AerSale Corp

Previous wording

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. You should read the following management’s discussion and analysis together with the financial statements and related notes including Part II, Item 7 of AerSale’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). This discussion contains forward-looking statements about AerSale’s business, operations and industry that involve risks and uncertainties, such as statements regarding AerSale’s plans, objectives, expectations and intentions. AerSale’s future results and financial condition may differ materially from those currently anticipated because of the factors described in the section titled “Risk Factors” in the 2023 Form 10-K.

Current wording

The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition. You should read the following management’s discussion and analysis and the accompanying financial statements and related notes together with AerSale’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). This discussion contains forward-looking statements about AerSale’s business, operations and industry that involve risks and uncertainties, such as statements regarding AerSale’s plans, objectives, expectations and intentions. AerSale’s future results and financial condition may differ materially from those currently anticipated because of the factors described in the section titled “Risk Factors” in the 2023 Form 10-K.

Previous wording

We are a worldwide provider of aftermarket commercial aircraft, engines, and their parts to passenger and cargo airlines, leasing companies, original equipment manufacturers (“OEM”), government and defense contractors, and maintenance, repair and overhaul (“MRO”) service providers. We report our activities in two business segments: Asset Management Solutions, comprised of activities that extract value from strategic Flight Equipment acquisitions either as whole assets or by disassembling for used serviceable material (“USM”), and TechOps, comprised of MRO activities for aircraft and their components, sales of internally developed engineered solutions and other serviceable products.

Current wording

We are a worldwide provider of aftermarket commercial aircraft, engines, and their parts to passenger and cargo airlines, leasing companies, original equipment manufacturers (“OEM”), government and defense contractors, and maintenance, repair and overhaul (“MRO”) service providers. We report our activities in two business segments: Asset Management Solutions, comprised of activities that extract value from strategic Flight Equipment acquisitions either as whole assets or by disassembling for used serviceable material (“USM”), and TechOps, comprised of MRO activities for aircraft and their components, and sales of internally developed engineered solutions and other serviceable products.

Previous wording

We focus on mid-life Flight Equipment and monetize them through our Asset Management Solutions segment. Asset Management Solutions’ activities include monetization of assets through the lease or sale of whole assets, or through disassembly activities in support of our USM-related activities. Our monetizing services have been developed to maximize returns on mid-life Flight Equipment throughout their operating life, in conjunction with realizing the highest residual value of Flight Equipment at its retirement. We accomplish this by utilizing deep market and technical knowledge related to the management of Flight Equipment sales, leasing and MRO services. To extract value from the remaining flight time on whole assets, we provide flexible short-term (generally less than five years) leasing solutions of Flight Equipment to passenger and cargo operators across the globe. Once the value from the Flight Equipment’s flight time has been extracted, Flight Equipment is considered to be at or near the end of its useful life and is analyzed for return maximization as either whole asset sales or disassembled for sale as USM parts. Revenue from this segment is segregated between Aircraft and Engine depending on the asset type that generated the revenue. Lease revenue and the related depreciation from aircraft and engines installed on those aircraft are recognized under the Aircraft category. Revenue from sales of whole aircraft and related cost of sales are allocated between the Aircraft and Engine categories based on the allocated cost basis of the asset sold.

Current wording

Our Asset Management Solutions segment focuses on mid-life Flight Equipment. Asset Management Solutions’ activities include monetization of assets through the lease or sale of whole assets, or through disassembly activities in support of our USM-related activities. Our monetizing services have been developed to maximize returns on mid-life Flight Equipment throughout their operating life, in conjunction with realizing the highest residual value of Flight Equipment at its retirement. We accomplish this by utilizing deep market and technical knowledge related to the management of Flight Equipment sales, leasing and MRO services. To extract value from the remaining flight time on whole assets, we provide flexible short-term (generally less than five years) leasing solutions of Flight Equipment to passenger and cargo operators across the globe. Once the value from the Flight Equipment’s flight time has been extracted, Flight Equipment is considered to be at or near the end of its useful life and is analyzed for return maximization as either whole asset sales or disassembled for sale as USM parts. Revenue from this segment is segregated between Aircraft and Engine depending on the asset type that generated the revenue. Lease revenue and the related depreciation from aircraft and engines installed on those aircraft are recognized under the Aircraft category. Revenue from sales of whole aircraft and related cost of sales are allocated between the Aircraft and Engine categories based on the allocated cost basis of the asset sold.

Previous wording

Our TechOps segment provides internal and third-party aviation services, including internally developed engineered solutions, full heavy aircraft maintenance and modification, component MRO, as well as end-of-life disassembly services. Our MRO business also engages in longer-term projects such as aircraft modifications, cargo and tanker conversions of aircraft, and aircraft storage. The TechOps segment also includes MRO services for landing gear, thrust reversers, hydraulic systems, and other aircraft components.

Current wording

Our TechOps segment provides internal and third-party aviation services, including internally developed engineered solutions, full heavy aircraft maintenance and modification, component MRO, as well as end-of-life disassembly services to all Flight Equipment. Our MRO business also engages in longer-term projects such as aircraft modifications, cargo and tanker conversions of aircraft, and aircraft storage. The TechOps segment also includes MRO services for landing gear, thrust reversers, hydraulic systems, and other aircraft components.

Previous wording

The most recently adopted and to be adopted accounting pronouncements are described in Note B of our condensed consolidated financial statements included in this Quarterly Report, as well as in Item 8, Note B within our consolidated financial statements in the 2023 Form 10-K.

Current wording

The most recently adopted and to be adopted accounting pronouncements are described in Note B of our condensed consolidated financial statements included in this Quarterly Report, as well as in, Note B within our consolidated annual financial statements in Part II, Item 8 of the 2023 Form 10-K.

Previous wording

Total revenue for the six-months ended June 30, 2024 increased $20.0 million or 13.6% compared to the six months ended June 30, 2023, driven by an increase of $15.6 million, or 18.2%, in revenues within Asset Management Solutions and an increase of $4.5 million, or 7.2%, in revenues within TechOps.

Current wording

Total revenue for the three months ended September 30, 2024 decreased $9.8 million or 10.6% compared to the three months ended September 30, 2023, driven by an decrease of $14.6 million, or 22.5%, in revenues within Asset Management Solutions, offset by an increase of $4.8 million, or 17.6%, in revenues within TechOps.

Previous wording

Sales in the Asset Management Solutions segment increased $4.7 million or 12.8%, to $41.8 million for the three months ended June 30, 2024, due to a $7.7 million, or 30.7%, increase in revenue from Engines; offset in part by a $2.9 million, or 24.4%, decrease in revenue from Aircraft. The increase in Engines revenue is primarily attributable tohigher activity across most product lines due to higher Flight Equipment sales in the amount of $3.2 million, higher leasing revenue of $1.0 million, and higher USM sales of $3.4 million. The decrease in Aircraft revenue is primarily attributable to decreased activity in the B737, as a result of lower Flight Equipment sales in the amount of $3.2 million due to the timing and availability of assets, as well as lower USM sales due to delays associated with the teardown process.

Current wording

Sales in the Asset Management Solutions segment decreased $14.6 million or 22.5%, to $50.4 million for the three months ended September 30, 2024, due to $11.9 million, or 57.2%, decrease in revenue from Aircraft and a $2.7 million, or 6.1%, decrease in revenue from Engines. The decrease in Aircraft revenue is a result of lower Flight Equipment sales in the amount of $12.7 million due to the timing and availability of assets, primarily attributable to decreased activity in the B757 product line, offset by higher USM sales. The decrease in Engines revenue is primarily attributable tolower activity across most product lines due to lower Flight Equipment sales in the amount of $9.5 million.

Previous wording

Cost of sales in Asset Management Solutions increased $0.7 million or 2.8%, to $26.4 million for the three months ended June 30, 2024, compared to the prior year period. The increase in cost of sales was primarily driven by the sales increase discussed above. Gross profit in the Asset Management Solutions segment increased $4.0 million to $15.4 million, or 35.3%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The gross profit increase is mainly attributable to higher revenue generated for the three months ended June 30, 2024, as noted above.

Current wording

Cost of sales in Asset Management Solutions decreased $15.4 million or 33.1%, to $31.1 million for the three months ended September 30, 2024, compared to the prior year period. The decrease in cost of sales was primarily driven by the sales decrease discussed above. Gross profit in the Asset Management Solutions segment increased $0.8 million to $19.3 million, or 4.1%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The gross profit increase is mainly attributable to higher margins on Flight Equipment sales for the three months ended September 30, 2024.

Previous wording

Aircraft gross profit margins increased to 37.6% for the three months ended June 30, 2024, from 14.6% for the three months ended June 30, 2023 due to higher margin contribution from USM sales. Engines gross profit margin was 36.5% for the three months ended June 30, 2024, a decrease from 38.4% for the three months ended June 30, 2023, which was primarily the result of lower margins on USM sales and leasing revenues.

Current wording

Engines gross profit margin was 39.3% for the three months ended September 30, 2024, an increase from 26.9% for the three months ended September 30, 2023, which was primarily the result of higher margins on Flight Equipment sales and leasing revenues. Aircraft gross profit margins increased to 33.7% for the three months ended September 30, 2024, from 31.9% for the three months ended September 30, 2023 due to higher margin contribution from USM sales.

Previous wording

Our revenue from TechOps increased by $3.0 million or 9.4%, to $35.3 million for the three months ended June 30, 2024, compared to the prior year period. The increase was driven in part by higher MRO product sales, as well as higher contributions by component and landing gear repair activities, offset by lower demand for heavy MRO services in our Goodyear, Arizona facility.

Current wording

Our revenue from TechOps increased by $4.8 million or 17.6%, to $32.3 million for the three months ended September 30, 2024, compared to the prior year period. The increase was driven by higher contributions by component and landing gear repair activities.

Previous wording

Cost of sales in TechOps increased $5.5 million or 23.3%, to $28.9 million for the three months ended June 30, 2024 compared to the prior year period. This was driven by higher revenue discussed above. Gross profit in TechOps decreased $2.4 million, or 27.6% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, driven by lower gross profit of $2.7 million on MRO services. Gross profit margin decreased to 18.0% for the three months ended June 30, 2024 compared to 27.2% for the prior year period, and was largely attributable to lower margin on MRO services of 15.5% for the three months ended June 30, 2024 compared to 25.5% for the prior year period, driven by lower margin generated on our heavy and component MROs.

Current wording

Cost of sales in TechOps increased $5.4 million or 24.0%, to $27.9 million for the three months ended September 30, 2024 compared to the prior year period. This was driven by higher revenue discussed above. Gross profit in TechOps decreased $0.5 million, or 11.1% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven by lower gross profit of $0.7 million on MRO services. Gross profit margin decreased to 13.6% for the three months ended September 30, 2024 compared to 18.0% for the prior year period, and was largely attributable to lower margin on MRO services of 11.3% for the three months ended September 30, 2024 compared to 16.8% for the prior year period, driven by lower margin generated on our heavy and component MROs.

Previous wording

Selling, general and administrative expenses decreased $3.5 million, or 13.0% to $23.6 million for the three months ended June 30, 2024, compared to the prior year period. The decrease was primarily related to lower payroll costs.

Current wording

Selling, general and administrative expenses decreased $3.7 million, or 14.7% to $21.7 million for the three months ended September 30, 2024, compared to the prior year period. The decrease was primarily related to lower repair and maintenance and lower payroll related costs.

Previous wording

We account for our private warrants as a liability at their fair value, with changes in fair value recognized in our results from operations for the period. The fair value of our private warrants is determined using a Black Scholes option pricing model. For the three months ended June 30, 2024, we recorded a $0.1 million change in fair value of warrant liability income, compared to a $1.4 million income in the prior year period.

Current wording

We account for our private warrants as a liability at their fair value, with changes in fair value recognized in our results from operations for the period. The fair value of our private warrants is determined using a Black Scholes option pricing model. For the three months ended September 30, 2024, we recorded a $0.2 million change in fair value of warrant liability income, compared to a $0.1 million loss in the prior year period.

Previous wording

Interest expense, net was $2.5 million for the six months ended June 30, 2024, compared to $1.4 million interest income, net for the six months ended June 30, 2023. This was primarily related to interest expense incurred on borrowings under our debt facilities during the current year period, compared to interest earned on our excess cash in the prior year period.

Current wording

Interest expense, net was $1.8 million for the three months ended September 30, 2024, compared to $0.3 million interest expense, net for the three months ended September 30, 2023. The increase in interest expense is primarily driven by higher borrowings under our debt facilities during the current year period to support feedstock acquisitions.

Previous wording

The effective tax rate for the three months ended June 30, 2024 was (15.8%) compared to 46.7% for the three months ended June 30, 2023. The difference between the effective tax rate and the statutory tax rate of 21% for the three months ended June 30, 2024 is primarily due to the exclusion of the foreign derived intangible income deduction previously assumed. The difference between the effective tax rate and the statutory tax rate of 21% for the three months ended June 30, 2023 is primarily due to the impact of state income taxes and non-deductible executive compensation, offset by the foreign derived intangible income deduction and R&D credits.

Current wording

The effective tax rate for the three months ended September 30, 2024, was 13.0% compared to 93.0% for the three months ended September 30, 2023. The difference between the effective tax rate and the statutory tax rate of 21% for the three months ended September 30, 2024, is primarily due to the impact of state income taxes and stock-based compensation. The difference between the effective tax rate and the statutory tax rate of 21% for the three months ended September 30, 2023 is primarily due to the impact of state income taxes and non-deductible executive compensation, offset by the foreign derived intangible income deduction and R&D credits.

Previous wording

Sales and gross profit for AerSale’s two business segments for the six months ended June 30, 2024 and 2023 were as follows:

Current wording

Sales and gross profit for AerSale’s two business segments for the nine months ended September 30, 2024 and 2023 were as follows:

Previous wording

Total revenue for the three months ended June 30, 2024 increased $7.8 million or 11.2% compared to the three months ended June 30, 2023, driven by an increase of $4.7 million, or 12.8%, in revenues within Asset Management Solutions, and an increase of $3.0 million, or 9.4%, in revenues within TechOps.

Current wording

Total revenue for the nine months ended September 30, 2024 increased $10.2 million or 4.3% compared to the nine months ended September 30, 2023, driven by an increase of $0.9 million, or 0.6%, in revenues within Asset Management Solutions and an increase of $9.3 million, or 10.4%, in revenues within TechOps.

Previous wording

Sales in the Asset Management Solutions segment increased $15.6 million or 18.2%, to $101.1 million for the six months ended June 30, 2024, due to a $27.1 million, or 55.7%, increase in revenue from Engines; offset by a $11.5 million, or 31.1%, decrease in revenue from Aircraft. The increase in Engines revenue is primarily attributable to increased activity in the CFM56 and V2500 product lines as a result of higher Flight Equipment sales in the amount of $19.9 million, and higher USM sales. The decrease in Aircraft revenue is primarily attributable todecreased activity in the B757 product line due to lower Flight Equipment sales in the amount of $8.9 million due to softer demand in the freighter market, and lower leasing revenue of $1.9 million, partially offset by higher USM sales activity.

Current wording

Sales in the Asset Management Solutions segment increased $0.9 million or 0.6%, to $151.5 million for the nine months ended September 30, 2024, due to a $24.4 million, or 26.3%, increase in revenue from Engines; offset by a $23.4 million, or 40.5%, decrease in revenue from Aircraft. The increase in Engines revenue is primarily attributable to increased activity in the CFM56 product line as a result of higher Flight Equipment sales in the amount of $10.5 million

Previous wording

Cost of sales in Asset Management Solutions increased $7.0 million, or 12.4%, to $63.0 million for the six months ended June 30, 2024, compared to the prior year period. The increase in cost of sales was primarily driven by the sales increase discussed above. Gross profit in the Asset Management Solutions segment increased $8.6 million to $38.0 million, or 29.2%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The gross profit increase is mainly attributable to the higher revenue generated for the six months ended June 30, 2024, as noted above.

Current wording

Cost of sales in Asset Management Solutions decreased $8.4 million, or 8.2%, to $94.2 million for the nine months ended September 30, 2024, compared to the prior year period. The decrease in cost of sales was primarily driven by lower costs on Flight Equipment sales. Gross profit in the Asset Management Solutions segment increased $9.3 million to $57.3 million, or 19.5%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The gross profit increase is mainly attributable to the higher margin generated on Flight Equipment sales for the nine months ended September 30, 2024, as noted above.

Previous wording

Aircraft gross profit margin increased to 32.5% for the six months ended June 30, 2024, from 27.6% for the six months ended June 30, 2023, due to higher margin on Flight Equipment sales. Engine gross profit margin was 39.4% for the six months ended June 30, 2024, a slight decrease from 39.5% for the six months ended June 30, 2023, which was primarily due to changes in the USM product mix.

Current wording

Aircraft gross profit margin increased to 32.8% for the nine months ended September 30, 2024, from 29.2% for the nine months ended September 30, 2023, due to higher margins on Flight Equipment sales. Engine gross profit margin was 39.3% for the nine months ended September 30, 2024, an increase from 33.5% for the nine months ended September 30, 2023, which was primarily due to changes in the USM product mix, along with higher margins on Flight Equipment sales.

Previous wording

Our revenue from TechOps increased by $4.5 million, or 7.2%, to $66.6 million for the six months ended June 30, 2024, compared to the prior year period. The increase was primarily driven by higher MRO product sales.

Current wording

Our revenue from TechOps increased by $9.3 million, or 10.4%, to $98.9 million for the nine months ended September 30, 2024, compared to the prior year period. The increase was primarily driven by higher MRO product sales.

Previous wording

Cost of sales in TechOps increased $7.1 million, or 15.1%, to $54.1 million for the six months ended June 30, 2024, compared to the prior year period, driven by higher revenues discussed above. Gross profit in TechOps decreased $2.6 million, or 17.3% for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, driven by lower profit generated on MRO services. Gross profit margin decreased to 18.8% for the six months ended June 30, 2024 compared to 24.3% for the six months ended June 30, 2023, and was largely attributable to lower margins on MRO services of 17.1% for the six months ended June 30, 2024, compared to 23.7% during the six months ended June 30, 2023.

Current wording

Cost of sales in TechOps increased $12.5 million, or 18.0%, to $82.0 million for the nine months ended September 30, 2024, compared to the prior year period, driven by the higher revenues discussed above. Gross profit in TechOps decreased $3.2 million, or 15.8% for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, driven by lower profit generated on MRO services. Gross profit margin decreased to 17.1% for the nine months ended September 30, 2024 compared to 22.4% for the nine months ended September 30, 2023, and was largely attributable to lower margins on MRO services of 15.1% for the nine months ended September 30, 2024, compared to 21.7% during the nine months ended September 30, 2023.

Previous wording

Selling, general and administrative expenses decreased $4.6 million, or 8.8% to $47.7 million for the six months ended June 30, 2024, compared to the prior year period. The decrease was primarily related to lower share-based compensation and payroll costs.

Current wording

Selling, general and administrative expenses decreased $8.3 million, or 10.7% to $69.4 million for the nine months ended September 30, 2024, compared to the prior year period. The decrease was primarily related to lower share-based compensation and lower payroll related costs.

Previous wording

We account for our private warrants as a liability at their fair value, with changes in fair value recognized in our results from operations for the period. The fair value of our private warrants is determined using a Black Scholes option pricing model. For the six months ended June 30, 2024, we recorded a change in fair value of the warrant liability income of $2.1 million, compared to a $1.1 million income in the prior year period.

Current wording

We account for our private warrants as a liability at their fair value, with changes in fair value recognized in our results from operations for the period. The fair value of our private warrants is determined using a Black Scholes option pricing model. For the nine months ended September 30, 2024, we recorded a change in fair value of the warrant liability income of $2.3 million, compared to a $1.0 million income in the prior year period.

Previous wording

Interest expense, net was $1.5 million for the three months ended June 30, 2024, compared to $0.4 million interest income, net for the three months ended June 30, 2023. This was primarily related to interest expense incurred on borrowings under our debt facilities during the current year period, compared to interest earned on our excess cash in the prior year period.

Current wording

Interest expense, net, was $4.2 million for the nine months ended September 30, 2024, compared to $1.2 million interest income, net, for the nine months ended September 30, 2023. This was primarily related to interest expense incurred on higher borrowings under our debt facilities during the current year period compared to the prior period related to feedstock and MRO expansion investments to grow our business.

Previous wording

The effective tax rate for the six months ended June 30, 2024 was 3.5% compared to 45.6% for the six months ended June 30, 2023. The difference between the effective tax rate and the statutory tax rate of 21% for the six months ended June 30, 2024 is primarily due to the benefit of the R&D credits, change in fair market value of the warrants and amended state tax returns. The difference between the effective tax rate and the statutory tax rate of 21% for the six months ended June 30, 2023 is primarily due to the impact of state income taxes and non-deductible executive compensation, offset by the foreign derived intangible income deduction and R&D credits.

Current wording

nine months ended September 30, 2024, is primarily due to the impact of state income taxes and stock-based compensation. The difference between the effective tax rate and the statutory tax rate of 21% for the nine months ended September 30, 2023 is primarily due to the impact of state income taxes and non-deductible executive compensation, offset by the foreign derived intangible income deduction and R&D credits.

Previous wording

As of June 30, 2024, we had $4.3 million of cash and cash equivalents. We finance our growth through cash flows generated from operations and borrowings secured by our assets. We had $81.0 million outstanding under the Revolving Credit Agreement as of June 30, 2024, and we had $97.5 million of availability thereunder. We used cash in operations of $36.8 million for the six months ended June 30, 2024, primarily for feedstock acquisitions, and used cash in investing activities of $9.0 million for the six months ended June 30, 2024.

Current wording

As of September 30, 2024, we had $9.8 million of cash and cash equivalents. We finance our growth through cash flows generated from operations and borrowings secured by our assets. We had $78.5 million outstanding under the Revolving Credit Agreement (as defined below) as of September 30, 2024, and we had $93.7 million of availability thereunder. We used cash in operations of $26.4 million for the nine months ended September 30, 2024, primarily for feedstock acquisitions, and used cash in investing activities of $11.5 million for the nine months ended September 30, 2024.

Previous wording

During the year ended December 31, 2023, we entered into a revolving term loan collateralized by our property and equipment (the “Equipment Loan”), and borrowed $8.6 million, which was paid off during the six months ended June 30, 2024. During the three months ended June 30, 2024, the Company financed additional equipment purchases of $0.6 million, which remain outstanding as of June 30, 2024.

Current wording

During the year ended December 31, 2023, we entered into a revolving term loan collateralized by our property and equipment (the “Equipment Loan”), and borrowed $8.6 million, which was paid off during the nine months ended September 30, 2024. During the nine months ended September 30, 2024, the Company financed additional equipment purchases of $0.6 million, of which $0.6 million remain outstanding as of September 30, 2024.

Previous wording

Net cash used in operating activities was $36.8 million for the six months ended June 30, 2024, compared to cash used of $129.2 million for the same period in 2023. The decrease in cash deployed of $92.4 million was primarily due to lower feedstock acquisitions and the timing of advances to vendors during the six months ended June 30, 2024 compared to the prior year period.

Current wording

Net cash used in operating activities was $26.4 million for the nine months ended September 30, 2024, compared to cash used of $168.1 million for the same period in 2023. The decrease in cash deployed of $141.7 million was primarily due to lower feedstock acquisitions and the timing of advances to vendors during the nine months ended September 30, 2024 compared to the prior year period.

Previous wording

Net cash used in investing activities was $9.0 million for the six months ended June 30, 2024, compared to cash provided of $7.9 million in the same period for 2023. Cash used in investing activities during the six months ended June 30, 2024 was driven by purchases of property and equipment in support of TechOps expansion. Cash generated by investing activities during the six months ended June 30, 2023 was driven by Flight Equipment sales.

Current wording

Net cash used in investing activities was $11.5 million for the nine months ended September 30, 2024, compared to cash provided of $6.7 million in the same period for 2023. Cash used in investing activities during the nine months ended September 30, 2024 was driven by purchases of property and equipment in support of TechOps expansion. Cash generated by investing activities during the nine months ended September 30, 2023 was driven by Flight Equipment sales.

Previous wording

Net cash provided by financing activities was $44.2 million for the six months ended June 30, 2024, compared to cash provided of $8.8 million in the same period for 2023. Cash provided by financing activities during the six months ended June 30, 2024 was primarily related to the proceeds from net borrowings under our Revolving Credit Agreement. Cash provided by financing activities during the six months ended June 30, 2023 is the result of proceeds from borrowings under the Equipment Loan.

Current wording

Net cash provided by financing activities was $41.7 million for the nine months ended September 30, 2024, compared to cash provided of $17.3 million in the same period for 2023. Cash provided by financing activities during the nine months ended September 30, 2024 was primarily related to the proceeds from net borrowings under our Revolving Credit Agreement (as defined below). Cash provided by financing activities during the nine months ended September 30,

Previous wording

As of June 30, 2024, there was $81.0 million outstanding under the Revolving Credit Agreement and we had $97.5 million of availability thereunder. We were in compliance with our debt covenants for the Revolving Credit Agreement as of June 30, 2024.

Current wording

As of September 30, 2024, there was $78.5 million outstanding under the Revolving Credit Agreement and we had $93.7 million of availability thereunder. We were in compliance with our debt covenants for the Revolving Credit Agreement as of September 30, 2024.

Previous wording

On June 30, 2023, the Company entered into a property and equipment revolving term loan (the “Equipment Loan”) with a total advance commitment of $10.0 million for the purpose of financing capital expenditures on property and equipment. Once the total advance commitment is reached or commencing on June 30, 2024, whichever came first, this facility would become a term loan with a maturity date of June 30, 2027. This loan is collateralized by the property and equipment it finances and requires interest only payment until converted to a term loan, at which point, principal and interest payments will be required.

Current wording

On June 30, 2023, the Company entered into the Equipment Loan with a total advance commitment of $10.0 million for the purpose of financing capital expenditures on property and equipment. This facility became a term loan during quarter ended June 30, 2024, with a maturity date of June 26, 2027. The Equipment Loan is collateralized by the property and equipment it finances and requires interest only payment until converted to a term loan, at which point, principal and interest payments will be required.

Previous wording

During the six months ended June 30, 2024, the Company repaid $8.6 million outstanding under this facility as of December 31, 2023, and borrowed $0.6 million, which remained outstanding as of June 30, 2024.

Current wording

During the nine months ended September 30, 2024, the Company repaid $8.6 million outstanding under this facility as of December 31, 2023, and borrowed $0.6 million, of which $0.6 million remained outstanding as of September 30, 2024.

Previous wording

The Company has entered into a purchase commitment with Universal Avionics valued at $27.5 million for the acquisition of technical equipment for manufacturing our AerAware TM product. The commitment is expected to be satisfied by the second quarter of 2025.

Current wording

The Company has entered into a purchase commitment with Universal Avionics valued at $24.5 million for the acquisition of technical equipment for manufacturing our AerAware TM product. The commitment is expected to be satisfied by the second quarter of 2025.

Previous wording

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires our 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. A summary of our critical accounting estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the 2023 Form 10-K. We continually review these estimates and their underlying assumptions to ensure they are appropriate for the circumstances. Changes in the estimates and assumptions we use could have a material impact on our financial results. During the six months ended June 30, 2024, there were no material changes in our critical accounting policies and estimates.

Current wording

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires our 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. A summary of our critical accounting policies and estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the