Global Crossing Airlines Announces Closing of Issuance of Additional Notes

MIAMI, Dec. 22, 2023 (GLOBE NEWSWIRE) -- Global Crossing Airlines Group, Inc. (JET: NEO; JET.B: NEO; JETMF: OTCQB) (the “Company” or “GlobalX”) is pleased to announce the closing of the placement of an additional US$5 million of Senior Secured Notes due 2029 (the “Financing”) with a fund managed by Axar Capital Management LP and its affiliates (the “Investor”), a value-oriented alternative investment firm with over US$2.3 billion in assets under management. These notes are the same series as the US$35 million of Senior Secured Notes due 2029 (the “August 2023 Notes”) that were issued on August 2, 2023.

The Financing consisted of the sale of US$5 million of Senior Secured Notes (the “Notes”) and accompanying warrants to purchase the Company’s common stock.

The terms of the Notes are the same as the August 2023 Notes, including:

• A 6-year term and Maturity Date of August 2, 2029
• The Notes will bear interest at a fixed rate of 15% per annum and include an upfront fee of 1.75% of the principal payment;
• The Company will be permitted to prepay all (but not less than all) of the Notes as follows beginning on August 2, 2025 subject to a redemption premium;
• At closing, the Investor will be issued 1,428,736 warrants (each, a “Warrant”) exercisable into one share of common stock at an exercise price of US$1.00 per share, with such warrants expiring on June 30, 2030;
• Each of the Company's material subsidiaries will guarantee the Notes; and
• The Notes and the related guarantees will be secured by a lien on substantially all of the property and assets of the Company and the guarantors of the Notes.

The net proceeds of the Financing will be used to repurchase $4,316,000 principal amount of the August 2023 Notes (the “Note Repurchase”), with the balance expected to be used for general corporate purposes, including the transaction expenses and deposits to expand its current fleet of aircraft. As a result of the Note Repurchase the Company is also acquiring and cancelling 1,233,285 warrants that were originally issued to the holder on August 2, 2023 and that had an exercise of US$1.00 per share.

Pursuant to Canadian Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Investor’s participation in the Financing constitutes a "related party transaction" as the Investor is a related party of the Company due to Mr. Andrew Axelrod being a director of the Company and the Investor being an affiliated entity of Mr. Axelrod. The Company is relying on an exemption from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that at the time the Investor's participation in the Financing was agreed to, neither the fair market value of the securities to be distributed in the Financing nor the consideration to be received for those securities, insofar as the Financing involved the related party, exceeds 25% of the Company's market capitalization. The Company did not file a material change report related to this financing more than 21 days before the closing of the Financing as required by MI 61-101 since the details of the participation by the related parties of the Company were not settled until just prior to closing and the Company wished to close on an expedited basis for sound business reasons.