Item 1.01 Entry into a Material Definitive Agreement
On March 17, 2022, Global Crossing Airlines Group Inc. (the “Company”) entered into agreements (each a “Subscription Agreement”), pursuant to which the Company agreed to sell up to US$6.0 million of its securities (the “Financing”). The closing of the Financing occurred on March 28, 2022.
The securities sold in the Financing consisted of (1) non-convertible debentures (each, a “Debenture”) and (2) one common stock purchase warrant (each, a “Warrant”) for every US$1.24 of principal of the Debentures purchased for gross proceeds of up to US$6,000,000. Each Warrant is exercisable into one share of common stock (each, a “Warrant Share”) at an exercise price of US$1.24 per Warrant Share with an exercise period of 24 months from the date of closing.
The terms of the Debentures include:
| | • | a maturity date of 24 months from the date of issuance (the “Maturity Date”) and the principal amount of the Debentures, together with any accrued and unpaid interest, will be payable on the Maturity Date; |
| | • | the Debentures bear interest (the “Interest”) at the rate of 15% per annum, which Interest will be payable in cash quarterly in arears; |
| | • | the Company has the option to prepay the principal amount of the Debentures on 30 business days’ notice, provided that if repaid in the first year, the Company must provide a payment such that the holders of the Debentures receive at least 10% premium on the principal amount, after deducting any prior Interest payments from such premium; and |
| | • | it is intended that repayment by the Company of amounts owing under the Debentures will be secured by a secured lien on the tangible fixed assets of the Company. |
The foregoing description of the Financing is a summary and is qualified in its entirety by reference to the Subscription Agreement, Warrant and Debenture, copies of which are attached to this Current Report as Exhibits 10.1, 10.2 and 10.3, respectively, which are incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities
The information included in Item 1.01 of this Form 8-K is hereby incorporated by reference into this Item 3.02. The issuances of the Debenture and the Warrant are exempt from registration pursuant to the provisions Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D, as promulgated by the Commission. The Debentures, the Warrants and the Warrant Shares (when issued) are restricted securities that may not be offered or sold absent their registration for resale or the availability of an exemption therefrom.
Item 7.01 Regulation FD
On March 17, 2022, the Company issued a press release announcing the Financing. On March 28, 2022, the Company issued a press release announcing the closing of the Financing. Copies of the press releases are attached to this report as Exhibits 99.1 and 99.2, respectively. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein and in the press releases are deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended. The information set forth in Item 7.01 of this report shall not be deemed an admission as to the materiality of any information in this report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.
