Global Crossing Airlines Group Inc. [JETMF] Filings

10-Q 1 jetmf-20240630.htm 10-Q 10-Q

ESPP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-56409

Global Crossing Airlines Group, Inc.

(Exact name of registrant as specified in its charter)

    Delaware

    86-2226137

    (State or other jurisdiction of
incorporation or organization)

    (I.R.S. Employer
Identification Number)

    4200 NW 36th Street, Building 5A
Miami International Airport
Miami, Florida

    33166

    (Address of principal executive office)

    (Zip Code)

Registrant’s telephone number, including area code: (786) 751-8503

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: common stock and Class B non-voting common stock

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
		Emerging growth company	[X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The number of shares outstanding of the registrant’s Common Stock as of August 12, 2024 was 60,698,680 shares, consisting of 43,062,231 shares of common stock, 5,537,313 shares of Class A Non-Voting Common Stock and 12,099,136 shares of Class B Non-Voting Common Stock.

GLOBAL CROSSING AIRLINES GROUP, INC.

Form 10-Q

Period Ended June 30, 2024

Index


Global Crossing Airlines Group, Inc.		Page

ITEM 1. GLOBAL CROSSING AIRLINES GROUP, INC. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023		3
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)		4
Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited)		5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)		6
Notes to Condensed Consolidated Financial Statements (Unaudited)		7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		26
ITEM 4. CONTROLS AND PROCEDURES		27
PART II - OTHER INFORMATION		28
ITEM 6. EXHIBITS		29
SIGNATURES		30

GLOBAL CROSSING AIRLINES GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value and share quantities)


	June 30, 2024 (Unaudited)	December 31, 2023

Current Assets
Cash and cash equivalents	$8,047	$11,596
Restricted cash	2,400	6,080
Accounts receivable, net of allowance	6,485	10,180
Prepaid expenses and other current assets	2,017	2,552
Current assets held for sale	403	184
Total Current Assets	19,352	30,592
Property and equipment, net	8,296	5,525
Finance leases, net	20,107	4,108
Operating lease right-of-use assets	90,664	76,880
Deposits	11,909	12,506
Other assets	3,114	1,717
Total Assets	$153,442	$131,328
Current liabilities
Accounts payable	$9,982	$7,481
Accrued liabilities	17,159	17,465
Deferred revenue	3,888	9,896
Customer deposits	4,429	3,935
Current portion of long-term operating leases	13,323	13,650
Current portion of finance leases	2,284	599
Total current liabilities	51,065	53,026
Other liabilities
Note payable, net of unamortized debt issuance costs	29,389	29,175
Long-term operating leases	79,512	65,158
Long-term finance leases	17,964	3,292
Other liabilities	511	544
Total other liabilities	127,376	98,169
Total Liabilities	$178,441	$151,195
Commitments and Contingencies (Note 7)
Equity (Deficit)
Common Stock
$.001 par value; 200,000,000 authorized; 60,603,681 and 58,925,871 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	$60	$59
Additional paid-in capital	40,004	38,943
Retained deficit	(65,189)	(59,094)
Total Company's stockholders’ deficit	(25,125)	(20,092)
Noncontrolling interest	126	225
Total stockholders’ deficit	(24,999)	(19,867)
Total Liabilities and Deficit	$153,442	$131,328

See accompanying notes to consolidated financial statements.

GLOBAL CROSSING AIRLINES GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except share and per share amounts)


	Three Months Ended June 30, 2024	Three Months Ended June 30, 2023	Six Months Ended June 30, 2024	Six Months Ended June 30, 2023

Revenue	$57,546	$31,475	$111,380	$63,626
Operating Expenses
Salaries, Wages, & Benefits	16,745	12,140	33,520	23,308
Aircraft Fuel	5,601	6,087	13,800	14,036
Maintenance, materials and repairs	2,645	1,767	5,578	3,326
Depreciation and amortization	1,444	443	2,609	886
Contracted ground and aviation services	4,757	5,201	11,660	10,054
Travel	3,118	1,347	6,969	3,601
Insurance	1,554	1,245	3,188	2,370
Aircraft Rent	14,762	6,830	27,523	12,474
Other	4,377	3,191	8,609	5,995
Total Operating Expenses	$55,003	$38,251	$113,456	$76,050
Operating Income (Loss)	2,543	(6,776)	(2,076)	(12,424)
Non-Operating Expenses
Interest Expense	2,258	695	4,018	1,119
Total Non-Operating Expenses	2,258	695	4,018	1,119
Income (Loss) before income taxes	285	(7,471)	(6,094)	(13,543)
Income tax expense	-	-	-	-
Net Income (Loss)	285	(7,471)	(6,094)	(13,543)
Net Income attributable to Noncontrolling Interest	1	-	1	-
Net Income (Loss) attributable to the Company	284	(7,471)	(6,095)	(13,543)
Income (Loss) per share:
Basic	$0.00	$(0.13)	$(0.10)	$(0.24)
Diluted	$0.00	$(0.13)	$(0.10)	$(0.24)
Weighted average number of shares outstanding	60,008,779	56,857,629	59,621,946	55,680,815

Fully diluted shares outstanding	83,633,139	56,857,629	59,621,946	55,680,815

See accompanying notes to consolidated financial statements.

GLOBAL CROSSING AIRLINES GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

(In thousands, except shares quantities)


	Common Stock Number of Shares	Amount	Additional Paid in Capital	Retained Deficit	Total
Beginning – January 1, 2023	53,440,482	$53	$30,774	$(38,083)	$(7,256)
Issuance of shares – options exercised	150,000	-	67	-	67
Issuance of shares – warrants exercised	2,499,453	3	1,134	-	1,137
Issuance of shares - share based compensation on RSUs	208,416	-	501	-	501
Loss for the period	-	-	-	(6,072)	(6,072)
Ending – March 31, 2023	56,298,351	$56	$32,476	$(44,155)	$(11,623)
Issuance of shares – options exercised	-	-	-	-	-
Issuance of shares – warrants exercised	227,630	-	220	-	220
Issuance of shares - share based compensation on RSUs	481,593	1	578	-	579
Issuance of shares - ESPP	300,121	-	199	-	199
Loss for the period	-	-	-	(7,471)	(7,471)
Ending – June 30, 2023	57,307,695	$57	$33,473	$(51,626)	$(18,096)


	Common Stock Number of Shares	Amount	Additional Paid in Capital	Retained Deficit	Total	Noncontrolling Interest	Total
Beginning – January 1, 2024	58,925,871	$59	$38,943	$(59,094)	$(20,092)	$225	$(19,867)
Issuance of shares - share based compensation on RSUs	742,079	1	342	-	343	-	343
Loss for the period	-	-	-	(6,379)	(6,379)	-	(6,379)
Ending – March 31, 2024	59,667,950	$60	$39,285	$(65,473)	$(26,128)	$225	$(25,903)
Issuance of shares - share based compensation on RSUs	544,157	-	498	-	498	-	498
Issuance of shares - ESPP	391,574	-	221	-	221	-	221
Dividends	-	-	-	-	-	(100)	(100)
Income for the period	-	-	-	284	284	1	285
Ending – June 30, 2024	60,603,681	$60	$40,004	$(65,189)	$(25,125)	$126	$(24,999)

See accompanying notes to consolidated financial statements.

GLOBAL CROSSING AIRLINES GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	For The Six Months Ended June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(6,094	)	$	(13,543	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		2,609			894
Bad debt expense (recovery)		357			(18	)
Loss on sale of property		—			136
Loss (gain) on sale of spare parts		79			(107	)
Foreign exchange loss		—			1
Amortization of debt issue costs		339			531
Amortization of operating lease right of use assets		7,081			3,647
Share-based payments		874			1,109
Interest on finance leases		1,042			202
Changes in assets and liabilities:
Accounts receivable		3,339			(2,931	)
Assets held for sale		(298	)		701
Prepaid expenses and other current assets		535			(684	)
Accounts payable		2,501			4,767
Accrued liabilities and other liabilities		(5,821	)		12,344
Operating lease obligations		(6,838	)		(3,669	)
Other liabilities		(945	)		233
Net cash (used in) provided by operating activities		(1,240	)		3,613
CASH FLOWS FROM INVESTING ACTIVITIES
Deposits, deferred costs and other assets		(1,616	)		(1,069	)
Purchases of property and equipment		(3,603	)		(2,969	)
Net cash used in investing activities		(5,219	)		(4,038	)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on finance leases		(858	)		(221	)
Dividends		(100	)		—
Proceeds on issuance of shares		188			1,594
Proceeds from note payable		—			2,017
Net cash (used in) provided by financing activities		(770	)		3,390
Net (decrease) increase in cash, cash equivalents, and restricted cash		(7,229	)		2,965
Cash, cash equivalents and restricted cash - beginning of the period		17,676			5,461
Cash, cash equivalents and restricted cash - end of the period	$	10,447		$	8,426
Non-cash transactions
Right-of-use (ROU) assets acquired through operating leases	$	20,865		$	37,297
Equipment acquired through finance leases	$	17,085		$	1,334
Note Payable reductions through accounts receivable from sale of Assets held for sale	$	-		$	337
Reclass of capitalized professional fees from proceeds from senior secured note	$	125		$	-
Cash paid for
Interest	$	3,421		$	473

See accompanying notes to consolidated financial statements.

GLOBAL CROSSING AIRLINES GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(In thousands, except share and per share data)

Item 1 - Financial Statements

BASIS OF PRESENTATION AND GOING CONCERN

Global Crossing Airlines Group, Inc. (the “Company” or “GlobalX”) principal business activity is providing passenger and cargo aircraft to customers through aircraft operating service agreements including, crew, maintenance, insurance (“ACMI”) and charter services “Charter” serving the United States, Caribbean, Latin American and European markets.

The condensed consolidated financial statements include the accounts of the Company, and its subsidiaries, Global Crossing Airlines, Inc. and Global Crossing Airlines Operations, LLC (collectively “GlobalX USA”), Global Crossing Airlines Holdings, Inc, GlobalX Travel Technologies, Inc. (“Technologies”), GlobalX Air Tours, LLC (“GlobalX Tours”), LatinX Air S.A.S., GlobalX Colombia S.A.S., UrbanX Air Mobility, Inc. ("UrbanX") and Charter Air Solutions, LLC ("Top Flight"). All intercompany transactions and balances have been eliminated on consolidation.

The accompanying unaudited condensed consolidated financial statements and related notes (the “Financial Statements”) have been prepared in accordance with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly reports on Form 10-Q, and consequently exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP). The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which includes additional disclosures and a summary of our significant accounting policies.

Our quarterly results are subject to seasonal and other fluctuations and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year.

The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of June 30, 2024, the Company had a working capital deficit of $31.7 million and a retained deficit of $65.2 million. The Company began flight operations in August 2021. Without ongoing income generation or additional financing, the Company will be unable to fund general and administrative expenses and working capital requirements for the next 12 months. These material uncertainties raise substantial doubt as to the Company’s ability to continue as a going concern. The Company is evaluating financing its future requirements through a combination of debt, equity and/or other facilities. There is no assurance that the Company will be able to obtain such financing or obtain them on favorable terms. The condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.

2. NEW ACCOUNTING STANDARDS

Recently Issued Accounting Standards

In March 2024, the FASB issued ASU 2024-02 - Codification Improvements - Amendments to Remove References to the Concepts Statements. This update contains amendments to the Codification that remove reference to various FASB Concepts Statement. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2024. Management expects no significant impact after adoption of the new standard.

In March 2024, the FASB issued ASU 2024-01 - Compensation-Stock Compensation - Amendments to improve generally accepted accounting principles (GAAP) by adding an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards ("profits interest awards") should be accounted for in accordance with Topic 718, Compensation-Stock Compensation. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2024. Management expects no significant impact after adoption of the new standard.

INVESTMENTS

Investment in Canada Jetlines Operations Ltd.:

On June 28, 2021, the Company completed the spin-out pursuant to the Arrangement under which the Company transferred 75% of shares of Jetlines to GlobalX shareholders. At that time, GlobalX retained 25% of the shares issued and outstanding of Jetlines and accounts for the investment in accordance with the equity method. As of June 30, 2024 and 2023, the Company holds approximately 7% and 13% ownership in Jetlines, respectively.

Investment in Top Flight:

On September 18, 2023, the Company acquired 80% of Charter Air Solutions, LLC ("Top Flight"). Top Flight was established on February 8, 2023 and had no significant transactions from the date of formation to the acquisition date. The balance sheet and operating activity of Top Flight are included in the Company's consolidated financial statements and net income is adjusted in the consolidated statement of operations to exclude the noncontrolling interests' proportionate share of results. The proportionate share of equity attributable to noncontrolling interests is presented as equity within our consolidated balance sheet.

NOTE PAYABLE

On January 27, 2023, the Company announced an up to $5.0 million loan (the "Loan") with a key investor to provide working capital and additional liquidity to support GlobalX’s rapidly growing operations. The net proceeds of the Loan were to be used to further the business objectives of the Company and to secure additional aircraft for charter operations. As of June 30, 2024, the Company received $2.5 million from the loan.

The terms of the promissory note (the "Note") issued in connection with Loan include:

•

a maturity date of 6 months from the date of issuance (the “Maturity Date”) and the principal amount of the Note, together with any accrued and unpaid interest, will be payable on the Maturity Date;

•

the Note bears interest at the rate of 20% per annum, accruing monthly and payable on the Maturity Date;

•

the principal amount of the Note will be advanced in two tranches of $2.5 million each. The first tranche was advanced within one business day and the second tranche will be advanced after the Company delivers a draw down notice, but subject to the lender receiving internal approval for the second tranche; and

•

the Note is unsecured, is not convertible and provides for no warrants.

This loan was paid off in connection with the new $35.0 million secured notes closed on August 2, 2023 and the outstanding balance related to debt costs and discounts of approximately $945 thousand was written off.

On August 2, 2023, the Company closed the placement of $35 million senior secured notes due 2029. The proceeds from these notes were used to pay-off the pre-existing Loan and Subscription Agreement.

The terms of the senior secure notes include:

•

a term of 6 years and maturity date of June 30, 2029 with no principal payments due until maturity date;

•

the notes bear interest at a fixed rate of 15% per annum and include an upfront fee of 2% of the principal payment;

•

the Company is permitted to prepay all (but not less than all) of the notes beginning on July 1, 2025 subject to a redemption premium of (i) 7.5% of the principal to be redeemed on or prior to August 2, 2026, (ii) 5.0% of the principal to be redeemed after August 2, 2026 or on or prior to August 2, 2027, (iii) 2.5% of the principal to be redeemed after August 2, 2027 or on or prior to August 2, 2028, (iv) 0% of the principal to be redeemed after August 2, 2028;

•

the investors will be issued 10 million warrants, each exercisable into one share of Class A common stock at an exercise price of $1.00 per share, with such warrants expiring on June 30, 2030;

•

each of the Company's material subsidiaries will guarantee the notes;

•

the notes and the related guarantees will be secured by a lien on substantially all of the property and assets of the Company and the guarantors of the notes.

•

financial covenants requirements as follows:

minimum adjusted EBITDA of (i) $5 million for the fiscal year ended December 31, 2023, (ii) $15 million for the fiscal year ended December 31, 2024 and (iii) $25 million for the fiscal year ended December 31, 2025;

minimum liquidity of $5 million measured at each quarter end;

•

collateralized by substantially of all the Company's assets.

The Company determined that the terms of the warrants issued in the financing require the warrants to be classified as equity. Accordingly, upon issuance, the Company recorded debt issuance costs of $3.8 million related to the warrants along with a corresponding credit to additional paid in capital. As the warrants are classified as equity warrants the Company will not remeasure the warrants each accounting period.

Since the warrants may purchase a fixed number of shares for a fixed price, the Company chose to use the Monte Carlo option pricing model to value the warrants at issuance. The inputs selected are: underlying stock price at date of issuance of $0.85 per share, exercise price of $1.0 per share, expected term of 6.91 years, dividends of $0, a risk free rate of 4.21%, and volatility of 50%.

The debt issuance costs resulting from the warrants along with other direct costs of the financing will be amortized to interest expense using the effective interest method.

On December 21, 2023, the Company and the senior secured notes due 2029 purchasers amended the original placement of $35 million senior secured notes due 2029 for the sale of an additional $5 million senior secured notes due 2029 to original purchasers and the total warrants increased by 142,874 warrants with an exercise price of US$1.00 per warrant. The net proceeds from the sale of the additional notes will be used to repurchase $4.3 million principal amount of senior secure notes due 2029 from an original purchaser plus payment of accrued interest due of $251 thousand, with the balance expected to be used for general corporate purposes, including the transaction expenses and deposits to expand its current fleet of aircraft. No other substantial modification to the terms of the original $35 million senior secure notes due 2029 was made in the issuance of the additional notes.

Notes Payable is comprised of the following:


	For the Period Ended June 30, 2024		For the Year Ended December 31, 2023

Subscription Agreement	$	35,684	$	35,684
Less unamortized debt issuance costs, noncurrent		6,295		6,509
Total carrying amount		29,389		29,175
Less current maturities	—		—
Total long-term Note Payable	$	29,389	$	29,175

GEM Global Yield LLC SCS

The Company entered into an agreement with GEM Global Yield LLC SCS ("GEM"), the private alternative investment group to provide the Company with up to CND $100 million over a 36-month term following the closing of the Transaction (the “Facility”). The initial CAD $100 million is in the form of a capital commitment that allows the Company to draw down funds during the 36-month term by issuing shares to GEM (or such persons as it may direct) and subject to share lending arrangement(s) being in place. The purchase price of the shares to be sold is set at (i) 90% of the recent average daily closing price of the Company’s common stock on the TSX Venture Exchange or (ii) the floor price set by the company for each drawn down. The Company is not permitted to make a draw-down request in an amount that exceeds (i)1000% of the average daily trading volume of the Company’s stock for the 15 trading days preceding the draw-down date or (ii) 90% of the closing price on the trading day immediately prior to the issue or the relevant draw down notice and then added to the aggregate purchase price of all the common shares subscribed for pursuant to all prior closings would not exceed the total facility. GEM may accept or reject such drawn down notice based on various conditions described in the agreement. On July 8, 2020, the TSX Venture Exchange provided approval for the Facility.

On March 4, 2024, Global Crossing Airlines and GEM decided to extend the length of the GEM Facility by 12 months with a new expiration date of March 4, 2025.

SHARE CAPITAL AND ADDITIONAL PAID IN CAPITAL AUTHORIZED

As of June 30, 2024 and December 31, 2023, the Company had 42,440,983 and 40,420,350 common shares, 5,537,313 and 5,537,313 Class A Non-Voting Common Shares, and 12,625,385 and 12,968,208 Class B Non-Voting Shares outstanding, respectively.

WARRANTS

Following is a summary of the warrant activity during the three and six months ended June 30, 2024 and 2023:


	Number of Share Purchase Warrants			Weighted Average Exercise Price
Outstanding January 1, 2023		19,633,911		$	1.18
Issued		-			-
Exercised		(2,499,453	)		0.43
Expired		-			-
Outstanding March 31, 2023		17,134,458		$	1.29
Issued		-			-
Exercised		(227,630	)		0.97
Expired		(4,530,808	)		0.99
Outstanding June 30, 2023		12,376,020		$	1.40


Outstanding January 1, 2024		22,571,471		$	1.35
Issued		-			-
Exercised		-			-
Expired		(4,838,707	)		1.24
Outstanding March 31, 2024		17,732,764		$	1.21
Issued		-			-
Exercised		-			-
Expired		-			-
Outstanding June 30, 2024		17,732,764		$	1.21

As of June 30, 2024, the following share purchase warrants were outstanding and exercisable:


Outstanding		Exercise Price	Remaining life (years)		Expiry Date
	7,537,313	USD$1.50		1.83	April 29, 2026
	10,195,451	USD$1.00		6.00	Jun 30, 2030
	17,732,764

As of June 30, 2023, the following share purchase warrants were outstanding and exercisable:


Outstanding		Exercise Price	Remaining life (years)		Expiry Date
	4,838,707	USD$1.24		0.75	March 28, 2024
	7,537,313	USD$1.50		2.83	April 29, 2026
	12,376,020

SHARE-BASED PAYMENTS

The maximum number of voting shares is the number of common stock of the Company issuable pursuant to share-based payment arrangements, including stock options, restricted share units and performance share units, is 9,400,000.

Stock options

The Company grants stock options to directors, officers, employees and consultants as compensation for services, pursuant to its Amended Stock Option Plan (the “Stock Option Plan”). The maximum price shall not be less than the closing price of the Company’s shares on the last trading day preceding the date on which the grant of options is approved by the Board of Directors. Options have a maximum expiry period of ten years from the grant date. Vesting conditions are determined by the Board of Directors in its discretion with certain restrictions in accordance with the Stock Option Plan.

The following is a summary of stock option activities for the three and six months ended June 30, 2024 and 2023:


	Number of stock options			Weighted average exercise price		Weighted average grant date fair value
Outstanding January 1, 2023		820,668		$	0.25	$	0.34
Granted		—			—		—
Exercised		(150,000	)		0.48		0.16
Forfeited		(200,000	)		0.25		0.57
Outstanding March 31, 2023		470,668		$	0.25	$	0.54
Granted		—			—		—
Exercised		—			—		—
Forfeited		—			—		—
Outstanding June 30, 2023		470,668		$	0.25	$	0.54


Outstanding January 1, 2024		470,668		$	0.25	$	0.54
Granted		—			—		—
Exercised		—			—		—
Forfeited		(157,334	)		0.37		0.24
Outstanding March 31, 2024		313,334		$	0.25	$	0.25
Granted		—			—		—
Exercised		—			—		—
Forfeited		(66,667	)		0.25		0.67
Outstanding June 30, 2024		246,667		$	0.25	$	0.67

As of June 30, 2024, the following stock options were outstanding and exercisable:


Outstanding		Exercisable		Exercise Price		Remaining life (years)		Expiry Date
	246,667		246,667	$	0.25		—	June 23, 2025
	246,667		246,667

As of June 30, 2023, the following stock options were outstanding and exercisable:


Outstanding		Exercisable		Exercise Price		Remaining life (years)		Expiry Date
	420,668		420,668	$	0.25		1.98	June 23, 2025
	50,000		50,000	$	0.62		2.24	September 23, 2025
	470,668		470,668

The Company recognizes share-based payments expense for all stock options granted using the fair value based method of accounting. The fair value of stock options is determined by the Black-Scholes Option Pricing Model with assumptions for risk-free interest rates, dividend yields, volatility factors of the expected market price of the Company’s shares, forfeiture rate, and expected life of the options.

There were no stock options granted during the three and six months ended June 30, 2024 and 2023.

Restricted share units

The Company grants restricted share units (“RSUs”) to directors, officers, employees and consultants as compensation for services, pursuant to its Amended RSU Plan (the “RSU Plan”). One restricted share unit has the same value as a Voting Share. The number of RSUs awarded and underlying vesting conditions are determined by the Board of Directors in its discretion.

At the election of the Board of Directors, upon each vesting date, participants receive (a) the issuance of Voting Shares from treasury equal to the number of RSUs vesting, or (b) a cash payment equal to the number of vested RSUs multiplied by the fair market value of a Voting Share, calculated as the closing price of the Voting Shares on the NEO for the trading day immediately preceding such payment date; or (c) a combination of (a) and (b).

On the grant date of RSUs, the Company determines whether it has a present obligation to settle in cash. If the Company has a present obligation to settle in cash, the RSUs are accounted for as liabilities, with the fair value remeasured at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. The Company has a present obligation to settle in cash if the choice of settlement in shares has no commercial substance, or the Company has a past practice or a stated policy of settling in cash, or generally settles in cash whenever the counterpart asks for cash settlement.

If no such obligation exists, RSUs are accounted for as equity settled share-based payments and are valued using the share price on grant date. Upon settlement:

If the Company elects to settle in cash, the cash payment is accounted for as the repurchase of an equity interest (i.e. as a deduction from equity), except as noted in (c) below.

If the Company elects to settle by issuing shares, the value of RSUs initially recognized in reserves is reclassified to capital, except as noted in (c) below.

If the Company elects the settlement alternative with the higher fair value, as of the date of settlement, the Company recognizes an additional expense for the excess value given (i.e. the difference between the cash paid and the fair value of shares that would otherwise have been issued, or the difference between the fair value of the shares and the amount of cash that would otherwise have been paid, whichever is applicable).

The following is a summary of RSU activities for the three and six months ended June 30, 2024 and 2023:


	Number of RSUs			Weighted average grant date fair value per RSU
Outstanding January 1, 2023		3,305,837		$	1.14
Granted		1,687,777			0.97
Vested		(400,542	)		1.04
Forfeited		(129,315	)		0.96
Outstanding March 31, 2023		4,463,757		$	1.10
Granted		1,155,000			0.97
Vested		(467,500	)		0.91
Forfeited		(378,334	)		1.01
Outstanding June 30, 2023		4,772,923		$	1.01


Outstanding January 1, 2024		4,989,603		$	0.98
Granted		2,573,333			0.52
Vested		(794,579	)		1.02
Forfeited		(870,002	)		1.11
Outstanding March 31, 2024		5,898,355		$	0.75
Granted		231,667			0.54
Vested		(619,908	)		1.26
Forfeited		(330,892	)		0.71
Outstanding June 30, 2024		5,179,222		$	0.69

During the three and six months ended June 30, 2024, the Company recognized total share-based payments expense with respect to stock options, RSUs and employees' stock purchase plan of $0.5 and $0.9 million, respectively. During the three and six months ended June 30, 2023, the Company recognized total share-based payments expense with respect to stock options, RSUs and employees' stock purchase plan of $0.6 and $1.1 million, respectively.

The remaining compensation that has not been recognized as of June 30, 2024 and 2023 with regards to RSUs and the weighted average period they will be recognized are $2.8 million and 2.16 years and $3.8 million and 2.18 years, respectively. As of June 30, 2024, all compensation expense with respect to stock options has been recognized.

Employee Stock Purchase Plan

In September 2021, the Board adopted the GlobalX 2021 Employee Stock Purchase Plan (“ESPP”). There are 2 offering periods that the employees make contributions to the plan. The first offering period starts from June 16th to November 15th and the second offering period starts from November 16 th to May 15th of each year. Eligible employees may purchase maximum of $10 of the Company's common stock per offering through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six-month offering periods. An employee's payroll deductions under the ESPP are limited to 15% of the employee's compensation and an employee may not purchase more than $25 of stock during any calendar year in which the employee’s option to purchase stock under the ESPP is outstanding at any time.

During the three and six months ended June 30, 2024, the Company issued 391,574 common shares under the ESPP. During the three and six months ended June 30, 2023, the Company issued 300,121 common shares under the ESPP.

As of June 30, 2024 and 2023, total recognized equity-based compensation costs related to ESPP was 0.2 million.

ESPP payroll contributions accrued at June 30, 2024 and 2023, totaled $48 and $88 thousand, respectively, and are included within accrued expenses in the consolidated balance sheets. Employee payroll contributions used to purchase shares under the ESPP will be reclassified to stockholders' equity at the end of the offering period.

8. INCOME TAXES

The Company’s expected effective tax rate for the three and six months ended June 30, 2024, and 2023 was 0%. The effective tax rate varies from the statutory rate due to the change in the valuation allowance.

9. COMMITMENTS AND CONTINGENCIES

The Company has contractual obligations and commitments primarily with regard to management and development services, lease arrangements and financing arrangements.

On October 14, 2021, the Company entered into a lease agreement for one Airbus A321 converted freighter. The ten-year lease term commenced on January 23, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 120 months, plus supplemental rent for maintenance of the aircraft.

On June 21, 2022, the Company entered into a lease agreement for one A321F cargo aircraft. The eight-year lease term commenced on August 1, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 94 months, plus supplemental rent for maintenance of the aircraft.

On December 14, 2022, the Company entered into a lease agreement for one A319 passenger aircraft. The two-year lease term commenced on August 18, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 24 months, plus supplemental rent for maintenance of the aircraft.

On January 27, 2023, the Company entered into a lease agreement for one A320 passenger aircraft. The six-year lease term commenced on April 21, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 72 months, plus supplemental rent for maintenance of the aircraft.

On May 22, 2023, the Company entered into a lease agreement for a commercial property warehouse. The five-year lease term commenced on June 1, 2023. Under the agreement, the Company will pay the lessor variable monthly rents increasing once every year for 62 months, plus estimated expenses for insurance, utilities, taxes, management fees and other operating expenses.

On June 16, 2023, the Company entered into a lease agreement for one A320 passenger aircraft. The four-year lease term commenced on November 13, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 48 months, plus supplemental rent for maintenance of the aircraft.

On August 8, 2023, the Company signed a lease agreement for an A320 passenger aircraft and paid commitment fees to the lessor. The lease will commence upon aircraft delivery which is expected to be in 2024 and will run through the next heavy maintenance visit reached (estimated to be in February 2028) from delivery date. In addition to basic rent due, the Company will pay the lessor supplemental rent for maintenance of aircraft equipment.

On September 8, 2023, the Company entered into a lease agreement for one A321F cargo aircraft. The eight-year lease term commenced on October 6, 2023. Under the agreement, the Company will pay the lessor a fixed monthly rent for 96 months, plus supplemental rent for maintenance of the aircraft.

On November 17, 2023, the Company signed a lease agreement for one A321 passenger aircraft and paid commitment fees to the lessor. The lease will commence upon aircraft delivery which is expected to be in 2025 and will run through 24 months from delivery date. In addition to basic rent due, the Company will pay the lessor supplemental rent for maintenance of the aircraft.

On November 20, 2023, the Company entered into a lease agreement for one A320 passenger aircraft. The seven-year lease term commenced on February 9, 2024. Under the agreement, the Company will pay the lessor a fixed monthly rent for 86 months, plus supplemental rent for maintenance of the aircraft.

On December 22, 2023, the Company entered into a lease agreement for one A321F cargo aircraft. The ten-year lease commenced on March 8, 2024. Under the agreement, the Company will pay the lessor a fixed monthly rent for 120 months, plus supplemental rent for maintenance of the aircraft.

On January 19, 2024, the Company signed a lease agreement for one A320 passenger aircraft and paid commitment fees to the lessor. The lease will commence upon aircraft delivery which is expected to be in 2024 and will run through 96 months from delivery date. In addition to basic rent due, the Company will pay the lessor supplemental rent for maintenance of the aircraft.

On April 16, 2024, the Company entered into a lease agreement for one A320 passenger aircraft. The six-year lease commenced on April 17, 2024. Under the agreement, the Company will pay the lessor a fixed monthly rent for 72 months, plus supplemental rent for maintenance of the aircraft.

On April 29, 2024, the Company signed a lease agreement for one A321F passenger aircraft and paid commitment fees to the lessor. The lease will commence upon aircraft delivery which is expected to be in 2024 and will run through the next heavy maintenance visit on November 15, 2025. Following the expiration date, the aircraft is expected to undergo a passenger-to-freighter conversion and a second lease after completion which will run through an additional 102 months from redelivery date. In addition to basic rent due, the Company will pay the lessor supplemental rent for maintenance of the aircraft.

On April 29, 2024, the Company signed a lease agreement for one A321F cargo aircraft and paid commitment fees to the lessor. The lease will commence upon aircraft delivery which is expected to be in 2024 and will run through 102 months from delivery date. In addition to basic rent due, the Company will pay the lessor supplemental rent for maintenance of the aircraft.

The Company reviewed the operating leases for extension options that may be reasonably certain to be exercised and then would become part of the right-of-use assets and lease liabilities. On December 21, 2022, and October 10, 2023, the Company signed extensions for two aircraft extending their lease terms for an additional 60 and 15 months from original ending date of June 1, 2023, and October 1, 2023, to May 31, 2028, and December 31, 2024, respectively. In addition, on March 27, 2024 an additional extension was signed to extend aircraft lease term for an additional 74 months from previous extended ending date of December 31, 2024 to February 28, 2031. Terms of extensions were agreed solely to grant the Company the right to use the asset for the related additional time including no changes in payment rent. As such, extension was accounted as a modification of lease in accordance with ASC 842 rather than as a new contract and the Company remeasured at modification date the following: Right-of-use asset, lease liability, discount rate, lease term and classification. In addition, as of March 31, 2024, the Company signed a lease agreement to convert one of its lease passenger aircraft with lease term ending on November 1, 2024, into an Aircraft Freighter at lessor's expense. The new lease is contingent on a successful conversion from induction date of November 1, 2024, and can take up to a year. Among terms agreed includes commitment fees paid to lessor and also no basic and supplemental rent shall be payable while the Aircraft undergoes conversion during the period commencing on the conversion induction date and ending on the conversion redelivery date. The Company expects to record a new lease on the acceptance of redelivery date, which is the date the lessee will have access to the leased asset.

The following table provides details of the Company's future minimum lease payments under finance lease liabilities and operating lease liabilities recorded in thousands on the Company's condensed consolidated balance sheets as of June 30, 2024. The table does not include commitments that are contingent on events or other factors that are currently uncertain or unknown.


	Finance Leases		Operating Leases
Remainder of 2024	$	2,471	$	12,509
2025		5,122		24,535
2026		5,122		22,854
2027		5,013		20,936
2028		4,384		16,232
2029 and thereafter		8,485		44,412
Total minimum lease payments		30,597		141,478
Less amount representing interest		10,349		48,643
Present value of minimum lease payments		20,248		92,835
Less current portion		2,284		13,323
Long-term portion	$	17,964	$	79,512

The table below presents information for lease costs related to the Company's finance and operating leases in thousands:


	For The Three Months Ended June 30,				For The Six Months Ended June 30,
	2024		2023		2024		2023
Finance lease cost
Amortization of leased assets	$	756	$	105	$	1,087	$	219
Interest of lease liabilities		733		101		1,042		202
Operating lease cost

Global Crossing Airlines Group Inc. [JETMF] Filings
Global Crossing Airlines Group Inc. [JETBF] Filings
10-Q	[2024-08-14]
10-Q	[2024-05-07]
10-K	[2024-03-07]
S-1	[2023-12-22]
10-Q	[2023-11-08]
10-Q	[2023-08-09]
10-Q	[2023-05-10]
10-K	[2023-03-10]
10-Q	[2022-10-31]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-31]
S-1	[2021-11-23]

Global Crossing Airlines Group Inc. [JETMF] Filings

Global Crossing Airlines Group Inc. [JETBF] Filings