Global Crossing Airlines Group Inc.

ITEM 1A. RISK FACTORS

Risk Factors Relating to Our Business

We have a limited operating history, which makes it difficult to forecast our revenue and evaluate our business and future prospects.

GlobalX has been in the build-out stage of the airline and as a result, investors are unable t and may be unable for the next several years to review and consider any significant operational history to evaluate future viability or profitability. GlobalX will be subject to the risks, difficulties and uncertainties associated with a start-up airline. The likelihood of GlobalXs success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with the expansion of a business operation in a competitive industry and the development of a customer base. GlobalX could also sustain material losses in the future. GlobalXs future performance will depend upon a number of factors, including its ability to:

maintain the safety and security of operations;

capitalize on its business strategy;

implement its growth strategy;

provide the intended services at the prices anticipated;

maintain adequate control of expenses;

attract, retain and motivate qualified personnel;

react to customer and market demands; and

generate operating revenue.

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We have a history of net losses, we anticipate increasing operating expenses in the future, and we may not be able to achieve and, if achieved, maintain profitability.

GlobalX is generating operahas historically had and conting revenue andues to hasve negative cash flow from operating activities. It is anticipated that GlobalX will continue to have negative cash flow infor the foreseeable future. If our revenue does not increase to offset the expected increases in our operating expenses,  or if our operating expenses are not contained, then we will not be profitable in future periods. Continued losses may have the following consequences:

increasing GlobalXs vulnerability to general adverse economic and industry conditions;

limiting GlobalXs ability to obtain additional financing to fund future working capital, capital expenditures, operating costs and other general corporate requirements; and

limiting GlobalXs flexibility in planning for, or reacting to, changes in its business.

Our ability to purchase or lease aircraft on favorable terms will have a significant impact on our operating performance, need for capital and profitability.

To operate in accordance with its business plan, GlobalX will need to acquire or lease additional aircraft. While GlobalX does not anticipate any difficulties in entering into satisfactory leasing arrangements  or purchase agreements for additional aircraft, there is no guarantee that we will be able to enter into leaseagreements for additional aircraft on terms satisfactory to itus, or at all.

The terms of GlobalXs leasing arrangements and purchase agreements will impact the potential profitability of GlobalXs business. If we are unable to acquire or lease additional aircraft on satisfactory terms, then we will be unable to operate in accordance with its business plan. GlobalXs ability to pay any fixed costs associated with aircraft lease or purchase contractual obligations will depend on GlobalXs operating performance, cash flow, its ability to secure adequate financing, whether fuel prices continue at current price levels and/or further increase or decrease, further weakening or improvement in the United States economy, as well as general economic and political conditions and other factors that are, to a large extent, beyond GlobalXs control.

Our business has grown rapidly, and we may fail to manage our growth effectively.

GlobalX may be subject to growth-related risks including capacity constraints and pressure on its internal systems and controls. The ability of GlobalX to manage growth effectively will require it to continue to implement and improve its operations and financial systems and to expand, train, and manage its employee base. The inability of GlobalX to deal with potential growth could result in a material adverse effect.

Any expansion of operations GlobalX may undertake will entail risks; such actions may involve specific operational activities, which may negatively impact the profitability of GlobalX. Consequently, shareholders must assume the risk that: (i) such expansion may ultimately involve expenditures of funds beyond the resources available to GlobalX at that time; and (ii) management of such expanded operations may divert managements attention and resources away from any other operations, all of which factors may result in a material adverse effect.

If we fail to implement our business strategy successfully, our business, results of operations and financial condition will be materially adversely affected.

The viability of GlobalXs business model and its ability to implement this model is dependent on a number of inputs and assumptions, including:

the timing and receipt of all regulatory approvals required or desirable for operations by GlobalX and their impact upon expectations as to future operations of GlobalX;

the expected operations and performance of GlobalXs business as compared to existing charter operators;

the anticipated competitive response from existing charter operators as well as potential new market entrants which may compete with GlobalX;

impact of existing or new governmental regulation on GlobalX;

future development and growth prospects;

expected operating costs, general administrative costs, costs of services and other costs and expenses;

the anticipated increase in the size of the airline passenger market in North America;

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ability to meet current and future obligations;

treatment under governmental regulatory regimes;

projections of market prices and costs;

ability to obtain equipment, services and supplies in a timely manner, including the ability to lease or purchase aircraft; and

ability to obtain financing or leasing arrangements on acceptable terms, or at all.

ShouldIf one or more of these inputs and assumptions not be is incorrect or fails to occur as anticipated, then there is a risk that GlobalXs business model may not be implemented as anticipated and GlobalX may suffer a material adverse effect. 

In addition, in order  to successfully implement our growth strategy, we will require access to an additional number of airport gates and other services at airports we currently serve or may seek to serve. We believe there are currently significant restraints on gates and related ground facilities at many of the most heavily utilized airports in the United States. As a result, if we are unable to obtain access to a sufficient number of slots, gates or related ground facilities at desirable airports to accommodate our growing fleet, then we may be unable to compete in those markets, our aircraft utilization rate could decrease, and we could suffer a material adverse effect on our business, results of operations and financial condition.  There can be no assurance that we will be able to enter into these arrangements on terms that we deem desirable or at all. Our Airport Use Agreement with Miami International Airport does not guarantee availability of boarding gates or landing slots at that airport.

Our reputation and business could be adversely affected in the event of an emergency, accident or similar public incident involving our aircraft or personnel.

A major safety incident involving GlobalXs aircraft during operations would likely incur substantial repair or replacement costs to the damaged aircraft and a disruption in service. GlobalX could also incur potentially significant claims relating to injured passengers and parties, along with a significant negative impact on GlobalXs reputation for safety, adversely affecting GlobalXs ability to attract and retain passengers.

We may face unanticipated obstacles to the execution of GlobalXs business plan.

As GlobalXs business evolves and grows, its business plans may change significantly. The execuGlobalX may need to make significant modification os to some or all of GlobalXs business plan is capital intensive andstated strategies depending on future events or developments in the may become subjectrketplace. We may struggle to statutory or regulatory requirements. GlobalX may need to make significant modificationadapt our business plan or fail to anticipate the changes that are necessary in order for our business to anybe successful. The execution of GlobalXs stated strategies depending on future evbusiness plan is capital intensive and may become subject to statutory or regulatory requirements.

We may require additional capital, which may not be available on terms acceptable to us or at all.

The ability of GlobalX to execute its build-out and growth strategy and achieve operations will depend on acquiring substantial additional financing through debt financing, equity financing or other means. Failure to obtain such financing may result in the delay or indefinite postponement of such growth strategy or even impact the ability of GlobalX to continue as a going concern.

There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable to GlobalX. If additional financing is raised by GlobalX through the issuance of its securities, shareholders may suffer significant dilution. If additional financing is not available, or if available, not available on satisfactory terms, then this could result in a material adverse effect or could require GlobalX to reduce, delay, scale back or eliminate portions of its actual or proposed operations or could prevent GlobalX from continuing as a going concern.

GlobalX may also need to raise capital by incurring long-term or short-term indebtedness in order to fund its business objectives. This could result in increased interest expense and decreased net income. Investors are cautioned that there can be no assurance as to the terms of such financing and whether such financing will be available. The level of GlobalXs indebtedness could impair its ability to obtain additional financing in the future on a timely basis to take advantage of business opportunities that may arise.

We rely on third-party specialists and other commercial partners to perform functions integral to our operations.

GlobalX is expected to secure goods and services from a number of third party suppliers. Any significant interruption in the provision of goods and services from any such key suppliers, some of which would be beyond GlobalXs control, or any significant increase in price of such goods and services, could have a material adverse effect. GlobalX will be reliant upon providers of aircraft, such as Airbus and other third party leasing companies, which will make GlobalX susceptible to any problems connected with aircraft or engines or components, including defective materials, mechanical problems or negative perceptions in the traveling community. The delay or

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inability of any provider of aircraft to deliver aircraft or engines or components as GlobalX requires could negatively impact GlobalXs growth strategy and could result in a material adverse effect.

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Our limited fleet size could prevent us from replacing aircraft that face business may become subject to disruption due to unscheduled maintenance and variability in fuel costs.

Given the limited number of aircraft GlobalX currently operates, if one or more aircraft becomes unavailable due to unscheduled maintenance, repairs or other reasons, GlobalX could suffer material adverse financial and reputational impacts.

Our business has been and in the future may be materially adversely affected by the price and availability of aircraft fuel. Unexpected increases in the price of aircraft fuel or a shortage or disruption in the supply of aircraft fuel could have a material adverse effect on our business, results of operations and financial condition.

GlobalX will be dependent on f For example, a major hurricane making landfall along the Gulf Coast could disrupt oil production, refinery operations and pipeline capacity in that region, possibly resulting in significant increases in the price of aircraft fuel to operate its business, and therefore, will be exposed to and diminished availability of aircraft fuel supply. Fuel prices also may be affected by geopolitical and macroeconomic conditions and events that are outside of our control, including volatility in the relative strength of the U.S. dollar, the currency in which oil is denominated. Instability within major oil producing regions, such as the risk of volatile fuel prices. FMiddle East and Venezuela, Russias ongoing conflict in Ukraine, ongoing conflicts throughout the Middle East, changes in demand from major petroleum users such as China, and increases in competing energy sources are examples of these trends.

GlobalX will be dependent on fuel prices are ito operate its business. Fuel supply is impacted by a host of global events outside of GlobalXs control, such as significant weather events, market speculation, geopolitical tensions, refinery capacity, government taxes and levies, and GlobalX demand and supply. GlobalXs fuel costs are expected to make up one of the largest anticipated expenses of GlobalX. A significant change in the price of f fuel availability would materially affect GlobalXs projected operating results and growth strategy. A fuel supply shortage or significantly higher fuel prices could result in a curtailment of GlobalXs planned scheduled service. There can be no assurance that increases in the price of fuel can be offset by fuel surcharges or any potential hedging transactions.

We operate a limited number of aircraft types.

Critical to GlobalXs business model is a supply of modern and cost-effective aircraft that can service the various sectors required to fly GlobalXs planned route network. ShouldIf the A319, A320 or A321 family of aircraft is not be available in accordance with GlobalX growth strategy or shouldif the aircraft lease or maintenance costs increase drastically, then there could be a material impact on GlobalXs growth strategy, cost structure and potential profitability. In addition, a switch to a different family of aircraft could have a material adverse effect on our cost structure.

A critical cost-saving element of our business strategy is to operate a limited number of aircraft types; however, our dependence on the A319, A320 and A321 20 family of aircraft for all of our aircraft makes us vulnerable to any design defects or mechanical problems associated with this aircraft type or these engines. In the event of any actual or suspected design defects or mechanical problems with this family of aircraft, whether involving our aircraft or that of another airline, we may choose or be required to suspend or restrict the use of our aircraft. Our business could also be materially adversely affected if the public avoids flying on our aircraft due to an adverse perception of our plane type or engine type, whether because of safety concerns or other problems, real or perceived, or in the event of an accident involving such aircraft or engine. Our intellectual property rights, particularly our branding rights, are vulnerable, and any inability to protect them may adversely affect our business and financial results.

We consider our intellectual property rights, particularly our branding rights such as our trademark applicable to our airline, to be a significant and valuable aspect of our business. We aim to protect our intellectual property rights through a combination of trademark, copyright and other forms of legal protection, contractual agreements and policing of third-party misuses of our intellectual property, but cannot guarantee that such efforts will be successful. Our failure to obtain or adequately protect our intellectual property or any change in the law that lessens or removes the current legal protections of our intellectual property may diminish our competitiveness and adversely affect our business and financial results. Any litigation or disputes regarding intellectual property may be costly and time-consuming and may divert the attention of our management and key personnel forrom our business operations, either of which may adversely affect our business and financial results.

Our quarterly results of operations fluctuate due to a number of factors, including seasonality.

The charter airline industry is seasonal. The demand for and the pricing of charter services does fluctuate throughout the year, as it does with most air travel industries. Historically, demand for air travel is higher in the second and third quartcan vary greatly on a month to month basis different customers, driving higher revenues, than in due to seasonality. This can be offset by managing the first and fourth quarters, which are periods of lower travel demandcustomer mix, longer term contracts with guaranteed minimum hours and focusing on different geographies. In soas much as GlobalX has fixed costs relating to air crews, insurance, leases, rent, and other payments, lower periods of demand, combined with lower prices, could lead to negative cash flow and earnings for a given period.

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Threatened or actual terrorist attacks or security concerns involving airlines could have a material adverse effect on our business, results of operations and financial condition.

The September 11, 2001 terrorist attacks and subsequent terrorist activity have caused uncertainty in the minds of the traveling public. The occurrence of a major terrorist attack or attempted terrorist attack (whether domestic or international and whether involving GlobalX or another carrier or no carrier at all) and additional restrictive security measures that are implemented in response could have a material adverse effect on passenger demand for air travel and on the number of passengers traveling on GlobalXs flights. It could also lead to a substantial increase in insurance, airport security and other costs. Any resulting reduction in passenger revenues and/or increases in insurance, security or other costs could result in a material adverse effect.

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The rapid spread of th

Ge COVID-19 virus and its variants has had an adverse impact on our business, operating results, financialneral economic condition and liquidity. A new outbreak of COVID-19 or another disease or similar public healths may reduce threat in the future could also have an adverse effect one demand for our business, operating results,services.

The financial condition and liquidity.

On March 11, 2020, the World Health Organization declared COVID-19 a gsuccess of Global pandemic causing a massive market disruption to the aviation industry. Measures such as travel restrictions, including testing regimes, stay at home and quarantine orders, limitations on public gatherings, cancellation of publX may be sensitive to adverse changes in general economic events and many others have resulted in a decline in demand for air travel.

While most restrictioconditions have been removed in the United States, and a recovery is underway in the domestic airline industry, additional governmental and other restrictions and regulations may be implemented or reinstated in the future in response to further outbreaks of COVID-19 or another disease, including travel restrictions (including on domestic air travel within the United States), quarantines of popu such as war, terrorist attacks, recession, inflations (including our personnel), limitations on aircraft capacity, testing requirements , labor disputes, demographic changes, pand restrictions on our ability to access our facilities or aircraft emics, weather or requirements to collect additional passenger data. In addition, governmentclimate changes, non-governmental organizationsunemployment and entities in the privinterest rate sector may issue non-binding advisories or recommendations regards. Such changing air travel or other physical distancing measures, including limitations on the number of persconditions that shcould be present at public gatherings, which may significantly re reduce demand. These and o in ther restrictions and regulations, as well as the general concern about the virus among travelers, marketplace for GlobalXs services.

Inflation may have had, and could continue to have, a material a adverse impact on our business, operating rresults, financial condi of operations and liquidity.

Future outbreaks of COVID-19 or another diseasefinancial could have a material negative impact on demand. Reduced demand would have an adverse impact on our revenues and lower levels of flying can leandition.

In recent years, inflation increased to higher unit costs. Actual or perceived risk of infection from COVID-19 or another disease could have a material adverse effect onhroughout the U.S. economy. In response, the publics demand for and willingness to use air travel, which could harm our reputation and business. Our operations may be further impacted in the event of additionalFederal Reserve raised certain benchmark instances of actual or perceived risk of infection of COVID-19 or another disease among our employees, suppliers or business partners, and this impact may have a material adverse effect if we are unableterest rates in an effort to maintain a suitably skilled and sized workforce and address recombat inflated employee mattersion. In addiflation, supply chain disruptions may impede our cargo customers ability to deliver freight to the airports we serve, which could reduce their need for our services and thus have a material adverse eff can adversely affect on our business,us by results of operations and financial condition. 

The industry may also be subject to enhanced health and hygiene requirements in attemping in increased costs to counteract future outbreaks of COVID-19 orof goods another disease, which requirements may be costly and take a significant amount of time to implement, or drive additional staffing durd services, including a time when staffing shortages are common place.

We may take additional actions in response to COVID-19 or another disease to improve our financial posithose GlobalX uses in its operation, including measures to improve liquidity, such as the issuance of unsecured and secured debt securities, equity securities and equity-linked securities, the sale of assets and/or the entry into s, which would increase GlobalXs expenses. In additional bilateral and syndicated secured and/or unsecured credit facilities. There can be no assurance as to the timing of any such issuance, or that any such additional financing will be completed on favorable terms, or at all. Any such actions may, GlobalXs customers could also be material in nature and could result in significant additaffected by inflational borrowing. Our reduction in expenditures, measures to improve liquidity or other strategic actions that we may take in the future in response to COVID-19 or another disease may not be effective in offsetting decreased de, which could have a negative impact on demand, which could result in a material adverse effect on our business, operating results, liquidity and financial condition.

Even as enhanced screenings, quarantine and other requirements, and travel restrictions have eased, we ma for air travel. If the U.S. economy continues to experience similar adversfeel the effects to our business, operating results, financial condition and liquidity resulting from a recessioof inflationary or depressed economic environment that may persist, including increases in unemployment, and our business and operating results may not return to pre-COVID-19 pandemic levels on a timely basis or at all. The impact of future outbreaks of COVID-19 or another disease on our ures, then GlobalXs businesses, operating r, results, financial condition and liquidity could exacerbate the other risks identified in this prospectus.

General economic condi of operations may reduce the demaand for our services.

The fiinancial success of GlobalX may be sensitive to adverse changes in general economic condiconditions in the United States such as war, terrorist attacks, recession, inflation, labor disputes, demographic changes, pandemics, weather or climate changes, unemployment and interest rates. Such changing conditions could reduce demand in the marketplace for GlobalXs services could be materially adversely affected.

We may become involved in litigation that may materially adversely affect us.

GlobalX may be subject to litigation arising out of its operations. Damages claimed under such litigation may be material or may be indeterminate, and the outcome of such litigation may materially impact GlobalXs business, results of operations, or financial condition. While GlobalX will assess the merits of any lawsuit and defend itself accordingly, it may be required to incur significant expense or

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devote significant financial resources to defending itself against such litigation. In addition, the adverse publicity surrounding such claims may result in a material adverse effect.

Increased labor costs, union disputes, employee strikes and other labor-related disruption, may adversely affect our business, results of operations and financial condition.

GlobalX currently has and intends to havemaintain a non-unionized workforce. In the event that unionization activities occur with its workforce, GlobalX will incur increased labor costs. Increased labor costs will negatively impact upon GlobalXs cost structure and will adversely affect GlobalXs ability to successfully operate an airlits business.

Many factors could affect our ability to control our costs and to maintain a low cost structure.

Our business plan calls for our operations to be based at MIA, which is ourout of three primary hub, s; MIA, AEX and HRL, with the vast majority of our projected flights consisting of daily round trips departing from and returning to MIAtheir respective bases. If we are unable to continue to secure operating capacity at MIAthese hubs for our operations or planned expansion , then our business will be substantially harmed. And, assuming that we do obtain operating capacity at MIAthese locations, there is no guarantee that the fees and other costs related to operating out of MIAthese locations will not increase. Our operating performance and results of operations could be harmed by any such increase in fees or costs charged by the airport.

We will rely heavily on technology and automated systems to operate our business and any failure of these technologies or systems or failure by their operators could harm our business.

We will need to have put in place a significant amount of information technology and automated systems to operate our business. The functionality and implementation oof these systems will be is one of the keys to achieving low operating costs. These systems are expected to include a computerized airline reservation system, flight operations system, financial planning, management and accounting systems, telecommunications systems, website, maintenance systems and check-in kiosks. An inability to implement these systems in a timely fashion could result in delays in the start of our operation and maintenance systems. In addition, in order for oFor our operations to work efficiently, oall of our website and reservation ssystems will need to be able to accommodate a high volume of traffic, maintain secure information and deliver flight information. Substantially all If any of our tickets are expected to be issued to passengers as electronic tickets. We operational systems fail or experience intend for our reservarruption system to be hosted and maintained under as, then we could long term contract by a third-party service provider and we plan to rely on this reservation system to issue, trackse a significant amount of revenue and accept electronic tickets. If we are unable to contract with the third party service provider or otherwise are unable to implement our reservation system or our reservexperience operational difficulties which could lead to reputation system fails or experiences interruptions,al harm and whave are unable to book seats for any period of time, we could lo material adverse a significant amount of revenue as customers book seats on competing airlines.

impact on our business.

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Unauthorized breach of our information technology infrastructure could compromise the personally identifiable information of our passengers, prospective passengers or personnel and expose us to liability, damage our reputation and have a material adverse effect on our business, results of operations and financial condition.

Our anticipated pprocessing, storage, use and disclosure of personal data could give rise to liabilities as a result of government regulation or a significant data breach may adversely affect the Companys business. In our regular business operations, we collect, transmit, process and store sensitive data, including personal and financial information of our customers and employees such as payment processing information and information of our business partners. GlobalX depends on the ability to use information we collect to provide our services and operate our business.

GlobalX must manage increasing legislative, regulatory and consumer focus on privacy issues and data security. For example, in May 2018, the EUs General Data Protection Regulation became effective, which imposes significant privacy and data security requirements, as well as potential for substantial penalties for non-compliance. Recent penalties imposed by regulators have resulted in substantial adverse financial consequences to those companies. Also, some of GlobalXs commercial partners, such as credit card companies, have imposed data security standards that GlobalX must meet. These standards continue to evolve. GlobalX will continue its efforts to meet its privacy and data security obligations; however, it is possible that certain new obligations or customer expectations may be difficult to meet and could increase GlobalXs costs.

Additionally, GlobalX must manage evolving cybersecurity risks. Our network systems and storage applications, and those systems and storage and other business applications maintained by our third-party providers, may be subject to attempts to gain unauthorized access, breach, malfeasance or other system disruptions. In some cases, it is difficult to anticipate or to detect immediately such incidents and the damage caused thereby. In addition, as attacks by cybercriminals become more sophisticated, frequent and intense, the costs of proactive defense measures may increase. While we continually work to safeguard our internal network systems, including through risk assessments, system monitoring, information security policies and employee awareness and training, and review and validate our third-party security standards, there is no assurance that such actions will be sufficient to prevent cyber-attacks or data breaches.

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The loss, disclosure, misappropriation of or access to customers, employees or business partners information or GlobalXs failure to meet its obligations could result in legal claims or proceedings, penalties and remediation costs. A significant data breach or GlobalXs failure to meet its obligations may adversely affect GlobalXs reputation, relationships with our business partners, business, operating results and financial condition.

Failure to comply with applicable environmental laws and regulations could have a material adverse effect on our business, results of operations and financial condition.

We expect to be subject to increasingly sstringent federal, state, local and foreign laws, regulations and ordinances relating to the protection of the environment, including those relating to emissions to the air, discharges to surface and subsurface waters, safe drinking water, and the management of hazardous substances, oils and waste materials. Compliance with all environmental laws and regulations can require significant expenditures and any future regulatory developments in the U.S. and abroad could adversely affect operations and increase operating costs in the airline industry. For example, climate change legislation was previously introduced in Congresuture operations and financial results may vary as a result of environmental laws and regulations. Compliance with environmental laws and such legisregulation coulds that may be re-introducedapplicable to us in the future by Congresscould increase our cost base and state legislaturecould have a material adverse effect on our business, and couldresults of operations and financial contain provisions affecting thdition. Governmental authorities in several U.S. and foreign cities are also considering or have aviation industry, compliance with lready implemented aircraft noise reduction programs, including the imposition of nighttime curfews and limitations on daytime take-offs and landings, which could result in the creadversely affect our operation of substantial addis going forward, particularly if locally-imposed regulational costs to us. Similarly, s become more restrictive or widespread. 

Changes in legislation, regulation and government policy have affected, and may in the Environmentfuture have a material Protection Agency issued a rule that regulates larger emitters of greenhouse gases. Futuadverse effect on, our business.

Executive orders could affect GlobalXs business, operations, strategies and increase GlobalXs costs of compliance. Any such changes may make it more difficult and/or more expensive for GlobalX to acquire operationr lease new aircraft or engines and financial results may vary as a result of suparts to maintain existing aircraft or engines or make flying less profitable. GlobalX also faces uncertainty regarding increased tariffs under the second Trump Administration, which regulations. Compliance witcould result in retaliatory tariffs imposed on U.S. businesses from countries affected by such these regulaariffs. While GlobalX cannot predict what actions and new or existingmay ultimately be taken with respect to tariffs or trade regulations that may be applicable to us in the future could increase our cost basbetween the United States and other countries, the tariffs described above, the adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs, trade and could greements or related policies have a materthe potential to adverse effely impact on ourGlobalXs business, results of operations, and financial condition. Governmental authorities in severAny tariffs imposed on commercial U.S.aircraft and foreign cities are also conrelated parts imported from outsidering or have already implemented aircraft noi the United States may have a material adverse reductieffect on programGlobalXs fleet, business, including the imposifinancial condition and results of operation of nighttime curfews and limitations. To the extent that any such changes have a negative impact on us on daytime take-offs and lanr the airline industry, includings, which could adversely affect our operations going forward, particular as a result of related uncertainty, these changes may materially and adversely if locally-imposedmpact GlobalXs business, financial condition, regulations become more restrictive or widespread. sults of operations and cash flows.

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Non-compliance with the growing Rregulations and Gguidelines for Mminimizing Aaircraft Eemissions and its Itheir impact on Cclimate Cchange.

Concerns about climate change may prompt governments to introduce regulatory changes affecting the aviation industry, potentially resulting in increased costs. These changes could involve emission reduction requirements, capital investments in specific equipment or technologies, or other additional expenses linked to emissions. Indirectly, these regulatory activities may raise operating costs, including fuel expenses.

Assets securing loans, such as aircraft, spare parts, and airport slots, may depreciate if there is a shift in customer demand towards low-carbon alternatives. Operational impacts, such as increased flight cancellations, may result in revenue loss. We may incur significant expenses to enhance the climate resilience of our infrastructure in response to the physical effects of climate change, although the materiality of such costs remains uncertain.

Growing public awareness of climate change threats might lead customers to reduce air travel frequency or opt for airlines perceived as more environmentally sustainable. Business customers may explore alternatives like virtual meetings and workspaces. The advancement of high-speed rail in markets served by short-haul flights may offer passengers lower-carbon travel options, affecting the demand for our services.

In addition, the International Civil Aviation Organization (ICAO) CAO endorsed the implementation of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)CORSIA. CORSIA aims to achieve carbon-neutral growth in the global aviation sector from 2021 to 2035. It mandates airlines to offset the increase in carbon dioxide (CO2) emissions, relative to an ICAO-defined baseline, for a significant majority of international flights. This offsetting is accomplished through the acquisition of carbon offsets or the utilization of low-carbon fuels.

The future costs associated with CORSIA compliance are uncertain, influenced by variables like the availability and pricing of carbon offset credits and low-carbon aircraft fuels. We acknowledge the potential impact on our business due to the uncertain landscape of compliance costs.

Notably, we lack direct control over CORSIA compliance costs until 2032, as they are contingent on global aviation sector emissions growth. Beginning in 2033, such requirements incorporate a factor for individual airline operator emissions growth. Due to the competitive and unpredictable nature of the airline industry, we cannot assure the ability to offset CORSIA-related costs through fare adjustments, surcharges, revenue increases, or other operating cost reductions.

We have a significant amount of aircraft-related fixed obligations that could impair our liquidity and thereby harm our business, results of operations and financial condition.

We expect to lease all or finance the majority of our aircraft. Our ability to pay the fixed costs associated with our contractual obligations under these leases and debt arrangements will depend on our operating performance and cash flow, which will in turn depend on, among other things, the success of our current

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business strategy, whether fuel prices continue at current price levels and/or further increase or decrease, further weakening or improving in the U.S. economy, as well as general economic and political conditions and other factors that are, to some extent, beyond our control. The amount of our aircraft related fixed obligations could have a material adverse effect on our business, results of operations and financial condition.

Rising maintenance and repair costs could adversely affect cash flow and results of operation.

As we anticipate orderingtaking delivery of all aircraft fresh from maintenance, our initial maintenance costs will in all likelihood be lower at the beginningdelivery of the aircraft and rise throughout the term of the lease or ownership of the aircraft. Our fleet will require more maintenance as it ages and our maintenance and repair expenses for each of our aircraft will likely be incurred at approximately the same intervals. Moreover, because we anticipate thatmuch of our current fleet willhas been acquired over a relatively short period, significant maintenance that is scheduled on each of these planes will likely occur at roughly the same time, meaning we will likely incur our most expensive scheduled maintenance obligations, known as heavy maintenance, across our present fleet around the same time. These more significant maintenance activities could result in out-of-service periods during which our aircraft are dedicated to maintenance activities and unavailable to generate revenue. In addition, we anticipate that the terms of our lease agreements will require us to pay supplemental rent, also known as maintenance reserves, to be paid to the lessor in advance of the performance of major maintenance, resulting in our recording significant prepaid deposits on our balance sheet. We expect scheduled and unscheduled aircraft maintenance expenses to increase as a percentage of our revenue over the next several years. Any significant increase in maintenance and repair expenses would have a material adverse effect on our business, results of operations and financial condition.

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We may face difficulties in recruiting and hiring our workforce.

From time to time, the airline industry has experienced a shortage of personnel licensed by the FAA, especially pilots and mechanics. We expect to compete against the major U.S. and foreign flag airlines for labor in these highly-skilled positions. Major U.S. airlines may offer wage and benefit packages that exceed our wage and benefit packages. If we are unable to hire, train and retain qualified employees at its anticipated costs, we may be unable to successfully execute our business plan. Moreover, in the future, we may have to increase wages and benefits in order to attract and retain qualified personnel or risk considerable employee turnover.

The airline industry is particularly sensitive to changes in economic conditions.

Negative economic conditions or a reocccurrence of such conditions would negatively impact our business, results of operations and financial condition. Our business and the airline industry in general are affected by many changing economic conditions beyond our control, including, among others:

changes and volatility in general economic conditions, including the severity and duration of any downturn in the U.S. or Gglobal economy and financial markets;

changes in consumer preferences, perceptions, spending patterns or demographic trends, including any increased preference for higher-fare carriers offering higher amenity levels, and reduced preferences for low-fare carriers offering more basic transportation, during better economic times;

higher levels of unemployment and varying levels of disposable or discretionary income;

depressed housing and stock market prices; and

lower levels of actual or perceived consumer confidence.

These factors can adversely affect the results of our operations, our ability to obtain financing on acceptable terms, and our liquidity generally. Unfavorable general economic conditions, such as higher unemployment rates, a constrained credit market, housing-related pressures and increased focus on reducing business operating costs can reduce spending for leisure, visiting friends and relatives, and business travel. For many travelers, in particular the leisure andtravelers visiting friends and relatives travelers we serve, air transportation is a discretionary purchase that they can eliminate from their spending in difficult economic times. Unfavorable economic conditions could also affect our ability to raise prices to counteract increased fuel, labor or other costs, resulting in a material adverse effect on our business, results of operations and financial condition.

Risks associated with our presence in international emerging markets, including political or economic instability, and failure to adequately comply with existing legal requirements, may materially adversely affect us.

Some of our target growth marketsWe sometimes operate include countries with less developed economies, legal systems, financial markets and business and political environments athat are vulnerable to economic and political disruptions, such as significant fluctuations in gross domestic product, interest and currency exchange rates, civil disturbances, government instability, nationalization and expropriation of private assets,

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trafficking and the imposition of taxes or other charges by governments. The occurrence of any of these events in markets served by us now or in the future and the resulting instability may have a material adverse effect on our business, results of operations and financial condition.

We will emphasize compliance with all applicable laws and regulations and will iimplement and refresh policies, procedures and certain ongoing training of our employees, third-party specialists and partners with regard to business ethics and key legal requirements; however, we cannot assure you that our employees, third-party specialists or partners will adhere to our code of ethics, other policies or other legal requirements. If we fail to enforce our policies and procedures properly or maintain adequate recordkeeping and internal accounting practices to record our transactions accurately, then we may be subject to sanctions. In the event we believe or have reason to believe our employees, third-party specialists or partners have or may have violated applicable laws or regulations, we may incur investigation costs, potential penalties and other related costs which in turn may have a material adverse effect on our reputation, business, results of operations and financial condition.

We face limits on foreign ownership and control.

To comply with restrictions imposed by federal law on foreign ownership of U.S. airlines, we will restrict voting of shares of capital stock by non-U.S. citizens. The restrictions imposed by federal law currently require that no more than 25% of our stock be voted or controlled, directly or indirectly, by persons who are not U.S. citizens and that our president and at least two-thirds of the members of our board of directors be U.S. citizens.

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To be considered a U.S. citizen, you must be: (1) an individual who is a citizen of the U.S.; (2) a partnership each of whose partners is an individual who is a citizen of the U.S.; or (3) a corporation or association organized under the laws of the U.S. or a state, the District of Columbia, or a territory or possession of the U.S., of which the president and at least two-thirds of the board of directors and other managing officers are citizens of the U.S., which is under the actual control of citizens of the U.S., and in which at least 75 percent of the voting interest is owned and controlled by persons that are citizens of the U.S.

No shares of stock may be voted by or at the direction of non-U.S. citizens unless such shares are registered on a separate stock record, which is referred to as the foreign stock record. Further, no shares of it a non-U.S. citizens capital stock will be registered on the foreign stock record if the amount so registered would exceed the foreign ownership restrictions imposed by federal law.

We are subject to extensive regulation by the FAA, the DOT, the TSA, CBP and other U.S. and foreign governmental agencies, compliance with which could cause us to incur increased costs and adversely affect our business, results of operations and financial condition.

Airlines are subject to extensive regulatory and legal compliance requirements, both domestically and internationally, that involve significant costs. In the last several years, Congress has passed laws, and the DOT, FAA and TSA have issued regulations, relating to the operation of airlines that have required significant expenditures. We expect to continue to incur expenses in connection with complying with government regulations. Additional laws, regulations, taxes and airport rates and charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce the demand for air travel. If adopted, these measures could have the effect of raising charter prices, reducing revenue and increasing costs.

We cannot assure you that these and other laws or regulations enacted in the future will not harm our business. Our ability to operate as an airline is dependent on our maintaining certifications issued to us by the DOT and the FAA. The FAA has the authority to issue mandatory orders relating to, among other things, the grounding of aircraft, inspection of aircraft, installation of new safety-related items and removal and replacement of aircraft parts that have failed or may fail in the future. A decision by the FAA to ground, or require time consuming inspections of or maintenance on, our aircraft, for any reason, could negatively affect our business and financial results. Federal law requires that air carriers operating large aircraft be continuously fit, willing and able to provide the services for which they are licensed. Our fitness is monitored by the DOT, which considers factors such as unfair or deceptive competition, advertising, baggage liability and disabled passenger transportation. While the DOT has seldom revoked a carriers certification for lack of fitness, such an occurrence would render it impossible for us to continue operating as an airline. The DOT may also institute investigations or administrative proceedings against airlines for violations of regulations.

International routes are regulated by treaties and related agreements between the United States and foreign governments. Our ability to operate international routes is subject to change because the applicable arrangements between the United States and foreign governments may be amended from time to time. Our access to new international markets may be limited by our ability to obtain the necessary certificates to fly the international routes. In addition, our operations in foreign countries are subject to regulation by foreign governments and our business may be affected by changes in law and future actions taken by such governments, including granting or withdrawal of government approvals and restrictions on competitive practices. We are subject to numerous foreign regulations based on the large

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number of countries outside the United States where we currently provide service. If we are not able to comply with this complex regulatory regime, then our business could be significantly harmed.

Risk Factors Relating to Ownership of Our Common Stock

We do not know whether an active, liquid and orderly market will develop for our common stock or what the market price of our common stock will be, and, as a result, it may be difficult for you to sell your shares of our common stock.

Our common stock currently trades on the OTCQB and CBOE CA and our Class B Non-Voting Common Stock trades on the CBOE CA, each with very limited daily trading volume. The market price of our common stock and our Class B Non-Voting Common Stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

limited daily trading volume resulting in the lack of a liquid market;

our success in purchasing aircraft, obtaining regulatory approval and other authorizations for our business;

general market, political and economic conditions;

changes in fuel prices;

changes in earnings estimates and recommendations by financial analysts;

our failure to meet financial analysts performance expectations;

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changes in market valuations of our competitors; and

the expiration of the lock-up periods on shares of our common stock that were outstanding.

Until our common stock is listed on a qualified national securities exchange or our common stock price exceeds $5 per share, our common stock will be considered a penny stock and will not qualify for exemption from the penny stock restrictions, which may make it more difficult for you to sell your shares.

Our common stock has traded on the OTCQB at a price of less than $5.00 per share and, as a result, is considered a penny stock by the SEC and subject to rules adopted by the SEC regulating broker- dealer practices in connection with transactions in penny stocks. The SEC has adopted regulations which generally define a penny stock to be any equity security that is not listed on a qualified national securities exchange and that has a market price of less than $5.00 per share, or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, these rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule relating to the penny stock market. Disclosure is also required to be made about current quotations for the securities and commissions payable to both the broker-dealer and the registered representative. Finally, broker-dealers must send monthly statements to purchasers of penny stocks disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As a result of our common stock being subject to the rules on penny stocks, the liquidity of our common stock may be adversely affected.

We will require additional capital in the future and raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our business assets.

We will require additional capital in the future and we may seek additional capital through a combination of public and private equity offerings, debt financings, working capital lines of credit and potential licenses and collaboration agreements. We, and indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future offerings. To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire additional aircraft and other operating restrictions that could adversely impact our ability to conduct our business. Additionally, any future collaborations we enter into with third parties may provide capital in the near term but limit our potential cash flow and revenue in the future.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the n the price of our stock could decline.

The trading market for our common stock and our Class B Non-Voting Stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not currently have and may never obtain research coverage by industry or financial analysts. If no or few analysts commence coverage of us, the tn the trading price of our stock could decrease. Even if we do obtain

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analyst coverage, if one or more of the analysts covering our business downgrade their evaluations of our stock, the n the price of our stock could decline. If one or more of these analysts cease to cover our stock, then we could lose visibility in the market for our stock, which in turn could cause our stock price to decline.

Insiders will continue to have substantial influence over us, which could limit your ability to affect the outcome of key transactions, including a change of control.

Our directors, executive officers, holders of more than 5% of our outstanding stock and their respective affiliates will beneficially own shares representing approximately 408% of our outstanding common stock . As a result, these stockholders, if they act together, will be able to influence our management and affairs and all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control of our company and might affect the market price of our common stock and our Class B Non-Voting Common Stock.

Exercise of our warrants or conversion of our Class A Non-Voting Common Stock may dilute the ownership interest of existing stockholders.

Holders of our outstanding warrants and our Class A Non-Voting Common Stock may elect to convert their securities into shares of our common stock. As a result, the conversion of some or all of the convertible securities may dilute the ownership interests of existing stockholders. Any sales in the public market of the common stock issuable upon such conversion of the convertible securities could adversely affect prevailing market prices of our common stock. In addition, the existence of the convertible securities may encourage short selling by market participants because the conversion of the convertible securities could depress the price of our common stock. 

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We do not intend to pay cash dividends for the foreseeable future.

We have never declared or paid cash dividends on our common stock. We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business. We do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained in current or future financing instruments, business prospects and such other factors as our board of directors deems relevant. 

Our corporate charter and Bylaws include provisions limiting voting and ownership by non-U.S. citizens.

To comply with restrictions imposed by federal law on foreign ownership of U.S. airlines, our Certificate of Incorporation and Bylaws restrict voting of shares of our common stock by non-U.S. citizens. The restrictions imposed by federal law currently require that no more than 24.95% of our stock be voted, directly or indirectly, by persons who are not U.S. citizens, that no more than 49.9% of our outstanding stock be owned (beneficially or of record) by persons who are not U.S. citizens and that our president and at least two-thirds of the members of our board of directors and senior management be U.S. citizens. Our Bylaws provide that the failure of non-U.S. citizens to register their shares on a separate stock record, which we refer to as the foreign stock record, would result in a suspension of their voting rights in the event that the aggregate foreign ownership of the outstanding common stock exceeds the foreign ownership restrictions imposed by federal law. Our Bylaws also provide that any transfer or issuance of our stock that would cause the amount of our stock owned by persons who are not U.S. citizens to exceed foreign ownership restrictions imposed by federal law will be void and of no effect.

Our Bylaws further provide that no shares of our common stock will be registered on the foreign stock record if the amount so registered would exceed the foreign ownership restrictions imposed by federal law. If it is determined that the amount registered in the foreign stock record exceeds the foreign ownership restrictions imposed by federal law, then shares will be removed from the foreign stock record in reverse chronological order based on the date of registration therein, until the number of shares registered therein does not exceed the foreign ownership restrictions imposed by federal law. WeTo our knowledge, we are currently in compliance with these ownership restrictions.

We are an emerging growth company and a smaller reporting company and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an emerging growth company, as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include, but are not limited to: (i) exemption from compliance with the auditor attestation requirements pursuant to SOX; (ii) exemption from compliance with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditors report providing additional information about the audit and the financial statements; (iii) reduced disclosure about our executive compensation arrangements; and (iv) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a public company, and particularly after we are no longer an emerging growth company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company. SOX, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq, and other applicable securities rules and regulations i, including the rules of national securities exchanges, impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

We expect that we will need to hire additional accounting, finance, and other personnel as we continue to grow to comply with public company reporting requirements, as a public company, and our management and other personnel will need to devote a substantial amount of time towards maintaining compliance with these requirements. These requirements will increase our legal and financial compliance costs and will make some activities more time- consuming and costly. For example, the rules and regulations applicable to us as a public company may make it more difficult and more expensive for us to maintain director and officer liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors. We are currently evaluating these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and

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regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

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Pursuant to Section 404 of SOX, we are required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 10-K with the SEC after we became a public company. However, while we remain an emerging growth company or smaller reporting company, we are not required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 of SOX within the prescribed period, we are engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we need to continue to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we are not able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404 of SOX. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Delaware law and provisions in our Certificate of Incorporation and Bylaws might discourage, delay, or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Provisions in our Certificate of Incorporation and Bylaws may discourage, delay, or prevent a merger, acquisition, or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. Therefore, these provisions could adversely affect the price of our common stock.

In addition, Section 203 of the General Corporation Law of the State of Delaware, or DGCL, prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.

Any provision of our Certificate of Incorporation, Bylaws, or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our common stock.

We may experience volatility in the trading price of our shares due to fluctuations in our quarterly operating results or other factors.

Significant fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Trading in the shares

of our common stock has been volatile, often has limited volume and is subject to fluctuations in response to various factors, some of

which are beyond our control. Accordingly, the valuation ascribed to us and our common stock may not be indicative of the price that

will prevail in the trading market in the future. Any of the factors in this Annual Report on Form 10-K could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future. In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our managements attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

As a public company, we are subject to the periodic reporting requirements of the Exchange Act. Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act are accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.