S-1/A: Global Crossing Airlines Files Amendment to S-1 Registration for Resale of Common Stock

Global Crossing Airlines amends its S-1 registration to allow selling stockholders to resell up to 23,217,500 shares of common stock issuable upon exercise of warrants.

Summary

• Global Crossing Airlines Group Inc. has filed an amendment to its S-1 registration statement with the SEC.
• The amendment covers the resale of up to 23,217,500 shares of common stock by selling stockholders.
• These shares are issuable upon the exercise of outstanding warrants and conversion of Class A Non-Voting Common Stock.
• The company will not receive any proceeds from the resale of these shares, except from any cash exercise of warrants.
• The company is an emerging growth company and a smaller reporting company, allowing it to comply with reduced reporting requirements.
• GlobalX operates a US Part 121 domestic flag and supplemental airline using the Airbus A320 family of aircraft.
• GlobalX's business model is to provide services on an Aircraft, Crew, Maintenance and Insurance (ACMI) using wet lease contracts to airlines and non-airlines, and on a Full Service (Charter) basis.
• GlobalX operates within the United States, Europe, Canada, Central and South America.
• GlobalX began operating the Airbus A321 freighter (A321F) during the first quarter of 2023.
• The company was originally incorporated in British Columbia, Canada on September 2, 1966.
• The company has changed its name several times, eventually becoming Global Crossing Airlines Group Inc. on December 22, 2020.
• The company's principal executive offices are located in Miami, Florida.
• The company's common stock is traded on the OTCQB Marketplace under the symbol JETMF and on the NEO Exchange under the symbol JET.
• The company's Class B Non-Voting Common Stock is traded on the NEO Exchange under the symbol JET.B.

Sentiment

Score: 5

Explanation: The document presents a mix of positive and negative aspects. While it highlights growth opportunities and strategic initiatives, it also acknowledges significant risks and financial challenges. Therefore, a neutral sentiment score is appropriate.

Positives

• The registration allows selling stockholders to offer their shares to the public.
• The company's ACMI and Charter business model insulates profitability from fluctuations in jet fuel prices.
• The company has an experienced management team.
• The company is focused on becoming a market leader with differentiated, value-creating solutions.

Negatives

• The company will not receive proceeds from the resale of shares, except from warrant exercises.
• The company has a limited operating history, making it difficult to forecast revenue and evaluate the business.
• The company has a history of net losses and anticipates increasing operating expenses.
• The company may require additional capital, which may not be available on terms acceptable to it or at all.
• The company relies on third-party specialists and other commercial partners to perform functions integral to its operations.

Risks

• The company's ability to implement its business plan is subject to numerous risks and uncertainties.
• The company operates in an exceedingly competitive industry.
• The company is subject to factors beyond its control, including air traffic congestion, adverse weather, federal government shutdowns, aircraft-type groundings, increased security measures or disease outbreaks.
• The company's reputation and business could be adversely affected in the event of an emergency, accident or similar public incident involving its aircraft or personnel.
• The company's business has been and in the future may be materially adversely affected by the price and availability of aircraft fuel.
• The company operates a limited number of aircraft types.
• The company's intellectual property rights, particularly its branding rights, are vulnerable.
• The company's quarterly results of operations fluctuate due to a number of factors, including seasonality.
• Threatened or actual terrorist attacks or security concerns involving airlines could have a material adverse effect on the company's business.
• The rapid spread of the COVID-19 virus and its variants has had and may continue to have an adverse impact on the company's business.
• General economic conditions may reduce the demand for the company's services.
• The company may become involved in litigation that may materially adversely affect it.
• Increased labor costs, union disputes, employee strikes and other labor-related disruption, may adversely affect the company's business.
• The company will rely heavily on technology and automated systems to operate its business and any failure of these technologies or systems or failure by their operators could harm its business.
• Unauthorized breach of the company's information technology infrastructure could compromise the personally identifiable information of its passengers, prospective passengers or personnel and expose it to liability.
• Failure to comply with applicable environmental regulations could have a material adverse effect on the company's business.
• The company has a significant amount of aircraft-related fixed obligations that could impair its liquidity and thereby harm its business.
• Rising maintenance and repair costs could adversely affect cash flow and results of operation.
• The company may face difficulties in recruiting and hiring its workforce.
• The airline industry is particularly sensitive to changes in economic conditions.
• The company faces limits on foreign ownership and control.
• The company is subject to extensive regulation by the FAA, the DOT, the TSA, CBP and other U.S. and foreign governmental agencies, compliance with which could cause it to incur increased costs and adversely affect its business.
• The company does not know whether an active, liquid and orderly market will develop for its common stock or what the market price of its common stock will be.
• Until the company's common stock is listed on a qualified national securities exchange or its common stock price exceeds $5 per share, its common stock will be considered a penny stock and will not qualify for exemption from the penny stock restrictions.
• The company will require additional capital in the future and raising additional capital may cause dilution to its existing stockholders, restrict its operations or require it to relinquish rights to its business assets.
• If securities analysts do not publish research or reports about the company's business or if they publish negative evaluations of its stock, the price of its stock could decline.
• Insiders will continue to have substantial influence over the company after this offering, which could limit your ability to affect the outcome of key transactions, including a change of control.
• The company will register the shares of common stock issuable under its equity compensation plans and the sale of such shares could affect its market price.
• The company's corporate charter and Bylaws include provisions limiting voting and ownership by non-U.S. citizens.
• The company is an emerging growth company and a smaller reporting company and the reduced disclosure requirements applicable to emerging growth companies may make its common stock less attractive to investors.
• The company incurs increased costs as a result of operating as a public company, and its management will be required to devote substantial time to new compliance initiatives and corporate governance practices.
• The company does not expect to pay any dividends for the foreseeable future.
• Delaware law and provisions in the company's Certificate of Incorporation and Bylaws might discourage, delay, or prevent a change in control of the company or changes in its management and, therefore, depress the trading price of its common stock.
• The company's disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Future Outlook

The company expects the fleet to increase to 15 passenger aircraft and five cargo aircraft by the end of 2024. To achieve the number of aircraft deliveries in 2024, the Company currently has seven aircrafts under lease with partial or total deposits paid and four aircraft under binding agreements that are subject to execution of definitive lease documentation and fulfillment of certain closing conditions.

Management Comments

• Management is confident that the augmented cash and cash equivalents, coupled with the anticipated rise in sales linked to the Companys strategies to attract more funds, will adequately address the Companys liquidity requirements for the next twelve months.
• Management is actively assessing various options to procure additional funds, including exploring opportunities for additional equity or debt financing.

Industry Context

The document discusses the consolidation in the U.S. passenger airline industry and the categorization of airlines as legacy network airlines, low cost carriers, or ultra-low cost carriers. It also mentions the growth of the U.S. narrow-body charter market and the global air cargo market.

Comparison to Industry Standards

• The document mentions several competitors in the airline industry, including United Airlines, Delta Air Lines, American Airlines, Southwest Airlines, JetBlue Airways, Spirit Airlines, Allegiant Travel Company, and Frontier Airlines.
• It also mentions cargo operators such as UPS, FedEx, DHL, Air Transport Services Group, Inc., and Atlas Air.
• The document compares GlobalX's business model to those of low cost carriers and ultra-low cost carriers, highlighting the differences in cost structure and target markets.
• The document also mentions the International Civil Aviation Organization (ICAO) and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

Management Changes

Legal Proceedings

• GEM Global Yield LLC SCS filed a claim against the Company for breach of a share subscription agreement, which was settled on March 29, 2023.
• Global Crossing Airlines and Top Flight Charters filed a lawsuit against Shorts Travel Management, Inc and STM Charters, Inc, which is currently in the discovery phase.

Related Party Transactions

• GlobalX earned revenue from flights flown and shared TRAX services with Jetlines.
• Jetlines earned revenue from flights flown for GlobalX.
• The Company entered into Subscription Agreement and Secure Notes with entities of which its former executive or executives were elected Board of Directors' members of the Company during the last annual shareholders meeting in December 2023.
• Smartlynx Airlines Malta Limited is an entity whose Chief Executive Officer was a Board Member of GlobalX until his term expired in December 2022.

Stakeholder Impact

• The registration of the resale shares provides an opportunity for existing stockholders to sell their shares.
• The company's ability to obtain additional financing will impact its ability to execute its growth strategy.
• The company's compliance with environmental regulations will impact its operating costs.
• The company's ability to attract and retain qualified employees will impact its ability to successfully execute its business plan.

Next Steps

• The Selling Stockholders may, from time to time, sell any or all of their shares of our common stock on the stock exchange, market or trading facility on which the shares are traded or in private transactions.
• The company expects to break ground on a new aircraft maintenance facility at the Fort Lauderdale-Hollywood International Airport (KFLL) in Q2 2024, and occupy the facility in Q2 2025.

Key Dates

Keywords

common stock, resale, warrants, Global Crossing Airlines, registration statement, securities, Class A Non-Voting Common Stock, ACMI, charter, airline