Item 9A. Controls and Procedures
ITEM 9A CONTROLS AND PROCEDURES
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2023. We maintain disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2023.
Management Report on Internal Control Over Financial Reporting
Management of AerSale Corporation is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. The Company’s internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. Internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems which are determined to be effective provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer and oversight of the Board of Directors, assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the criteria for effective internal control over financial reporting described in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
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Based on our assessment, management concluded that the Company maintained effective internal control over financial reporting as of December 31, 2023.
This Annual Report does not include an attestation report of our independent registered accounting firm on management’s assessment regarding internal control over financial reporting due to the exemption from such requirements established by rules of the SEC for emerging growth companies.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B OTHER INFORMATION
N o n e .
ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item 10 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 11 EXECUTIVE COMPENSATION
The information required by this Item 11 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Equity Compensation Plan Information
The following table provides information on our equity compensation plans as of December 31, 2023:
Number of Securities to
Weighted-Average
Number of Securities Remaining
be Issued Upon Exercise
Exercise Price of
Available for Future
of Outstanding Options,
Outstanding Options,
Issuance Under Equity
Plan Category:
Warrants, and Rights
Warrants, and Rights
Compensation Plans
Equity compensation plans approved by security holders (1)
532,399
(2)
14.82
3,404,137
(3)
Equity compensation plans not approved by security holders
-
-
-
Total
532,399
14.82
3,404,137
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(1) Consists of the AerSale Corporation 2020 Equity Incentive Plan (the “2020 Plan”) and the AerSale Corporation 2020 Employee Stock Purchase Plan (the “ESPP”).
(2) All outstanding awards represent shares pursuant to the 2020 Plan.
(3) Under the 2020 Plan, a total of 2,996,618 shares were available for issuance in the form of restricted stock, restricted stock units, stock options, or other stock-based or cash-based awards as of December 31, 2023, excluding shares to be issued under outstanding equity awards. Under the ESPP, a total of 407,519 shares were available for issuance as of December 31, 2023.
The remainder of the response to this Item 12 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item 13 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2024 Annual Meeting of Stockholders and is incorporated herein by reference
ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item 14 will be included in our definitive proxy statement to be filed with the SEC with respect to our 2024 Annual Meeting of Stockholders and is incorporated herein by reference.
PART IV
ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE S
(a)(1) Financial Statements.
The financial statements required by this item are listed in Item 8, “Financial Statements and Supplementary Data” herein.
(a)(2) Financial Statement Schedules.
All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.
(a)(3) Exhibits.
The following is a list of exhibits filed as part of this Annual Report.
Exhibit
Number
Description
Form
File No.
Exhibit
Filing
Date
Filed/Furnished
Herewith
2.1
Agreement and Plan of Merger, dated December 8, 2019, by and among Monocle Acquisition Corporation, Monocle Holdings Inc., AerSale Corp., Monocle Merger Sub 1 Inc., Monocle Merger Sub 2 LLC, and Leonard Green & Partners, L.P., in its capacity as the Holder Representative .
8-K
001-38801
2.1
12/9/2019
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Exhibit
Number
Description
Form
File No.
Exhibit
Filing
Date
Filed/Furnished
Herewith
2.2
Amendment No. 1 to the Agreement and Plan of Merger, dated August 13, 2020, by and among Monocle Acquisition Corporation, Monocle Holdings Inc., AerSale Corp., Monocle Merger Sub 1 Inc., Monocle Merger Sub 2 LLC, and Leonard Green & Partners, L.P., in its capacity as the Holder Representative .
10-Q
001-38801
2.1
08/4/2020
2.3
Amended and Restated Agreement and Plan of Merger, dated September 8, 2020, by and among Monocle Acquisition Corporation, Monocle Holdings Inc., AerSale Corp., Monocle Merger Sub 1 Inc., Monocle Merger Sub 2 LLC, and Leonard Green & Partners, L.P., in its capacity as the Holder Representative.
8-K
001-38801
2.1
09/08/2020
2.4
Amendment No. 1 to the Amended and Restated Agreement and Plan of Merger, dated December 16, 2020, by and among Monocle Acquisition Corporation, Monocle Holdings Inc., AerSale Corp., Monocle Merger Sub 1 Inc., Monocle Merger Sub 2 LLC, and Leonard Green & Partners, L.P., in its capacity as the Holder Representative.
8-K
001-38801
10.5
12/17/2020
3.1
Amended and Restated Certificate of Incorporation of Monocle Holdings Inc., dated October 13, 2020.
S-4/A
333-235766
3.1
10/14/2020
3.2
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Monocle Holdings Inc., dated December 22, 2020.
8-K
001-38801
3.2
12/23/2020
3.3
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of AerSale Corporation, dated June 17, 2021.
10-Q
001-38801
3.3
08/09/2021
3.4
Certificate of Amendment to Amended and Restated Certificate of Incorporation, as amended, of AerSale Corporation, dated June 17, 2021.
8-K
001-38801
3.1
06/21/2021
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Exhibit
Number
Description
Form
File No.
Exhibit
Filing
Date
Filed/Furnished
Herewith
3.5
Amended and Restated Bylaws of Monocle Holdings Inc., dated October 13, 2020.
S-4/A
333-235766
3.2
10/14/2020
3.6
Amendment No. 1 to the Amended and Restated Bylaws of AerSale Corporation, dated December 22, 2020.
8-K
001-38801
3.4
12/23/2020
4.1
Specimen Common Stock Certificate of Monocle Holdings Inc.
S-4/A
333-235766
4.2
02/14/2020
4.2
Specimen Warrant Certificate of Monocle Holdings Inc.
S-4/A
333-235766
4.3
02/14/2020
4.3
Warrant Agreement, dated February 6, 2019, between Monocle Acquisition Corporation and Continental Stock Transfer & Trust Company, as warrant agent.
8-K
001-38801
4.1
02/12/2019
4.4
Assignment and Assumption Agreement, dated December 22, 2020, by and among Monocle Holdings Inc., Monocle Acquisition Corporation and Continental Stock Transfer & Trust Company.
8-K
001-38801
10.9
12/23/2020
4.5
Description of the Registrant’s Securities
10-K
001-38801
4.4
3/15/2022
10.1
Letter Agreement, dated December 16, 2020, by and among Monocle Acquisition Corporation, Monocle Holdings Inc., AerSale Corp., Monocle Merger Sub 1 Inc., Monocle Merger Sub 2 LLC, and Leonard Green & Partners, L.P., in its capacity as the Holder Representative.
8-K
001-38801
10.4
12/17/2020
10.2
Amended and Restated Registration Rights Agreement, dated December 22, 2020, by and among Monocle Holdings Inc., Monocle Acquisition Corporation, Monocle Partners, LLC, Cowen Investments II LLC, C. Robert Kehler, Donald W. Manvel, John C. Pescatore, Green Equity Investors V, L.P., Green Equity Investors Side V, L.P., LGP Parts Coinvest LLC., Florida Growth Fund LLC, Enarey, LP and ThoughtValley Limited Partnership.
8-K
001-38801
10.7
12/23/2020
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Exhibit
Number
Description
Form
File No.
Exhibit
Filing
Date
Filed/Furnished
Herewith
10.3#
Executive Offer Letter between AerSale Inc. and Nicolas Finazzo
10-K
001-38801
10.10
03/16/2021
10.4#
Executive Offer Letter between AerSale Inc. and Martin Garmendia
10-K
001-38801
10.12
03/16/2021
10.5#
Executive Offer Letter between AerSale Inc. and Basil Barimo
10-K
001-38801
10.13
03/16/2021
10.6#
Executive Offer Letter between AerSale Inc. and Gary Jones
10-K
001-38801
10.14
03/16/2021
10.7#
Executive Offer Letter between AerSale Inc. and Iso Nezaj
10-K
001-38801
10.15
03/16/2021
10.8#
Executive Offer Letter between AerSale Inc. and Craig Wright
10-K
001-38801
10.16
03/16/2021
10.9#
Amended and Restated AerSale Corp. Stock Appreciation Rights Plan.
S-4/A
333-235766
10.8
02/14/2020
10.10#
AerSale Corporation Severance Plan.
S-4/A
333-235766
10.9
02/14/2020
10.11#
AerSale Corporation 2020 Equity Incentive Plan.
S-4/A
333-235766
10.1
10/14/2020
10.12#
Forms of award agreements under the AerSale Corporation 2020 Equity Incentive Plan
S-8
333-253424
99.2
02/24/2021
10.13#
AerSale Corporation 2020 Employee Stock Purchase Plan.
S-4/A
333-235766
10.11
10/14/2020
10.14
Amended and Restated Credit Agreement, dated as of July 20, 2018, by and among Aersale Aviation Inc., the existing borrowers thereto, the lenders thereto and Wells Fargo Bank, National Association, as administrative agent and lender.
10-K
001-38801
10.22
03/16/2021
10.15
Amendment No. 1 to Amended and Restated Credit Agreement, dated as of September 8, 2020, by and among AerSale Aviation Inc., the existing borrowers thereto, the lenders thereto and Wells Fargo Bank, National Association, as administrative agent and lender.
10-K
001-38801
10.23
03/16/2021
10.16
Amendment No. 2 to Amended and Restated Credit Agreement, dated as of March 12, 2021, by and among AerSale Aviation Inc., the existing borrowers thereto, the lenders thereto, Wells Fargo Bank, National Association, as administrative agent
10-K
001-38801
10.24
03/16/2021
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Exhibit
Number
Description
Form
File No.
Exhibit
Filing
Date
Filed/Furnished
Herewith
and lender, AerSale Ireland 1 Limited, as new borrower and AerSale Corporation and Monocle Parent LLC, as guarantors.
10.17#
AerSale Corporation Amended and Restated Non-Employee Director Policy
10-K
001-38801
10.25
08/09/2022
10.18#
Form of Restricted Stock Unit Grant Notice under the AerSale Corporation 2020 Equity Incentive Plan (Non-Employee Directors).
10-K
001-38801
10.26
08/09/2022
10.19#
AerSale Corporation Second Amended and Restated Non-Employee Director Compensation Policy
10-Q
001-388801
10.22
08/09/2023
10.20
Amendment No. 3 to Amended and Restated Credit Agreement, dated as of March 9, 2023, by and among AerSale Aviation Inc., the existing borrowers thereto, the lenders thereto, and Wells Fargo Bank, National Association, as administrative agent and lender
10-Q
001-38801
10.23
08/09/2023
10.21
Amendment No. 4 to the Amended and Restated Credit Agreement, dated as of July 25, 2023, by and among the Company, the lenders and other parties from time to time party thereto, Synovus Bank, as documentation agent, and Wells Fargo Bank, National Administration, as administrative agent and collateral agent.
8-K
001-38801
1.1
08/10/2023
10.22
First Amendment to the AerSale Corporation 2020 Equity Incentive Plan
S-8
333-274663
99.2
09/22/2023
21.1
List of Subsidiaries.
*
23.1
Consent of Grant Thornton LLP.
*
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*
31.2
Certification of Principal Financial Officer Pursuant to
*
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Exhibit
Number
Description
Form
File No.
Exhibit
Filing
Date
Filed/Furnished
Herewith
Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**
32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**
97.1
AerSale Corporation Clawback Policy
**
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
*
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
*
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
*
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
*
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
*
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
*
104
Cover Page Interactive Data (formatted as Inline XBRL and contained in Exhibit 101).
*
Filed herewith
**
Furnished herewith
#
Denotes a management contract or compensation plan or arrangement
†
Schedules and exhibits to these agreements have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The Company will furnish supplemental copies of such omitted schedules and exhibits to the Securities and Exchange Commission upon request.
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ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized .
2
AerSale Corporation
Date: March 8, 2024
By:
/s/ Nicolas Finazzo
Nicolas Finazzo
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Name
Title
Date
/s/ Nicolas Finazzo
Chairman, Chief Executive Officer, Division President, TechOps and Director
March 8, 2024
Nicolas Finazzo
(principal executive officer)
/s/ Martin Garmendia
Chief Financial Officer and Treasurer
March 8, 2024
Martin Garmendia
( principal financial and accounting officer )
/s/ Robert B. Nichols
Director
March 8, 2024
Robert B. Nichols
/s/ Jonathan Seiffer
Director
March 8, 2024
Jonathan Seiffer
/s/ Richard J. Townsend
Director
March 8, 2024
Richard J. Townsend
/s/ General C. Robert Kehler
Director
March 8, 2024
General C. Robert Kehler
/s/ Peter Nolan
Director
March 8, 2024
Peter Nolan
/s/ Andrew Levy
Director
March 8, 2024
Andrew Levy
/s/ Lt. General Judith A. Fedder
Director
March 8, 2024
Lt. General Judith A. Fedder
86