Financial Analysis

6. COMMITMENTS AND CONTINGENCIES The Company has contractual obligations and commitments primarily with regard to management and development services, lease arrangements, and financing arrangements. The Company is subject to various legal proceedings in the normal course of business and records legal costs as incurred. Management believes these proceedings will not have a materially adverse effect on the Company.

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4. DEBT ISSUANCE COSTS In relation to the aggregate of $ 35.7 million of Secured Notes issued by the Company on August 2, 2023, and December 21, 2023, the Company capitalized $ 6.9 million of debt issuance costs. These debt issuance costs are netted against the outstanding principal portion on the Consolidated Balance Sheets as Note payable, net of unamortized debt issuance costs and amortized to interest expense using the effective interest method. The Company amortized $ 0.8 million and $ 0.6 million of the related debt issuance costs during the years ended December 31, 2025 and 2024, respectively. In addition, as of December 31, 2025 and 2024, unamortized debt issuance costs totaled $ 5.2 million and $ 6.0 million, respectively, and are included in Note payable, net of debt issuance costs in the Consolidated Balance Sheets. As it relates to the $ 14.7 million Promissory Note issued by the Company on July 11, 2025, the Company netted $ 0.2 million of debt issuance costs against the outstanding principal portion. These debt issuance costs are capitalized on the Consolidated Balance Sheets as Note payable, net of unamortized debt issuance costs and amortized to interest expense using the straight-line method, as results are materially consistent with the effective interest method. The Company amortized $ 12 thousand of the related debt issuance costs during the year ended December 31, 2025. In addition, as of December 31, 2025, unamortized debt issuance costs totaled approxim …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table presents disaggregated revenues by service type for the years ended December 31, 2025 and 2024 (in thousands): For the years ended December 31, Consolidated Revenue 2025 2024 Charter $ 62,258 $ 95,456 ACMI 175,770 123,061 Other 8,318 5,234 Total $ 246,346 $ 223,751

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8. INCOME TAXES The Companys effective tax rate for the years ended December 31, 2025 and 2024 was ( 0.70 %) and ( 0.02 %), respectively. The effective tax rate represents a blend of federal and state taxes and includes the impact of certain nondeductible items. The following table summarizes the significant components of the provision for income taxes from continuing operations (in thousands): For the Year Ended December 31, 2025 For the Year Ended December 31, 2024 Federal: Current $ $ Deferred ( 542 ) ( 2,126 ) State: Current 18 2 Deferred 269 ( 255 ) Change in valuation allowance 273 2,381 Total income tax provision $ 18 $ 2 During the years ended December 31, 2025 and 2024, the Company did no t make any income tax payments. The income tax provision differs from that computed at the federal statutory corporate tax rate as follows (in thousands): For the Year Ended December 31, 2025 For the Year Ended December 31, 2024 Expected provision at Federal statutory tax rate 21.00 % 21.00 % State tax expense, net of Federal benefit ( 10.90 )% 2.17 % Change in valuation allowance ( 10.48 )% ( 20.80 )% Permanent difference ( 1.67 )% ( 2.05 )% Other 1.35 % ( 0.34 )% Total ( 0.70 )% ( 0.02 )% The following table summarizes the Company's effective income tax rate reconciliation disaggregated into the categories below (in thousands): Consolidated US Federal Statutory Rate 21 % Loss before income taxes $( 2,600 ) $( 2,600 ) Tax Affected Categories: Income Tax Benefit at federal statutory …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

10. NOTE PAYABLE On August 2, 2023 and December 21, 2023, the Company consummated the placement of $ 35 million and $ 0.7 million, respectively, of senior secured notes due 2029 (the Secured Notes). The terms of the Secured Notes include: a maturity date of June 30, 2029 , with no principal payments due until the maturity date; the Secured Notes bear interest at a fixed rate of 15 % per annum and include an upfront fee of 2 % of the principal amount of such Secured Notes; the Company is permitted to prepay all (but not less than all) of the Secured 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 and on or prior to August 2, 2027, (iii) 2.5 % of the principal to be redeemed after August 2, 2027 and on or prior to August 2, 2028, (iv) 0 % of the principal to be redeemed after August 2, 2028; the investors were granted 10 million warrants, each exercisable into one share of Class A Non-Voting Common Stock at an exercise price of $ 1.00 per share, with such warrants expiring on June 30, 2030 ; each of the Companys material subsidiaries guaranteed the Secured Notes; the Secured Notes and the related guarantees are secured by a lien on substantially all of the property and assets of the Company and the guarantors of the Secured Notes. financial covenants requiring minimum adjusted EBITDA of (i) $ 5 million for the fiscal year en …

LongTermDebtTextBlock · excerpt; the full note is in the filing

"13. RELATED PARTY TRANSACTIONS Related parties and related party transactions impacting the consolidated financial statements not disclosed elsewhere in these consolidated financial statements are summarized below and include transactions with the following individuals or entities. As of December 31, 2024, amounts due to related parties include the following: 1. GlobalX earned $ 39 thousand in 2024 and it was owed $ 0 , in relation to flights flown and shared TRAX services with Jetlines. 2. Jetlines earned approximately $ 1.2 million in 2024 and it was owed $ 0 , respectively, in relation to flights flown by Jetlines for GlobalX. The Company had provided a guarantee for one of their aircraft and as a result it settled a $ 1.3 million obligation with lessor of related aircraft during the year ended December 31, 2024, as recorded in current liabilities and non-operating expenses on the Companys Consolidated Balance Sheets and Statement of Operations, respectively. As of and for the year ended December 31, 2025, the Company did no t incur, earn or have any related parties transactions or balances. As described in Note 4 above, on August 2, 2023 and December 21, 2023, the Company issued an aggregate of $ 35.7 million of Secured Notes , which includes among others, an entity of which its executive remained elected as a member of the Board of Directors of the Company during the last annual stockholders meeting in December 2025. During the years ended December 31, 2025 and 2024, Re …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

15. REVENUE CONTRACT LIABILITY Deferred revenue for customer contracts represents amounts collected from, or invoiced to, customers in advance of revenue recognition. The balance of Deferred revenue will increase or decrease based on the timing of invoices and recognition of revenue. Significant changes in our Deferred revenue liability balances during the years ended December 31, 2025 and 2024 (in thousands) were as follows: December 31, 2025 December 31, 2024 Beginning Balance $ 8,903 $ 9,896 Revenue Recognized ( 8,903 ) ( 9,896 ) Amounts Collected or Invoiced 16,830 8,903 Ending Balance $ 16,830 $ 8,903

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17. SEGMENT INFORMATION The Companys business activity is providing customized, non-scheduled air transport services to customers. Management structured the Companys business model to derive revenue from customers from two types of contracts: (1) ACMI and (2) Charter, as discussed in Managements Discussion and Analysis of Financial Condition and Results of Operations. The Companys President and Chief Financial Officer together serve as the Chief Operating Decision Maker (CODM). The Company manages the business activities on a consolidated basis and operates in one reportable segment. The CODM assesses performance for the Companys single operating segment and decides how to allocate resources based on net income or loss that is also reported on the Consolidated Statements of Operations. Net income is used to monitor actual versus budget results. Significant expenses within net income or loss, include operating expenses, which are each separately presented on the Companys Consolidated Statements of Operations. Other segment items within net income or loss include Interest Expense, Loss in Canada Jetlines Operations Ltd. and Income tax expense. The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets. The following table presents revenue for the Companys single reportable segment for the periods indicated (in thousands): For the years ended December 31, 2025 2024 Consolidated Revenue $ 246,346 $ 223,751 Products and services The C …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing