Global Crossing Airlines Reports First Quarterly Revenues of US$3.1 Million and Provides Details of Management Webinar to Discuss Q3 Results and Outlook
Significant highlights and milestones for the quarter include:
- Obtained its US FAA Aircraft Operating Certificate as a US 121 Flag and Supplemental Carrier
- Obtained its Certificate of Public Convenience and Necessity for Foreign Charter Air Transportation from the US DOT to Fly Internationally
- Entered Revenue Service on August 7, 2021 with one Airbus A320 Aircraft; Three aircraft in operation by September 30, 2021
- Signed leases for one Airbus A321 converted freighter and two A320 passenger aircraft; Signed letters of intent for one A321 converter freighter and one A320 passenger plane
MIAMI, Nov. 22, 2021 (GLOBE NEWSWIRE) — Global Crossing Airlines Group, Inc. (JET: TSX-V; JET.B: TSX-V; JETMF: OTCQB) (the “Company” or “GlobalX”) today reported financial results for its first quarter of revenue operations which occurred in the third quarter ended September 30, 2021, including revenue of $3.1M and net operating loss of $5.26M or ($.10) per diluted share. Included in GlobalX’s operating results are an estimated $2.1 million in expense related to pre-revenue operations during the quarter, as well as approximately $750 thousand in non-recurring expenses. All dollar amounts in this press release are in United States dollars.
Management will be hosting a Zoom webinar to discuss Q3 results and outlook.
When: Tuesday, November 30, 2021, 02:00 PM Eastern Time (US and Canada)
Topic: Global Crossing Q3 Results and Outlook
Register in advance for this webinar:
https://us02web.zoom.us/webinar/register/WN_zHMJeX4BSw-TAi0N8Nnvag
After registering, you will receive a confirmation email containing information about joining the webinar.
“We had a very smooth entry into revenue operations and the GlobalX team has performed exceedingly well,” said Ed Wegel, Chairman and CEO of GlobalX. “During our first seven weeks of operations we operated more than 150 revenue flights, and approximately 400 block hours, for nearly a dozen customers.”
“On August 30th, we received our final authority from the US Department of Transportation to fly international charters. This enables us to fly to the Caribbean, Mexico, Latin America, and Canada. We capitalized on that authority by immediately executing on international contracts, and we have been continuing to expand our international client base.”
Mr. Wegel further added: “Now that the FAA certification is behind us, our focus is on delivering exceptional customer value, while scaling the airline towards profitability. We are extremely encouraged about the demand for our product offering as well as our growing portfolio of customers.”
Third-Quarter Results
Flights in the third quarter of 2021 totaled 378 block hours with revenue of $3.1M, both of which were zero for the same period in 2020. Operating losses during the quarter were driven by the investments necessary to achieve FAA certification and limited number of aircraft. During the quarter GlobalX operated two Airbus A320s and one Airbus A321 aircraft for 91 total combined days available for sale.
GlobalX ended the quarter with $8.9 million in cash and restricted cash.
For full details of the third quarter financial results, Management’s discussion and analysis of financial results and consolidated financial statements and notes for the three and nine months ended September 30, 2021, are available under the Company’s SEDAR profile at www.sedar.com. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP).
Outlook
Looking ahead, GlobalX projects strong demand for its services and a resulting increase in revenue block hours in the fourth quarter of 2021. GlobalX will seek to continue to increase its flight activity to Cuba and the Dominican Republic, as well as flights on behalf of the US Government agencies, US-based hotel and casino operators, and for college football team clients (including NCAA football bowl game flights). GlobalX is accepting delivery of three aircraft in the coming weeks and expects to have as many as 6 aircraft operating by the end of the year. This will result in an estimated 270% increase in total combined aircraft days available for sale in the fourth quarter versus third.
Commenting on the results, Mr. Wegel stated: “We believe we are now developing a strong foundation for our airline, with a strong team of airline professionals, and we are well positioned going into 2022.”
About Global Crossing Airlines
GlobalX is a US 121 domestic flag and supplemental airline flying the Airbus A320 family aircraft. GlobalX flies as an ACMI and charter airline serving the US, Caribbean, and Latin American markets. For more information, please visit www.globalxair.com.
For more information, please contact:
Ryan Goepel, Chief Financial Officer
Email: [email protected]
Tel: 786.751.8503
Cautionary Note Regarding Forward-Looking Information
This news release contains “forward-looking information” concerning anticipated developments and events that may occur in the future. Forward-looking information contained in this news release includes, but is not limited to, statements with respect to the Company’s intention to fly as an ACMI and wet lease charter airline, the Company’s aircraft fleet size, the destinations that the Company intends to service, the expected delivery timelines for aircraft, future demand for block hours, increases in flight activity and expected future revenues.
In certain cases, forward-looking information can be identified by the use of words such as “plans”, “expects” “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur”, “be achieved” suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the receipt of financing to continue airline operations, the accuracy, reliability and success of GlobalX’s business model; the timely receipt of governmental approvals; the success of airline operations of GlobalX; the legislative and regulatory environments of the jurisdictions where GlobalX will carry on business or have operations; the Company has or will have sufficient aircraft to provide the service; the impact of competition and the competitive response to GlobalX’s business strategy; and the availability of aircraft. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks related to, the ability to obtain financing at acceptable terms, the impact of general economic conditions, risks related to supply chain disruptions, failure to retain or obtain sufficient aircraft, domestic and international airline industry conditions, passenger demand being less than anticipated, the impact of the global uncertainty created by COVID-19, future relations with shareholders, volatility of fuel prices, increases in operating costs, terrorism, pandemics, natural disasters, currency fluctuations, interest rates, risks specific to the airline industry, the ability of management to implement GlobalX’s operational strategy, the ability to attract qualified management and staff, labour disputes, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits; and the additional risks identified in the “Risk Factors” section of the Company’s reports and filings with applicable Canadian securities regulators. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update any forward-looking information.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this release.
Global Crossing Airlines Group, Inc.
Consolidated Statement of Operations and Comprehensive Loss
| THREE MONTH PERIOD ENDED SEPTEMBER 30, | NINE MONTH PERIOD ENDED SEPTEMBER 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| OPERATING REVENUES | $ | 3,123,946 | $ | – | $ | 3,123,946 | $ | – | |||||||
| OPERATING EXPENSES | |||||||||||||||
| Aircraft and operating expense | 2,418,699 | – | 4,089,238 | 3,321 | |||||||||||
| Consulting fees | 197,245 | 747,341 | 521,424 | 953,795 | |||||||||||
| Compensation expense | 2,277,115 | 45,000 | 4,482,330 | 153,000 | |||||||||||
| Depreciation | 7,099 | 44 | 15,484 | 85 | |||||||||||
| Directors’ fees | 12,000 | – | 60,000 | – | |||||||||||
| Education and training | 83,445 | – | 373,948 | – | |||||||||||
| General and administrative | 711,807 | 73,804 | 1,433,043 | 92,971 | |||||||||||
| Marketing and advertising | 47,956 | 7,327 | 366,281 | 8,977 | |||||||||||
| Professional fees | 739,764 | 85,192 | 1,353,577 | 91,160 | |||||||||||
| Regulatory costs | 47,291 | – | 189,530 | – | |||||||||||
| Rent expense | 1,217,258 | 21,994 | 2,198,339 | 33,087 | |||||||||||
| Share-based payments (Note 14) | 280,903 | 216,111 | 565,888 | 216,111 | |||||||||||
| Taxes | 10,433 | – | 10,433 | – | |||||||||||
| Travel, meals, and entertainment | 327,998 | 12,998 | 391,320 | 15,997 | |||||||||||
| Other | 2,367 | – | 2,367 | – | |||||||||||
| Loss from operations | (5,257,434 | ) | (1,209,811 | ) | (12,929,256 | ) | (1,568,504 | ) | |||||||
| Equity method investment activity | 20,478 | – | 20,478 | – | |||||||||||
| Foreign exchange gain (loss) | (82,529 | ) | (1,899 | ) | 73,037 | (15,607 | ) | ||||||||
| Gain (loss) on warrant revaluation (Note 12) | – | 726,713 | (2,650,772 | ) | 726,713 | ||||||||||
| Interest income (expense) | 56,065 | (1,920 | ) | (27,081 | ) | (6,529 | ) | ||||||||
| Loss from continuing operations | (5,263,420 | ) | (486,917 | ) | (15,513,594 | ) | (863,927 | ) | |||||||
| Income from discontinued operations, including gain on disposal of $302,830 (Note 3) | – | – | 177,706 | – | |||||||||||
| Net loss | $ | (5,263,420 | ) | (486,917 | ) | $ | (15,335,888 | ) | $ | (863,927 | ) | ||||
| Other comprehensive loss | |||||||||||||||
| Foreign currency translation adjustments | (164,738 | ) | – | (164,738 | ) | – | |||||||||
| Comprehensive loss | $ | (5,428,158 | ) | (486,917 | ) | $ | (15,500,626 | ) | $ | (863,927 | ) | ||||
| Basic loss per share – continuing operations | $ | (0.10 | ) | $ | (0.02 | ) | $ | (0.35 | ) | $ | (0.05 | ) | |||
| Diluted loss per share – continuing operations | $ | (0.10 | ) | $ | (0.02 | ) | $ | (0.35 | ) | $ | (0.05 | ) | |||
| Weighted average number of shares outstanding | 50,431,295 | 27,488,398 | 43,572,925 | 16,008,529 |
Global Crossing Airlines Group, Inc.
Consolidated Balance Sheets
| SEPTEMBER 30, 2021 (Unaudited) | DECEMBER 31, 2020 | |||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 8,440,884 | $ | 523,690 | ||
| Restricted cash | 447,705 | 25,000 | ||||
| Accounts Receivable | 55,706 | – | ||||
| Prepaid expenses and other current assets | 738,907 | 350,420 | ||||
| Lessor maintenance reserves | 37,287 | – | ||||
| Current assets held for sale | – | 11,400 | ||||
| 9,720,489 | 910,510 | |||||
| Deferred financing fee (Note 5) | 2,809,031 | 3,035,037 | ||||
| Equipment, net of accumulated depreciation of $17,318 | 490,954 | 422 | ||||
| Other assets | 2,099,700 | 705,000 | ||||
| Operating lease – right of use assets | 6,043,449 | 2,520,243 | ||||
| $ | 21,163,623 | $ | 7,171,212 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 3,911,048 | $ | 1,226,861 | ||
| Deferred revenue | 1,361,464 | – | ||||
| Due to related parties (Note 17) | 35,235 | 232,027 | ||||
| Note payable, current portion (Note 9) | 1,573,000 | 392,700 | ||||
| Warrant liability (Note 12) | – | 824,607 | ||||
| Operating lease obligation – current portion (Note 7) | 1,331,359 | 605,397 | ||||
| Current liabilities held for sale | – | 274,951 | ||||
| 8,212,106 | 3,556,543 | |||||
| Note payable (Note 9) | – | 1,178,100 | ||||
| Other liabilities | 219,149 | 187,928 | ||||
| Operating lease obligation (Note 7) | 5,140,005 | 1,914,846 | ||||
| Non-current liabilities held for sale (Note 13) | – | 31,416 | ||||
| 13,571,260 | 6,868,833 | |||||
| COMMITMENTS AND CONTINGENCIES | ||||||
| Shareholders’ equity | ||||||
| Common stock – $.001 par value; 200,000,000 authorized; 50,462,767 and 28,938,060 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 50,462 | 28,938 | ||||
| Common stock subscribed | – | 452,269 | ||||
| Additional paid in capital | 25,486,321 | 2,264,966 | ||||
| Accumulated other comprehensive loss | (164,738 | ) | – | |||
| Retained deficit | (17,779,682 | ) | (2,443,794 | ) | ||
| 7,592,363 | 302,379 | |||||
| $ | 21,163,623 | $ | 7,171,212 | |||
Global Crossing Airlines Group, Inc.
Condensed Consolidated Statement of Cash Flows
| NINE MONTH PERIOD ENDED SEPTEMBER 30, 2021 | NINE MONTH PERIOD ENDED SEPTEMBER 30, 2020 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Net loss from continuing operations | $ | (15,513,594 | ) | $ | (863,927 | ) |
| Items not affecting cash: | ||||||
| Decrease in operating lease- right of use assets | 817,900 | |||||
| Depreciation | 15,484 | 85 | ||||
| Foreign exchange (gain) loss | (73,037 | ) | 15,607 | |||
| Loss on warrant revaluation | 2,650,772 | (726,713 | ) | |||
| Share-based payments | 565,888 | 216,111 | ||||
| Non-cash working capital item changes: | ||||||
| Accounts receivable | (55,706 | ) | – | |||
| Prepaid expenses and other current assets | (377,087 | ) | (337,401 | ) | ||
| Lessor maintenance reserves | (37,287 | ) | – | |||
| Accounts payable and accrued liabilities | 2,409,236 | 807,376 | ||||
| Deferred revenue | 1,361,464 | – | ||||
| Decrease in operating lease obligations | (389,985 | ) | – | |||
| Net cash used in operating activities – continuing operations | (8,625,952 | ) | (888,862 | ) | ||
| Net cash provided by operating activities – discontinued operations | 177,706 | |||||
| Net cash used in operating activities | (8,448,246 | ) | (888,862 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
| Proceeds from asset disposal | – | 24,639 | ||||
| Aircraft and equipment | (506,016 | ) | (521 | ) | ||
| Other assets | (1,394,700 | ) | (375,000 | ) | ||
| Net cash used in investing activities | (1,900,716 | ) | (350,882 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
| Deferred finance fee | 226,006 | – | ||||
| Payments to related party | (196,792 | ) | (61,110 | ) | ||
| Other liabilities | 31,221 | – | ||||
| Proceeds on issuance of units | 18,878,080 | 1,524,506 | ||||
| Share issue costs | (218,238 | ) | (16,191 | ) | ||
| Net cash provided by financing activities – continuing operations | 18,720,277 | 1,447,205 | ||||
| Net cash (used in) provided by financing activities – discontinued operations | (31,416 | ) | 30,240 | |||
| Net cash provided by financing activities | 18,688,861 | 1,477,445 | ||||
| Net increase in cash | 8,339,899 | 237,701 | ||||
| Cash, cash equivalents and restricted cash – beginning of the period | 548,690 | – | ||||
| Cash, cash equivalents and restricted cash – end of the period | $ | 8,888,589 | $ | 237,701 | ||
| Cash paid for | ||||||
| Interest | $ | 27,306 | $ | 6,640 | ||
| Taxes | $ | – | $ | – | ||
| The following provides a reconciliation of cash, cash equivalents, and restricted cash to the amounts reported on the condensed consolidated Balance Sheets: | ||||||
| Cash and cash equivalents | $ | 8,440,884 | $ | 237,701 | ||
| Restricted cash | 447,705 | – | ||||
| $ | 8,888,589 | $ | 237,701 | |||
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