United States securities and exchange commission logo
July 1, 2021
Edward J. Wegel
Chairman and Chief Executive Officer
Global Crossing Airlines Group Inc.
4200 NW 36th Street
Building 5A
Miami International Airport
Miami, FL 33166
Re: Global Crossing
Airlines Group Inc.
Draft Registration
Statement on Form S-1
Submitted June 4,
2021
CIK No. 0001846084
Dear Mr. Wegel:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 filed June 4, 2021
Cover Page
1. Please indicate the
market price of your common stock as of the latest practicable date on
your prospectus cover
page. Refer to Instruction 2 to Item 501(b)(3) of Regulation S-K.
Summary of the Prospectus, page 1
2. You state on page 1
that assuming completion of this offering and the U.S airline
certification process,
you plan to begin operating a charter air service. However, you will
not receive any
proceeds from the securities sold pursuant to this registration statement.
Edward J. Wegel
FirstName LastNameEdward J. Wegel
Global Crossing Airlines Group Inc.
Comapany
July 1, 2021NameGlobal Crossing Airlines Group Inc.
July 1,2 2021 Page 2
Page
FirstName LastName
Please expand your disclosure to provide details regarding the amount
and source of funds
needed to fulfill certain milestones and commence operations. In this
regard, we note
your reference to a "financing plan" on page 3.
3. We note you intend to operate a "US 121 Flag and Supplemental charter
airline in the
United States." Please expand your disclosure to define "Flag and
Supplemental charter
airline."
4. We note that the completion of certain milestones have target dates
for the second quarter
of 2021. In your next amendment, please update the status of the
milestones for your
passenger and cargo charter operations.
5. We note your disclosure with respect to cargo charter flights that you
intend to operate the
A321Fs under ACMI/Wet Lease charter operations with major package
operators, and
note your disclosure that under these arrangements, customarily, these
operators will "take
all of the risk" and provide all ground handling and cargo-specific
operations, with
GlobalX providing the ACMI. Please revise to clarify the risks that
you are referencing,
and provide the basis for such statement.
6. Please clarify your disclosure on page 9 that GlobalX will be emerging
from COVID-19
with zero legacy costs or debt.
7. Please revise to clarify the material terms of the Airport Use
Agreement with Miami
International Airport. In that regard, we note the risk factor
disclosure beginning on page
20 regarding the risk that you may be unable to secure operating
capacity at such airport.
8. We note your disclosure on page 45 that without additional financing,
you will be unable
to fund general and administrative expenses and working capital
requirements for the next
12 months. Please include such disclosure in your prospectus summary.
Distribution and Sales, page 7
9. Please revise to include additional disclosure regarding the reference
to Eastern Airlines
here, including the officers and directors that were part of Eastern
Airlines, their roles
with the company and the years during which they served in those
roles.
Risk Factors
Our liquidity would be adversely impacted, potentially materially, in the event
one or more of
credit card processors..., page 18
10. We note your disclosure that if you fail to meet certain liquidity and
other financial
covenants, your credit card processors have the right to hold back
credit card remittances
to cover your obligations to them. If material, please disclose such
liquidity and other
financial covenants.
Edward J. Wegel
FirstName LastNameEdward J. Wegel
Global Crossing Airlines Group Inc.
Comapany
July 1, 2021NameGlobal Crossing Airlines Group Inc.
July 1,3 2021 Page 3
Page
FirstName LastName
We are subject to extensive regulation by the FAA..., page 25
11. Your disclosure in this risk factor that you currently provide service
in a large number of
countries outside the United States does not appear to be consistent
with disclosure
elsewhere in the filing. Please revise or advise.
Cautionary Note Regarding Forward-Looking Statements, page 31
12. We note your disclosure that some of the information contained in this
prospectus
contains forward-looking statements within the meaning of the safe
harbor provisions of
the United States Private Securities Litigation Reform Act of 1995.
Please provide your
basis for such statement.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
33
13. Please disclose all material terms of the share subscription facility
with GEM.
Outlook, page 35
14. We note your disclosure in the sixth point on page 35 of your plan to
spin-out 100% of
your subsidiary Canada Jetlines Operations Ltd. to another existing
wholly owned
subsidiary that you plan to rename Canada Jetlines Vacations. However,
we also note that
you issued a press release on June 28, 2021 indicating that 75% of
this entity has been
spun-off to shareholders and that you will retain 25% of its stock.
Please update or reconcile your disclosure and press release, and
include comparable
details in MD&A, to describe the purpose of the transaction and the
composition of the
entity, including any contractual arrangements, management, staffing
and any assets and
liabilities conveyed. Tell us how you considered whether to include
pro forma financial
statements to depict the spin off.
Business
IT Map, page 63
15. Please modify your graphic here to ensure that all text is legible and
revise this section to
include additional narrative details with a view to provide context
for the graphics.
Management, page 68
16. We note several of your officer and director biographies where the
principal occupation
and employment is unclear during the past five years. Please revise to
disclose your
officers' and directors' principal occupations and employment during
the past five years,
including the name, and principal business of any corporation or other
organization. Refer
to Item 401(e) of Regulation S-K.
Edward J. Wegel
FirstName LastNameEdward J. Wegel
Global Crossing Airlines Group Inc.
Comapany
July 1, 2021NameGlobal Crossing Airlines Group Inc.
July 1,4 2021 Page 4
Page
FirstName LastName
Selling Stockholders, page 87
17. We note that you seek to register the resale of up to 22,089,034
shares of common stock
pursuant to this registration statement. However, it appears that the
column for the
maximum number of shares offered for resale total 22,129,034 shares.
Please revise to
address this apparent discrepancy.
18. We note your disclosure that the percentages in the table in the
Selling Stockholders
section reflect the securities beneficially owned by the selling
stockholders as a
percentage of the total number of shares of common stock outstanding
as of March 31,
2021. Please revise to update such information as of the latest
practicable date.
Financial Statements as of and for the year ended December 31, 2020
Note 1 - Nature of Operations and Going Concern, page F-7
19. We note that you have a reference to the financial statement index in
the forepart of the
filing although the index referenced only lists the annual financial
statements. Please
expand the index on page F-1 to also include the interim financial
statements that begin on
page F-27.
20. Please correct the column labeling on page F-3 which currently
indicates you are reporting
balances as of December 31, 2021.
Please also revise disclosures throughout your filing as necessary to
present columnar
information in a consistent manner, in terms of ordering the most
recent and prior periods
from left-to-right. For example, the most recent balances and activity
are shown first, from
left-to-right, in your annual and interim financial statements and in
MD&A, while the
ordering is reversed in your presentation of summary and selected
financial data on pages
13 and 32.
21. We note that in the first and second paragraphs under this heading you
refer to Global
Crossing Airlines, Inc. as "the Company," "Global," and "Global USA,"
although you also
have disclosures on pages 1 and 33 that refer to Global Crossing
Airlines Group Inc. as
both "the Company" and "GlobalX," while disclosures on pages 10 and 67
indicate
that Global Crossing Airlines, Inc. and Global Crossing Airlines Group
Inc. are the same
entity with a name change.
The lack of specificity appears to yield disclosure under this heading
of a business
acquisition in which the company has acquired itself. Please
reformulate these
disclosures, and any similar disclosures elsewhere in your filing
(e.g., as appear in Note 3
on page F-12), as necessary to clearly identify the parties to the
transaction with distinct
nomenclature, and to clearly describe the nature and status of each
entity, including any
prior business endeavors, and reasons for the transaction.
Given your disclosure indicating the company is "a continuation of
Global USA" it should
be clear which business is being continued and which business is being
acquired or
Edward J. Wegel
FirstName LastNameEdward J. Wegel
Global Crossing Airlines Group Inc.
Comapany
July 1, 2021NameGlobal Crossing Airlines Group Inc.
July 1,5 2021 Page 5
Page
FirstName LastName
discontinued if that is the case. Please describe the utility of the
transaction to the
continuing entity.
22. We note your disclosure explaining that your shares trade on the TSX
Venture Exchange
under the symbol JET and on page 83 you indicate your shares
also trade on the
OTCQB Marketplace under the symbol JETMF. Please expand your
disclosures to
clarify the extent to which you have publicly filed any financial
reports and to identify the
venue(s) in which any historical financial reports are available.
Note 2 Basis of Presentation and Summary of Significant Accounting Policies
Property and Equipment, page F-9
23. Please disclose how you plan to account for any airframe and engine
overhaul costs,
considering the guidance in FASB ASC 908-360-25-2.
Note 3 Acquisition , page F-12
24. Please expand your disclosure to clarify the terms under which
2,357,594 "consideration
warrants" were issued to Global USA shareholders and to clarify how
the recipients
exercised these warrants "in exchange for the settlement of $589,400
in Global USA
liabilities outstanding as of February 29, 2020." Please describe the
mechanism by which
the liabilities were settled, disclose the exercise price, and clarify
whether the
intention was for Canada Jetlines Ltd. to settle liabilities of Global
USA.
Financial Statements as of and for the period ended March 31, 2021
Note 3 Deferred Financing Fee, page F-34
25. We note that in connection with the GEM Global Yield LLC agreement you
issued a note
for $2,000,000 CND ($1,570,800 USD), and that as of December 31, 2020
and March 31,
2021, a total of $1,570,800 was reported on your balance sheet for
this obligation,
although with differences in the short and long term classifications.
If the note is
denominated in a currency other than your functional currency, please
disclose how you
are accounting for transaction gains or losses under FASB ASC
830-20-35-1 and 2.
Note 10. Share Capital and Additional Paid-in Capital Authorized, page F-38
26. We note that you report in your Statements of Changes in Shareholders'
Equity for the
year ended December 31, 2020, on pages F-6 and F-31, 8,482,990 shares
of your common
stock and a debit to additional paid in capital of $1,286,533 related
to the effect of the
reverse merger. We also see that Global USA share activity prior to
the merger has been
recast to reflect the 9,485,257 shares issued in completing the
transaction.
Please expand your disclosures in Note 3 on page F-12, Note 12 on page
F-19, and Note
10 on page F-38 to explain how the number of shares and warrants
issued in the reverse
merger were determined, and to specify the relative ownership
interests of the two
shareholder groups following the transaction.
Edward J. Wegel
Global Crossing Airlines Group Inc.
July 1, 2021
Page 6
Please clarify the relative significance of the two entities prior to the
merger, including the
extent and nature of any operations, assets and liabilities, and describe
the composition of
the adjustment to additional paid in capital.
In addition to the incremental disclosures requested above, also describe
for us the
motivations of the parties involved in the transaction, as pertain to the
entities prior to the
merger, and describe the extent of any common ownership, interests or
relationships, as
may include officers/employees, directors and creditors.
27. Please revise your disclosures under this heading, and the corresponding
information in
Note 12 on page F-19, as necessary to specify the total numbers of shares
involved in any
consolidation or exchange of interests, before and after the transaction,
and from the
perspective of each entity for transactions involving more than one
entity. For example,
this would apply to the one-for-ten share consolidation, and the
one-for-18,971 Global
USA share exchange, which occurred on June 23, 2020.
Exhibits
28. Please file as exhibits to your registration statement the agreements
entered into with
SmartLynx Airlines, agreements regarding holdbacks for credit card
transactions, your
joint venture agreement with Global Aviation Services, Inc., and your
registration rights
and nomination rights agreements with Ascent, or tell us why you do not
believe you are
required to do so. Refer to Item 601(b)(10) of Regulation S-K.
You may contact John Cannarella, Staff Accountant, at (202) 551-3337 or
Karl Hiller,
Accounting Branch Chief, at (202) 551-3686 if you have questions regarding
comments on the
financial statements and related matters. Please contact Anuja A. Majmudar,
Attorney-Advisor,
at (202) 551-3844 or, in her absence, Laura Nicholson, Special Counsel, at
(202) 551-3584 with
any other questions.
Sincerely,
FirstName LastNameEdward J. Wegel
Division of
Corporation Finance
Comapany NameGlobal Crossing Airlines Group Inc.
Office of Energy
& Transportation
July 1, 2021 Page 6
cc: Jahan S. Islami
FirstName LastName