybrid electric powertrain, initially designed for the Cessna Grand Caravan.

• SAM has entered into a binding agreement (the “Southern Agreement”) to acquire Southern Airways Corporation (“Southern”) and expects to complete its acquisition of Southern concurrently with closing of the merger with Tuscan Holdings Corp. II (“THCA”), subject to satisfaction or waiver of remaining closing conditions and completion of the regulatory reviews. Southern Airways Express is the largest passenger operator of Cessna Grand Caravans in the US, serving over 300,000 customers across 39 cities with over 60,000 flights in 2021, and is expected to expand SAM’s air mobility platform nationwide. Stan Little, founder, Chairman, and CEO of Southern Airways, will serve as president of the combined company.

• SAM has entered into an MOU with Signature Aviation, the world’s largest private aviation terminal operator, to jointly support the expansion of the Surf Air flying experience nationally. SAM and Signature Aviation plan to co-market and scale the availability of sustainable aviation fuel and co-develop technology to support the eventual rollout of electrified aircraft charging infrastructure.

• The merger and related financing transactions are expected to provide up to $467 million in gross proceeds to SAM from strategic and financial investors including iHeartMedia, and Partners For Growth, and a committed equity line from Global Emerging Markets (“GEM”), as well as from THCA’s cash in trust (assuming no exercise of THCA stockholder redemption rights).

• Carl Albert, the former Chairman, CEO, and controlling shareholder of aircraft OEM, Fairchild Dornier, was recently appointed Chairman of Surf Air Mobility. SAM’s existing investors include IVP, NEA, Anthem Ventures, Plus Capital, Base Ventures, Bill Woodward, Thor Björgólfsson, Jo Bamford, and other venture and private investors.

• On a pro forma basis, the combined company, consisting of SAM, Southern, and SPAC expects to generate approximately $100 million in 2022 revenue from all its business units, an approximate 50% YOY increase from 2021.

• The implied pro forma enterprise value of the combined company is approximately $1.42 billion, assuming full payment of earnout. SPAC sponsors and company shareholders have restricted 20% and 31% of their shares, respectively, in an earnout subject to achieving specified operational and financial milestones.

May 18, 2022 07:00 AM Eastern Daylight Time

LOS ANGELES--(BUSINESS WIRE) -- Surf Air Mobility Inc. ("SAM" or the "Company"), a company working to accelerate the adoption of green aviation, and Tuscan Holdings Corp. II (Nasdaq: THCA) ("THCA"), a publicly listed special purpose acquisition company ("SPAC"), jointly announced today that they have entered into a definitive business combination agreement resulting, subject to the satisfaction or waiver of certain closing conditions, in Surf Air Mobility becoming a publicly listed company.

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The acquisition of Southern, also announced today, and the completion of the business combination with THCA (together, the "Transactions") positions SAM to be a leader in the electrification of commercial aviation, providing it with resources necessary to bring electrified powertrain technology to market and expanding and electrifying regional consumer scheduled and charter flight services. Following completion of the Transactions, and the successful deployment of SAM's proprietary powertrain technology, SAM plans to deploy the world's largest fleet of hybrid electric aircraft on regional routes being serviced today and on additional routes in new markets. SAM intends for its hybrid electric propulsion to reduce operating costs and reduce emissions from regional air travel by offering original equipment manufacturers ("OEMs") and third-party operators the ability to upgrade existing aircraft to hybrid electric powertrains.

"We believe deploying hybrid electric propulsion technology on existing aircraft at scale will be the most significant step we can take toward decarbonization of aviation in this decade," said Sudhin Shahani, Co-founder and CEO of Surf Air Mobility. "We're at a moment when the increasing consumer demand for faster, affordable, and cleaner regional travel will be met with SAM's electrification ecosystem to accelerate the industry's adoption of green flying."

SAM's agreements with AeroTEC and magniX will help the Company accelerate the introduction of its proprietary electrification technology. magniX has successfully flown the world's largest fully-electric aircraft to date, a prototype Cessna Grand Caravan 208B, which it calls the eCaravan. SAM is designing its initial hybrid electric Cessna Grand Caravans to have the same flight range capabilities as their fully combustion counterparts, which will allow the Company to utilize the hybrid electric Cessna Grand Caravan aircraft across its own existing network, connecting more airports with direct flights and building a regional mass transport platform to sustainably connect communities across the U.S. SAM also intends to make hybrid electric powertrain upgrades available to fleet owners on and off its consumer platform, as well as license its technology to OEMs for new aircraft types.

SAM's proprietary electrified propulsion technology, once developed, would target carbon emission reductions of up to 50% on its first-generation Cessna Grand Caravans, helping to reduce the 915 million metric tons of carbon dioxide emitted by the aviation industry globally per year. By targeting direct operating cost reductions of up to 25% on its first-generation Cessna Grand Caravans, lower cost point-to-point flight networks can connect previously economically untenable markets with non-stop and direct, regularly scheduled flights. SAM's initial hybrid electric aircraft will not require charging stations, new takeoff and landing infrastructure, or changes to zoning, allowing the aircraft to operate anywhere in the U.S., unlocking more air travel potential for over 5,000 underserved public airports.

"Surf Air Mobility's practical approach to scaling the decarbonization of aviation is built on a base of tangible revenue, industry-leading electrification technology, and significant growth prospects for the future," stated Stephen A. Vogel, Tuscan Holdings. "Surf Air Mobility's management team is first class, and with their leadership we have confidence this transaction will enable the Company to reach its true growth potential."

SAM's planned acquisition of Southern Airways Corporation ("Southern"), subject to satisfaction or waiver of the remaining closing conditions set forth in the Southern Agreement, including the completion of all required regulatory reviews and approvals, is expected to expand the companies' collective regional airline network to U.S. cities across the Mid-Atlantic, Gulf South, Rocky Mountains, West Coast, New England, and Hawaii, where Southern currently operates. Southern Airways Express operates the largest passenger fleet of Cessna Grand Caravans in the U.S. SAM intends to electrify Southern's existing fleet utilizing the Company's proprietary electrified propulsion technology.

"Surf Air Mobility is positioned to bring benefits to consumers quickly while creating opportunities for the entire aviation industry. Our hybrid electric propulsion technologies will be the building blocks upon which reduced operating cost and green aviation can be realized," stated Surf Air Mobility's Chairman, Carl Albert. "We're thrilled to be merging with THCA as they share our ambition of advancing the future of flight for the good of people and the planet."

Transaction Overview

The proposed transaction reflects an implied pro forma equity value of $1.42 billion, assuming full payment of earnout. The transaction is expected to provide up to $467 million in gross cash proceeds to SAM, including committed capital from strategic and financial investors including iHeartMedia, and Partners For Growth, and an equity line from Global Emerging Markets (GEM), as well as from THCA's cash in trust (assuming no exercise of THCA stockholder redemption rights).

The Boards of Directors of both SAM and THCA have unanimously approved the proposed business combination, which is expected to be completed in the second half of 2022, subject to, among other things, the approval by THCA's stockholders, satisfaction of the conditions stated in the definitive agreement and other customary closing conditions, including a registration statement being declared effective by the U.S. Securities and Exchange Commission (the "SEC"), the receipt of certain regulatory approvals, and the receipt of required approvals to publicly list the securities of the combined company.

The mergers are also conditioned on the closing of the acquisition of Southern. Although SAM and Southern are party to the Southern Agreement, there can be no assurance that the closing conditions set forth in the Southern Agreement will be satisfied and the acquisition will be completed.

Additional information about the proposed transaction, including a copy of the definitive agreement, investor presentation and transcript of management commentary, will be provided on a Current Report on Form 8-K to be filed by Tuscan Holdings Corp. II, which will be available on the SEC's website at www.sec.gov.

About Surf Air Mobility

Surf Air Mobility (SAM) is a Los Angeles-based electric aviation and air travel company reinventing flying through the power of electrification. The company intends to bring electrified aircraft to market at scale in order to substantially reduce the cost and environmental impact of flying. The management team has deep experience and expertise across aviation, electrification, and consumer technology. SAM has a number of notable advisors including Arianna Huffington (founder Huffington Post), Fred Reid (former Virgin America CEO, President Delta and Lufthansa), Jonathan Mildenhall (founder 21st Century Brands, former Airbnb CMO), Dr. David Agus (founder/CEO Ellison Institute), and Matthew Anderson (former Roku CMO). Surf Air Mobility is the parent company of Surf Air Inc. For more information, visit: https://surfair.com.

About Tuscan Holdings Corp. II

Tuscan Holdings Corp. II is a special purpose acquisition company formed for the purpose of effecting a merger, stock purchase or similar business combination with one or more differentiated businesses.