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Item 1A. Risk Factors

2026-03-19 compared with 2025-05-14 · 353 added, 422 removed, 42 unchanged (95% of the section changed)

Investing in our common stock involves a high degree of risk.

Certain factors may have a material adverse effect on our business, financial condition, and results of operation.

You should carefully consider the risks and uncertainties described below, together with all of the other information included in this Annual Report on Form 10-K, including our financial statements and the related notes, and in our other filings with the SEC.

Our business, financial condition, operating results, cash flow, and prospects could be materially and adversely affected by any of these risks or uncertainties.

In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risk Factor Summary

The following is a summary of the material risk factors that could adversely affect our business, financial condition, and results of operations:

▪ We are highly dependent on our agreement with United and our operations may be negatively impacted if United experiences events that negatively impacts its financial strength or operations.

▪ Reduced utilization levels of our aircraft under our agreements with United would adversely impact our financial results.

▪ If United experiences events that negatively impact its financial strength or operations, our operations may be negatively impacted.

▪ We have a significant amount of debt and other contractual obligations, certain of which are subject to financial and other covenants.

▪ The loss of key personnel or the inability to attract additional qualified personnel could adversely affect our business.

▪ If the supply of pilots and mechanics to the airline industry becomes constrained and pilot attrition levels increase, our results of operations and financial condition would be negatively impacted.

▪ Mechanic attrition and difficulty recruiting and retaining qualified maintenance technicians may negatively affect our operations and financial condition.

▪ Increases in our labor costs may adversely affect our business, results of operations, and financial condition.

▪ United may expand its direct operation of regional jets or seek other independent airlines to service their regional aircraft needs.

▪ We may be limited from expanding our flying within United's flight system.

▪ The residual value of our owned aircraft may be less than estimated in our depreciation policies.

▪ The amounts we receive under our agreement with United may be less than the corresponding costs we incur.

▪ Strikes, labor disputes and increased unionization of our workforces may adversely affect our ability to conduct our business and reduce our profitability.

▪ We may incur substantial maintenance costs as part of our leased aircraft return obligations.

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

▪ Disagreements regarding the interpretation of our agreement with United could have an adverse effect on our operating results and financial condition.

▪ If we face problems with any of our third-party service providers, our operations could be adversely affected.

▪ Maintenance costs will likely increase as the age of our jet fleet increases.

▪ Regulatory changes or tariffs could negatively impact our business and financial condition.

▪ The issuance of operating restrictions applicable to one of the fleet types we operate could negatively impact our business and financial condition.

▪ If we have a failure in our technology or security breaches of our information technology infrastructure our business and financial condition may be adversely affected.

▪ We are subject to various environmental and noise laws and regulations.

▪ Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

▪ Our ability to obtain financing or access capital markets may be limited.

▪ Negative publicity regarding our customer service could have a material adverse effect on our business, results of operations and financial condition.

▪ Our failure to be current in our SEC filings could pose significant risks to our business, each of which could materially and adversely affect our financial condition and results of operations.

▪ Future public health threats that negatively impact the demand for air travel could adversely impact our business.

▪ The airline industry is highly competitive and has undergone a period of consolidation and transition leaving fewer potential major partners.

▪ We are subject to significant governmental regulation.

▪ Airlines are often affected by factors beyond their control including:

air traffic congestion at airports;

air traffic control inefficiencies;

adverse weather conditions, such as hurricanes or blizzards;

increased security measures;

new travel-related taxes;

or the outbreak of disease;

any of which could have a material adverse effect on our business, results of operations, and financial condition.

▪ Terrorist activities or warnings have dramatically impacted the airline industry and are likely to continue to do so.

▪ The occurrence of an aviation accident involving our aircraft would negatively impact our operations and financial condition.

▪ The market price of our common stock may be volatile, which could cause the value of an investment in our stock to decline.

▪ If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our stock price and trading volumes could decline.

▪ Additional issuances of our common stock, whether by us or as a result of the exercise of our outstanding warrants, could materially affect the value of our common stock.

▪ Our corporate charter limits certain transfers of our stock, which could have an effect on the market price and liquidity of our common stock.

▪ We currently do not intend to pay dividends on our common stock.

▪ The requirements of being a public company may strain our resources, increase our operating costs and divert management’s attention.

▪ We are required to assess our internal control over financial reporting on an annual basis, and any future adverse findings from such assessment could result in a loss of investor confidence in our financial reports and have a material adverse effect on our business.

For a more complete discussion of the material risk factors relevant to us, see below.

Risks Related to Our Business

We are highly dependent on our agreement with United.

We derive substantially all of our operating revenue from our CPA with United.

United accounted for approximately 97% and 73% of our revenue for our fiscal years ended September 30, 2024 and 2023, respectively.

A termination of our United CPA would have a material adverse effect on our business prospects, financial condition, results of operations, and cash flows.

Business" for additional information on our CPA with United.

If our United CPA is terminated or not renewed, we would be significantly impacted and likely would not have an immediate source of revenue or earnings to offset such loss.

United is not under any obligation to renew its CPA with us.

A termination or expiration of this agreement would have a material adverse effect on our financial condition, cash flows, ability to satisfy debt and lease obligations, operating revenues, and net income unless we are able to enter into satisfactory substitute arrangements for the utilization of the affected aircraft by other airline partners, or, alternatively, obtain the airport facilities, gates, ticketing and ground services and make the other arrangements necessary to fly as an independent airline.

We may not be able to enter into substitute CPAs, and any such arrangements we might secure may not be as favorable to us as our current agreements.

Operating an airline independently from United would be a significant departure from our business plan and would likely require significant time and resources, which may not be available to us when needed.

Reduced utilization levels of our aircraft under our United CPA would have a material adverse impact our results of operations and financial condition.

Historically, United has utilized our flight operations at levels at or near the maximum capacity of our fleet allocations under the CPA agreement.

As previously reported, we operated at significantly lower block hours during fiscal 2024 due to decreased utilization.

Our United CPA does not require United to schedule any specified minimum level of flight operations for our aircraft.

Additionally, United may remove aircraft from our United CPA with 90 days' prior notice to us.

While United pays us a fixed monthly revenue amount for each aircraft under contract, a continuation of the low block hours flown in 2024 and/or a significant reduction in the utilization levels of our fleet in the future or removal of aircraft from our United CPA at United's election could reduce our revenues based on the number of flights and block hours flown for United.

Challenges with hiring, training, and retaining replacement pilots may also lead to reduced utilization levels of our aircraft and penalties under our CPA.

Our operations and financial results could be materially and adversely impacted by such events.

Additionally, United may change routes and frequencies of flights, which can negatively impact our operating efficiencies.

Changes in schedules may increase our flight costs, which could exceed the reimbursed rates paid by United.

Reduced utilization levels of our aircraft or other changes to our schedules under our CPA would adversely impact our business, financial condition, and results of operations.

If United experiences events that negatively impact its financial strength or operations, our operations also may be negatively impacted.

We may be directly affected by the financial and operating strength of United.

Any events, such as new pandemics, that negatively impact the financial strength of United or have a long-term effect on the use of United by airline travelers would likely have a material adverse effect on our business, financial condition, and results of operations.

In the event of a decrease in United's financial or operational strength, United may seek to reduce, or be unable to make, the payments due to us under the United CPA.

In addition, in some cases, they may further reduce utilization of our aircraft.

Although we receive guaranteed monthly revenue for each aircraft under contract and a fixed fee for each block hour or flight actually flown, United is not required to schedule any specified level of flight operations for our aircraft.

If United becomes bankrupt, our agreement with them may not be assumed in bankruptcy and could be terminated.

This and other events, which are outside of our control, could have a material adverse effect on our business, financial condition, and results of operations.

In addition, any negative events that impact other regional

carriers and that affect public perception of such carriers generally could also have a material adverse effect on our business, financial condition, and results of operations.

We have a significant amount of debt and other contractual obligations that could impair our liquidity and thereby harm our business, results of operations and financial condition.

The airline business is a capital-intensive business and, as a result, we are highly leveraged.

As of September 30, 2024, we had approximately $310.3 million in total long-term principal balance (including current portion of $50.5 million, of which $1.8 million pertains to finance lease obligations.

Additionally, all outstanding principal amounts, $113.7 million as of September 30, 2024, under our UST Loan are due and payable in a single installment on October 30, 2025.

We also have $13.2 million available for borrowing under our United Revolving Credit Facility as of September 30, 2024.

Substantially all of our long-term debt was incurred in connection with the acquisition of aircraft and aircraft engines.

During our fiscal year ended September 30, 2024, 2023, and 2022, our principal payments on debt totaled $286.3 million, $203.0 million, and $114.9 million, respectively.

We also have significant long-term lease obligations, primarily relating to our office space and other facilities (excluding aircraft leased at nominal amounts from United), with an average remaining term of 6.5 years.

As of September 30, 2024, future minimum lease payments due under all long-term operating leases were approximately $10.5 million and future debt service obligations were $363.6 million, including finance lease obligations and interest payments.

The Company's substantial level of indebtedness, non-investment grade credit ratings, and the availability of Company assets as collateral for future loans or other indebtedness, which available collateral would be reduced under other future liquidity-raising transactions and was reduced during our fiscal year ended September 30, 2021 as a result of CARES Act loan program borrowings under our UST Loan, may make it difficult for the Company to raise additional capital if required to meet its liquidity needs on acceptable terms, or at all.

Although the Company's cash flows from operations and its available capital, including the proceeds from financing transactions and asset sales, have been sufficient to meet its obligations and commitments to date, the material uncertainties arising from the decrease in scheduled flying activity associated with the transition of our operations from American to United raised substantial doubt as to the Company’s ability to continue as a going concern.

The Company is evaluating strategies to obtain the required additional funding for future operations.

These strategies may include, but are not limited to, obtaining equity financing, issuing debt, entering into other financing arrangements, restructuring of operations to grow revenues and decrease expenses, or selling excess aircraft and related assets.

We cannot assure you that our operations will generate sufficient cash flow to make our required payments, or that we will be able to obtain financing to acquire additional aircraft or make other capital expenditures necessary for expansion.

Our ability to pay the high level of fixed costs associated with our contractual obligations will depend on our operating performance, cash flow, and ability to secure adequate financing, which will in turn depend on, among other things, the success of our current business strategy, the U.S.

economy, availability and cost of financing, as well as general economic and political conditions and other factors that are, to some extent, beyond our control.

The amount of our fixed obligations could have a material adverse effect on our business, results of operations and financial condition.

The degree to which we are leveraged could have important consequences to holders of our securities, including the following:

▪ we must dedicate a substantial portion of cash flow from operations to the payment of principal and interest on applicable indebtedness which, in turn, reduces funds available for operations and capital expenditures;

▪ our flexibility in planning for, or reacting to, changes in the markets in which we compete may be limited;

▪ we may be at a competitive disadvantage relative to our competitors with less indebtedness;

▪ we are rendered more vulnerable to general adverse economic and industry conditions;

▪ we are exposed to increased interest rate risk given that a majority of our indebtedness obligations are at variable interest rates;

▪ our credit ratings may be reduced, and our debt and equity securities may significantly decrease in value.

Additionally, failure to pay our operating leases, debt or other fixed cost obligations or a breach of our contractual obligations could result in a variety of further adverse consequences, including the exercise of remedies by our creditors and lessors.

In such a situation, it is unlikely that we would be able to cure our breach, fulfill our obligations, make required lease payments, or otherwise cover our fixed costs, which would have a material adverse effect on our business, results of operations and financial condition.

In addition, several of the Company's debt agreements contain affirmative and negative covenants that, among other things, restrict the ability of the Company and its subsidiaries to enter into, create, incur, assume, or suffer to exist any liens.

See “Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations” of this report for additional information regarding the Company's liquidity and capital resources as of September 30, 2024.

We are required to comply with certain ongoing financial and other covenants under certain credit facilities and leases, and if we fail to meet those covenants or otherwise suffer a default thereunder, our lenders and lessors may accelerate the payment of such obligations.

Under our (i) credit and guaranty agreement with United (the "United Revolving Credit Facility"), we are required to comply with a minimum consolidated interest and rental coverage ratio at the end of each fiscal quarter during the term of such credit facility and a minimum liquidity level, measured at the close of any business day during the term of such credit facility, and (ii) loan and guarantee agreement with the UST Loan, we are required to comply with a minimum collateral coverage ratio, measured monthly during the term of such credit facility, and a minimum liquidity level, measured at the close of any business day during the term of such credit facility.

Failure to comply with the terms of these credit facilities and financing arrangements and the ongoing financial and other covenants thereunder would result in an event of default (as defined in the applicable credit facility and financing agreement) and, to the extent the applicable lenders so elect, an acceleration of our existing indebtedness following the expiration of any applicable cure periods, causing such debt to be immediately due and payable.

Acceleration of such indebtedness would also trigger cross-default clauses under our other indebtedness.

It could also result in the termination of all commitments to extend further credit under the United Revolving Credit Facility.

We currently do not have sufficient liquidity to repay all of our outstanding debt in full if such debt were accelerated.

If we are unable to pay our debts as they come due, or obtain waivers for such payments, our secured lenders could foreclose on any assets securing such debt.

These events could materially adversely affect our business, results of operations and financial condition.

The loss of key personnel upon whom we depend on to operate our business or the inability to attract additional qualified personnel could adversely affect our business .

We believe that our future success will depend in large part on our ability to retain or attract highly qualified management, technical and other personnel.

We may not be successful in retaining key personnel or in attracting other highly qualified personnel.

Among other things, the CARES Act imposes significant restrictions on executive compensation, which will remain in place through the date that is one year after the amounts outstanding under our Loan and Guarantee Agreement with the U.S.

Department of the Treasury are fully repaid.

Such restrictions, over time, will likely result in lower executive compensation in the airline industry than is prevailing in other industries which may present retention challenges in the case of executives presented with alternative, non-airline opportunities.

Any inability to retain or attract significant numbers of qualified management and other personnel would have a material adverse effect on our business, results of operations, and financial condition.

If the supply of pilots to the airline industry becomes constrained and pilot attrition levels increase, our results of operations and financial condition would be negatively impacted.

In prior periods, the FAA Qualification Standards (and associated regulations) related to pilot qualification and flight training standards discussed in “Item 1.

Government Regulation” dramatically reduced the supply of qualified pilot candidates and negatively impacted our ability to hire pilots at a rate sufficient to support required utilization levels under our CPAs, resulting in certain cases issuing credits to United, temporarily removing aircraft from service under a CPA, or performance penalties.

More recently, our operations have been negatively impacted by the severity of the pilot shortages that have plagued the airline industry as whole, and by the associated elevated pilot attrition that we believe disproportionately impacted regional airlines, including us.

Our pilots continue to be recruited by other carriers, primarily the major carriers and heavy equipment cargo operators, which generally offer higher salaries and more extensive benefit programs.

The magnitude of this attrition in fiscal years 2022 and 2023 created significant backlogs in training, further exacerbating an already challenging environment.

These events have had a negative impact on pilot scheduling, work hours, and the number of pilots required to support our operations.

There has been significant press coverage regarding the issues stemming from the pilot shortages (namely flight cancellations and delays by the major carriers), with no airline being immune to the issues created by the pilot shortage or the associated negative press.

We have taken important steps to further attract, hire and retain qualified pilots, including the implementation of significant pilot wage and bonus increases, pilot retention initiatives, increases in training capacity, the initiation of MPD, and other cost efficiency initiatives.

In August 2022, we entered into a Letter of Agreement with the Airline Pilots Association (“ALPA”), which provided for increased overall hourly pay increases of nearly 118% for captains and 172% for new-hire first officers.

These measures have positively impacted our ability to attract, hire, and retain pilots at a sufficient rate in fiscal 2023 and 2024, and attrition rates have returned to pre-covid levels.

No assurance can be given that the measures we have taken or may take in the future will enable us to attract, hire and train pilots at a rate necessary to support our operations.

These pay increases have positively impacted our ability to attract, hire, and retain pilots in fiscal 2023 and 2024, and attrition levels have dropped to a pre-COVID level.

In addition to the foregoing, our pilot premium wage and bonus initiatives have substantially increased our labor costs and continue to negatively impact our operations and financial condition.

Other regional air carriers have implemented similar measures, which has only served to increase the competition for qualified pilots and the costs associated with hiring pilots.

As part of our Amended and Restated United CPA, United has increased rates to cover our pilot pay increases instituted in September 2022.

As such, these increased costs have not materially and adversely impact our financial condition and results of operations.

If the high levels of pilot attrition return and we are unable to attract, hire and retain pilots at a rate sufficient to support required utilization levels under our CPA, we may be required to issue credits or provide offsets to United, as we have done in the past, and to reduced flight schedules with United, which has resulted in and may continue to result in monetary performance penalties under our CPA, as well as give rise to the ability of United in certain circumstances to elect to remove aircraft from the scope of our CPA.

Should any of these events arise in the future, they could have a material and adverse impact on our financial condition and results of operations.

Mechanic attrition, together with difficulty recruiting and retaining qualified maintenance technicians, may negatively affect our operations and financial condition.

Our operations rely on qualified personnel, including maintenance technicians.

Our maintenance technicians may seek employment at mainline airlines, which generally offer higher salaries and more extensive benefit programs than regional airlines are financially able to offer.

Should the turnover of

maintenance technicians increase, we may not be able to hire sufficient maintenance technicians to replace those leaving.

Additionally, FAA regulations regarding personnel certification and qualifications, and potential future changes in FAA regulations, could limit the number of qualified new entrants that we could hire.

In the event we are unable to hire and retain qualified mechanics, our business, financial condition, or results of operations could be adversely affected.

Increases in our labor costs, which constitute a substantial portion of our total operating costs, may adversely affect our business, results of operations and financial condition.

As a result of the FAA Qualification Standards and other events described above in August 2022, we entered into a Letter of Agreement with the ALPA, which provided for increased overall hourly pay increases of nearly 118% for captains and 172% for new-hire first officers, the supply of qualified pilots has been dramatically reduced.

This shortage of pilots has driven up our pilot salaries and sign-on bonuses and resulted in a material increase in our labor costs.

Another pilot shortage could require us to further increase our labor costs, which could result in a material reduction in our earnings.

United may expand its direct operation of regional jets or seek other independent airlines to service their regional aircraft needs, thus limiting the expansion of our relationships with them.

We depend on United electing to contract with us instead of operating their own regional jets or operating their own " captive " regional airlines through wholly owned subsidiaries.

Currently, the captive regional airlines include Endeavor (owned by Delta), Envoy (owned by American), PSA (owned by American), Piedmont (owned by American), and Horizon (owned by Alaska).

These major airlines possess the financial and other resources to acquire and operate their own regional jets, create, or grow their own captive regional airlines, or acquire other regional air carriers instead of entering into contracts with us.

We have no guarantee that in the future United will choose to enter into contracts with us, or renew their existing agreements with us, instead of operating their own regional jets, allocating flying to their captive regional airlines, or entering into relationships with competing regional airlines.

A decision by United to phase out or limit our CPA or to enter into similar agreements with our competitors would have a material adverse effect on our business, financial condition, or results of operations.

We may be limited from expanding our flying within United flight systems and there are constraints on our ability to provide services to airlines other than United.

Additional growth opportunities within United's flight system are limited by various factors, including a limited number of independent regional aircraft that United can operate in its regional network due to " scope " clauses in the current collective bargaining agreements with their pilots that restrict the number and size of regional jets that may be operated in their flight systems not flown by their pilots.

Except as contemplated by our existing agreement, we cannot be sure that United will contract with us to fly any additional aircraft.

We may not have additional growth opportunities or may agree to modifications to our agreement that reduce certain benefits to us in order to obtain additional aircraft, or for other reasons.

Given the competitive nature of the airline industry, we believe limited growth opportunities may result in competitors accepting reduced margins and less favorable contract terms in order to secure new or additional capacity purchase operations.

Even if we are offered growth opportunities by United, those opportunities may involve economic terms or financing commitments that are unacceptable to us.

Additionally, United may reduce the number of regional jets in its system by not renewing or extending existing flying arrangements with regional operators or transitioning those flying arrangements to their own captive regional carriers.

Any one or more of these factors may reduce or eliminate our ability to expand our flight operations with United.

Additionally, our CPA limits our ability to provide regional flying services to other airlines in certain major airport hubs of United.

These restrictions may make us a less attractive partner to other major airlines whose regional flying needs do not align with our geographical restrictions.

In addition to factors discussed elsewhere in this Report, the following are important risks which could adversely affect our future results.

Additional risks and uncertainties not presently known to us or that we currently do not deem material may also impair our business operations.

If any of the risks we describe below occur, or if any unforeseen risk develops, our operating results may suffer, our financial condition may deteriorate, the trading price of our common stock may decline and investors could lose all or part of their investment in us.

Risks Related to Disruption of our Operations

Various negative economic or industry conditions may result in reductions to our flight schedules, which could materially and adversely affect our operations and financial condition.

Our operations and financial condition are affected by many changing economic and other conditions beyond our control, including, among others:

• actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, higher taxes and/or tariffs, public health emergencies, including pandemics, international hostilities (including the ongoing conflicts in the Middle East and between Russia and Ukraine), terrorist attacks or political instability;

• impact on workforce availability and economic uncertainty;

• future public health threats, outbreaks of diseases or other illnesses could negatively affect travel behavior and the industry;

• changes in consumer preferences, perceptions, spending patterns or demographic trends;

• changes in the competitive environment due to industry consolidation, new airlines entering the market, our major Partner Airlines operating smaller sized aircraft that may reduce the demand for regional aircraft and other factors;

• actual or potential disruptions to U.S.

air traffic control systems, caused by a government funding shutdown or otherwise;

• interference on aviation equipment from the deployment of 5G wireless telecommunications systems, or other factors disrupting communications;

• price of jet fuel and oil that may negatively impact the number of flights we are scheduled to operate by our major Partner Airlines under our CPAs and may negatively impact the profitability of our agreements;

• disruptions in the credit markets, which may impact availability of price competitive financing;

• weather and natural disasters.

The effect of any, or some combination, of the foregoing economic and industry conditions on our operations or financial condition is virtually impossible to forecast;

however, the occurrence of any or all of such conditions in a significant manner could materially and adversely affect our operations and financial condition and could cause our major Partner Airlines to reduce the utilization levels of our aircraft under our code-share agreements.

We may experience disruption in service due to delays from key third-party service providers.

We rely on third-party vendors for a variety of services and functions critical to our business, including airframe and engine maintenance, telecommunication systems, and information technology infrastructure, as well as services and functions provided by our Partner Airlines such as ground handling, fueling, computer reservation system hosting, telecommunication systems, and information technology infrastructure and services.

Even though we strive to formalize agreements with these vendors that define expected service levels, our use of third-party vendors increases our exposure to several risks.

In the event that one or more vendors goes into bankruptcy, ceases operation, or fails to perform as promised , replacement services may not be readily available at competitive rates, or at all.

If one of our vendors fails to perform adequately, we may experience increased costs, delays, maintenance issues, safety issues, or negative public perception.

Vendor bankruptcies, unionization, regulatory compliance issues, or significant changes in the competitive marketplace among suppliers could adversely affect vendor services or force us to renegotiate

existing agreements on less favorable terms.

These events could result in disruptions in our operations or increases in our cost structure.

We currently depend on Embraer, General Electric (“GE ” ) Aviation, and other original equipment manufacturers (“OEMs”) to support our fleet of aircraft.

We currently rely on Embraer as the primary manufacturer of all of our regional jets and GE Aviation and its affiliates as the primary manufacturer for our supporting engines.

Our risks in relying on a limited number of aircraft and engine manufacturers include:

• the failure or inability of Embraer, GE Aviation, or an OEM to provide sufficient parts or related support services on a timely basis;

• the interruption of scheduled passenger service as a result of unscheduled or unanticipated maintenance requirements for these aircraft;

• the issuance of DOT or FAA directives restricting or prohibiting the use of Embraer aircraft or GE Aviation engines or requiring time-consuming inspections and maintenance;

• the enactment of tariffs that will increase cost and/or delay parts at the border causing prolonged time of repair;

• the adverse public perception of a manufacturer as a result of an accident or other adverse publicity.

Our operations could be materially and adversely affected by the failure or inability of Embraer, GE Aviation, or an OEM to provide sufficient parts or related maintenance and support services on a timely basis or by an interruption of fleet service as a result of unscheduled or unanticipated maintenance requirements for our aircraft or engines.

In addition, our Partner Airlines include both Embraer aircraft and aircraft manufactured by other OEMs as part of their networks.

If we continue to operate a single manufactured fleet, we may not be able to compete for and win new regional flying opportunities, and our growth could be limited.

Therefore, our growth plan may require us to expand our operations to flying regional jets manufactured by other OEMs.

In such event, the introduction of additional aircraft types will require us to develop and implement specific operational proficiencies, including pilots, flight attendants, and maintenance technicians.

Doing so may erode our operational efficiencies gained from flying a single aircraft type and could cause margin degradation.

We are at risk of losses stemming from an accident or incident involving any of our regional or general aviation aircraft or personnel.

It is possible that one or more of our commercial passenger aircraft or general aviation aircraft may be involved in an accident in the future, causing death or serious injury to individual air travelers and our employees, destroying our aircraft, and the property of third parties.

In addition, an accident involving one of our aircraft could expose us to significant tort liabilities.

Such liabilities could include liability arising from the claims of those on board, including passengers or their estates seeking to recover damages for death or injury.

There can be no assurance that the insurance we carry to cover such damages will be adequate.

Accidents could also result in unforeseen mechanical and maintenance costs.

In addition, any accident involving an aircraft type that we operate could create a public perception that our aircraft are not safe.

Such an accident could materially and adversely affect our financial condition, results of operations, and the price of our common stock.

We are also at risk of adverse publicity stemming from any incident involving us, which could expose us or our Partner Airlines to reputational harm and potential legal liability.

Our involvement in any such incident could negatively impact our relationship with our Partner Airlines or affect our Partner Airlines’ respective brands, and as a result, adversely impact our business, results of operations, financial condition, and the price of our common stock.

Interruptions or disruptions in service at one of our hub airports, due to weather, system malfunctions, security closures, or for any other reason, could have an adverse impact on our operations.

We currently operate primarily through hubs supporting our Partner Airlines’ respective route network across the Northeast, Midwest, and South regions of the United States.

A significant portion of our flights either originate from or fly into one of these hubs.

These regions tend to experience higher than average adverse weather events, air traffic control disruptions, and the airports within these regions tend to experience significant congestion relative to many other U.S.

airports, each of which creates significant challenges to completing flights on time.

Our revenues depend primarily on our completion of flights and, secondarily, on service factors such as timeliness of departures and arrivals.

Certain revenues are also impacted by non-controllable conditions such as weather.

Any interruptions or disruptions could, therefore, adversely affect us.

Extreme weather such as blizzards, hurricanes or tornados can cause flight disruptions, and during periods of storms or adverse weather, our flights may be cancelled or significantly delayed.

An interruption or disruption in service at one of our hubs, due to adverse weather, system malfunctions, air traffic control disruptions, airport construction, security closures, or otherwise, could result in the cancellation or delay of a portion of our flights and, as a result, could have adverse impact on our operations and financial performance.

Risks Related to the Merger and Integration with Mesa Air Group, Inc.

We may be unable to integrate Mesa’s business with ours successfully and realize any anticipated benefits of the Merger, which could negatively impact our stock price and our future business and financial results.

We must devote significant management attention and resources to integrating the business practices and operations of Mesa Airlines.

Potential difficulties we may encounter as part of the integration process include the following:

• integrating complex systems, operating procedures, regulatory compliance programs, technology, aircraft fleets, networks, and other assets of the two companies in a manner that minimizes any adverse impact on customers, suppliers, employees, and other constituencies;

• diversion of the attention of our management and other key employees;

• integrating the workforces of the two companies while maintaining focus on providing consistent, high quality customer service and running a safe, clean, and reliable flying experience;

• disruption of, or the loss of momentum in, our ongoing business;

• liabilities that are significantly larger than we currently anticipate and unforeseen increased expenses or delays associated with the Merger, including transition costs to integrate the two businesses that may exceed the costs that we currently anticipate;

• maintaining productive and effective employee relationships and achieving cost-competitive collective bargaining agreements that cover the combined union-represented work groups;

• the increased scale of our operations resulting from the Merger;

• retaining key employees of our company;

• obligations that we will have to counterparties of Mesa that arise as a result of the change in control of Mesa.

If we do not successfully manage these issues and the other challenges inherent in integrating an acquired business the size of Mesa, then we may not achieve any potential benefits of the Merger of Mesa and our revenues, expenses, operating results, and financial condition could be materially adversely affected.

We are expected to incur substantial expenses related to the Merger and the integration of Mesa Airlines’ business.

We are expected to incur substantial integration and transition expenses in connection with the Merger of Mesa Airlines related to a large number of processes, policies, procedures, operations, technologies, and systems that must be integrated.

While we have assumed that a certain level of expenses will be incurred, there are many factors beyond our control that could affect the total amount or the timing of the integration expenses.

Moreover, many of the expenses that will be incurred are, by their nature, difficult to estimate accurately.

These expenses could, particularly in the near term, exceed the financial benefits we expect to achieve from the Merger, including the elimination of duplicative expenses and the realization of economies of scale and cost savings.

These integration expenses likely will continue to result in us taking significant charges against earnings in future periods, and the amount and timing of such charges are uncertain at present.

Risks Related to our Capacity Purchase Agreements with our Partner Airlines

Our business is dependent on our CPAs with our Partner Airlines.

Substantially all of our revenues depend on relationships created by our regional jet CPAs with American Airlines, Delta Air Lines, and United Airlines.

For the year ended December 31, 2025, our American Airlines capacity purchase agreements (the “American Airlines CPAs”) accounted for 43% of our revenue, our Delta Air Lines capacity purchase agreements (the “Delta Air Lines CPAs”) accounted for 24% of our revenue and our United Airlines capacity purchase agreement s(the “United Airlines CPAs”) accounted for 31% of our revenue.

The American Airlines CPAs expire with respect to different tranches of aircraft between 2028 and 2033, unless otherwise extended or amended.

In addition, the American Airlines CPAs are subject to early termination for cause.

The Delta Air Lines CPAs expire with respect to different tranches of aircraft between 2027 and 2030, unless otherwise extended or amended.

In addition, the Delta Air Lines CPAs are subject to early termination for material breach of contract and significant declines in operating performance, among other triggering events.

The United Airlines CPAs expire with respect to different tranches of aircraft between 2026 and 2037 , unless otherwise extended or amended.

In September 2021, we entered into a new capacity purchase agreement with United Airlines.

The terms extended the contract expiration from 2029 to 2037 and provided for 38 E170 aircraft to be replaced with new E175s which began in June 2022 with the remaining three new E175s to be delivered throughout the three months ending March 31, 2026.

In addition, the United Airlines CPAs are subject to early termination for breach of contract.

As substantially all of our revenues are currently generated under our CPAs, adverse material modification to, or termination of, our CPAs with any of our Partner Airlines could have a material adverse effect on our financial condition and the results of our operations.

None of our Partner Airlines are under any obligation to renew their respective CPAs.

If any one of our Partner Airlines were to terminate or fail to renew their CPA, we would have difficulty replacing these agreements, due to the concentration of major airlines in the industry.

If we were unable to replace these CPAs with alternative commitments from our Partner Airlines or with new partners, our results of operations would be significantly impacted.

Operating an airline independently from our Partner Airlines would be a significant departure from our business plan and would likely require significant time and resources, which may not be available to us at that point.

Reduced utilization levels of our aircraft under CPAs with our Partner Airlines would adversely impact our revenues, earnings, and liquidity.

Our CPAs with our Partner Airlines require each of them to schedule our aircraft to a minimum level of utilization.

Even though the fixed fee rates may adjust, either up or down, based on scheduled utilization levels, or require a fixed amount per day to compensate for our fixed costs , if our aircraft are utilized only at the minimum requirement (taking into account block hour and departure utilization and frequency of its scheduled flights), we will likely lose both (i) fixed-fee revenues (as a result of reduced utilization) and (ii) the opportunity to earn an additional margin and incentive compensation for such flights.

Challenges with hiring, training, and retaining pilots, flight attendants, maintenance technicians, and dispatchers may also lead to reduced utilization levels of our aircraft and possibly the incurrence of penalties under our CPAs.

Additionally, our Partner Airlines may change routes and frequencies of flights without notice to us or our consent, which can negatively impact our operating efficiencies.

Changes in schedules may increase our flight costs, which could exceed the fixed rates paid by our Partner Airlines.

If the financial strength of any of our Partner Airlines decreases, our financial strength, in turn, is at risk.

We are directly affected by the financial and operating strength of our Partner Airlines.

In the event of a decrease in the financial or operational strength of any of our Partner Airlines, such Partner may be unable to make the payments due to us under our CPA.

In addition, a Partner may reduce utilization of our aircraft to the minimum levels specified in the relevant CPAs, and it is possible that any CPAs with a Partner that files for reorganization under Chapter 11 of the U.S.

Bankruptcy Code may not be assumed in bankruptcy and could be modified or terminated.

Our Partner Airlines have experienced, and may experience in the future, a sudden and severe loss of passenger demand and significant financial

stress as a result of unforeseen events or conditions.

Any such event impacting our Partner Airlines could have an adverse effect on our operations.

Our Partner Airlines may choose to operate their own regional aircraft, thus limiting the opportunity for expansion of our relationships with them.

We depend on major airlines, such as our Partner Airlines, to contract with us instead of purchasing and operating their own aircraft;

however, some major airlines own their own regional airline subsidiaries and operate their own regional aircraft instead of entering into contracts with us or other independent regional carriers.

Currently, the regional airlines owned by major airlines include Endeavor Air, Inc.

(“Endeavor”) (owned by Delta Air Lines), Envoy Air Inc.

(“Envoy”) (subsidiary of the parent company of American Airlines), PSA Airlines, Inc.

(“PSA”) (subsidiary of the parent company of American Airlines), Piedmont Airlines (“Piedmont”) ( subsidiary of the parent company of American Airlines), and Horizon Air Industries, Inc.

(“Horizon”) (owned by Alaska Air Group, Inc.).

The major airlines possess the financial and other resources needed to acquire and operate their own regional jets, create or grow their own captive regional airlines, or acquire other regional air carriers instead of entering into contracts with us.

We have no guarantee that, in the future, our Partner Airlines or any other airline will choose to enter into contracts with us instead of purchasing their own aircraft or entering into relationships with competing regional airlines, as they are not prohibited from doing so under the CPAs.

A decision by American Airlines, Delta Air Lines, or United Airlines to phase out our contract-based relationships as they expire and instead acquire and operate their own aircraft or enter into similar agreements with one or more of our competitors could have a material adverse effect on our financial condition , results of operations, and the price of our common stock.

Because of the concentration of major airlines in the industry, we would have difficulty replacing lost revenues if any of our Partner Airlines were to terminate or reduce their CPAs with us.

Our Partner Airlines may be restricted in increasing the level of business that they conduct with us, thereby limiting our growth.

In general, the pilots’ unions of certain major airlines have negotiated clauses in their CBAs that restrict the number and/or size of aircraft that can be operated by the regional partners of such major airlines, referred to in the industry as “scope clauses.” These CBAs limit regional airlines to flying aircraft with a maximum take-off weight of 86,000 pounds and a maximum passenger configuration of 76 seats with certain exceptions expressly provided in certain CBAs.

Except as contemplated by our existing CPAs, we cannot be sure that our Partner Airlines will contract with us to fly any additional aircraft.

We may not have additional growth opportunities or may agree to modifications to our CPAs that reduce certain benefits to us in order to obtain additional aircraft or for other reasons.

Given the competitive nature of the airline industry, we believe its current environment with limited growth opportunities may result in competitors accepting reduced margins and less favorable contract terms in order to secure new or additional capacity purchase operations.

Even if we are offered growth opportunities by our Partner Airlines, those opportunities may involve economic terms or financing commitments that are unacceptable to us.

Additionally, our Partner Airlines may reduce the number of regional jets in their system by not renewing or extending existing flying arrangements with regional operators or transitioning those flying arrangements to their own captive regional carriers.

Any one or more of these factors may reduce or eliminate our ability to expand our flight operations with our Partner Airlines.

Disagreements regarding the interpretation of the CPAs with our Partner Airlines could have an adverse effect on our operating results and financial condition.

To the extent that we experience disagreements regarding the interpretation of the CPAs or other agreements, we will likely expend valuable management time and financial resources in our efforts to resolve those disagreements.

Those disagreements may result in litigation, arbitration, settlement negotiations, or other proceedings.

Furthermore, there can be no assurance that any or all of those proceedings, if commenced, would be resolved in our favor or that we would be able to exercise sufficient leverage in any proceeding relative to our Partner Airlines to achieve a favorable outcome.

unfavorable result in any such proceeding could have adverse financial consequences and could require us to modify our operations.

Such disagreements and their consequences could have an adverse effect on our operating results and financial condition.

The residual value of our owned aircraft may be less than estimated in our depreciation policies.

As of September 30, 2024, we had approximately $426.4 million of property and equipment and related assets, net of accumulated depreciation, of which $353.7 million relates to owned aircraft.

As of December 31, 2025 , we had $2.4 billion of aircraft, engines, property, and other equipment, net of accumulated depreciation and amortization, of which most relates to aircraft and engines.

In accounting for these long-lived assets, we make estimates about the expected useful lives of the assets, the expected residual values of certain of these assets, and the potential for impairment based on the fair value of the assets and the cash flows they generate.

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In the event the estimated residual value of any of our aircraft types is determined to be lower than the residual value assumptions used in our depreciation policies, the applicable aircraft type in our fleet may be impaired and may result in a material reduction in the book value of applicable aircraft types we operate or we may need to prospectively modify our depreciation policies.

An impairment on any of the aircraft types we operate or an increased level of depreciation expense resulting from a change to our depreciation policies could result in a material negative impact to our financial results.

For our fiscal year ended September 30, 2024, we recognized approximately $73.7 million of impairment losses on our owned aircraft and related assets.

See Note 7 – “Balance Sheet Information” in the notes to the audited consolidated financial statements included in this Annual Report on Form 10-K for further discussion of our impairment of long-lived assets.

The amounts we receive under our United CPA may be less than the corresponding costs we incur.

Under our CPA with United, a portion of our compensation is based upon pre-determined rates typically applied to production statistics (such as departures and block hours flown).

The primary operating costs intended to be compensated by the pre-determined rates include labor costs, including crew training costs, certain aircraft maintenance expenses and overhead costs.

During our fiscal year ended September 30, 2024, approximately $72.1 million, or 13.3%, of our operating costs under our agreements were pass-through costs, excluding fuel which is paid directly to suppliers by United.

If our operating costs for labor, aircraft maintenance and overhead costs exceed the compensation earned from our pre-determined rates under our agreement, our financial position and operating results will be negatively affected.

Strikes, labor disputes and increased unionization of our workforces may adversely affect our ability to conduct our business and reduce our profitability.

As of September 30, 2024, approximately 62.8% of our workforce was represented by labor unions, including the ALPA and the Association of Flight Attendants ("AFA").

In August 2022, we entered into a Letter of Agreement with the ALPA, which provided for increased overall hourly pay increases of nearly 118% for captains and 172% for new-hire first officers.

These pay increases have positively impacted our ability to attract, hire, and retain pilots in fiscal 2023 and 2024, and attrition levels have dropped to pre-covid levels.

The inability to negotiate acceptable contracts with existing unions or with new unions could result in work stoppages by the affected workers, lost revenues resulting from the cancellation of flights and increased operating costs as a result of higher wages or benefits paid to union members.

The terms and conditions of our future collective bargaining agreements may be affected by the results of collective bargaining negotiations at other airlines that may have a greater ability, due to larger scale, greater efficiency or other factors, to bear higher costs than we can.

In addition, if we are unable to reach agreement with any of our unionized work groups in future negotiations regarding the terms of their collective bargaining agreements, we may be subject to work interruptions, stoppages, or shortages.

We may also become subject to additional collective bargaining agreements in the future as non-unionized workers may unionize.

Our labor agreements with the ALPA and AFA are amendable as of September 30, 2024.

We are also subject to various ongoing employment disputes outside of the collective bargaining agreements.

We consider these disputes to not be material, but any current or future dispute could become material.

Impairment on any of the aircraft types we operate or an increased level of depreciation expense resulting from a change to our depreciation policies could result in a material negative impact to our financial results.

We have recorded impairment charges in the past when aircraft values decreased faster than our depreciation policies estimated and future cash flows did not support the current net book value of the aircraft.

Risks Related to our Operating Costs and Personnel

We may experience difficulty hiring, training, and retaining qualified aviation professionals.

As is common within the regional airline industry, we have, from time to time, faced considerable turnover of our employees.

Our pilots, flight attendants, maintenance technicians, and dispatchers sometimes leave to work for major airline, low cost, and cargo carriers, which generally offer higher salaries and more extensive benefit programs than regional airlines are financially able to offer.

The airline industry has experienced a significant shortage of qualified personnel, specifically pilots, as a result of decreased interest in the profession, new and more stringent government regulations, and an aging pilot population.

These factors have created a greater industry-wide demand for pilots, including at major airlines, low cost, and cargo carriers, which frequently recruit from regional airlines and offer higher salaries and more extensive benefit programs than regional carriers have historically offered.

This, in turn, has increased difficulty for regional airlines to retain sufficient pilot staffing levels.

In 2013 , the congressionally mandated pilot experience qualifications contained in the Airline Safety and Federal Aviation Administration Extension Act of 2010 became effective (“FAA Qualification Standards”).

As a result of this legislation, the age and training requirements for our First Officer pilots generally increased to 23 years and 1,500 hours of flight time, respectively, and First Officer pilots are required to hold an Air Transport Pilot (“ATP”) Certificate.

Previously, First Officers were required to have only a commercial pilot certificate, which required 250 hours of flight time and no ATP certification requirement.

Military pilots are subject to somewhat lower requirements, but there is a limited number of military-trained pilots available to enter the workforce.

In addition, the FAA implemented a regulation beginning in 2014 that increased the flight crew duty, flight, and rest requirements for pilots.

This update changed the length of time a pilot may be on duty and how much she or he may fly in a day, month, and year.

These limitations, together with the more restrictive certification and qualification requirements, have resulted in a scarcity of qualified new entrants and have contributed to a severe nationwide pilot shortage from time to time.

The industry-wide pilot shortage is also caused by the aging population of experienced pilots approaching the mandatory retirement age of 65 .

As a result, the global demand for pilots is expected to increase over the next decade.

The shift in demographics is concentrated at major airline, low cost, and cargo carriers, giving rise to increased attrition at regional air carriers to replace those pilots.

There can be no assurance that we will be able to attract and retain sufficient

qualified pilots and our operations and financial condition may be negatively impacted if we are unable to hire and train pilots in a timely manner.

In 2022 and 2023, we experienced significant levels of pilot attrition, particularly attrition of C aptains and experienced First Officers, as a result of industry-wide hiring following the COVID-19 pandemic.

The corresponding shortages of Captains caused a sequential reduction in our annual block hours in 2022, 2023, and the first half of 2024.

Although Captain attrition levels eased in 2024, future elevated pilot attrition levels could constrain our flight schedules.

Operating at reduced flying schedules results in operating inefficiencies which negatively impacts our financial results.

Additionally, there can be no assurance that labor shortages may not affect other staffing needs, including those related to flight attendants, dispatchers, and maintenance technicians.

If we are unsuccessful in sufficiently staffing these positions, our operations and financial condition may be negatively impacted if hiring and training of flight attendants, dispatchers, and maintenance technicians is not done in a timely manner.

Furthermore, any labor disruption or labor strikes by our employees or those of our Partner Airlines would adversely affect our ability to conduct our business.

Relations between air carriers and labor unions in the United States are governed by the RLA.

Under the RLA, collective bargaining agreements generally contain "amendable dates" rather than expiration dates, and the RLA requires that a carrier maintain the existing terms and conditions of employment following the amendable date through a multi-stage and usually lengthy series of bargaining processes overseen by the NMB.

This process continues until either the parties have reached agreement on a new

collective bargaining agreement, or the parties have been released to "self-help" by the NMB.

Under the RLA, CBAs generally contain amendable dates rather than expiration dates, and the RLA requires that a carrier maintain the existing terms and conditions of employment following the amendable date through a multi-stage and often lengthy series of bargaining process overseen by the NMB.

This process continues until either the parties have reached agreement on a new CBA, or the parties have been released to “self-help” by the NMB.

In most circumstances, the RLA prohibits strikes;

however, after release by the NMB, carriers and unions are free to engage in self-help measures such as lockouts and strikes.

Any strike, labor dispute or increased unionization among our employees could disrupt our operations, reduce our profitability, or interfere with the ability of our management to focus on executing our business strategies.

For example, if a labor strike were to continue for a specified number of consecutive days or longer, United may have cause to terminate the CPA.

As a result, our business, results of operations and financial condition may be materially adversely affected.

We may incur substantial maintenance costs as part of our leased aircraft return obligations.

Our aircraft lease agreements contain provisions that require us to return aircraft airframes and engines to the lessor in a specified condition or pay an amount to the lessor based on the actual return condition of the equipment.

These lease return costs are recorded in the period in which they are incurred.

We estimate the cost of maintenance lease return obligations and accrue such costs over the remaining lease term when the expense is probable and can be reasonably estimated.

Any unexpected increase in maintenance return costs may negatively impact our financial position and results of operations.

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

however, after release by the NMB, carriers and unions are free to engage in self-help measures such as lock-outs and strikes.

Any strike, labor dispute, or increased unionization among our employees could disrupt our operations, reduce profitability, or interfere with the ability of our management to focus on business strategies.

Increases in our labor costs, which constitute a substantial portion of our total operating costs, will directly impact our earnings and ability to compete for new fixed-fee business.

Wages and benefits constituted 51% of our total operating costs for the year ended December 31, 2025 , and we have experienced pressure to increase wages and benefits for our employees.

Under our CPAs, our reimbursement rates for certain operating costs contemplate labor costs that increase on a set schedule generally tied to an increase in the consumer price index.

We are entirely responsible for our labor costs, and we are not entitled to receive increased payments for our flights from our Partner Airlines if our labor costs increase above the assumed costs included in the reimbursement rates.

As a result, a significant increase in our labor costs above the levels assumed in our reimbursement rates could result in a material adverse effect to our results of operations, cash flows, and the price of our common stock.

Due to our business strategy to position the airline for future capacity growth, we have from time to time reached a pilot staffing level that exceeds the pilot base necessary to operate our current contractual obligations.

These staffing levels are necessary to position our airline to accept new business, acquire additional aircraft, and expand our fleet.

During periods in advance of growth, or in the event that we are unable to achieve fleet expansion and capacity growth, the cost to carry excess pilots could result in a material adverse effect to our results of operations, cash flows, and the price of our common stock.

In response to past significant increases in attrition and wage escalation in selected work groups, we have increased wages and provided signing bonuses to attract new employees in order to be competitive in the marketplace.

If our annual revenue rate increases are less than our actual cost escalations, our financial results will be negatively impacted.

Our maintenance expenses will increase as our fleet ages and may be higher than we anticipate.

We bear substantial costs for routine and major maintenance events.

Maintenance expenses comprise a significant portion of our operating expenses.

The average age of our aircraft is approxima tely 13.0 years old.

As a result, our newer aircraft require less maintenance now than they will in the future.

We have incurred lower maintenance expenses because some of the parts on our aircraft are under multi-year warranties.

Our maintenance costs will increase as these warranties expire and our fleet ages.

For example, our recent engine expenses for our aircraft do not reflect the full mature cost of

maintaining the aircraft, as they do not include all of our expenses for future engine life limited parts replacement (“LLP”) restoration as these parts are only replaced approximately every ten to twelve years.

As we incur expenses to replace these LLPs, only a portion of the expense may be passed through to our Partner Airlines, thus our future results of operations and liquidity will be materially impacted.

If our annual revenue rate increases are less than our actual cost escalations, our financial results will be negatively impacted.

In addition, we are periodically required to take aircraft out of service for heavy maintenance checks, which can increase costs and reduce revenue.

We also may be required to comply with regulations and airworthiness directives the FAA issues, the cost of which our aircraft lessors may only partially assume depending upon the magnitude of the expense.

Although we believe that our owned and leased aircraft are currently in compliance with all effective FAA airworthiness directives, our aircraft could fall out of compliance, or additional airworthiness directives may be required in the future, necessitating additional expenditures.

We have a significant amount of debt and other contractual obligations that could impair our liquidity and thereby harm our business, results of operations, financial condition, and the price of our common stock.

The airline business is capital intensive, and as a result, we are highly leveraged.

As of December 31, 2025 , we had approximately $ 1.1 billion in total debt and finance leases.

Substantially all of our debt was incurred in connection with the acquisition of aircraft and spare aircraft engines.

This substantial indebtedness could:

• require us to dedicate a substantial portion of cash flow from operations to the payment of principal and interest on indebtedness, thereby reducing the funds available for operations and future business opportunities;

• make it difficult for us to satisfy our debt service payments and other obligations;

• limit our ability to borrow additional funds for working capital, capital expenditures, or other purposes, if needed, and increase the cost of any of these borrowings;

• reduce our flexibility in planning for or responding to changing business and economic conditions.

If we are unable to meet our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our existing debt obligations and impair our liquidity.

Our ability to restructure or refinance our debt will depend on, among other things, our financial condition at such time.

Any refinancing of our indebtedness could be at higher interest rates or otherwise on more onerous terms.

Moreover, in the event of a default, the holders of our indebtedness, could elect to declare all the funds borrowed to be due and payable, together with accrued and unpaid interest, if any.

We also have significant long-term debt obligations primarily relating to our aircraft fleet.

As of December 31, 2025 , our minimum required debt service payments for the next 12 months totals $257.0 million and our finance lease payments total approximately $9.5 million.

We have significant operating lease obligations with respect to our flight simulators and facility leases, which aggregated to approximately $140.4 million a s of December 31, 2025 through the remaining minimum lease terms.

If our liquidity is materially diminished, we might not be able to timely pay our lease payments and debts or comply with material provisions of our contractual obligations.

Our business could be harmed if we are unable to attract, develop, and retain the services of our key personnel.

Our business depends upon the efforts of our key management and operating personnel.

If we experience a substantial turnover in our leadership and other key employees and are not able to replace these persons with individuals with comparable skills, our performance could be materially adversely impacted.

In addition, competition for skilled personnel has intensified and may continue to intensify if overall industry capacity continues to increase and/or we were to incur attrition at levels higher than we have historically.

We may have difficulty replacing management or other key personnel who leave and, therefore, the loss of the services of any of these individuals could harm our business.

Risks Related to Regulation and Litigation

We may become involved in litigation that may have a material and adverse effect on our business and financial condition.

From time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including employment, commercial, product liability, class action, whistleblower, and other litigation and claims, and governmental and other regulatory investigations and proceedings.

Such matters can be time-consuming, divert management's attention and resources, cause us to incur significant expenses or liability and/or require us to change our business practices.

Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses.

Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business, results of operations and financial condition.

Disagreements regarding the interpretation of our CPA with United could have an adverse effect on our operating results and financial condition.

To the extent that we experience disagreements regarding the interpretation of our CPA, we will likely expend valuable management time and financial resources in our efforts to resolve those disagreements.

Those disagreements may result in litigation, arbitration, settlement negotiations, or other proceedings.

An unfavorable result in any such proceeding could have adverse financial consequences or require us to modify our operations.

Such disagreements and their consequences could have an adverse effect on our operating results and financial condition.

We rely on third-party suppliers as the sole manufacturers of our aircraft and aircraft engines.

We depend upon MHI, Boeing, and Embraer as the sole manufacturers of our aircraft and GE as the sole manufacturer of our aircraft engines.

Our operations could be materially and adversely affected by the failure or inability of MHI, Boeing, Embraer or GE to provide sufficient parts or related maintenance and support services to us in a timely manner, or the interruption of our flight operations as a result of unscheduled or unanticipated maintenance requirements for our aircraft or engines.

Maintenance costs will likely increase as the age of our jet fleet increases.

The average age of our E-175 and CRJ-900 aircraft is approximately 8.7 and 18.2 years, respectively.

We have incurred relatively low maintenance expenses on our E-175 aircraft because most of the parts are under multi-year warranties and a limited number of heavy airframe checks and engine overhauls have

Our maintenance costs will increase significantly, both on an absolute basis and as a percentage of our operating expenses, as our fleet ages and the E-175 warranties expire.

In addition, because our current aircraft were acquired over a relatively short period of time, significant maintenance events scheduled for these aircraft will occur at roughly the same intervals, meaning we will incur our most expensive scheduled maintenance obligations across our present fleet at approximately the same time.

These more significant maintenance activities will result in out-of-service periods during which aircraft are dedicated to maintenance activities and unavailable for flying under our agreement.

Any unexpected increase in our maintenance costs as our fleet ages or decreased revenues resulting from out-of-service periods could have an adverse effect on our cash flows, operating results, and financial condition.

If we face problems with any of our third-party service providers, our operations could be adversely affected.

Our reliance upon others to provide essential services on behalf of our operations may limit our ability to control the efficiency and timeliness of contract services.

We have entered into agreements with contractors to provide various facilities and services required for our operations, including aircraft maintenance, ground facilities and IT services, and expect to enter into additional similar agreements in the future.

In particular, we rely on AAR and Aviall to provide fixed-rate parts procurement and component overhaul services for our aircraft fleet and GE to provide engine support.

Our agreements with AAR, and other service providers, are subject to termination after notice.

If our third-party service providers terminate their contracts with us, or do not provide timely or consistently high-quality service, we may not be able to replace them in a cost-efficient manner or in a manner timely enough to support our operational needs, which could have a material adverse effect on our business, financial condition, and results of operations.

In addition, our operations could be materially and adversely affected by the failure or inability of AAR, Aviall or GE to provide sufficient parts or related maintenance and support services to us in a timely manner.

Such matters can be time-consuming, divert management’s attention and resources, and cause us to incur significant expenses or liability and/or require us to change our business practices.

Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that it has meritorious claims or defenses.

Because litigation is inherently unpredictable, we cannot assure that the results of any of these actions will not have a material adverse effect on our business, results of operations, financial condition, and the price of our common stock.

Regulatory changes or tariffs could negatively impact our business and financial condition.

We import a substantial portion of the equipment we utilize in our operations.

For example, the sole manufacturers of our regional aircraft, MHI and Embraer, are headquartered in Japan and Brazil, respectively.

We cannot predict the impact of potential regulatory changes or action by U.S.

regulatory agencies, including the potential impact of tariffs or changes in international trade treaties on the cost and timing of parts and aircraft.

Our business may be subject to additional costs as a result of potential regulatory changes, which could have an adverse effect on our operations and financial results.

The issuance of operating restrictions applicable to one of the fleet types we operate could negatively impact our business and financial condition.

We rely on a limited number of aircraft types, including CRJ-900 and E-175 aircraft.

We rely on a limited number of aircraft types, including E170s and E175s, and we import a substantial portion of the equipment we need.

The issuance of FAA or manufacturer directives restricting or prohibiting the use of the aircraft types we operate could negatively impact our business and financial results.

If we have a failure in our technology or security breaches of our information technology infrastructure our business and financial condition may be adversely affected.

The performance and reliability of our technology, and the technology of United, is critical to our ability to compete effectively.

Any internal technological error or failure or large-scale external interruption in the technological infrastructure we depend on, such as power, telecommunications, or the internet, may disrupt our internal network.

Any individual, sustained or repeated failure of our technology or that of our major partners could impact our ability to conduct our business, lower the utilization of our aircraft and result in increased costs.

Our technological systems and related data, and those of United, may be vulnerable to a variety of sources of interruption due to events beyond our control, including natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers, and other security issues.

In addition, as a part of our ordinary business operations, we collect and store sensitive data, including personal information of our employees and information of United.

Our information systems are subject to an increasing threat of continually evolving cybersecurity risks.

Unauthorized parties may attempt to gain access to our systems or information through fraud or other means of deception.

The methods used to obtain unauthorized access, disable, or degrade service or sabotage systems are constantly evolving, and may be difficult to anticipate or to detect for long periods of time.

We may not be able to prevent all data security breaches or misuse of data.

The compromise of our technology systems resulting in the loss, disclosure, misappropriation of, or access to, employees' or business partners' information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disruption to our operations and damage to our reputation, any or all of which could adversely affect our business and financial condition.

We are subject to various environmental and noise laws and regulations, which could have a material adverse effect on our business, results of operations and financial condition.

We are subject to increasingly stringent federal, state, local, and foreign laws, regulations and ordinances relating to the protection of the environment and noise, including those relating to emissions to the air, discharges (including storm water discharges) to surface and subsurface waters, safe drinking water and the use, management, disposal and release of, and exposure to, hazardous substances, oils and waste materials.

We are or may be subject to new or proposed laws and regulations that may have a direct effect (or indirect effect through our third-party specialists or airport facilities at which we operate) on our operations.

In addition, U.S.

airport authorities are exploring ways to limit de-icing fluid discharges.

Any such existing, future, new or potential laws and regulations could have an adverse impact on our business, results of operations, and financial condition.

Additionally, potential regulatory changes or action by the U.S.

government or U.S.

regulatory agencies, including the imposition of new tariffs, increase in existing tariffs, or changes in international trade treaties, could negatively impact the cost and availability of parts and aircraft.

Our business may be subject to additional costs as a result of potential regulatory changes, which could have an adverse effect on our operations and financial results.

The United States has recently enacted and proposed to enact significant new tariffs.

There continues to exist significant uncertainty about the future relationship between the United States and other countries with respect to such trade policies, treaties and tariffs.

These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly impact the cost of new Embraer aircraft imported from Brazil, aircraft parts and supplies sourced internationally or impact the cost of service providers located outside of the United States, which in turn would negatively impact us.

We are subject to various environmental and noise laws and regulations, which could negatively impact our business and financial condition.

We are subject to increasingly stringent Federal, state, local, and foreign laws, regulations, and ordinances relating to noise and the protection of the environment, including those relating to emissions to the air, discharges (including storm water discharges) to surface and subsurface waters, safe drinking water, and the use, management, disposal, and release of and exposure to, hazardous substances, oils, and waste materials.

We are or may become subject to new or proposed laws and regulations that may have a direct effect (or indirect effect through our third-party specialists or airport facilities at which we operate) on our operations.

In addition to other potential new regulations, U.S.

airport authorities are exploring ways to limit de-icing fluid discharges to groundwater, which can result in additional costs to and restrictions on airlines required to participate in the construction of new or modified airport de-icing facilities.

Additionally, air quality initiatives at the state and local level (including state implementation plans for achieving national ozone standards) could, in the future, result in curtailments in services, increased operating costs, limits on expansion, or further emission reduction requirements.

Certain airports and/or state governments either have or are seeking to establish environmental fees and other requirements applicable to carbon/greenhouse gas emissions, local air quality pollutants, and/or noise.

As a result, we may face increased taxes or costs related to greenhouse gas emissions, as well as other regulatory requirements.

Similarly, we are subject to environmental laws and regulations that require us to investigate and remediate soil or groundwater to meet certain remediation standards.

Under certain laws, generators of waste materials and current and former owners or operators of facilities, can be subject to liability for investigation and remediation costs at locations that have been identified as requiring response actions.

Liability under these laws may be strict, joint and several, meaning that we could be liable for the costs of cleaning up environmental contamination regardless of fault or the amount of wastes directly attributable to us.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

As of September 30, 2024, we had aggregate federal and state net operating loss ("NOL") carryforwards of approximately $511.7 million and $226.9 million, which expire in fiscal years 2027-2038 and 2024-2044, respectively.

Approximately $194.2 million of our federal NOL carryforwards are not subject to expiration.

Our unused losses generally carry forward to offset future taxable income, if any, until such unused losses expire.

We may be unable to use these losses to offset income before such unused losses expire.

However, US federal net operating losses generated in fiscal years 2018 and forward are not subject to expiration and are only available to offset eighty percent of taxable income each year due to changes in tax law attributable to the passage of Tax Cuts and Jobs Act.

In addition, if a corporation undergoes an

"ownership change" (generally defined as a greater than 50% cumulative change in the equity ownership of certain shareholders over a rolling three-year period) under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), the corporation's ability to use its pre- change net operating loss carryforwards and other pre-change tax attributes to offset future taxable income or taxes may be limited.

We have experienced ownership changes in the past and may experience ownership changes as a result of future changes in our stock ownership (some of which changes may not be within our control).

This, in turn, could materially reduce or eliminate our ability to use our losses or tax attributes to offset future taxable income or tax and have an adverse effect on our future cash flows.

Our ability to obtain financing or access capital markets may be limited.

There are a number of factors that may limit our ability to raise financing or access capital markets in the future, including our significant debt and future contractual obligations, our liquidity and credit status, our operating cash flows, the market conditions in the airline industry, U.S.

and global economic conditions, the general state of the capital markets and the financial position of the major providers of commercial aircraft financing.

We cannot assure you that we will be able to source external financing for future aircraft acquisitions or for other significant capital needs, and if we are unable to source financing on acceptable terms, or unable to source financing at all, our business could be materially adversely affected.

To the extent we finance our activities with additional debt, we may become subject to additional financial and other covenants that may restrict our ability to pursue our business strategy or otherwise constrain our growth and operations.

Negative publicity regarding our customer service could have a material adverse effect on our business, results of operations and financial condition.

Our business strategy includes the implementation of United's brand and product in order to increase customer loyalty and drive future ticket sales.

In addition, we also receive certain amounts or incur penalties under our United CPA upon the results of certain performance metrics.

However, we may experience a high number of passenger complaints related to, among other things, our customer service.

These complaints, together with delayed and cancelled flights, and other service issues, are reported to the public by the DOT.

If we do not meet United's expectations with respect to reliability and service, our and United's brand and product could be negatively impacted, which could result in customers deciding not to fly with United or with us.

If we are unable to provide consistently high-quality customer service, it could have an adverse effect on our relationships with United.

Our failure to be current in our SEC filings could pose significant risks to our business, each of which could materially and adversely affect our financial condition and results of operations.

Under the Exchange Act, the Company, as reporting company, is required to provide investors on a regular basis with periodic reports that contain important financial and business information.

Examples of these reports include the annually filed Form 10-K and the quarterly filed Form 10-Q.

The timely and complete submission of periodic reports provides investors with information to help them make informed investment decisions.

Our inability to timely file our periodic reports with the SEC, as occurred with our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and Quarterly Reports on Form 10-Q for the periods ended December 31, 2023, March 31, 2024, and June 30, 2024, could have an adverse impact on our ability to, among other things, (i) remain listed on the Nasdaq Stock Market, (ii) access our credit facilities, (iii) attract and retain key employees, and (iv) raise funds in the public markets, any of which could materially and adversely affect our financial condition and results of operations.

Liability under these laws may be strict, joint, and several, meaning that

we could be liable for the costs of cleaning up environmental contamination regardless of fault or the amount of waste materials directly attributable to us.

We support our Partner Airlines’ goals and strategies to reduce carbon emissions on flights we operate under our code-share agreements and, as we work to support each of our Partner Airlines’ goals and strategies, initiatives to reduce emissions may not materialize and could materially and adversely affect the Company’s business plans, strategies, results of operations, and the price of our common stock.

Under our flying contracts, our Partner Airlines are responsible for fuel procurement and have significant control over our flight schedules.

Accordingly, we anticipate our Partner Airlines will take responsibility for carbon emissions incurred on our contract flights.

Each of our Partner Airlines may have different goals, strategies and timelines to reduce carbon emissions on our flights.

We are largely dependent on the direction from our Partner Airlines regarding long-term fuel saving initiatives such as engine innovations reducing fuel consumption, use of sustainable alternative fuels, carbon sequestration programs, and air traffic flow routing efficiencies, among other initiatives.

Each of our Partner Airlines may pursue alternative strategies and goals to reduce carbon emissions on flights we operate under our code-share agreements that may impact the rate at which we are able to reduce our carbon emissions, if at all.

There is no assurance our Partner Airlines will take responsibility for carbon emissions incurred under our contract flights and no assurance future long-term fuel saving initiatives will materialize.

In the event we pursue initiatives to reduce our carbon emissions, the cost could materially and adversely affect our business plans, results of operations, and the price of our common stock.

Risks Related to our Industry

Future public health threats that negatively impact the demand for air travel could adversely impact our business.

The duration and severity of a public health threat that we may face in the future could result in additional adverse effects on our business, operating results, financial condition, and liquidity.

The airline industry is highly competitive and has undergone a period of consolidation and transition leaving fewer potential major partners.

The airline industry is highly competitive.

We compete primarily with other regional airlines, some of which are owned by or operated by major airlines.

In certain instances, our competitors are larger than us and possess significantly greater financial and other resources than we do.

The airline industry has undergone substantial consolidation, including the mergers between Alaska Airlines and Hawaiian Airlines in 2024, Alaska Airlines and Virgin America Inc.

in 2016, American and US Airways in 2013, Southwest Airlines Co.

and AirTran Airways in 2011, United and Continental Airlines in 2010 and Delta and Northwest Airlines in 2008.

Any additional consolidation or significant alliance activity within the airline industry could further limit the number of potential partners with whom we could enter into CPAs.

We are subject to significant governmental regulation.

All interstate air carriers, including us, are subject to regulation by the DOT, the FAA and other governmental agencies, as described in “Item 1.

Government Regulation.” We cannot predict whether we will be able to comply with all present and future laws, rules, regulations, and certification requirements or that the cost of continued compliance will not have a material adverse effect on our operations.

We incur substantial costs in maintaining our current certifications and otherwise complying with the laws, rules, and regulations to which we are subject.

A decision by the FAA to ground, or require time consuming inspections of or maintenance on, all or any of our aircraft for any reason may have a material adverse effect on our operations.

In addition to state and federal regulation, airports and municipalities enact rules and regulations that affect our operations and require that we incur substantial on-going costs.

Airlines are often affected by factors beyond their control, including:

air traffic congestion at airports;

air traffic control inefficiencies;

adverse weather conditions, such as hurricanes or blizzards;

increased security measures;

new travel-related taxes;

or the outbreak of disease;

any of which could have a material adverse effect on our business, results of operations, and financial condition.

Like other airlines, our business is affected by factors beyond our control, including air traffic congestion at airports, air traffic control inefficiencies, increased security measures, new travel-related taxes and fees, adverse weather conditions, natural disasters, and the outbreak of disease.

Factors that cause flight delays frustrate passengers and increase operating costs and decrease revenues, which in turn could adversely affect profitability.

The federal government singularly controls all U.S.

Airlines are often affected by factors beyond their control, including economic conditions, air traffic congestion at airports, air traffic control inefficiencies, government shutdowns, major construction or improvements at airports, FAA grounding of aircraft, increased security measures, new travel-related taxes and fees, adverse weather conditions and natural disasters.

Demand for air travel could weaken in an economic recession or due to other factors that are outside of our control.

The airline industry is highly cyclical and the level of demand for air travel is correlated to the strength of the U.S.

and global economies, including unemployment levels, consumer confidence levels and the availability of consumer and business credit.

Air transportation is often a discretionary purchase that leisure travelers may limit or eliminate during difficult economic times.

Short-haul travelers, in particular, have the option to replace air travel with surface travel.

In addition, during periods of unfavorable economic conditions, business travelers historically have reduced the volume of their travel, either due to cost-saving initiatives, the replacement of travel with alternatives such as videoconferencing, or as a result of decreased business activity requiring travel.

Furthermore, an increase in price levels generally or in price levels in a particular sector (such as current inflationary pressures related to domestic and global supply chain constraints, which have led to both overall price increases and pronounced price increases in certain sectors) could result in a shift in consumer demand away from both leisure and business travel.

Any of the foregoing could have a significant negative impact on our results of operations and the price of our common stock.

Our business is also affected by other factors beyond our control, including air traffic congestion at airports, air traffic control inefficiencies, government shutdowns, major construction or improvements at airports at which we operate, increased security measures, new travel-related taxes and fees, adverse weather conditions, natural disasters, and public health events, including the outbreak of disease (such as the COVID-19 pandemic).

During periods of fog, ice, low temperatures, storms, or other adverse weather conditions, flights may be cancelled or significantly delayed.

For example, in 2025 , we cancelled approximately 3% of our scheduled flights due to extreme weather.

The Federal government controls all U.S.

airspace, and airlines are completely dependent on the FAA to operate that airspace in a safe, efficient, and affordable manner.

The air traffic control system, which is operated by the FAA, faces challenges in managing the growing demand for U.S.

and foreign air-traffic controllers often rely on outdated technologies that routinely overwhelm the system and compel airlines to fly inefficient, indirect routes resulting in delays.

In addition, there are currently proposals before Congress that could potentially lead to the privatization of the United States' air traffic control system, which could adversely affect our business.

Further, implementation of the Next Generation Air Transport System by the FAA would result in changes to aircraft routings and flight paths that could lead to increased noise complaints and lawsuits, resulting in increased costs.

There are additional proposals before Congress that would treat a wide range of consumer protection issues, including, among other things, proposals to regulate seat size, which could increase the costs of doing business.

Adverse weather conditions and natural disasters, such as hurricanes, winter snowstorms, or earthquakes, can cause flight cancellations or significant delays.

Cancellations or delays due to adverse weather conditions or natural disasters, air traffic control problems or inefficiencies, breaches in security or other factors may affect us to a greater degree than other, larger airlines that may be able to recover more quickly from these events, and therefore could have a material adverse effect on our business, results of operations, and financial condition to a greater degree than other air carriers.

Any general reduction in airline passenger traffic could have a material adverse effect on our business, results of operations, and financial condition.

and foreign air-traffic controllers often rely on outdated technologies that routinely overwhelm the system and compel airlines to fly inefficient, indirect routes resulting in delays, and such delays may impact our operations.

The Federal government also controls airport security.

In addition, Congress could enact legislation that could impose a wide range of consumer protection requirements, which could

increase the costs of doing business.

Further, implementation of the Next Generation Air Transport System, or NextGen, by the FAA could result in changes to required aircraft equipment or aircraft routings and flight paths that could lead to increased flight time and potentially increased costs.

In addition, Federal government shutdowns can affect the availability of federal resources necessary to provide air traffic control and airport security.

Furthermore, a Federal government grounding of our aircraft type could result in flight cancellations and adversely affect our business.

Adverse weather conditions and natural disasters, such as hurricanes, thunderstorms, winter snowstorms, or earthquakes, can cause flight cancellations or significant delays, and in the past have led to Congressional demands for investigations.

Cancellations or delays due to adverse weather conditions or natural disasters, air traffic control problems or inefficiencies, breaches in security, or other factors may affect us to a greater degree than other, larger airlines that may be able to recover more quickly from these events, and therefore could have a material adverse effect on our business, results of operations, the price of our common stock, and financial condition to a greater degree.

Similarly, outbreaks of pandemic or contagious diseases, such as COVID-19, Ebola, measles, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine) flu, pertussis (whooping cough), and zika virus, or their respective variants, have resulted and could continue to result in significant decreases in passenger traffic and the imposition of government restrictions in service and could have a material adverse impact on the airline industry.

Any increases in travel-related taxes could also result in decreases in passenger traffic.

Any general reduction in airline passenger traffic could have a material adverse effect on our business, results of operations, the price of our common stock, and financial condition.

Moreover, U.S.

Federal government shutdowns may cause delays and cancellations or reductions in discretionary travel due to longer security lines, including as a result of furloughed government employees, or reductions in staffing levels, including air traffic controllers.

government shutdowns may also impact our ability to take delivery of aircraft and commence operations in new domestic stations.

Any extended shutdown may have a negative impact on our operations.

Under our CPAs, our regional airline business is partially protected against cancellations due to weather or air traffic control, although these factors may affect our ability to receive variable revenues for flight completions and incentive payments for flying more than the minimum number of flights specified in our CPAs.

The airline industry is heavily regulated.

Airlines are subject to extensive regulatory and legal compliance requirements, both domestically and internationally, that impose significant costs.

In the last several years, Congress has passed laws and the FAA, DOT, and TSA have issued regulations, orders, directives, rulings, and guidance relating to the operation, maintenance, safety, and security of airlines and to consumer protections that have required significant expenditures.

We expect to continue to incur expenses in connection with complying with such laws and government regulations, orders, directives, rulings, and guidance.

FAA requirements cover, among other things, retirement of aged aircraft, collision avoidance systems, airborne wind shear avoidance systems, noise abatement, aircraft safety measures, and increased inspection and maintenance procedures to be conducted on older aircraft.

The FAA, in its authority granted by U.S.

Federal legislation, issues mandatory regulations and orders relating to, among other things, pilot and flight attendant rest rules, air traffic procedures, the grounding of aircraft, inspection of aircraft, installation of new safety-related items, and removal, replacement, or modification of aircraft parts that have failed or may fail in the future.

We are dependent on the operation of the FAA even in times of government agency closures and employee furloughs affected by intermittent periods of shutdown of the U.S.

Our inability to secure the necessary registrations, permits, and approvals from the FAA in these times could impact our ability to operate our aircraft, which could in turn, adversely impact our results of operations and the price of our common stock.

Similarly, a decision by the FAA to ground, or require time consuming inspections of or maintenance on, all or any of our aircraft, for any reason, could negatively impact our results of operations and the price of our common stock.

In addition to state and Federal regulation, airports, and municipalities enact rules and regulations that affect our operations.

The imposition of any limits on the use of our aircraft at any airport at which it operates could interfere with our obligations under our CPAs and severely interrupt our business operations.

Additional laws, regulations, taxes, and increased 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.

We incur substantial costs in maintaining our current certifications and otherwise complying with the laws, rules, and regulations to which we are subject.

We cannot predict whether we will be able to comply with all present and future laws, rules, regulations, and certification requirements or that the cost of continued compliance will not significantly increase our costs of doing business.

The DOT has broad authority over airlines and their consumer and competitive practices and has used this authority to issue numerous regulations and pursue enforcement actions, including rules and fines relating to the handling of lengthy tarmac delays, consumer notice requirements, consumer complaints, customer service commitments, contracts of carriage, and the transportation of passengers with disabilities.

Among these are recently issued rules on refunds on airfare, baggage fees, and ancillary services, rules on disclosure of information regarding fees for ancillary services and rules regarding accommodation of passengers with disabilities.

Furthermore, in 2024 , the U.S.

Congress approved a five -year reauthorization for the FAA, which encompasses significant aviation tax and policy-related issues.

The law includes a range of policy changes related to enhancing aviation safety, improving and modernizing air traffic control, and strengthening the aviation workforce, implementation of some items continues into the new Administration, and depending on how they are implemented, could impact our operations and costs.

The airline industry is highly competitive and has undergone a period of consolidation and transition leaving fewer potential partners, which could adversely affect our operating results and financial condition.

We compete with other regional airlines, some of which are owned by or operated as partners of major airlines, on various factors including, but not limited to labor resources, including pilots, flight attendants, maintenance technicians, and dispatchers;

financial resources, including the ability to finance aircraft at competitive terms;

geographical infrastructure;

and overall customer service levels relating to on-time arrival and flight completion percentages.

Our Partner Airlines rely on us to fly passengers from various locations into their hubs under our CPAs at competitive terms.

Within the airline industry, we also face indirect competition from low-cost or ultra-low-cost carriers who compete with our Partner Airlines on many routes we operate, and major airlines on many of our routes, including carriers that fly point to point instead of to, or through, a hub.

Additionally, future developments of electric-powered aircraft designed to operate on routes typically served by regional aircraft could impact our Partner Airlines’ strategy and result in reduction of demand or increase our capital expenditures and could have a negative impact on our business and financial condition.

In addition, some of our competitors are larger and have significantly greater financial and other resources than we do.

Moreover, federal deregulation of the industry allows competitors to rapidly enter our markets and to quickly discount and restructure fares.

The airline industry is particularly susceptible to price discounting because airlines incur only nominal costs to provide service to passengers occupying otherwise unsold seats.

In addition to traditional competition among airlines, the industry faces competition from videoconferencing and other methods of electronic communication.

New advances in technology may add a new dimension of competition to the industry as business travelers seek lower-cost substitutes for air travel.

Among these is the series of Enhanced Airline Passenger Protection rules issued by the DOT.

See “ The airline industry is heavily regulated .”

Furthermore, the airline industry has undergone substantial consolidation, and any additional consolidation or significant alliance activity within the airline industry could further limit the number of potential partners with whom we could enter into CPAs, which could adversely affect our operating results and financial condition.

Terrorist activities or warnings have dramatically impacted the airline industry and will likely continue to do so.

The terrorist attacks of September 11, 2001 and their aftermath have negatively impacted the airline industry in general, including our operations.

If additional terrorist attacks are launched against the airline industry, there will be lasting consequences of the attacks, which may include loss of life, property damage, increased security and insurance costs, increased concerns about future terrorist attacks, increased government regulation and airport delays due to heightened security.

Past terrorist attacks and their aftermath negatively impacted the airline industry in general, including our operations.

If additional terrorist attacks or other acts of violence are launched against the airline industry, there will be lasting consequences of such attacks, which may include loss of life, property damage, increased security, and insurance costs, increased concerns about future terrorist attacks, increased government regulation, and airport delays due to heightened security.

We cannot provide any assurance that these events will not harm the airline industry generally or our operations or financial condition in particular.

The occurrence of an aviation accident involving our aircraft would negatively impact our operations and financial condition.

An accident or incident involving our aircraft could result in significant potential claims of injured passengers and others, as well as repair or replacement of a damaged aircraft and its consequential temporary or permanent loss from service.

In the event of an accident, our liability insurance may not be adequate to offset our exposure to potential claims and we may be forced to bear substantial losses from the accident.

Substantial claims resulting from an accident in excess of our related insurance coverage would harm our operational and financial results.

Moreover, any aircraft accident or incident, even if fully insured, could cause a public perception that our operations are less safe or reliable than other airlines.

General Risks Related to Us

We are increasingly dependent on technology, and if our technology fails, we do not adequately continue to invest in new technology or we are the subject of any cybersecurity incidents of our information technology infrastructure, our business may be adversely affected.

The performance and reliability of our technology, and the technology of our Partner Airlines, are critical to our ability to compete effectively.

We have become increasingly dependent on technology to manage our flight operations, reduce costs, and compete in the current business environment, such as software programs supporting flight operations, supply chain logistics, crew scheduling, and crew communications.

Technology initiatives will continue to require significant capital investments in order to deliver these expected benefits.

If we are unable to make these investments, the technology fails, or the expected benefits do not materialize, our business and operations could be negatively affected.

Any internal technological error or failure or large-scale external interruption in the information systems, networks, hardware, software, and technological infrastructure we depend on, such as U.S.

air traffic control systems, power, telecommunications, or the internet, may disrupt our internal network, impact our ability to conduct our business, lower the utilization of our aircraft, negatively impact our reputation, lower revenue, and/or result in increased costs.

Our technological systems (including those provided by third parties) and those of our Partner Airlines, may be vulnerable to a variety of sources of interruption due to events beyond our control, including natural disasters, terrorist attacks, telecommunications or IT System failures, computer viruses, hackers, and other security issues.

In addition, as a part of our ordinary business operations, we collect and store sensitive data, including the personal information of our employees.

Our information systems are subject to an increasing threat of continually evolving cybersecurity risks that may compromise the confidentiality, integrity, and availability of such systems.

Unauthorized parties, including diverse threat actors such as state-sponsored organizations, opportunistic hackers and hacktivists, may attempt to gain access to our technological systems or information through fraud or other means of deception, including through diverse attack vectors, such as social engineering/phishing, security breaches, malfeasance by insiders, human, or technological error, computer viruses, malicious destructive code, misconfigurations “bugs”, or other vulnerabilities in commercial software that is integrated into our technological systems.

The methods used to obtain unauthorized access, disable, or degrade service, or sabotage systems are constantly evolving and threat actors are becoming increasingly sophisticated in using techniques and tools—including artificial intelligence—that circumvent security controls, evade detection and remove forensic evidence.

As a result, we may be unable to anticipate or to detect, investigate, remediate, or recover from attacks or incidents for long periods of time.

We may not be able to prevent all data security breaches or misuse of data.

The compromise of our technology systems resulting in the loss, disclosure, misappropriation of, or access to, employees’ or business partners’ information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disruption to our operations, and damage to our reputation, any or all of which could adversely affect its business and financial condition.

Our ability to obtain financing or access capital markets may be limited.

and global economic conditions, the general state of the capital markets,

and the financial position of the major providers of commercial aircraft financing.

We cannot assure you that we will be able to source external financing for our planned aircraft acquisitions or for other significant capital needs, and if we are unable to source financing on acceptable terms, or if we are unable to source financing at all, our business could be materially and adversely affected.

To the extent we finance our activities with additional debt, we may become subject to financial and other covenants that may restrict our ability to pursue our business strategy or otherwise constrain our growth and operations.

Our business strategy includes making investments that complement our existing business.

These investments could be unsuccessful or consume significant resources, which could adversely affect our operating results.

Some of the businesses we may seek to invest in may be marginally profitable or unprofitable.

For these businesses to achieve acceptable levels of profitability, we may need to improve their management and operations.

Investments may involve significant cash expenditures, debt incurrence, operating losses, and expenses.

It may be difficult for us to complete investments quickly or integrate investments efficiently into our current business operations.

Any investments may ultimately harm our business or financial condition, as such investments may not be successful and may ultimately result in impairment charges.

Risks Related to Owning Our Common Stock

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The market price of our common stock may fluctuate substantially due to a variety of factors, many of which are beyond our control, including:

(i) announcements concerning our major partners, competitors, the airline industry, or the economy in general;

(ii) strategic actions by us, our major partners, or our competitors, such as acquisitions or restructurings;

(i) announcements concerning our Partner Airlines, competitors, the airline industry, or the economy in general;

(ii) strategic actions by us, our Partner Airlines, or our competitors, such as acquisitions or restructurings;

(iii) media reports and publications about the safety of our aircraft or the types of aircraft we operate;

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and (ix) general market, political and other economic conditions;

and (x) in response to the risk factors described in this Annual Report on Form 10-K.

and (x) in response to the risk factors described in this Report.

The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of particular companies.

1 unchanged sentence

In the past, shareholders have sometimes instituted securities class action litigation against companies following periods of volatility in the market price of their securities.

Any similar litigation against us could result in substantial costs, divert management's attention and resources, and have a material adverse effect on our business, results of operations and financial condition.

If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities and industry analysts may publish about us or our business.

If one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, the trading price of our common stock would likely decline.

If one or more of these analysts ceases to cover our company or fails to publish reports on us regularly, demand for our stock could decrease, which may cause the trading price of our common stock and the trading volume of our common stock to decline.

The value of our common stock may be materially adversely affected by additional issuances of common stock underlying our outstanding warrants.

As of September 30, 2024, we had outstanding warrants to purchase an aggregate of 4,899,497 shares of our common stock, all of which were issued to the U.S.

Treasury pursuant to the terms of the Loan and Guarantee Agreement dated October 30, 2020.

The warrants have a term of five years from the date of issuance and an initial exercise price of $3.98 per share.

Any future warrant exercises by the U.S.

Treasury, or any authorized transferee of the U.S.

Treasury, will be dilutive to our existing common shareholders.

Sales of substantial amounts of our common stock in the public or private market, a perception in the market that such sales could occur, or the issuance of securities exercisable into our common stock, could adversely affect the prevailing price of our common stock.

Any similar litigation against us could result in substantial costs, divert management’s attention and resources, and have a material adverse effect on our business, results of operations, financial condition, and the price of our common stock .

Provisions in our charter documents might deter acquisition bids for us, which could adversely affect the price of our common stock.

2 unchanged sentences

• dilute the interest of, or impair the voting power of, holders of our common stock and could also have the effect of discouraging, delaying, or preventing a change of control;

▪ establish advance notice procedures that shareholders must comply with in order to nominate candidates to our Board of Directors and propose matters to be brought before an annual or special meeting of our shareholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of our company;

• establish advance notice procedures that shareholders must comply with in order to nominate candidates to our Board of Directors and propose matters to be brought before an annual or special meeting of our shareholders,

which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company;

• authorize a majority of our Board of Directors to appoint a director to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which may prevent shareholders from being able to fill vacancies on our Board of Directors;

1 unchanged sentence

• restrict the ability of shareholders to call special meetings of shareholders.

Our corporate charter includes provisions limiting ownership by non-U.S.

To comply with restrictions imposed by federal law on foreign ownership of U.S.

airlines, our second amended and restated articles of incorporation restrict the ownership and voting of shares of our common stock by people and entities who are not "citizens of the United States" as that term is defined in 49 U.S.C.

That statute defines "citizen of the United States" as, among other things, a U.S.

corporation, of which the president and at least two-thirds of the board of directors and other managing officers are individuals who are citizens of the United States, which is under the actual control of citizens of the United States and in which at least 75% of the voting interest is owned or controlled by persons who are citizens of the United States.

Our second amended and restated articles of incorporation prohibit any non-U.S.

citizen from owning or controlling more than 24.9% of the aggregate votes of all outstanding shares of our common stock or 49.0% of the total number of outstanding shares of our capital stock.

The restrictions imposed by the above-described ownership caps are applied to each non-U.S.

citizen in reverse chronological order based on the date of registration on our foreign stock record.

At no time may shares of our capital stock held by non-U.S.

citizens be voted unless such shares are reflected on the foreign stock record.

The voting rights of non-U.S.

citizens having voting control over any shares of our capital stock are subject to automatic suspension to the extent required to ensure that we are in compliance with applicable law.

In the event any transfer or issuance of shares of our capital stock to a non-U.S.

citizen would result in non-U.S.

citizens owning more than the above-described cap amounts, such transfer or issuance will be void and of no effect.

As of September 30, 2024, we had outstanding warrants to purchase 4,899,497 shares of our common stock, all of which were held by the U.S.

We are currently in compliance with all applicable foreign ownership restrictions.

Our corporate charter limits certain transfers of our stock, which limits are intended to preserve our ability to use our net operating loss carryforwards, and these limits could have an effect on the market price and liquidity of our common stock.

To reduce the risk of a potential adverse effect on our ability to use our net operating loss carryforwards for federal income tax purposes, our second amended and restated articles of incorporation prohibit the transfer of any shares of our capital stock that would result in (i) any person or entity owning 4.75% or more of our then-outstanding capital stock, or (ii) an increase in the percentage ownership of any person or entity owning 4.75% or more of our then-outstanding capital stock.

These transfer restrictions expire upon the earliest of (i) the repeal of Section 382 of the Code or any successor statute if our Board of Directors determines that such restrictions are no longer necessary to preserve our ability to use our net operating loss carryforwards, (ii) the beginning of a fiscal year to which our Board of Directors determines that no net operating losses may be carried forward, or (iii) such other date as determined by our Board of Directors.

These transfer restrictions apply to the beneficial owner of the shares of our capital stock.

The clients of an investment advisor are treated as the beneficial owners of stock for this purpose if the clients have the right to receive dividends, if any, the power to acquire or dispose of the shares of our capital stock, and the right to proceeds from the sale of our capital stock.

Certain transactions approved by our Board of Directors, such as mergers and consolidations meeting certain requirements set forth in our articles of incorporation, are exempt from the above-described transfer restrictions.

Our Board of Directors also has the ability to grant waivers, in its discretion, with respect to transfers of our stock that would otherwise be prohibited.

The transfer restrictions contained in our second amended and restated articles of incorporation may impair or prevent a sale of common stock by a shareholder and may adversely affect the price at which a shareholder can sell our common stock.

In addition, this limitation may have the effect of delaying or preventing a change in control of the Company, creating a perception that a change in control cannot occur or otherwise discouraging takeover attempts that some shareholders may consider beneficial, which could also adversely affect the market price of our common stock.

We cannot predict the effect that this provision in our second amended and restated articles of incorporation may have on the market price of our common stock.

We currently do not intend to pay dividends on our common stock and, consequently, your only opportunity to achieve a return on your investment is if the price of our common stock appreciates.

4 unchanged sentences

Consequently, your only opportunity to achieve a positive return on your investment in us will be if the market price of our common stock appreciates.

Risks Related to our Merger with Republic Airways Holdings Inc.

The merger of Republic Airways Holdings Inc.

(“Republic”) with and into the Company (the “Merger”) is subject to conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all.

Failure to complete the Merger in a timely manner or at all could have adverse effects on the Company.

The completion of the merger of Republic with and into the Company is subject to a number of conditions, including, among others:

(i) approval of the transactions contemplated under the Agreement, Plan of Conversion and Plan of Merger (the “Merger Agreement”) by (a) the holders of at least two-thirds of the outstanding shares of Republic common stock entitled to vote thereon and (b) the holders of a majority of the outstanding shares of Company common stock, (ii) expiration of the waiting period (or extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) effectiveness of the registration statement relating to the transaction, (iv) the shares of Company common stock to be issued in the Merger being approved for listing on NASDAQ, (v) no governmental entity shall have enacted, issued, promulgated, enforced or entered any law or order that has the effect of making illegal, enjoining, or otherwise restraining or prohibiting the consummation of the transactions contemplated under the Merger Agreement, (vi) the receipt of requisite approvals from specified aviation authorities, (vii) the representations and warranties of the other party being true and correct, subject to the materiality standards contained in the Merger Agreement, (viii) material compliance by the other party with its covenants, (ix) no material adverse effect having occurred with respect to the other party since the signing of the Merger Agreement, (x) the satisfaction of certain specified conditions of the Three Party Agreement among the Company, Republic, and United, (xi) United shall not have materially breached the terms of the CPA Side Letter (as defined in the Merger Agreement) or provided the Company or Republic with written notice of its intention not to perform or comply with any of the terms or conditions under the Go-Forward CPA (as defined in the Merger Agreement), and (xiii) the filing by the Company of its Form 10-Q for the period ended December 31, 2024.

If the Merger is not completed, the Company’s ongoing business, financial condition, financial results and stock price may be materially adversely affected.

The market price of our common stock after the Merger may be affected by factors different from those affecting the price of our common stock before the Merger.

After completion of the Merger, the results of operations as well as the price of our common stock may in the future be affected by factors different from those factors affecting the Company and Republic, respectively, as independent standalone companies.

The Company, following the Merger, may face additional risks and uncertainties that the Company is currently not be exposed to as an independent company.

Potential litigation against the Company and/or Republic could result in substantial costs, an injunction preventing the completion of the Merger and/or a judgment resulting in the payment of damages.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements.

Even if such a lawsuit is unsuccessful, defending against these claims can result in substantial costs.

An adverse judgment could result in monetary damages, which could have a negative impact on the Company’s liquidity and financial condition.

Stockholders of the Company or Republic may file lawsuits against the Company, Republic and/or the directors and officers of each company in connection with the Merger.

These lawsuits could prevent or delay the completion of the Merger and result in significant costs to the Company, including any costs associated with the indemnification of the Company’s directors and officers.

There can be no assurance that any of the defendants will be successful in the outcome of any potential lawsuits.

The Merger is subject to the requirements of the HSR Act, and regulatory authorities may impose conditions that could have an adverse effect on the Company and/or Republic following the Merger or that could delay, prevent or increase the costs associated with completion of the Merger.

Before the Merger may be completed, all applicable waiting periods (or extensions thereof) under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) must have expired or been terminated.

In deciding whether to grant the required approvals, consents, registration, permits, expirations or terminations of the waiting periods, authorizations or other confirmations, the relevant governmental entities may impose requirements, limitations or costs or place restrictions on the conduct of our business following the acquisitions.

Under the Merger Agreement, the Company and Republic, as

applicable, have agreed to use their respective reasonable best efforts to cause the expiration or termination of the applicable waiting periods under any applicable Competition Laws (as defined the Merger Agreement) as soon as reasonably practicable following the date of the Merger Agreement (and prior to the Outside Date specified in the Merger Agreement).

However, notwithstanding the foregoing, Republic is not required to (and no member of the Parent Group (as defined in the Merger Agreement) shall without the prior written consent of Republic) agree to any term, condition, obligation, liability, requirement, limitation, qualification, remedy, commitment, sanction or other action imposed, required or requested by a governmental entity, including but not limited to selling, holding separate or otherwise disposing of or conducting their business (or, following the closing, the combined business) in a specified manner, or agree to sell, hold separate or otherwise dispose of or conduct their business (or, following the closing, the combined business) in a specified manner, or entering into or agreeing to enter into a voting trust arrangement, proxy arrangement, “hold separate” agreement or arrangement or similar agreement or arrangement with respect to the assets, operations or conduct of their business (or, following the closing, the combined business) in a specified manner, or permitting the sale, hold separate or other disposition of, any assets of the Company, Republic or their respective affiliates, or otherwise take any action that limits the freedom of action with respect to, or its ability to retain any of the businesses, product lines or assets of, the Company or Republic.

Governmental authorities may also impose conditions, terms, obligations or restrictions in connection with their approval of or consent to the Merger, and such conditions, terms, obligations or restrictions may delay completion of the Merger or impose additional material costs.

There can be no assurance that governmental authorities will choose not to impose such conditions, terms, obligations, or restrictions, and, if imposed, such conditions, terms, obligations or restrictions may delay or lead to the abandonment of the Merger.

At any time before or after consummation of the Merger, notwithstanding the early termination of the applicable waiting period under the HSR Act, the Federal Trade Commission, the Antitrust Division of the U.S.

Department of Justice, or any state could take such action under U.S.

antitrust laws as it deems necessary or desirable in the public interest, including seeking (i) to enjoin the completion of the Merger, (ii) to require divestiture of assets of the Company, Republic or their respective subsidiaries, (iii) to require the parties to take other actions or agree to other restrictions limiting the freedom of action of the parties.

General Risk Factors

The requirements of being a public company may strain our resources, increase our operating costs, divert management's attention, and affect our ability to attract and retain qualified board members or executive officers.

We became a public company in August 2018.

As a public company, we incur significant legal, accounting, and other expenses, including costs associated with public company reporting requirements.

We also have incurred and will continue to incur costs associated with the Sarbanes-Oxley Act of 2002, as amended, the Dodd-Frank Wall Street Reform and Consumer Protection Act and related rules implemented or to be implemented by the SEC and the Nasdaq Capital Market.

The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing.

We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly and divert management's time and attention from revenue-generating activities to compliance activities.

It could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees, or as our executive officers and may divert management’s attention.

Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.

We are required to assess our internal control over financial reporting on an annual basis, and any future adverse findings from such assessment could result in a loss of investor confidence in our financial reports, result in significant expenses to remediate any internal control deficiencies and have a material adverse effect on our business, results of operations and financial condition.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting for our fiscal year ended September 30, 2024 and each subsequent year.

This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

As of August 10, 2023, we are no longer an "emerging growth company," as defined in the JOBS Act.

As such, our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting and we are required to disclose, to the extent material, changes made in our internal control over financial reporting on a quarterly basis.

To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff.

Management assessed the effectiveness of our internal control over financial reporting at September 30, 2024.

In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).

Based on our assessments and those criteria, management determined that we maintained effective internal control over financial reporting as of September 30, 2024.

In future periods, if we fail to achieve and maintain an effective internal control environment, it could result in material misstatements in our financial statements and failure to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information and adversely impact our stock price.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors