Global Aircraft Solutions (GACF) 10-Q 2008 Q1 Quarterly report

     UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-Q

[ x ]	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For quarterly period ended March 31, 2008
[    ]	Transition report Pursuant to Section 13 of 15(d) of the Securities Exchange Act of 1934
	For the transition period from	_____________________to____________________
Commission File No. 0-28575

GLOBAL AIRCRAFT SOLUTIONS, INC.

(Exact name of issuer as specified in its charter)

NEVADA	84-1108499
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
6901 South Park Avenue
Tucson, Arizona 85706
Mail: P.O. Box 23009
Tucson AZ	85734-3009
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (520) 294-2481

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.

Yes [ x ] No [    ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated file, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller Reporting Company [ x ] 

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [ x ] 

The registrant had 40,181,301 shares of its Common Stock outstanding as of March 31, 2008.

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INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Information
Condensed Consolidated Balance Sheets (unaudited): As of
March 31, 2008 and December 31, 2007	3
Condensed consolidated Statements of Operations (unaudited):
For the three months ended March 31, 2008 and 2007	5
Condensed Consolidated Statement of Changes in Stockholders’
Equity (unaudited): For the year ended December 31, 2007 and
Three months ended March 31, 2008	6
Condensed Consolidated Statements of Cash Flows (unaudited):
For the three month periods ended March 31, 2008 and 2007	7
Item 2. Management’s Discussion and Analysis of Financial Condition	15
Item 3. Controls and Procedures	19
Item 3A. Controls and Procedures	19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	20
Item 6. Exhibits	20
Signatures	21
Certifications

2

 

ITEM 1. FINANCIAL STATEMENTS.
GLOBAL AIRCRAFT SOLUTIONS, INC.
Condensed Consolidated Balance Sheets
March 31, 2008 and December 31, 2007
(unaudited)
ASSETS
		March 31,		December 31,
		2008		2007
CURRENT ASSETS
Cash and cash equivalents	$	269,176	$	1,221,598
Accounts receivable, net		8,735,347		7,412,120
Due from equity investee partner		347,000		472,000
Inventory		14,977,569		16,429,501
Restricted funds		372,005		196,181
Deferred income taxes		1,682,948		1,682,948
Other current assets		561,136		752,784
TOTAL CURRENT ASSETS		26,945,181		28,167,132
Property, plant and equipment, net		922,906		1,024,837
Investments in and advances to affiliates		20,000		20,000
Goodwill		38,992		38,992
Deferred taxes		76,718		76,718
Other assets		123,288		366,469
TOTAL ASSETS	$	28,127,085	$	29,694,148

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GLOBAL AIRCRAFT SOLUTIONS, INC.
Condensed Consolidated Balance Sheets
March 31, 2008 and December 31, 2007
(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
		March 31,			December 31,
		2008			2007
CURRENT LIABILITIES
Notes payable	$	9,085,479		$	10,268,091
Notes payable, related party		300,000			--
Accounts payable – trade		1,926,603			3,051,776
Customer deposits		465,097			419,076
Billings in excess of costs and estimated
earnings on contracts in progress, net		1,099,113			822,782
Accrued liabilities		436,350			484,109
Income taxes payable		702,413			673,453
Current maturities – capital lease obligations		63,540			62,038
TOTAL CURRENT LIABILITIES		14,078,595			15,781,325
LONG-TERM LIABILITIES
Capitalized lease obligations		154,904			170,990
TOTAL LONG-TERM LIABILITIES		154,904			170,990
TOTAL LIABILITIES		14,233,499			15,952,315
Commitments and contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value, 5,000,000 shares authorized no
shares issued or outstanding 2008 and 2007		--			--
Common stock, $.001 par value, 100,000,000 shares authorized
and 40,181,301 and 39,587,807 shares issued and
outstanding 2008 and 2007		40,181			40,181
Additional paid-in capital		13,853,944			13,755,973
Contributed capital		620,289			620,289
Accumulated deficit		(620,828	)		(674,610	)
TOTAL STOCKHOLDERS' EQUITY		13,893,586			13,741,833
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	28,127,085		$	29,694,148

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

 

GLOBAL AIRCRAFT SOLUTIONS, INC.
Condensed Consolidated Statements of Operations
For the Three Months ended March 31, 2008 and March 31, 2007
(unaudited)
		Three			Three
		Months			Months
		ended			ended
		March 31,			March 31,
		2008			2007
Sales
Sales, maintenance, repair and overhaul	$	3,571,155		$	5,534,331
Sales, aircraft trading		1,993,750			50,000
Sales, parts		1,106,462			630,669
Sales, other		207,618			14,000
Total sales		6,878,985			6,229,000
Cost of sales
Cost of sales, maintenance, repair and overhaul		(2,306,565	)		(3,751,280	)
Cost of sales, aircraft trading		(1,220,131	)		(234	)
Cost of sales, parts		(569,645	)		(374,009	)
Cost of sales, other		(140,768	)		(435	)
Inventory write-down		(37,938	)		--
Total cost of sales		(4,275,047	)		(4,125,958	)
Gross profit		2,603,938	��		2,103,042
Selling, general and administrative expense		(2,130,971	)		(1,599,485	)
Income from operations		472,967			503,557
Other income (expense):
Interest income		4,492			6,443
Interest expense		(395,814	)		(131,600	)
Miscellaneous income		2,174			21,999
Miscellaneous expense		--			(100,000	)
Equity in income of unconsolidated affiliate		--			214,800
Net income, before taxes		83,819			515,199
Provision for income taxes		(30,037	)		(180,334	)
Net income	$	53,782		$	334,865
Net income per share, Basic 2008 1st Qtr 40,181,301
shares; 2007 1st Qtr 39,624,241 shares.	$	0.00		$	0.01
Net income per share, Diluted 2008 1st Qtr
42,015,419 shares; 2007 1st Qtr 40,938,253 shares.	$	0.00		$	0.01

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

GLOBAL AIRCRAFT SOLUTIONS, INC.

     Condensed Consolidated Statement of Changes in Stockholders’ Equity
For the Year Ended December 31, 2007 and the Three Months Ended March 31, 2008
 (unaudited)

						Additional			Contributed		Retained			Stockholder
						Paid-in			Capital		Earnings			Equity
	Shares					Capital
Balance December 31,
2006	39,587,807	$	39,967		$	12,723,213		$	620,289	$	2,370,737		$	15,754,206
Exercise of warrants,
(non-cash)	48,494		48			(48	)							--
Share-based payments to
directors	10,000		10			13,890								13,900
Stock issued to
employees for
compensation	340,000		340			204,670								205,010
Stock issued to third
parties	120,000		120			94,680								94,800
Stock (restricted) issued
to 3rdparties for current
and future services	75,000		75			29,465								29,540
Shares vested on
employment agreements						176,843								176,843
Options issued to a
Director						10,546								10,546
Warrants issued with
debentures						581,282								581,282
Repricing of existing
warrants						69,241								69,241
Tax effects of share-
based payments						(148,188	)							(148,188	)
Reclassification from
commons stock to APIC			(379	)		379								--
Net loss, 2007											(3,045,347	)		(3,045,347	)
Balance December 31,
2007	40,181,301	$	40,181		$	13,755,973		$	620,289	$	(674,610	)	$	13,741,833
Shares vested on
employment agreements						97,971								97,971
Net income											53,782			53,782
Balance March 31,
2008	40,181,301	$	40,181		$	13,853,944		$	620,289	$	(620,828	)	$	13,893,586

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

     GLOBAL AIRCRAFT SOLUTIONS, INC.
Condensed Consolidated Statements of Cash Flows 
For the Three Months ended March 31, 2008 and 2007
(unaudited)  

		2008			2007
Cash flow from operating activities:
Net Income	$	53,782		$	334,865
Adjustments to reconcile net profit to net cash
used in operating activities:
Depreciation		114,083			150,173
Equity in income of unconsolidated affiliate		--			(214,800	)
Physical inventory adjustments		37,938			--
Bad debt expense		5,599			--
Customer Deposits-Forfeited		--			(50,000	)
Stock based compensation expense		107,972			58,408
Intercompany Non-Cash Transactions		(10,000	)		--
Changes in Assets and Liabilities:
Accounts receivable		(1,444,509	)		(1,397,087	)
Prepaid expenses		191,648			83,579
Inventory		1,413,992			179,894
Restricted funds		(175,824	)		--
Deposits		18,347			(43,853	)
Other non-current assets		74,309			--
Accounts payable-trade		(884,490	)		(718,410	)
Customer deposits		196,546			156,108
Billings in excess of cost and estimated
earnings on contracts in progress, net		276,331			1,156,459
Income tax payable		28,960			180,334
Accrued liabilities		(47,759	)		(113,248	)
Net cash used in operating activities		(43,075	)		(237,578	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(12,152	)		(9,869	)
Notes receivable		--			116,672
Net cash (used in) provided by investing activities		(12,152	)		106,803
Cash flows from financing activities:
Proceeds from bank loans		--			57,603
Repayment of loans		(999,990	)		--
Payments on capital lease obligations		(14,583	)		(16,939	)
Proceeds from note payable, related party		300,000			200,000
Payments on notes payable		(182,622	)		(194,768	)
Other financing activities, net		--			(4,808	)
Net cash used in provided by financing activities		(897,195	)		41,088
Net decrease in cash and cash equivalents		(952,422	)		(89,687	)
Cash and cash equivalents at beginning of period		1,221,598			104,440
Cash and cash equivalents at end of period	$	269,176		$	14,753
.

Interest paid for the three-month periods ended March 31, 2008 and 2007 was $400,229 and 126,657, respectively.

Taxes paid during the three-month periods ended March 31, 2008 and 2007 were $0.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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GLOBAL AIRCRAFT SOLUTIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

These Condensed Consolidated Financial Statements include the accounts of Global Aircraft Solutions, Inc., and its wholly owned subsidiaries, Hamilton Aerospace Technologies, Inc. (“HAT”) and Johnstone Softmachine Corporation (“Johnstone”), and World Jet Corporation (“World Jet”), collectively, the “Company” or “Global”. HAT and Johnstone were acquired by Global on May 2, 2002. Johnstone is currently inactive.

All material transactions and accounts with the subsidiaries have been eliminated from the consolidated financial statements.

These Condensed Consolidated Financial Statements have been prepared by the Company without audit. These Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company for the three months ended, March 31, 2008 and 2007 and cash flows for the three months ended March 31, 2008 and 2007. However, these operating results are not necessarily indicative of the results expected for the full fiscal y ear. The Condensed Consolidated Financial Statements should be read in conjunction with the notes to the Condensed Consolidated Financial Statements contained in our annual report on Form 10-K for the fiscal year ended December 31, 2007.

2. ORGANIZATIONS AND NATURE OF OPERATIONS

On September 4, 2007, the Company and Global Aircraft Leasing Partners, LLC, a Delaware limited liability company, (“GALP”) reached a tentative agreement that Global would assume a 40% equity interest in GALP. GALP is a start-up aircraft-leasing venture formed to acquire aircraft, through a combination of debt and equity financing, and lease these commercial jet aircraft to operators throughout the world. It has been mutually agreed by the parties that in consideration for a 40% equity participation in GALP, the company will make a one time capital contribution of $40,000. As further consideration the Company will provide to GALP ongoing technical support to facilitate GALP’s commercial aircraft purchasing, leasing and sales activities. All technical services provided to GALP by HAT and World Jet will be billed at Company-standard rates. The Company had made $20,000 in capital contribution as of December 31, 2007. A final operating agreement has not yet been finalized and Global had no equity participation in GALP for the quarter ended March 31, 2008. Global will make an additional capital contribution of $20,000 upon the parties reaching a final operating agreement. Global will not be required to invest capital in aircraft acquired by GALP, and all debt assumed by GALP as a result of aircraft acquisitions will be non-recourse with respect to the Company. Other members of GALP will include equity funding specialists and aircraft leasing professionals. Global and GALP have also agreed that Global will have first right of refusal for all aircraft maintenance, aircraft parts and technical consulting requirements that GALP may have as a result of its aircraft acquisition and leasing activities.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers cash and investments in securities with maturities at the date of purchase of three months or less to be cash and cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the accompanying financial statements as of March 31, 2007 have been reclassified to conform to the current year presentation, with no effect on reported net income.

Revenue and Cost Recognition

Revenues from fixed-fee contracts or portions of contracts for MRO sales are recognized by employing the percentage-of-completion method, measured by the cost-to-cost method, commencing when progress reaches a point where experience is sufficient to estimate final results with reasonable accuracy. The cumulative catch-up method is used to account for changes in estimates of total revenues, total costs or extent of progress. Each project is considered complete when the subject aircraft departs, or is cleared to depart, our facility. Revision in cost and labor hour estimates and recognition of losses, if any, on these contracts are reflected in the accounting period in which the facts become known. During the periods covered by these financial statements, no material prior period revisions were necessary. As of December 31, 2007 and March 31, 2008 there were no material amounts in excess of the agreed contract price that the Compan y seeks to collect from customers or others for customer-caused delays, errors in specifications or designs, contract termination, change orders in dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs.

Revenue from part sales is recognized when parts are shipped. All parts are shipped FOB shipping point; title passes at time of shipping and the Company has no further contractual or legal obligation to the customer upon shipping. Revenues from time and material contracts and all other ancillary services are recognized as the services are performed. Revenue from aircraft sales is recognized when the customer accepts delivery of the aircraft and/or when title is transferred.

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Recently Issued Accounting Pronouncements

In September 2006, FASB issued SFAS No. 157, “Fair Value Measurements.” This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. The Statement does not require any new fair value measurements but could change the current practice in measuring current fair value measurements. The Statement is effective for fiscal years beginning after November 15, 2007. The Company does not anticipate that the adoption of this Statement will have a material impact on the Company’s consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”) which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 will be effective for us on January 1, 2008. The Company is currently evaluating the impact of adopting SFAS 159 on the Company’s financial position, cash flows, and results of operations.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (SFAS 141(R)). SFAS 141(R) expands the definition of transactions and events that qualify as business combinations; requires that the acquired assets and liabilities, including contingencies, be recorded at the fair value determined on the acquisition date and changes thereafter reflected in revenue, not goodwill; changes the recognition timing for restructuring costs; and requires acquisition costs to be expensed as incurred. Adoption of SFAS 141(R) is required for annual periods beginning after December 15, 2008. Early adoption and retroactive application of SFAS 141(R) to fiscal years preceding the effective date are not permitted.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interest in Consolidated Financial Statements” (SFAS 160). SFAS 160 re-characterizes minority interests in consolidated subsidiaries as non-controlling interests and requires the classification of minority interests as a component of equity. Under SFAS 160, a change in control will be measured at fair value, with any gain or loss recognized in earnings. The effective date for SFAS 160 is for annual periods beginning on or after December 15, 2008. Early adoption and retroactive application of SFAS 160 to fiscal years preceding the effective date are not permitted.

Stock-Based Compensation

The Company measures the cost of employee services received in exchange for all equity awards granted including stock options based on the fair market value of the award as of the grant date.

Earnings per share

Basic earnings per share includes no dilution and is computed by dividing net earnings available to stockholders by the weighted number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the Company’s earnings. Reconciliation of EPS for the three-month period ended March 31 of 2008 and 2007 are as follows:

		For the Three Months ended March 31, 2008
		Income (Numerator)	Shares (Denominator)		Per-Share Amount
Net Income		53,782
Basic EPS
Income available to common stockholders		53,782	40,181,301	$	0.00
Warrants			--
Options			517,500
Unvested employment agreement shares			1,316,618
Diluted EPS
Income available to common stockholders and assumed
conversions		53,782	42,015,419	$	0.00
		For the Three Months ended March 31, 2007
		Income (Numerator)	Shares (Denominator)		Per-Share Amount
Net Income	$	334,865
Basic EPS
Income available to common stockholders	$	334,865	39,624,241	$	0.01
Warrants			148,339
Options			753,173
Unvested employment agreement shares			412,500
Diluted EPS
Income available to common stockholders and assumed
conversions	$	334,865	40,938,253	$	0.01

4.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying values of cash and cash equivalents, accounts receivable, notes receivable and accounts payable and notes payable approximate fair values due to the short-term maturities of these instruments. The fair value of notes payable approximates the carrying value because of

9

the current market value interest rates applied to those obligations. The fair value of capital leases approximates the carrying value of these instruments because the terms are similar to those in the marketplace under which they could be replaced.

5.   TRADE ACCOUNTS RECEIVABLE

As of March 31, 2008 and December 31, 2007, trade accounts receivable consist of the following:

		March 31,			December 31,
		2008			2007
Contracts in progress	$	1,822,251		$	2,393,224
Completed contracts		9,682,839			7,789,974
	$	11,505,090		$	10,183,198
Less: allowance for doubtful accounts		(2,769,743	)		(2,771,078	)
	$	8,735,347		$	7,412,120
Bad debt expense during the first three months of 2008 was $5,599.
6.   INVENTORY
Inventories consisted of the following:		March 31, 2008			December 31, 2007
Maintenance hardware	$	965,324		$	912,745
Parts for resale		6,297,938			6,527,947
Aircraft & engines		7,714,307			8,988,809
	$	14,977,569		$	16,429,501

Management reviews listed inventory items to determine whether there are slow moving or obsolete items on an annual basis. At March 31, 2008 it was Management’s determination that the carrying value of the inventory items, after adjustment for inventory write down, is appropriate and that there were no items requiring an allowance because the carrying value exceeded net realizable value.

7.   NOTES PAYABLE

On December 20, 2007, Global and its subsidiaries HAT, World Jet and Hamilton Aerospace S.A. de C.V. ("HATMEX") (collectively the "Companies") entered into and closed on three non-convertible secured debenture financing agreements with two accredited institutional investors ("Holders") in the total amount of $10 million (collectively the "Debentures"). The Debentures accrue interest at the rate of 15% per annum which is payable quarterly in arrears beginning April 1, 2008. The Debentures also provide for a cash flow recapture to the Holders equal to 60% of any proceeds related to the sale of Global's aircraft inventory. The Debentures mature on December 19, 2008.

In connection with the Debentures, the Companies and Holders executed a Pledge and Security Agreement, Aircraft Security Agreements, Securities Purchase Agreement, Registration Rights Agreement, and a Post Closing Agreement. Additionally, Global issued a Warrant (as defined and detailed below) to one Holder as an inducement to purchase a Debenture. Mr. John B. Sawyer, President of the Companies, also executed a personal guaranty for $2 million of the Debentures ("Personal Guaranty"). These transaction documents are attached hereto as Exhibits to this Form 8-K. Mr. Ian Herman, CEO of the Companies, executed an identical personal guaranty to Mr. Sawyer for $1 million of the Personal Guaranty.

Pursuant to the Pledge and Security Agreement and Aircraft Security Agreements, the Debentures are secured by (a) a first lien on all the current and future assets of the Companies including any owned aircraft; (b) the equity interests currently held by Global in HAT, WJ and HATMEX; and (c) the 40% membership interest of Global in Global Aircraft Leasing Partners, LLC. However, in the event of default, foreclosure of the foregoing equity and membership interests held by Global can only be enforced if the foreclosure on all other assets of the Companies is insufficient to satisfy repayment of the Debentures.

As an inducement for Holder Victory Park Master Fund, Ltd. ("Victory Park") to purchase a Debenture, Global issued Victory Park a 5-year warrant exercisable into 1,500,000 shares of Global common stock ("Common Stock") at an exercise price of $0.45 per share ("Warrant"). However, if Victory Park should choose to exercise the Warrant then it would receive a reduced number of Common Stock shares based upon the cashless exercise formula contained therein.

At March 31, 2008, the Company was in compliance with the covenants of these non-convertible secured debentures. At March 31, 2008, the outstanding balance was approximately $9M.

See Note 12,Related Party Transactions, below.

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8.    CONTRACTS IN PROGRESS

At March 31, 2008 and December 31, 2007, costs and estimated earnings in excess of billings and billings in excess of costs and estimated earnings on uncompleted contracts consist of the following:

		March 31,			December 31,
		2008			2007
Costs incurred on uncompleted contracts	$	2,532,748		$	1,670,556
Profit earned to date		2,116,089			1,630,873
	$	4,648,837		$	3,301,429
Less: Billings to date		(5,946,216	)		(4,124,211	)
	$	(1,297,379	)	$	( 822,782	)

Included in the accompanying balance sheet at March 31, 2008 and December 31, 2007, under the following caption: Billings in excess of costs and estimated earnings on uncompleted contracts.

		March 31,			December 31,
		2008			2007
Billings in excess from above	$	(1,297,379	)	$	( 822,782	)
Time and material earnings unbilled		198,266			--
Net	$	(1,099,113	)	$	( 822,782	)
Billings in excess are the result of amounts due from customers under contractual terms, which can be, in some cases, in advance of actual work performed.
9.    SHAREHOLDERS' EQUITY
SUMMARY OF EQUITY COMPENSATION STOCK-OPTION PLANS
								AVAILABLE
PLAN NAME			��		TOTAL SHARES		ISSUED	March 31, 2008
2002 Compensatory Stock Option Plan					3,000,000		1,045,000	1,955,000
2003 Employee Stock Compensation Plan					5,000,000		4,987,500	12,500

Stock-based Compensation Disclosure

Stock issued under plans to employees was issued at the value of the stock at the measurement date. All outstanding options were exercisable at the grant date. Those options issued to employees that were not immediately exercised remained outstanding at March 31, 2008 and are summarized below:

	March 31, 2008
		Weighted Average
		Exercise Price
Options outstanding at
beginning of year	940,000	$0.207	Exercisable on grant date
Granted during quarter 1	None
Exercised during quarter 1	None
Forfeited during quarter 1	None
Outstanding at 3/31/2008	940,000	$0.207	Exercisable on grant date
Options exercisable at
3/31/2008	940,000	$0.207	Exercisable on grant date
Weighted average fair value
of options granted during
quarter 1	None

The aggregate remaining contractual lives in years for the 900,000, 30,000 and 10,000 options outstanding and exercisable on March 31, 2008 was 1.022, 3.011 and 3.840, respectively.

	March 31, 2007
		Weighted Average
		Exercise Price
Options outstanding at
beginning of year	930,000	$0.198	Exercisable on grant date
Granted during quarter 1	10,000	$1.05
Exercised during quarter 1	None
Cancelled during quarter1	None
Forfeited during quarter 1	None
Outstanding at 3/31/2007	940,000	$0.207	Exercisable on grant date
Options exercisable at
3/31/2007	940,000	$0.207	Exercisable on grant date
Weighted average fair value	$1.05
of options granted during
quarter 1

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10.    SEGMENT INFORMATION

The company has divided its operations into the following reportable segments: (i) Aircraft maintenance, repair, and overhaul; (ii) Aircraft brokerage; and (iii) Part sales. Each segment represents distinct product lines, marketing, and management of its business. Limited other services for each company, which represent a small percentage of income, have been shown in the aggregate.

The reporting segments follow the same accounting policies used for the Company’s consolidated financial statements and described in the summary of significant accounting policies.

Selected information by business segment is presented in the following tables for the three months ended March 31, 2008 and March 31, 2007.

	Three months ended	Three months ended
	March 31, 2008	March 31, 2007
	($millions)	($millions)
Segment sales:
Aircraft maintenance	3.571	5.535
Aircraft trading	1.994	.050
Part sales	1.879	2.128
Other	.208	.014
Sub Total	7.652	7.727
Elimination of intersegment sales	-.773	-1.498
Total consolidated sales	6.879	6.229
Gross profit:
Aircraft maintenance	1.264	1.783
Aircraft trading	.774	.049
Part sales	.499	.257
Other	.067	.014
Sub total	2.604	2.103
Selling, general, administrative expense	-2.131	-1.599
Income from operations:	.473	.504
Other, net	-.389	-.204
Share of Jetglobal net income (aircraft trading)	- -	.215
Consolidated earnings (loss) before taxes	.084	.515
Interest income by segment
Aircraft maintenance	.005	.001
Aircraft trading	- -	- -
Part sales	- -	- -
Corporate	- -	.005
Total interest income	.005	.006
Interest expense by segment
Aircraft maintenance	.023	.025
Aircraft trading	- -	- -
Part sales	- -	.001
Corporate	.373	.106
Total interest expense	.396	.132

	Three months ended	Three months ended
	March 31, 2008	March 31, 2007
	($millions)	($millions)
Depreciation and amortization by segment
Aircraft maintenance	.077	.092
Aircraft brokerage	- -	- -
Part sales	- -	- -
Corporate	.037	.058
Total	.114	.150
Net asset values:
Aircraft maintenance	10.065	9.590
Aircraft trading	7.714	.750
Part sales	6.652	7.009

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Corporate	3.696	11.533
Total	28.127	28.882
Capital expenditures:
Aircraft maintenance	.011	- -
Aircraft brokerage	- -	- -
Part sales	- -	- -
Corporate	.001	.021
Total	.012	.021

The Company’s facilities and assets are primarily located in the United States. During 2006, the Company formed a Mexican corporation, Hamilton SA de C.V. The purpose of the new corporation was to satisfy Mexican governmental requirements related to the flight line servicing of Mexican airline, Avolar Aerolineas, S.A. de C.V. Minimal supplies are secured from local dealers using the foreign currency but all major revenue and expense transactions are transacted in U.S. dollars. The Company sells and ships to several foreign countries. All foreign revenues are collected and recorded in U.S. dollars. Geographic information regarding sales to foreign countries is presented in the following table:

		Three Months		Three Months
		Ended		Ended
		March 31, 2008		March 31, 2007
Afghanistan	$	624,755	$
Angola				60,653
Belgium		13,500		20,300
Canada		2,363,271		12,039
France		800
Israel				22,857
Kenya				1,500
Lebanon		13,500		19,844
Mexico		2,397,100		2,703,851
Nigeria		958,393
Pakistan				216,033
South Africa		2,655
UAE		13,500
Ukraine				6,560
United Kingdom				4,000
TOTALS	$	6,387,474	$	3,067,637

11.    CONCENTRATIONS

Revenues

The Company’s top four customers accounted for 92.2% and 85.1% of sales during the 1^st three months of 2008 and 2007, respectively. Three customers accounted for 71.9% of the Company’s accounts receivable at March 31, 2008. The broadening of our customer base will spread the risk associated with a potential failure of a significant customer. Efforts are continually being made to broaden our customer base. It should be noted that in any single quarter, due to the length of the typical repair job, percentages will normally be significantly higher than on an annual basis. While the relative significance of customers varies period to period, the loss of, or significant curtailments of purchase of our services by, one or more or our significant customers at any time could adversely affect our revenue and cash flow. The top four customers, referenced above, for the 1^st three months of 2008 and 2007 and the year 2007 are listed in the table below:

1stThree months of 2008 -Top Four	1stThree months of 2008 -% of	1stThree months of 2007 -Top Four	1stThree months of 2007 -% of
Customers	Revenues	Customers	Revenues
Customer G	34.8%	Customer C	37.5%
Customer I	34.4%	Customer B	31.7%
Customer H	13.9%	Customer E	8.5%
Customer D	9.1%	Customer F	7.4%
Top Four- 1stThree months of	92.2%	Top Four- 1stThree months of 2007	85.1%
2008 Total %		Total %

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Cash

We are potentially subjected to concentration of credit risk through our cash and cash equivalents and accounts receivable. Cash and cash equivalents are deposited or managed by major financial institutions and at times are in excess of FDIC insurance limits. At March 31, 2008 and December 31, 2007 cash and cash equivalents held in excess of FDIC insurance limits were approximately $289,000 and $900,000, respectively.

12.    RELATED PARTY TRANSACTIONS

GALP

GALP accounted for 1% of Company revenue during the first three months of 2008. At March 31, 2008, the Company had receivables in the amount of $1,311,543 from GALP, which represents 14.3% of the total Company accounts receivable balance.

On February 14, 2008, the Company received $300,000 from John Sawyer, the Company’s President. This loan carried no interest and was due and payable on or before 90 days. The loan was paid in full on April 17, 2008.

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS.

FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements and information relating to Global Aircraft Solutions, Inc. (“Global”) and its wholly owned subsidiaries Hamilton Aerospace Technologies Inc., "HAT", and World Jet Corporation, “World Jet”, that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this report, the words "anticipate", "believe", "estimate", "expect", "intend", "plan" and similar expressions, as they relate to Global, HAT, World Jet, or its management, are intended to identify forward-looking statements. These statements reflect management's current view of Global, HAT, and World Jet concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others relating to our results of operations: competitive factors, shifts in market demand, and other risks and uncertainties, that may affect our ability to generate sufficient working capital to meet our operating requirements and service our indebtedness, our ability to refinance our secured debt, or to convert such debt to equity, maintaining good working relationships with our vendors and customers, our ability to attract and retain qualified personnel, future terrorist-related activities, economic factors that affect the aviation industry, changes in government regulation, increases in fuel prices, and the overall economy. Should any of the assumptions underlying a forward-looking statement prove incorrect, actual results could differ materially from those anticipated. We are not obligated, nor do we undertake the obligation, to revise these forward-looking statements to reflect future events or circumstances.

PART 1

RECENT DEVELOPMENTS AFFECTING OUR OPERATIONS

The continued alerts by the U.S. Department of Homeland Security and fears of new terrorist attacks, the U.S.-led invasion of Iraq, high fuel costs and the general state of the economy could quite possibly produce negative impact on the aviation industry.

Problems in the airline industry could adversely affect our business. Since our customers consist primarily of passenger and cargo air carriers and aircraft leasing companies, the threat of terrorist activities continues to adversely impact the airline industry and consequently adversely impact our business. However, it does affect our business to a much lesser extent than it affects MRO firms that rely heavily on major airlines for business.

The trend in the market towards increasing jet fuel prices may adversely affect our business. The price of jet fuel affects the maintenance and repair markets, since older aircraft, which consume more fuel and which account for most of our maintenance and repair services business, become less viable as the price of fuel increases. In response to increased fuel prices and their negative effect upon the older aircraft that have been the principal focus of the Company up to this time, the Company has added more fuel-efficient ‘next generation’ Boeing 737 aircraft (i.e. 737-600 through 737-900) to HAT’s FAA-approved repair station certificate and has initiated marketing efforts to secure new maintenance work on that class of aircraft.

When economic factors adversely affect the airline industry, they tend to reduce the overall demand for maintenance and repair services, causing downward pressure on pricing and increasing the credit risks associated with doing business with airlines. We cannot assure you that economic and other factors, which may affect the airline industry, will not adversely impact our business, financial condition or results of operations. Such adverse effects in the airline industry, can also adversely affect our aircraft parts sales business conducted by our wholly owned subsidiary, World Jet. Any event or occurrence that adversely impacts the aircraft maintenance industry will also adversely impact the aircraft parts sales industry because aircraft parts sales are directly related to the demand for maintenance of aircraft.

RESULTS OF OPERATIONS

HAT operating revenues consist primarily of service revenues and sales of materials consumed while providing services. World Jet revenues consist primarily of sales of aircraft parts. Cost of sales consists primarily of labor and materials, cost of parts and freight charges. Global revenues consist of revenues derived from aircraft trading. Operating results have fluctuated in the past and may fluctuate significantly in the future. Many factors affect our operating results, including timing of repair orders and payments from large customers, competition from other third-party MRO service providers, the state of the aviation industry and the number of customers seeking services, the impact of fixed pricing on gross margins and our ability to accurately project our costs, our ability to obtain financing and other factors.

Significant portions of our operating expenses, such as insurance, rent, debt payments, certain salaries and such, are relatively fixed. Since we typically do not obtain long-term commitments from our customers, we must anticipate the future volume of orders based upon the historic patterns of our customers and upon discussions with our customers as to their future requirements. Cancellations, reductions or delays in orders by a customer or group of customers could have a material adverse effect on our business, financial condition and results of operations.

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Net sales for the three months ended March 31, 2008 increased $650K, or 10%, to $6.879 million from $6.229 million for the three months ended March 31, 2007. During the first quarter, our maintenance segment revenues decreased 35.5% from 2007’s first quarter. The first quarter 2008 maintenance segment revenues showed a significant increase of 54% over maintenance segment revenues during the fourth quarter of 2007. This increase reflects HAT marketing efforts to gradually and consistently recover from the temporary setbacks experienced in 2007. Our parts sales segment increased 75% over the 1^st quarter of 2007, reflecting a marked increase in sales to third parties during 2008’s 1^st quarter over the 1^st quarter of 2007. Aircraft sales revenues in the first quarter of 2007 consisted of a forfeited deposit in the amount of $50,000 compared with the sale of an aircraft as a glider, with the Company retaining the engines in inventory, and $199K in forfeitures during first quarter of 2008. Aircraft sales tend to vary significantly on a period-to-period basis based on the particular aircraft sold as well as the time necessary to complete a transaction.

Cost of sales consists of costs of inventory sold for World Jet, time and materials for HAT and aircraft purchase price for Global aircraft trading. Consolidated cost of sales for the three months ended March 31, 2008 increased $149K, or 3.6%, to $4.275 million from $4.126 million for the three months ended March 31, 2007. Consolidated cost of sales, as a percentage of revenue, decreased in the first quarter of 2008 to 64.6% from 67.8% for the same period in 2007. Cost of sales for our maintenance segment decreased $1.4 million or 38.5 % from fourth quarter 2007. Cost of sales for our aircraft-trading segment was 61% of revenue. As mentioned earlier, the first quarter of 2007 had no aircraft sales. Cost of sales for our part sales segment increased $196K over the first quarter of 2007. As a percentage of part sales revenue, cost of sales was 51.5% and 59.3% for the quarters ending March 31, 2008 and 2007, respectively.

While the Company engages in various revenue-producing activities such as aircraft sales, management gauges results by looking at what historically has been the core revenue-producing activity, the sale of labor hours. In the first three months of 2008, revenue produced from labor was $2,519,061 as compared with $2,684,643 the first three months of 2007. This represents a decrease of 6%. The comparative costs for all direct labor, including work performed by outside contractors, was $1,382,104 in the first three months of 2008 compared with $1,623,317 for the same period in 2007. All direct labor costs were 38.7% of total maintenance sales in first three months of 2007 compared with 29.3% in the first three months of 2007. All direct labor costs were 54.9% of labor sales in first three months of 2008 compared with 60.5% in the first three months of 2007. The relationship between direct labor costs and direct labor revenues saw re lative costs decrease 5.6% from 2008 to 2007. Direct labor percentages will always vary to some degree due to the nature of flat-rate bidding as opposed to billing for all time and materials. Additionally, the Company has gradually increased its labor rate, where possible, during the first quarter of 2008. A substantial sudden increase in volume can be expected to have a temporary impact on efficiencies and are viewed by Management as a temporary consequence of growth. A sudden decrease in volume should have a negative impact due to the retention of core labor during slower periods. Management is confident that adjustments to volume changes should be made and profitability will benefit over time.

Company-wide gross profit for the three months ended March 31, 2008 of $2.6 million was more than the same period in the prior year by $.5 million. Gross profit levels during any particular period are dependent upon the number and type of aircraft serviced, the contract terms under which services are performed and the efficiencies that can be obtained in the performance of such services. Significant changes in any one of these factors could have a material impact on the amount and percentage of gross profits. Additionally, gross profit could be impacted in the future by considerations as to the value of our inventory.

Selling, general and administrative expenses for the three months ended March 31, 2008, as percentage of sales, were 31%, which was 5% greater than for the same period in 2007. Aircraft trading revenues generated $380K in commission expense, which represents 5% of revenues.

Interest expense for the Company, during the first three months of 2008, was $396K.

The following tables depict our pre-tax operating profit or (loss) for the first quarter of 2008 and 2007 on a stand-alone basis and a consolidated basis for Global, HAT and World Jet:

First three months of 2008
	Global		HAT	World Jet	Intercompany		Consolidated
	Stand-Alone		Stand-Alone	Stand-Alone	Eliminations
Revenues	2,011,083		4,018,610	1,622,246	(772,954	)	6,878,985
Less: Cost of sales	1,220,131		2,738,688	1,089,182	(772,954	)	4,275,047
Less: Expenses	1,122,496		696,896	312,196	(617	)	2,130,971
Pre-tax Operating Profit (Loss)	(331,544	)	583,026	220,868	617		472,967
First three months of 2007
	Global		HAT	World Jet	Intercompany		Consolidated
	Stand-Alone		Stand-Alone	Stand-Alone	Eliminations
Revenues	50,000		5,559,431	2,117,156	(1,497,587	)	6,229,000
Less: Cost of sales	234		4,010,966	1,612,345	(1,497,587	)	4,125,958
Less: Expenses	588,580		692,888	318,634	(617	)	1,599,485
Pre-tax Operating Profit (Loss)	(538,814	)	855,577	186,177	617		503,557

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Improvement in the Company’s liquidity position depends on 3 main factors:

1.	The collections of the large past due amounts due from Avolar and BCI.
2.	The successful marketing of the aircraft and engines now in our inventory, converting them to cash.
3.	The continued growth and profit experienced prior to the cash problems experienced in 2007.

Avolar continues to honor their payment agreement with the Company. Avolar has stated its intention to bring its accounts current with HAT and World Jet and renew its maintenance and support agreements with both companies.

Although BCI is presently cooperating with the Company to resolve payment issues equitably, a final agreement relative to a cash payment to settle the amounts due from BCI has not at this time been reached between the companies. Management believes that the receivable amounts reflected on the financial statements are recoverable

At this time, HAT plans to expand its capabilities to include MRO servicing of new-generation aircraft. It is estimated that the necessary tooling to accomplish this expansion will cost between $200,000 and 250,000. The Company has no plans to make any other significant capital expenditures during 2008.

Our ability to make payments of principal and interest on outstanding debt will depend upon our future operating performance, which will be subject to economic, financial, competitive and other factors, some of which are beyond our control. Our ability to repay our indebtedness is dependent on several factors: our continued ability to secure high profit margin jobs, more fully utilizing our capacities, creating a higher bottom line and consequently more cash; and our ability to establish revolving credit lines, which we can draw on as needed.

Changes in the Company’s Balance Sheet for the quarter ended March 31, 2008 reflected several events. Total assets decreased from $29,694,148 at December 31, 2007 to $28,127,085. Significant changes for the period were:

Cash on hand decreased $952,422 due to the use of funding from the debenture transaction, (seeShort-Term Financing below), principally to pay-down accounts payable.

Accounts receivable increased $1,323,227 largely due to work performed at our HAT facility.

Total inventory decreased $1,451,932, mainly as a result of Global selling an aircraft as a glider (retaining the engines in inventory).

Restricted funds increased $175,824 due to a required performance bond related to a HAT customer.

Prepaid expenses decreased $191,648.

Deposits with vendors decreased $243,181 from the December 31, 2007 amount.

During the quarter ended March 31, 2008 total liabilities decreased from $15,952,315 at December 31, 2007 to $14,233,499 primarily due to:

Notes payable decreased $1,182,612 as a result of payments on the note related to the debenture agreement, (seeShort-Term Financing below), of $1M plus $183K related to financed insurance premiums and capital lease obligations.

Notes payable, related party increased $300,000, (seeShort-Term Financing below)

Accounts Payable decreased $1,125,173.

Billings in excess of costs and estimated earnings on contracts in progress increased $276,331.

Cash

As of March 31, 2008, we had $269,176 in cash on hand and $8,735,347 in accounts receivable.

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During 2007, the Company experienced a major cash deficit. In December of 2007 the Company was able to find the source of funding detailed underShort-Term Financing below. This funding was used to (i) eliminate the expensive short-term debt the Company had acquired to provide the cash necessary for day-to-day operations and (ii) pay off a $5,000,000 loan from M&I Marshall & Ilsley Bank.

The Company believes that it will fully recover from the effects of the cash shortage, which they experienced for most of 2007. Management bases its assessment on several factors:

• The Company will continue efforts to sell the aircraft received due to the termination of its partnership inJetglobal. Management believes that a conservative estimate of cash realized from the sale of these aircraft willbe in excess of $8.6 million.
• The Company will continue to aggressively collect on our older outstanding receivable balances from Avolar andBCI.
• Our HAT operation will increase its marketing effort in order to secure new customers to fill the void left by ourwithdrawal from Jetglobal and our temporary cessation of work for Avolar. HAT is being successful in securingprofitable maintenance contracts with new customers.
• Our HAT subsidiary has completed and billed over $2 million in work contracted by BCI on aircraft owned byBCI and still located in disabled condition on HAT’s facility. These aircraft have been repossessed by GMAC,who plans to place them with another operator. Management has taken a firm position that all moneyimprovements made to the aircraft will be received prior to the departure of the aircraft.

Management believes that anticipated cash flows from the operations of HAT and World Jet and from the anticipated sale of our aircraft inventory will be adequate to sufficiently provide working capital and satisfy the requirements of our short-term debt. We cannot give assurance that financing alternatives will be available to us in the future to support our working capital requirements should they be needed.

Short-Term Financing

At March 31, 2008, the Company was in compliance with the covenants of the non-convertible secured debenture financing agreements entered into on December 20, 2007. During the first quarter of 2008, the original $10M balance was reduced to $9M.

On February 14, 2008, the Company received $300,000 from John Sawyer, the Company’s President. This loan carried no interest and was due and payable on or before 90 days. The loan was paid in full on April 17, 2008.

Long-Term Financing

The long-term liabilities of Global, consisting primarily of capitalized lease obligations, were reduced to $152K by the end of the 1^stquarter of 2008.

Possible Cancellations, Reductions or Delays

A large portion of our operating expenses is relatively fixed; therefore cancellations, reductions or delays in orders by a customer or group of customers could materially adversely affect our business, financial condition or results of operations.

CRITICAL ACCOUNTING ESTIMATES

Financial Reporting Release No. 60 of the SEC encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of the financial statements. Our consolidated financial statements filed as part of this annual report include a summary of the significant accounting policies and methods used in the preparation of our consolidated financial statements.

Use of Estimates:Management's Discussion and Analysis of Financial Condition or Plan of Operation is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of our financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Management evaluates these estimates on an on-going basis, including those related to estimated losses on disposal of discontinued operations, the allowance to reduce inventory to the lower of cost or net realizable value, the estimated profit recognized as aircraft maintenance, design and construction services are performed, the allowance for doubtful acc ounts and notes receivable, future cash flows in support of long lived assets, medical benefit accruals, and the estimated fair values of facilities under capital leases. Management bases its estimates on historical experience and on various other assumptions that they believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

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Trade Accounts Receivable:Trade accounts receivable represent amounts billed but uncollected on both completed and in-progress aircraft repair and maintenance contracts as well as amounts billed but uncollected on parts shipped to customers.

Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. The allowance is estimated as a percentage of accounts receivable based on a review of accounts receivable outstanding and the Company's prior history of uncollectible accounts receivable. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable.

Inventory:Inventories are stated at the lower of cost (first-in, first-out) or market. Inventories include new, used parts and parts stripped from aircraft. These inventory items are initially carried at original cost basis determined on the pro-rata fair value of the individual parts based on market or catalog pricing. Inventory items held for over one year are no longer classified as “inventory, non-current”. All aircraft parts inventory are grouped as “Inventory” and accounted under ‘Current Assets’ category. This is based on standard aviation industry practice of showing all aircraft parts under single line item of inventory. Aircraft parts typically have more than one year of life. Rotable parts have the same life as the aircraft. Repairable parts can be repaired several times over the life of the aircraft and installed on the aircraft. This is a reclassification to conform with what we now believe is more appropriate. This change will not impact the current quarter results or past results of the company. When management determines that an allowance for slow moving and obsolete inventory should be provided for, the allowance is considered as an expense for the company.

The Company reviews the market value of inventories whenever events and circumstances indicate that the carrying value of inventories may not be recoverable from the estimated future sales price less cost of disposal and normal gross profit. In cases where the market values are less than the carrying value, a write down is recognized equal to an amount by which the carrying value exceeds the market value of inventories.

Revenue and Cost Recognition:Revenues from fixed-fee contracts or portions of contracts for MRO sales are recognized by employing the percentage-of-completion method, measured by the cost-to-cost method, commencing when progress reaches a point where experience is sufficient to estimate final results with reasonable accuracy. The cumulative catch-up method is used to account for changes in estimates of total revenues, total costs or extent of progress. Each project is considered complete when the subject aircraft departs, or is cleared to depart, our facility. Revision in cost and labor hour estimates and recognition of losses, if any, on these contracts are reflected in the accounting period in which the facts become known. Revenue from part sales is recognized when parts are shipped. Revenues from time and material contracts and all other anci llary services are recognized as the services are performed. Revenue from aircraft sales is recognized when the customer accepts delivery of the aircraft and/or when title is transferred.

Value of Share-Based Payments:The value of stock and warrants issued as payment is determined by the closing price of the Company’s stock at measurement date. In connection with the adoption of SFAS 123R, the company values options and warrants by application of the Black Scholes Model.

ITEM 3.    CONTROLS AND PROCEDURES

(a) As of the end of the period covered by this report on Form 10-Q (the "Evaluation Date"), our Chief Executive Officer, together with HAT's President and Principal Financial and Accounting Officer, evaluated our disclosure controls and procedures, as defined in Rules 13a-14 and 15 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on that evaluation, these officers have concluded that, as of the Evaluation Date, our disclosure controls and procedures allow for timely decisions regarding disclosure of material information relating to our company (including our consolidated subsidiaries) required to be included in our reports filed or submitted by us under the Exchange Act.

(b) there has not been any change in our internal controls or in other factors that are reasonably likely to affect internal controls subsequent to the date of our most recent evaluation.

ITEM 3A.    CONTROLS AND PROCEDURES

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer that: (i) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provides reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements for external reporting in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures are being made only in accordance with authorization of the Company’s management and directors; and (iii) provides reasonable assurance regarding prevent ion or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedure may deteriorate. As a non-accelerated filer, management has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. In making its assessment of internal control over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission inInternal Control — Integrated Framework . Based on this assessment, management concluded that certain controls and procedures were not effective. An explanation of the deficiencies is set forth below.

The Certifying Officers determined that certain deficiencies involving internal controls constituted material weaknesses as of the end of the period covered by this Annual Report. The deficiencies identified related to audit adjustments made due to limited or no review procedures performed by management beyond initial preparer calculations and estimates. Additionally, the Company identified a lack of formal control design structure for the review of external financial data.

PART II.    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

There has been no change to the legal proceedings information set forth in our Annual report on Form 10-K for the year ended December 31, 2007 and the information set forth in the Legal Proceedings Section of our Form 10-K for the year ended December 31, 2007 is incorporated herein by reference. No other material legal proceedings have commenced or been terminated during the period covered by this report. To the extent that we do not have any significant changes in the legal proceedings referred to in such Quarterly Report, we have not restated the description of those proceedings. That determination not to so restate those descriptions should not be taken as a representation that we have resolved the matter or that it is no longer a contingency.

Other Matters.From time to time in the ordinary course of our business, we are also party to other legal proceedings or receive correspondence regarding potential or threatened legal proceedings. While we currently believe that the ultimate outcome of these other proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position or overall trends in our results of operations, legal proceedings are subject to inherent uncertainties.

ITEM 6.   EXHIBITS

(a) Exhibits
31.1	Certification of Principal Executive Officer, Mr. Ian Herman
31.2	Certification of Principal Operating Officer, Mr. John B.  Sawyer
31.3	Certification of Principal Accounting Officer, Ms. Patricia  Graham
32.1	Certification of Mr. Ian M. Herman, Chief Executive  Officer

Forms 8-K filed during the first quarter of 2008:

Issued January 17, 2008, Item 5.02, Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers and Item 9.01, Financial Statements and Exhibits. The exhibit was a Press Release of Global Aircraft Solutions, Inc. issued January 14, 2008.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

	SIGNATURE	TITLE	DATE
/s/	Ian Herman	Chairman of the Board of Directors,	April 12, 2008
Ian Herman		Chief Executive Officer and Director
/s/	John Sawyer	President, Chief Operating Officer and Director	April 12, 2008
John Sawyer
/s/	Patricia Graham	Chief Accounting Officer	April 12, 2008
Patricia Graham

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