CREDIT FACILITY AND OTHER LOANS

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

CREDIT FACILITY AND OTHER LOANS

REVOLVING LOAN AND PROMISSORY NOTE- RELATED PARTY

Revolving loan and promissory note with a related party consisted of the following, in thousands:

	September 30, 2024		December 31, 2023
Dennis Liotta, March 2023 – 10% interest – promissory note due March 2024	$	—	$	1,000
Total notes from related party - current	$	—	$	1,000

Dennis Liotta – December 2021 note

On December 9, 2021, the Company entered into a revolving loan agreement with Dennis Liotta, an affiliate of the Company, for a total amount of $8.0 million that matured on January 1, 2023 (“December 2021 note”). The Company was required to make monthly payments of interest at a fixed rate of 4.0% per annum. The Company was required to make principal repayments at fixed scheduled dates.

In conjunction with the execution of the December 2021 note, both parties executed a security agreement, under which the Company granted a continuing security interest in all of the assets of the Company. The Company did not make its interest payments, thus triggering a default and increasing the interest rate to 9% plus an additional 5% on the missed payments. The Company incurred $370 thousand in interest and penalties during the three months ended March 31, 2023.

In the first quarter of 2023, the Company converted the unpaid principal balance of this revolving note and accrued interest into a convertible note for total principal balance of $6.0 million.

Dennis Liotta – March 2023 note

On March 15, 2023, the Company entered into a promissory note agreement with Dennis Liotta, an affiliate of the Company, for a total amount of $1 million, with an effective date of February 27, 2023, which matured on March 31, 2024 (“March 2023 note”). The entire outstanding principal balance together with accrued but unpaid interest were due at the maturity date. On April 1, 2024, the March 2023 note was paid in full. Promissory note from related party was zero as of September 30, 2024, and $1.0 million as of December 31, 2023, respectively.

The Company incurred zero and $25 thousand of interest expense during the three months ended September 30, 2024 and 2023, respectively. The Company incurred $23 thousand and $60 thousand of interest expense during the nine months ended September 30, 2024 and 2023, respectively. Accrued interest was zero as of September 30, 2024.

CREDIT FACILITY AND OTHER LOANS

Credit facility and other loans consisted of the following, in thousand:

	September 30, 2024		December 31, 2023
SAC Leasing G280 LLC credit facility, 12.5% interest, net of deposits	$	28,500	$	27,750
Less discounts	(307)		(376)
Total credit facility, net of discount	$	28,193	27,374

SAC Leasing G280 LLC Line of Credit

In 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four (4) Gulfstream G-280 aircraft for total consideration of $79.0 million. The first Gulfstream G280 was delivered in the third quarter of 2024 with the remaining three Gulfstream G280s expected to be delivered throughout fiscal year 2025. An aggregate amount of $48.0 million was funded and paid as of September 30, 2024, partially through a credit facility from SAC Leasing G280.

The Company entered into the pre-delivery payment agreement with SAC Leasing G280 on October 5, 2022, to obtain loans in the aggregate amount of $40.5 million for the purchase of the aircraft. The Company’s board of directors consented to the participation of Coastal States Bank, as a syndicate lender in the financing of additional aircraft by SAC Leasing G280.

On August 25, 2023, the Company and SAC Leasing G280 entered into the first amendment to the pre-delivery payment agreement. As of September 30, 2024, the Company had an aggregate amount of $25.5 million in promissory notes, of which 60% was solely to Coastal States Bank pursuant to the first amendment.

The maturity date is the earlier of the delivery date of the aircraft or September 14, 2025, which is thirty-five (35) months from the date of funding. The purchase agreement contracts were assigned to SAC Leasing G280 as collateral on this credit facility.

During the nine months ended September 30, 2024, the Company funded an additional $9.0 million and paid down $9.0 million through the SAC Leasing G280 line of credit through the sale of the first GulfStream G280 which brings the carrying balance to $28.5 million as of September 30, 2024.

The Company incurred $68 thousand and $548 thousand of incremental closing costs, which are reported as debt discount against the liability in the consolidated balance sheets as of September 30, 2024, and December 31, 2023, respectively.

During the three months ended September 30, 2024 and 2023 the Company amortized to interest expense $45 thousand and $45 thousand of debt discount, respectively. During the nine months ended September 30, 2024 and 2023, the Company amortized to interest expense $137 thousand and $147 thousand of debt discount, respectively.

During the three months ended September 30, 2024 and 2023, the Company incurred $1.0 million and $607 thousand of interest under this facility, respectively. During the nine months ended September 30, 2024 and 2023 the Company incurred $3.3 million and $1.3 million, respectively.

Term Loan

In July 2024, the Company entered into a business loan and security agreement (the “Loan”) with TVT Capital Sources LLC (the “Lender”), which provides for a term loan in the amount of $4.0 million. Net proceeds of $3.8 million were received by the Company and used to fund operations. The Loan bears interest at an annual percentage rate of 165% and matures on January 28, 2025, with principal and interest payments made weekly.

The Loan provides for events of default customary for term loans. As of September 30, 2024 the Company was in compliance with all covenants. The Loan is collateralized by all assets of the Company with the exception of the purchase agreements of G280 aircraft or any collateral pledged to SAC Leasing G280.

The Company incurred financing fees of $200 thousand, which were recorded as a direct discount to the debt and are being amortized over the term of the Loan. The Company amortized $64 thousand of financing fees in the three and nine months ended September 30, 2024. The Company recorded $894 thousand of interest expense related to the Loan in the three and nine months ended September 30, 2024.