0001558370-22-017038 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Nov. 08, 2022
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-38801
Entity Registrant Name	AerSale Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-3976002
Entity Address, Address Line One	255 Alhambra Circle, Suite 435
Entity Address, City or Town	Coral Gables
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33134
City Area Code	305
Local Phone Number	764-3200
Title of 12(b) Security	Common stock, $0.0001 par value per share
Trading Symbol	ASLE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		51,774,665
Entity Central Index Key	0001754170
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 151,378	$ 130,188
Accounts receivable, net of allowance for doubtful accounts of $1,272 and $1,692 as of September 30, 2022 and December 31, 2021	39,219	42,571
Inventory:
Aircraft, airframes, engines, and parts, net	107,150	81,759
Advance vendor payments	24,384	14,287
Deposits, prepaid expenses, and other current assets	3,471	2,724
Total current assets	325,602	271,529
Fixed assets:
Aircraft and engines held for lease, net	33,118	73,364
Property and equipment, net	11,963	7,350
Inventory:
Aircraft, airframes, engines, and parts, net	80,435	77,534
Deferred income taxes	12,852	10,013
Deferred financing costs, net	659	999
Deferred customer incentives and other assets, net	628	598
Goodwill	19,860	19,860
Other intangible assets, net	24,647	26,238
Total assets	509,764	487,485
Current liabilities:
Accounts payable	22,050	19,967
Accrued expenses	7,829	8,424
Income tax payable	1,239	3,443
Lessee and customer purchase deposits	10,116	33,212
Deferred revenue	3,524	2,860
Total current liabilities	44,758	67,906
Long-term lease deposits	152	2,053
Maintenance deposit payments and other liabilities	1,624	3,403
Deferred income taxes, net	1,297	1,113
Warrant liability	6,012	4,131
Total liabilities	53,843	78,606
Commitments and contingencies
Stockholders' equity:
Common stock, $0.0001 par value. Authorized 200,000,000 shares; issued and outstanding 51,774,665 and 51,673,099 shares as of September 30, 2022 and December 31, 2021, respectively	5	5
Additional paid-in capital	326,275	313,901
Retained earnings	129,641	94,973
Total stockholders' equity	455,921	408,879
Total liabilities and stockholders' equity	$ 509,764	$ 487,485

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Condensed Consolidated Balance Sheets
Allowance for doubtful accounts	$ 1,272	$ 1,692
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	51,774,665	51,673,099
Common Stock, Shares, Outstanding	51,774,665	51,673,099

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue:
Total revenue	$ 50,999	$ 73,298	$ 313,413	$ 223,654
Cost of sales and operating expenses:
Total cost of sales	35,510	48,666	196,241	148,449
Gross profit	15,489	24,632	117,172	75,205
Selling, general, and administrative expenses	23,983	22,803	71,252	53,079
Payroll support program proceeds				(14,768)
(Loss) income from operations	(8,494)	1,829	45,920	36,894
Other income (expenses):
Interest income (expense), net	393	(241)	15	(750)
Other income, net	45	9	526	258
Change in fair value of warrant liability	(2,029)	(2,104)	(1,881)	(2,735)
Total other expenses	(1,591)	(2,336)	(1,340)	(3,227)
(Loss) income before income tax provision	(10,085)	(507)	44,580	33,667
Income tax benefit (expense)	1,072	(1,129)	(9,912)	(8,737)
Net (loss) income	$ (9,013)	$ (1,636)	$ 34,668	$ 24,930
Earnings per share - basic
(Loss) earnings per share - basic	$ (0.17)	$ (0.04)	$ 0.67	$ 0.59
Earnings per share - diluted
(Loss) earnings per share - diluted	$ (0.17)	$ (0.04)	$ 0.64	$ 0.59
Product
Revenue:
Total revenue	$ 16,823	$ 43,613	$ 217,813	$ 124,914
Cost of sales and operating expenses:
Total cost of sales	12,755	30,954	133,702	85,147
Leasing
Revenue:
Total revenue	7,786	8,002	23,342	20,624
Cost of sales and operating expenses:
Total cost of sales	1,818	2,436	6,538	7,667
Services
Revenue:
Total revenue	26,390	21,683	72,258	78,116
Cost of sales and operating expenses:
Total cost of sales	$ 20,937	$ 15,276	$ 56,001	$ 55,635

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
Balance at beginning at Dec. 31, 2020	$ 4	$ 292,593	$ 58,858	$ 351,455
Balance at beginning (in shares) at Dec. 31, 2020	41,046,216
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of Earn-Out shares		(269)		(269)
Issuance of Earn-Out shares (in shares)	1,855,634
Shares issued upon exercise of warrants		545		545
Shares issued upon exercise of warrants (in shares)	47,411
Net income			10,018	10,018
Balance at ending at Mar. 31, 2021	$ 4	292,869	68,876	361,749
Balance at ending (in shares) at Mar. 31, 2021	42,949,261
Balance at beginning at Dec. 31, 2020	$ 4	292,593	58,858	$ 351,455
Balance at beginning (in shares) at Dec. 31, 2020	41,046,216
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under the 2020 Employee Stock Purchase Plan (in shares)				0
Net income				$ 24,930
Balance at ending at Sep. 30, 2021	$ 4	301,768	83,788	385,560
Balance at ending (in shares) at Sep. 30, 2021	42,949,261
Balance at beginning at Mar. 31, 2021	$ 4	292,869	68,876	361,749
Balance at beginning (in shares) at Mar. 31, 2021	42,949,261
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation		150		150
Net income			16,548	16,548
Balance at ending at Jun. 30, 2021	$ 4	293,019	85,424	378,447
Balance at ending (in shares) at Jun. 30, 2021	42,949,261
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation		8,749		8,749
Net income			(1,636)	(1,636)
Balance at ending at Sep. 30, 2021	$ 4	301,768	83,788	385,560
Balance at ending (in shares) at Sep. 30, 2021	42,949,261
Balance at beginning at Dec. 31, 2021	$ 5	313,901	94,973	408,879
Balance at beginning (in shares) at Dec. 31, 2021	51,673,099
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation		3,755		3,755
Shares issued under the 2020 Employee Stock Purchase Plan		125		125
Shares issued under the 2020 Employee Stock Purchase Plan (in shares)	11,988
Shares issued under the 2020 Equity Incentive Plan (in shares)	2,970
Net income			17,226	17,226
Balance at ending at Mar. 31, 2022	$ 5	317,781	112,199	429,985
Balance at ending (in shares) at Mar. 31, 2022	51,688,057
Balance at beginning at Dec. 31, 2021	$ 5	313,901	94,973	$ 408,879
Balance at beginning (in shares) at Dec. 31, 2021	51,673,099
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under the 2020 Employee Stock Purchase Plan (in shares)				30,099
Net income				$ 34,668
Balance at ending at Sep. 30, 2022	$ 5	326,275	129,641	455,921
Balance at ending (in shares) at Sep. 30, 2022	51,774,665
Balance at beginning at Mar. 31, 2022	$ 5	317,781	112,199	429,985
Balance at beginning (in shares) at Mar. 31, 2022	51,688,057
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation		3,917		3,917
Shares issued under the 2020 Employee Stock Purchase Plan		220		220
Shares issued under the 2020 Employee Stock Purchase Plan (in shares)	18,111
Net income			26,455	26,455
Balance at ending at Jun. 30, 2022	$ 5	321,918	138,654	460,577
Balance at ending (in shares) at Jun. 30, 2022	51,706,168
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		4,357		4,357
Restricted Stock Units ("RSUs") vested and settled (in share)	20,630
Shares issued upon exercise of warrants (in shares)	47,867
Net income			(9,013)	(9,013)
Balance at ending at Sep. 30, 2022	$ 5	$ 326,275	$ 129,641	$ 455,921
Balance at ending (in shares) at Sep. 30, 2022	51,774,665

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net income	$ 34,668	$ 24,930
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	8,589	9,868
Amortization of debt issuance costs	340	366
Inventory reserve	2,010	5,033
Impairment of aircraft held for lease	857
Provision for doubtful accounts	(379)	(122)
Deferred income taxes	(2,655)	(988)
Change in fair value of warrant liability	1,881	2,735
Share-based compensation	12,029	8,899
Changes in operating assets and liabilities:
Accounts receivable	3,730	5,279
Inventory	(26,441)	(44,104)
Deposits, prepaid expenses, and other current assets	(747)	3,628
Deferred customer incentives and other assets	661
Advance vendor payments	(10,097)	(3,201)
Accounts payable	2,082	(57)
Income tax payable	(2,205)	(987)
Accrued expenses	(594)	(2,234)
Deferred revenue	664	363
Lessee and customer purchase deposits	(24,996)	16,649
Other liabilities	(1,779)	327
Net cash (used in) provided by operating activities	(2,382)	26,384
Cash flows from investing activities:
Proceeds from sale of assets	37,107	6,995
Acquisition of aircraft and engines held for lease, including capitalized cost	(6,945)	(60)
Purchase of property and equipment	(6,935)	(1,060)
Net cash provided by investing activities	23,227	5,875
Cash flows from financing activities:
Cash paid for employee taxes on withholding shares		(269)
Proceeds from exercise of warrants		545
Proceeds from the issuance of Employee Stock Purchase Plan shares	345
Net cash provided by financing activities	345	276
Increase in cash and cash equivalents	21,190	32,535
Cash and cash equivalents, beginning of period	130,188	29,317
Cash and cash equivalents, end of period	151,378	61,852
Supplemental disclosure of cash activities
Income taxes paid	14,637	8,095
Interest paid	856	452
Supplemental disclosure of noncash investing activities
Reclassification of aircraft and aircraft engines inventory (from) to equipment held for lease, net	(25,025)	$ 14,650
Reclassification of customer purchase deposits to sale of assets	$ 12,500

DESCRIPTION OF THE BUSINESS

9 Months Ended

Sep. 30, 2022

DESCRIPTION OF THE BUSINESS

DESCRIPTION OF THE BUSINESS

NOTE A — DESCRIPTION OF THE BUSINESS

Organization

Monocle Acquisition Corporation (“Monocle”) was initially formed on August 20, 2018 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses.

On December 22, 2020, (the “Closing Date”), Monocle consummated a business combination pursuant to that certain Amended and Restated Agreement and Plan of Merger, dated September 8, 2020 (the “Merger Agreement”) by and among Monocle, AerSale Corporation (f/k/a Monocle Holdings Inc.), a Delaware corporation (the “Company”), AerSale Aviation, Inc. (f/k/a AerSale Corp.), a Delaware corporation (“AerSale Aviation”), Monocle Merger Sub 1 Inc., a Delaware corporation (“Merger Sub 1”), Monocle Merger Sub 2 LLC, a Delaware limited liability company (“Merger Sub 2”), and Leonard Green & Partners, L.P., a Delaware limited partnership, solely in its capacity as the initial Holder Representative (as defined in the Merger Agreement). The transactions contemplated by the Merger Agreement are referred to herein as the “Merger” and in connection therewith, Monocle merged with and into us, whereby the Company survived the merger and became the successor issuer to Monocle by operation of Rule 12g-3 under the Exchange Act.

Upon the consummation of the Merger: (a) Merger Sub 1 was merged with and into Monocle, with Monocle surviving the merger as a wholly-owned direct subsidiary of the Company (the “First Merger”), and (b) Merger Sub 2 was merged with and into AerSale Aviation, with AerSale Aviation surviving the merger as a wholly-owned indirect subsidiary of the Company (the “Second Merger”). In connection with the closing of the Merger (the “Closing”), AerSale Aviation changed its name from “AerSale Corp.” to “AerSale Aviation, Inc.” and the Company changed its name from “Monocle Holdings Inc.” to “AerSale Corporation.” Immediately following the Merger, the Company contributed all of its ownership in Monocle to AerSale Aviation which will continue as a wholly owned subsidiary of the Company.

The Company’s corporate headquarters are based in Miami, Florida, with additional offices, hangars, and warehouses globally.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with Generally Accepted Accounting Policies in the United States (“U.S. GAAP”) for interim financial information and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (“SEC”), which permits reduced disclosures for interim periods. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes all adjustments, consisting only of normal recurring adjustments, and disclosures necessary for a fair presentation of the accompanying condensed consolidated balance sheets, statements of operations, stockholders’ equity, and cash flows have been made. Unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. Unaudited interim condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report), wherein a more complete discussion of significant accounting policies and certain other information can be found.

Revenue Recognition

Products — Used Serviceable Material (“USM”) Sales

Revenues from sales of USM are measured based on consideration specified within customer contracts, and excludes any sales commissions and taxes collected and remitted to government agencies. The Company recognizes revenue when performance obligations are satisfied by transferring control of a product or service to a customer. The parts are sold at a fixed price with no right of return. In determining the performance obligation, management has identified the promise in the contract to be the shipment of the spare parts to the customer. Title passes to the buyer when the goods are shipped, the buyer is responsible for any loss in transit and the Company has a legal right to payment for the spare parts once shipped. The Company generally sells its USM products under standard 30-day payment terms, subject to certain exceptions. Customers neither have the right to return products nor do they have the right to extended financing. The Company has determined that physical acceptance of the spare parts to be a formality in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”).

Spare parts revenue is based on a set price for a set number of parts as defined in the purchase order. The performance obligation is completed once the parts have shipped and as a result, all of the transaction price is allocated to that performance obligation. The Company has determined that it is appropriate to recognize spare parts sales at a point in time (i.e., the date the parts are shipped) in accordance with ASC 606.

Products — Whole Asset Sales

Revenues from whole asset sales are measured based on consideration specified in the contract with the customer. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, condition of the whole asset, bill of sale and the assignment of rights and warranties from the Company to the customer. The Company believes the whole asset holds standalone value to the customer as it is not dependent on any other services for functionality purposes and therefore is distinct within the context of the contract and as described in ASC 606-10. Accordingly, the Company has identified the transfer of the whole asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of whole assets) and is explicitly stated in each contract. Whole asset sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer is the date the customer obtains control over the asset and would cause the revenue recognition. Payment is required in full upon a customer’s acceptance of the whole asset on the date of the transfer.

Leasing Revenues

The Company leases flight equipment under operating leases that contain monthly base rent and reports rental income straight line over the life of the lease as it is earned. Additionally, the Company’s leases provide for supplemental rent, which is calculated based on actual hours or cycles of utilization and, for certain components, based on the amount of time until maintenance of that component is required. In certain leases, the Company records supplemental rent paid by the lessees as maintenance deposit payment liabilities in recognition of the Company’s contractual commitment to reimburse qualifying maintenance. Reimbursements to the lessees upon receipt of evidence of qualifying maintenance work are charged against the existing maintenance deposit payment liabilities. In leases where the Company is responsible for performing certain repairs or replacement of aircraft components or engines, supplemental rent is recorded as revenue in the period earned. In the event of premature lease termination or lessee default on the lease terms, revenue recognition will be discontinued when outstanding balances beyond the customers’ deposits are held. Payment terms for leased flight equipment are due upon receipt.

Service Revenues

Service revenues are recognized as performance obligations when they are fulfilled and the benefits are transferred to the customer. At contract inception, the Company evaluates if the contract should be accounted for as a single performance obligation or if the contract contains multiple performance obligations. In some cases, the Company’s service contract with the customer is considered one performance obligation as it includes factors such as the good or service being provided is significantly integrated with other promises in the contract, the service provided significantly modifies or customizes the other good or service or the goods or services are highly interdependent or interrelated with each other. If the contract has more than one performance obligation, the Company determines the standalone price of each distinct good or service underlying each performance obligation and allocates the transaction price based on their relative standalone selling prices. The transaction price of a contract, which can include both fixed and variable amounts, is allocated to each performance obligation identified. Some contracts contain variable consideration, which could include incremental fees or penalty provisions related to performance. Variable consideration that can be reasonably estimated based on current assumptions and historical information is included in the transaction price at the inception of the contract but limited to the amount that is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Variable consideration that cannot be reasonably estimated is recorded when known.

For most service contracts, performance obligations are satisfied over time as work progresses based on transfer of control of products and services to our customers. The Company receives payments from our customers based on billing schedules or contractual terms.

For performance obligations that are satisfied over time, the Company measures progress in a manner that depicts the performance of transferring control to the customer. As such, the Company utilizes the input method of cost-to-cost to recognize revenue over time as this depicts when control of the promised goods or services are transferred to the customer. Revenue is recognized based on the relationship of actual costs incurred to date to the estimated total cost at completion of the performance obligation. The Company is required to make certain judgments and estimates, including estimated revenues and costs, as well as inflation and the overall profitability of the arrangement. Key assumptions involved include future labor costs and efficiencies, overhead costs and ultimate timing of product delivery. Differences may occur between the judgments and estimates made by management and actual program results. Under most of the Company’s Maintenance, Repair and Overhaul (“MRO”) contracts, if the contract is terminated for convenience, the Company is entitled to payment for items delivered, fair compensation for work performed, the costs of settling and paying other claims and a reasonable profit on the costs incurred or committed.

Changes in estimates and assumptions related to our arrangements accounted for using the input method based on labor hours are recorded using the cumulative catchup method of accounting. These changes are primarily adjustments to the estimated profitability for our long term programs where the Company provides MRO services.

The Company has elected to use certain practical expedients permitted under ASC 606. Shipping and handling fees and costs incurred associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost, are included in cost of sales in our Condensed Consolidated Statements of Operations and are not considered a performance obligation to our customers. The Company’s reported sales on our Condensed Consolidated Statements of Operations are net of any sales or related non income taxes. The Company also utilizes the “as invoiced” practical expedient in certain cases where performance obligations are satisfied over time and the invoiced amount corresponds directly with the value the Company is providing to the customer.

New Accounting Pronouncements Not Yet Adopted

On February 2016, the Financial Accounting Standards Board (“FASB”) issued “Leases (Topic 842)”, which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” Topic 842 became effective for the Company for the annual period beginning on January 1, 2022, the impact of which will be reflected in the fourth quarter of 2022 recorded retroactively at the beginning of the period of adoption through a cumulative-effect adjustment. We plan to elect the practical expedients, which permits us to not reassess (i) whether any expired or existing contracts are or contain leases,

(ii) the lease classification for any expired leases and (iii) indirect costs for any existing leases. In addition, the practical expedient allows us not to separate lease and non-lease components for both lessee and lessor relationships and to not apply the recognition requirements to leases with terms of less than 12 months. Based on preliminary estimates, our adoption is expected to result in the recognition of operating lease right of use assets of approximately $13.8 million and lease liabilities of approximately $14.9 million on January 1, 2022. We are continuing our assessment, which may identify additional impacts that Topic 842 could have on our financial statements.

In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”), “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments — Credit Losses,” which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Topic 326 will become effective for the Company beginning January 1, 2023, with early adoption permitted, on a modified retrospective basis. The Company is currently evaluating the impact this guidance will have on our consolidated financial statements and related disclosures.

New Accounting Pronouncements Recently Adopted

On May 3, 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Under this standard, issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company adopted the new standards as of January 1, 2022 and the adoption did not have a material impact to the Condensed Consolidated Financial Statements.

Payroll Support Programs

The Company has also taken steps to improve our liquidity, including seeking financial assistance under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Certain of the Company’s subsidiaries have received $16.4 million from the U.S. Treasury Department (“Treasury”) through the Payroll Support Program under the CARES Act, of which $3.7 million was received and recognized as payroll support program proceeds during the nine months ended September 30, 2021. No amount was received or recognized under the CARES Act during the quarter ended September 30, 2022.

As part of the Payroll Support Extension Law, the Company entered into an agreement with the Treasury on March 4, 2021 for the receipt of relief funds of $5.5 million. During the nine months ended September 30, 2021, we received $5.5 million in grant proceeds under the Payroll Support Extension Law. During the three- and nine- month periods ended September 30, 2021, $0.0 million and $5.5 million was recognized as payroll support program proceeds in the Condensed Consolidated Statements of Operations.

Pursuant to the American Rescue Plan Act of 2021 (“ARP”), we entered into an agreement with the Treasury on April 16, 2021 for the receipt of relief funds of an additional $5.5 million. During the three- and nine- month periods ended September 30, 2021, $0.0 million and $5.5 million was recognized as payroll support program proceeds in the Condensed Consolidated Statements of Operations.

In connection with the financial assistance the Company received under the Payroll Support Program, it was required to comply with certain provisions of the CARES Act, including the requirement that funds provided pursuant to

the Payroll Support Program be used exclusively for the continuation of payment of employee wages, salaries and benefits; the requirement against involuntary terminations and furloughs and reductions in employee pay rates and benefits from the signing date of the Payroll Support Program agreement through September 30, 2021. The agreement also required the Company to issue a recall to any employee who was terminated or furloughed between October 1, 2020 and March 4, 2021 and enable such employee to return to employment. In addition, the Company was subject to provisions prohibiting the repurchase of common stock and the payment of common stock dividends through September 30, 2022, and remains limited on the payment of certain employee compensation through April 1, 2023. These restrictions may affect the Company’s operations and if the Company does not comply with these provisions, it may be required to reimburse up to 100% of any previously received relief funds. In particular, limitations on compensation may adversely impact our ability to attract and retain senior management or attract other key employees during this critical time. As of September 30, 2022, we were in compliance with all applicable provisions of the CARES Act, Payroll Support Program and ARP.

SIGNIFICANT RISKS AND UNCERTAINTIES

9 Months Ended

Sep. 30, 2022

SIGNIFICANT RISKS AND UNCERTAINTIES

SIGNIFICANT RISKS AND UNCERTAINTIES

NOTE C — SIGNIFICANT RISKS AND UNCERTAINTIES

Impact of Ukraine Conflict and Russia Sanctions

In February of 2022, Russia invaded Ukraine and is still engaged in an active conflict against the country. As a result, governments in the European Union, the United States, the United Kingdom, Switzerland, and other countries have enacted sanctions against Russia and Russian interests. These sanctions include controls on the export and re-export of certain goods, supplies, and technologies, supply of aircraft and aircraft components to Russian persons or for use in Russia, subject to certain wind-down periods, and the imposition of restrictions on doing business with certain state-owned Russian customers and other investments and business activities in Russia. In order to comply with these sanctions, we ceased pursuing future business in Russia and terminated our three leases with operators doing business in Russia, successfully recovering two aircraft with one engine still unrecovered. Due to continued uncertainty in the ability to recover this engine from Russia or to collect insurance coverage, we have fully impaired this asset. Although the current sanctions prohibit the continuation of certain business activities, the three leases referenced were contractually scheduled to expire in 2022 and therefore will not have a material impact on our business or 2022 financial condition. While it is difficult to predict the short or long term implications of this conflict and sanctions on the global economy and the aviation industry, we intend to fully comply with all applicable sanctions and embargoes, and do not expect the current situation will have a material adverse effect on our results of operations.

REVENUE

9 Months Ended

Sep. 30, 2022

REVENUE.

REVENUE

NOTE D — REVENUE

The timing of revenue recognition, customer billings and cash collections results in a contract asset or contract liability at the end of each reporting period. Contract assets consist of unbilled receivables or costs incurred where revenue recognized over time exceeds the amounts billed to customers. Contract liabilities include advance payments and billings in excess of revenue recognized. Certain customers make advance payments prior to the satisfaction of performance obligations on the contract. These amounts are recorded as contract liabilities until such performance obligations are satisfied. Contract assets and contract liabilities are determined on a contract by contract basis.

Contract assets are as follows (in thousands):


	September 30, 2022		December 31, 2021		Change
Contract assets	$	7,580	$	13,221	$	(5,641)

Contract assets are reported within accounts receivable on our Condensed Consolidated Balance Sheets. Changes in contract assets primarily results from the timing difference between the performance of services. Contract liabilities are reported as deferred revenue on our Condensed Consolidated Balance Sheets and amounted to $2.9 million as of December 31, 2021, of which $2.6 million was related to contract liabilities for services to be performed. For the three and nine months ended September 30, 2022, the Company recognized as revenue $0.1 million and $2.3 million of contract liabilities included in the beginning balance for services performed as the timing between customer payments and our performance of the services is generally no longer than six months.

Disaggregation of Revenue

The Company reports revenue by segment. The following tables present revenue by segment, as well as a reconciliation to total revenue for the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022						2022
	Asset Management						Asset Management
	Solutions		Tech Ops		Total Revenues		Solutions		TechOps		Total Revenues
USM	$	10,128	$	3,455	$	13,583	$	38,869	$	5,209	$	44,078
Whole asset sales		2,677		-		2,677		147,451		23,605		171,056
Engineered solutions		-		563		563		-		2,679		2,679
Total products		12,805		4,018		16,823		186,320		31,493		217,813
Leasing		7,786		-		7,786		23,342		-		23,342
Services		-		26,390		26,390		-		72,258		72,258
Total revenues	$	20,591	$	30,408	$	50,999	$	209,662	$	103,751	$	313,413


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021						2021
	Asset Management						Asset Management
	Solutions		Tech Ops		Total Revenues		Solutions		TechOps		Total Revenues
USM	$	13,466	$	1,315	$	14,781	$	33,935	$	3,574	$	37,509
Whole asset sales		27,408		-		27,408		83,868		-		83,868
Engineered solutions		-		1,424		1,424		-		3,537		3,537
Total products		40,874		2,739		43,613		117,803		7,111		124,914
Leasing		8,002		-		8,002		20,624		-		20,624
Services		-		21,683		21,683		-		78,116		78,116
Total revenues	$	48,876	$	24,422	$	73,298	$	138,427	$	85,227	$	223,654

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

INVENTORY

9 Months Ended

Sep. 30, 2022

INVENTORY

INVENTORY

NOTE E — INVENTORY

Following are the major classes of inventory as of the below dates (in thousands):


	September 30, 2022		December 31, 2021
Used serviceable materials	$	73,551	$	65,496
Work-in-process		21,145		12,462
Whole assets		92,889		81,335
	$	187,585		159,293
Less short term		(107,150)		(81,759)
Long term	$	80,435	$	77,534

The Company did not record inventory reserve for the three months ended September 30, 2022 and 2021, respectively, and recorded an inventory reserve of $1.8 million and $4.8 million for the nine months ended September 30, 2022 and 2021, respectively, due to the Company’s evaluation of the inventory’s net realizable value. These amounts are included in cost of products in the accompanying Condensed Consolidated Statements of Operations.

INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2022

INTANGIBLE ASSETS

INTANGIBLE ASSETS

NOTE F — INTANGIBLE ASSETS

In accordance with ASC 350, Intangibles — Goodwill and Other, goodwill and other intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. The Company reviews and evaluates our goodwill and indefinite life intangible assets for potential impairment at a minimum annually or more frequently if circumstances indicate that impairment is possible.

The Company determined the fair value of assets acquired and liabilities assumed using a variety of methods. An income approach based on discounted cash flows was used to determine the values of our trademarks, certifications, customer relationships and FAA certificates. The assumptions the Company used to estimate the fair value of our reporting units are based on historical performance, as well as forecasts used in our current business plan and require considerable management judgment.

The Company’s goodwill and intangible assets as defined by ASC 350 is related to our subsidiaries, AerSale Component Solutions (d/b/a AerSale Landing Gear Solutions) (“ALGS”), Avborne Component Solutions (d/b/a AerSale Component Solutions) (“ACS”), and Aircraft Composite Technologies (“ACT”), which are included in the TechOps segment, as well as Qwest, which is included under the Asset Management Solutions segment.

Goodwill and other intangibles as of the below dates are (in thousands):


	September 30, 2022		December 31, 2021
Qwest:
FAA Certifications	$	724	$	724
Goodwill		13,416		13,416
ALGS:
FAA Certifications		710		710
Goodwill		379		379
ACS:
Trademarks		600		600
FAA Certifications		7,300		7,300
Goodwill		63		63
ACT:
Trademarks		200		200
FAA Certificates		796		796
Goodwill		6,002		6,002
Total intangible assets with indefinite lives	$	30,190	$	30,190

The Company performed its annual quantitative impairment analysis on the indefinite lived intangible assets as of July 1, 2022 and concluded there was no impairment. Intangible assets with definite useful lives are amortized on a straight-line basis over their estimated useful lives. Intangible assets with definite lives as of the below dates are as follows (in thousands):


	Useful Life
	In Years	September 30, 2022		December 31, 2021
Qwest:
Customer relationships	10	$	6,381	$	7,109
ALGS:
Customer relationships	10		55		70
ACS:
Customer relationships	10		1,295		1,453
ACT:
Customer relationships	10		6,586		7,276
Total intangible assets with definite lives		$	14,317	$	15,908

Total amortization expense amounted to $0.5 million and $0.5 million for the three months ended September 30, 2022 and 2021, respectively. Total amortization expense amounted to $1.6 million and $1.6 million for the nine months ended September 30, 2022 and 2021, respectively. Accumulated amortization amounted to $6.7 million and $5.1 million as of September 30, 2022 and December 31, 2021, respectively.

Other intangible assets are reviewed at least annually or more frequently if any event or change in circumstance indicates that an impairment may have occurred.

PROPERTY AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT, NET

PROPERTY AND EQUIPMENT, NET

NOTE G — PROPERTY AND EQUIPMENT, NET

Property and equipment, net, as of the below dates consisted of the following (in thousands):


	Useful Life
	In Years	September 30, 2022		December 31, 2021
Tooling and equipment	7 - 15	$	14,445	$	13,530
Furniture and other equipment	5		9,740		7,928
Computer software	5		2,152		1,998
Leasehold improvements	3 - 6		6,680		3,632
Equipment under capital lease	5		192		192
			33,209		27,280
Less accumulated depreciation			(21,246)		(19,930)
		$	11,963	$	7,350

Depreciation expense, which includes amortization of equipment under capital lease, amounted to $0.6 million and $0.5 million for the three months ended September 30, 2022 and 2021, respectively. Depreciation expense, which includes amortization of equipment under capital lease, amounted to $1.6 million and $1.5 million for the nine months ended September 30, 2022 and 2021, respectively.

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE

9 Months Ended

Sep. 30, 2022

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE

NOTE H — LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE

Aircraft and engines held for operating leases, net, as of the below dates consisted of the following (in thousands):


	September 30, 2022		December 31, 2021
Aircraft and engines held for operating leases	$	100,650	$	197,397
Less accumulated depreciation		(67,532)		(124,033)
	$	33,118	$	73,364

Total depreciation expense amounted to $1.7 million and $2.1 million for the three months ended September 30, 2022 and 2021, respectively. Total depreciation expense amounted to $5.4 million and $6.8 million for the nine months ended September 30, 2022 and 2021, respectively, and is included in cost of leasing in the Condensed Consolidated Statements of Operations.

The Company recorded an impairment of Flight Equipment in the amount of $0.9 million for the nine months ended September 30, 2022, which is included in cost of leasing in the Condensed Consolidated Statements of Operations.

Supplemental rents recognized as revenue totaled $3.6 million and $2.3 million for the three months ended September 30, 2022 and 2021, respectively. Supplemental rents recognized as revenue totaled $10.1 million and $5.2 million for the nine months ended September 30, 2022 and 2021, respectively.

The Company’s current operating lease agreements for leased flight equipment expire over the next two years. The amounts in the following table are based upon the assumption that flight equipment under operating leases will remain

leased for the length of time specified by the respective lease agreements. Minimum future annual lease rentals contracted to be received under existing operating leases of flight equipment were as follows (in thousands):


Year ending December 31:
Remainder of 2022	$	3,976
2023		4,867
2024		132
Total minimum lease payments	$	8,975

ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2022

ACCRUED EXPENSES.

ACCRUED EXPENSES

NOTE I — ACCRUED EXPENSES

The following is a summary of the components of accrued expenses as of the below dates (in thousands):


	September 30, 2022		December 31, 2021
Accrued compensation and related benefits	$	5,050	$	6,294
Accrued legal fees		680		377
Commission fee accrual		211		115
Accrued federal, state and local taxes and fees		183		243
Other		1,705		1,395
	$	7,829	$	8,424

WARRANT LIABILITY

9 Months Ended

Sep. 30, 2022

WARRANT LIABILITY

WARRANT LIABILITY

NOTE J – WARRANT LIABILITY

Warrants to purchase a total of 623,834 and 835,014 shares of the Company’s common stock were outstanding as of September 30, 2022 and December 31, 2021. 750,000 warrants were issued to founders in a private placement (the “Private Warrants”). Each of the Private Warrants entitles the registered holder to purchase one share of the Company’s common stock at a price of $11.50 per share. In the three months ended September 30, 2022, a warrant holder initiated a cashless exercise of 126,166 warrants for the purchase of shares of common stock at an exercise price of $11.50 per share (remaining term on exercised warrants at September 30, 2022 was 3.2 years) and we issued 47,867 shares of common stock based on the fair value at the date of exercise of $18.5306 per share. The remaining Private Warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of the completion of the Merger, or earlier upon redemption or liquidation.

The Private Warrants include provisions that affect the settlement amount. Such variables are outside of those used to determine the fair value of a fixed-for-fixed instrument, and as such, the warrants do not meet the criteria for equity treatment under guidance contained in ASC Topic 815, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in a Company’s Own Stock.” The Company classifies the Private Warrants as a liability at their fair value subject to re-measurement at each balance sheet date and adjusted at each reporting period until exercised or expired, and any change in fair value is recognized in the Company's Condensed Consolidated Statement of Operations. The fair value of the Private Warrants as of September 30, 2021 was determined using the market price of the Company’s public warrants adjusted for their lack of liquidity. Effective December 29, 2021 all public warrants were redeemed on a cashless basis and ceased trading on Nasdaq. As a result, the Black-Scholes option pricing model was adopted. The following table represents the assumptions for the Black-Scholes option-pricing model used in determining the fair value of the Private Warrants as of September 30, 2022:


		September 30, 2022
Risk-free interest rate		3.98%
Expected volatility of common stock		42.37%
Dividend yield		-
Expected option term in years		3.2

The significant assumptions utilized in the Black-Scholes calculation consist of interest rate for U.S. Treasury Bonds, as published by the U.S. Federal Reserve, and expected volatility estimated using historical daily volatility of guideline public companies.

The expense recognized in the Company's Condensed Consolidated Statement of Operations related to the change in fair value of warrant liability was $2.0 million and $1.9 million during the three and nine months ended September 30, 2022, respectively. The expense recognized in the Company's Condensed Consolidated Statement of Operations related to the change in fair value of warrant liability was $2.1 million and $2.7 million during the three and nine months ended September 30, 2021, respectively.

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2022

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE K — EARNINGS PER SHARE

The computation of basic and diluted earnings per share (“EPS”) is based on the weighted average number of common shares outstanding during each period.

The following table provides a reconciliation of the computation for basic and diluted earnings per share for the three and nine months ended September 30, 2022 and 2021, respectively (in thousands, except share and per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net (loss) income	$	(9,013)	$	(1,636)	$	34,668	$	24,930
Net (loss) income for EPS - diluted	$	(9,013)	$	(1,636)	$	34,668	$	24,930

Weighted-average number of shares outstanding - basic		51,745,354		42,599,261		51,707,809		42,358,069
Additional shares from assumed stock-settled restricted stock units		-		-		2,326,858		24,299
Additional shares from assumed exercise of public warrants		-		-		180		-
Additional shares purchasable for employee stock purchase plan		-		-		1,555		7,875
Weighted-average number of shares outstanding - diluted		51,745,354		42,599,261		54,036,402		42,390,243

(Loss) earnings per share – basic:	$	(0.17)	$	(0.04)	$	0.67	$	0.59
(Loss) earnings per share – diluted:	$	(0.17)	$	(0.04)	$	0.64	$	0.59

Anti-dilutive shares/units excluded from (loss) earnings per share - diluted:
Additional shares from assumed exercise of warrants		188,150		1,063,357		179,695		1,666,400
Additional shares from assumed stock-settled restricted stock units		2,415,638		21,501		-		-
Additional shares purchasable for employee stock purchase plan		4,626		5,257		-		-

BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2022

BUSINESS SEGMENTS

BUSINESS SEGMENTS

NOTE L — BUSINESS SEGMENTS

Consistent with how our chief operating decision maker (Chairman and Chief Executive Officer) evaluates performance and utilizes gross profit as a profitability measure, the Company reports its activities in two business segments:

●

Asset Management Solutions — comprised of activities to extract value from strategic asset acquisitions through leasing, trading, or disassembling for product sales.

●

TechOps — comprised of MRO activities; and product sales of internally developed engineered solutions and other serviceable products.

The Asset Management Solutions segment activities include monetization of assets through the lease or sale of whole assets, or through disassembly activities in support of our USM-related activities. Our monetizing services have been developed to maximize returns on mid-life Flight Equipment throughout their operating life, in conjunction with realizing the highest residual value of Flight Equipment at its retirement.

The TechOps segment consists of aftermarket support and services businesses that provide maintenance support for aircraft and aircraft components, and sale of engineered solutions. Our MRO business also engages in longer term projects such as aircraft modifications, cargo conversions of wide-body aircraft, and aircraft storage. The segment also includes MRO of landing gear, thrust reversers, and other components. Cost of sales consists principally of the cost of product, direct labor, and overhead. Our engineered solutions revenues consist of sales of products internally developed as permitted by Supplemental Type Certificates issued by the FAA. These products are proprietary in nature and function as non-original equipment manufacturer solutions to airworthiness directives and other technical challenges for operators. In order to develop these products, the Company engages in research and development activities, which are expensed as incurred. The TechOps segment also engages in the repair and sale of used serviceable material inventory for which it has the overhaul capabilities and relationships to sell.

Gross profit is calculated by subtracting cost of sales from sales. The assets and certain expenses related to corporate activities are not allocated to the segments. Our reportable segments are aligned principally around the differences in products and services. The segment reporting excludes the allocation of selling, general and administrative expenses, interest expense and income tax expense.

Selected financial information for each segment for the three and nine months ended September 30, 2022 and 2021 is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues
Asset Management Solutions
Aircraft	$	6,503	$	15,204	$	78,343	$	49,925
Engine		14,088		33,672		131,319		88,502
		20,591		48,876		209,662		138,427
TechOps
MRO services		26,390		21,683		72,258		78,116
Product sales		4,018		2,739		7,888		7,111
Whole asset sales		-		-		23,605		-
		30,408		24,422		103,751		85,227
Total	$	50,999	$	73,298	$	313,413	$	223,654


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Gross profit
Asset Management Solutions
Aircraft	$	2,480	$	6,729	$	29,779	$	16,370
Engine		6,210		10,084		60,439		33,129
		8,690		16,813		90,218		49,499
TechOps
MRO services		5,453		6,407		16,257		22,481
Product sales		1,346		1,412		3,174		3,225
Whole asset sales		-		-		7,523		-
		6,799		7,819		26,954		25,706
Total	$	15,489	$	24,632	$	117,172	$	75,205


	September 30, 2022		December 31, 2021
Total Assets
Asset Management Solutions	$	369,040	$	370,378
Tech Ops		131,352		112,742
Corporate		9,372		4,365
	$	509,764	$	487,485

The following table reconciles segment gross profit to income before income tax provision for the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Segment gross profit	$	15,489	$	24,632	$	117,172	$	75,205
Selling, general and administrative expenses		(23,983)		(22,803)		(71,252)		(53,079)
Payroll support program proceeds		-		-		-		14,768
Interest expense, net		393		(241)		15		(750)
Other income, net		45		9		526		258
Change in fair value of warrant liability		(2,029)		(2,104)		(1,881)		(2,735)
(Loss) income before income tax provision	$	(10,085)	$	(507)	$	44,580	$	33,667

Intersegment sales include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed or products sold and agreed-upon pricing which is intended to be reflective of the arm’s length value of the contribution made by the supplying business segment. All intersegment transactions have been eliminated upon consolidation. Intersegment revenue for the three and nine months ended September 30, 2022 and 2021, is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Asset Management Solutions	$	1,705	$	959	$	4,886	$	2,942
TechOps		3,168		6,015		15,771		14,747
Total intersegment revenues	$	4,873	$	6,974	$	20,657	$	17,689

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Publisher FASB
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+ Details

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

NOTE M— COMMITMENTS AND CONTINGENCIES

Litigation

The Company may be involved in litigation incidental to the operation of the business. The Company intends to vigorously defend all matters in which the Company is named as defendant and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect the Company. Although the adequacy of existing insurance coverage of the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, the Company does not believe the ultimate liability associated with known claims or litigation, if any, in which the Company is involved will materially affect the Company’s condensed consolidated financial condition or results of operations.

Lease Commitments

The Company leases office space, warehouses, hangars and equipment in connection with its operations under various operating leases, many of which contain escalation clauses.

Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) are (in thousands):


	Operating
	Leases
Year ending December 31:
Remainder of 2022	$	1,270
2023		6,350
2024		5,976
2025		5,071
2026		4,873
Thereafter		19,526
Total minimum lease payments	$	43,066

Expenses incurred under the operating lease agreements was $2.9 million and $1.4 million for the three months ended September 30, 2022 and 2021, respectively. Expenses incurred under the operating lease agreements were $4.3 million and $4.6 million for the nine months ended September 30, 2022 and 2021, respectively. Operating lease expense is recognized on a straight-line basis over the term of the lease, including any option periods, as appropriate. The same lease term is used for lease classification, the amortization period of related leasehold improvements, and the estimation of future lease commitments.

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2022

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

NOTE N — STOCKHOLDERS’ EQUITY

Common Stock

The Company’s common stock, $0.0001 par value, consists of 200,000,000 authorized shares, of which 51,774,665 and 51,673,099 shares were issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.

Earn-Out Shares

Upon consummation of the Merger and in each case on or prior to the fifth anniversary of the Closing, the pre-closing holders of AerSale Aviation’s common stock and the holders of in-the-money SARs (as defined in the Merger Agreement) received a contingent right to receive up to 3,000,000 additional shares of the Company’s common stock. Additionally, certain pre-closing holders of AerSale Aviation’s common stock received a contingent right to receive 746,876 shares of the Company’s common stock. Effective February 8, 2021, the contingent event related to the Minimum Target Earn-Out Shares (as defined by the Merger Agreement) was met and 1,855,634 shares were issued. Effective October 22, 2021, the contingent event related to the Maximum Target Earn-Out Shares was met and 1,854,169 shares were issued. The remaining shares pursuant to the contingent rights were withheld to cover employee taxes.

The Company determined the Earn-Out Shares (as defined by the Merger Agreement) to be classified as equity under ASC Topic 815, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in a Company’s Own Stock” as the contingent right is indexed to the Company’s stock and accordingly, the accrual of the Earn-Out Shares had no impact on the Company’s condensed consolidated financial statements for the three and nine month periods ended September 30, 2021. There are no Earn-Out Shares contingent as of September 30, 2022 and December 31, 2021.

Unvested Founder Shares

Upon the consummation of the Merger, certain pre-closing holders of AerSale Corporation’s common stock agreed to defer the vesting of an aggregate of 700,000 shares (the “Unvested Founder Shares”), half of which was to vest at such time as the Minimum Target (as defined in the Merger Agreement) and the other half of which was to vest at the Maximum Target (as defined in the Merger Agreement). The Unvested Founder Shares would also vest upon the occurrence of a Liquidity Event (as defined by the Merger Agreement) on or prior to the fifth anniversary of the date of the Amended and Restated Founder Shares Agreement, solely to the extent the Liquidity Event Consideration (as defined in the Merger Agreement) would be greater than $13.50, in which case half of the Unvested Founder Shares which would vest, or $15.00, in which case the other half of the Unvested Founder Shares would also vest. Pursuant to the Amended and Restated Founder Shares Agreement, the holders of the Unvested Founder Shares retained the right to vote such Unvested Founder Shares prior to vesting. Unvested Founder Shares that did not vest on or prior to the fifth anniversary of the Closing Date would be forfeited.

Effective February 8, 2021, the contingency event related to the Minimum Target was met and half of the Unvested Founder Shares vested. Effective October 22, 2021, the contingent event related to the Maximum Target was met and the other half of the Unvested Founder Shares vested. There are no Unvested Founder Shares as of September 30, 2022 and December 31, 2021.

2020 Equity Incentive Plan

The Company maintains a 2020 Equity Incentive Plan (the “2020 Plan”) and has registered 4,200,000 shares of common stock issuable under the Plan. The 2020 Plan authorizes discretionary grants of incentive stock options to employees of the Company and its qualifying subsidiaries. The 2020 Plan also authorizes discretionary grants of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents or other equity or cash-based awards to employees and consultants of the Company and its subsidiaries and to members of the Board of Directors of the Company. To the extent that an award under the 2020 Plan expires, is cancelled, forfeited, terminated, settled in cash or is otherwise settled without issuance of the full number of shares to which it relates, will become or again be available for awards under the 2020 Plan. The 2020 Plan is administered by the Company's Compensation Committee. The Compensation Committee has complete, full and final authority to: designate participants; determine the types of awards to be granted; determine the terms of awards; interpret and administer the 2020 Plan and any agreements and awards thereunder.

Restricted stock unit activity under the 2020 Plan for the nine months ended September 30, 2022 and 2021 was as follows:


				Weighted Average
		Weighted Average		Remaining Contractual
	Amount	Grant Date Fair Value		Life (Years)
Outstanding at December 31, 2021	1,669,300	$	10.10	$	2.02
Granted	278,473		14.80		2.49
Forfeited	(11,048)		13.39		2.20
Vested	(23,643)		12.24		-
Outstanding September 30, 2022	1,913,082	$	10.74	$	2.11


				Weighted Average
		Weighted Average		Remaining Contractual
	Amount	Grant Date Fair Value		Life (Years)
Outstanding at December 31, 2020	-	$	-	$	-
Granted	1,702,280		10.10		2.24
Forfeited	(2,210)		12.46		2.40
Outstanding September 30, 2021	1,700,070	$	10.10	$	2.24

The Company’s restricted stock units include 1,595,000 performance restricted stock units (“2021 PSUs”) that performance vested at the 200% milestone as of March 31, 2022. This is the highest level of performance condition to be achieved and results in total shares to be issued of 3,190,000, subject to a time vesting schedule of one-third on December 22, 2022 and two-thirds on December 22, 2023. For the three and nine months ended September 30, 2022, the Company recognized share-based compensation expense for the 2021 PSUs of $3.6 million and $10.6 million, respectively, given the achievement of the 200% performance milestone. For the three and nine months ended September 30, 2021, the Company recognized share-based compensation expense for the 2021 PSUs of $8.5 million.

For the restricted stock unit awards granted under the 2020 Plan containing both service and performance conditions, the Company recognizes compensation expense when the awards are considered probable of vesting. Restricted stock units are considered granted, and the service inception date begins, when a mutual understanding of the key terms and conditions between the Company and the employee have been established. The fair value of these awards is determined based on the closing price of the shares on the grant date. The probability of restricted share awards granted with future performance conditions is evaluated at each reporting period and compensation expense is adjusted based on the probability assessment.

2020 Employee Stock Purchase Plan

The Company also maintains a 2020 Employee Stock Purchase Plan (the “ESPP”) and has registered 500,000 shares of common stock issuable under the ESPP. During the nine-months ended September 30, 2022, the Company issued 30,099 shares pursuant to the ESPP. No shares were issued during the nine-month period ended September 30, 2021.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements	Interim Financial Statements The accompanying unaudited interim consolidated financial statements have been prepared from the books and records of the Company in accordance with Generally Accepted Accounting Policies in the United States (“U.S. GAAP”) for interim financial information and Rule 10-01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (“SEC”), which permits reduced disclosures for interim periods. Although these interim consolidated financial statements do not include all of the information and footnotes required for complete annual consolidated financial statements, management believes all adjustments, consisting only of normal recurring adjustments, and disclosures necessary for a fair presentation of the accompanying condensed consolidated balance sheets, statements of operations, stockholders’ equity, and cash flows have been made. Unaudited interim results of operations and cash flows are not necessarily indicative of the results that may be expected for the full year. Unaudited interim condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and footnotes included in Part II, Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report), wherein a more complete discussion of significant accounting policies and certain other information can be found.
Revenue Recognition	Revenue Recognition Products — Used Serviceable Material (“USM”) Sales Revenues from sales of USM are measured based on consideration specified within customer contracts, and excludes any sales commissions and taxes collected and remitted to government agencies. The Company recognizes revenue when performance obligations are satisfied by transferring control of a product or service to a customer. The parts are sold at a fixed price with no right of return. In determining the performance obligation, management has identified the promise in the contract to be the shipment of the spare parts to the customer. Title passes to the buyer when the goods are shipped, the buyer is responsible for any loss in transit and the Company has a legal right to payment for the spare parts once shipped. The Company generally sells its USM products under standard 30-day payment terms, subject to certain exceptions. Customers neither have the right to return products nor do they have the right to extended financing. The Company has determined that physical acceptance of the spare parts to be a formality in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). Spare parts revenue is based on a set price for a set number of parts as defined in the purchase order. The performance obligation is completed once the parts have shipped and as a result, all of the transaction price is allocated to that performance obligation. The Company has determined that it is appropriate to recognize spare parts sales at a point in time (i.e., the date the parts are shipped) in accordance with ASC 606. Products — Whole Asset Sales Revenues from whole asset sales are measured based on consideration specified in the contract with the customer. The Company and customer enter into an agreement which outlines the place and date of sale, purchase price, condition of the whole asset, bill of sale and the assignment of rights and warranties from the Company to the customer. The Company believes the whole asset holds standalone value to the customer as it is not dependent on any other services for functionality purposes and therefore is distinct within the context of the contract and as described in ASC 606-10. Accordingly, the Company has identified the transfer of the whole asset as the performance obligation. The transaction price is set at a fixed dollar amount per fixed quantity (number of whole assets) and is explicitly stated in each contract. Whole asset sales revenue is based on a set price for a set number of assets, which is allocated to the performance obligation discussed above, in its entirety. The Company has determined the date of transfer to the customer is the date the customer obtains control over the asset and would cause the revenue recognition. Payment is required in full upon a customer’s acceptance of the whole asset on the date of the transfer. Leasing Revenues The Company leases flight equipment under operating leases that contain monthly base rent and reports rental income straight line over the life of the lease as it is earned. Additionally, the Company’s leases provide for supplemental rent, which is calculated based on actual hours or cycles of utilization and, for certain components, based on the amount of time until maintenance of that component is required. In certain leases, the Company records supplemental rent paid by the lessees as maintenance deposit payment liabilities in recognition of the Company’s contractual commitment to reimburse qualifying maintenance. Reimbursements to the lessees upon receipt of evidence of qualifying maintenance work are charged against the existing maintenance deposit payment liabilities. In leases where the Company is responsible for performing certain repairs or replacement of aircraft components or engines, supplemental rent is recorded as revenue in the period earned. In the event of premature lease termination or lessee default on the lease terms, revenue recognition will be discontinued when outstanding balances beyond the customers’ deposits are held. Payment terms for leased flight equipment are due upon receipt. Service Revenues Service revenues are recognized as performance obligations when they are fulfilled and the benefits are transferred to the customer. At contract inception, the Company evaluates if the contract should be accounted for as a single performance obligation or if the contract contains multiple performance obligations. In some cases, the Company’s service contract with the customer is considered one performance obligation as it includes factors such as the good or service being provided is significantly integrated with other promises in the contract, the service provided significantly modifies or customizes the other good or service or the goods or services are highly interdependent or interrelated with each other. If the contract has more than one performance obligation, the Company determines the standalone price of each distinct good or service underlying each performance obligation and allocates the transaction price based on their relative standalone selling prices. The transaction price of a contract, which can include both fixed and variable amounts, is allocated to each performance obligation identified. Some contracts contain variable consideration, which could include incremental fees or penalty provisions related to performance. Variable consideration that can be reasonably estimated based on current assumptions and historical information is included in the transaction price at the inception of the contract but limited to the amount that is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Variable consideration that cannot be reasonably estimated is recorded when known. For most service contracts, performance obligations are satisfied over time as work progresses based on transfer of control of products and services to our customers. The Company receives payments from our customers based on billing schedules or contractual terms. For performance obligations that are satisfied over time, the Company measures progress in a manner that depicts the performance of transferring control to the customer. As such, the Company utilizes the input method of cost-to-cost to recognize revenue over time as this depicts when control of the promised goods or services are transferred to the customer. Revenue is recognized based on the relationship of actual costs incurred to date to the estimated total cost at completion of the performance obligation. The Company is required to make certain judgments and estimates, including estimated revenues and costs, as well as inflation and the overall profitability of the arrangement. Key assumptions involved include future labor costs and efficiencies, overhead costs and ultimate timing of product delivery. Differences may occur between the judgments and estimates made by management and actual program results. Under most of the Company’s Maintenance, Repair and Overhaul (“MRO”) contracts, if the contract is terminated for convenience, the Company is entitled to payment for items delivered, fair compensation for work performed, the costs of settling and paying other claims and a reasonable profit on the costs incurred or committed. Changes in estimates and assumptions related to our arrangements accounted for using the input method based on labor hours are recorded using the cumulative catchup method of accounting. These changes are primarily adjustments to the estimated profitability for our long term programs where the Company provides MRO services. The Company has elected to use certain practical expedients permitted under ASC 606. Shipping and handling fees and costs incurred associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost, are included in cost of sales in our Condensed Consolidated Statements of Operations and are not considered a performance obligation to our customers. The Company’s reported sales on our Condensed Consolidated Statements of Operations are net of any sales or related non income taxes. The Company also utilizes the “as invoiced” practical expedient in certain cases where performance obligations are satisfied over time and the invoiced amount corresponds directly with the value the Company is providing to the customer.
New Accounting Pronouncements Not Yet Adopted	New Accounting Pronouncements Not Yet Adopted On February 2016, the Financial Accounting Standards Board (“FASB”) issued “Leases (Topic 842)”, which generally requires companies to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance sheet. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” Topic 842 became effective for the Company for the annual period beginning on January 1, 2022, the impact of which will be reflected in the fourth quarter of 2022 recorded retroactively at the beginning of the period of adoption through a cumulative-effect adjustment. We plan to elect the practical expedients, which permits us to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired leases and (iii) indirect costs for any existing leases. In addition, the practical expedient allows us not to separate lease and non-lease components for both lessee and lessor relationships and to not apply the recognition requirements to leases with terms of less than 12 months. Based on preliminary estimates, our adoption is expected to result in the recognition of operating lease right of use assets of approximately $13.8 million and lease liabilities of approximately $14.9 million on January 1, 2022. We are continuing our assessment, which may identify additional impacts that Topic 842 could have on our financial statements. In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”), “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments — Credit Losses,” which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Topic 326 will become effective for the Company beginning January 1, 2023, with early adoption permitted, on a modified retrospective basis. The Company is currently evaluating the impact this guidance will have on our consolidated financial statements and related disclosures. New Accounting Pronouncements Recently Adopted On May 3, 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Under this standard, issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company adopted the new standards as of January 1, 2022 and the adoption did not have a material impact to the Condensed Consolidated Financial Statements.
Payroll Support Programs	Payroll Support Programs The Company has also taken steps to improve our liquidity, including seeking financial assistance under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Certain of the Company’s subsidiaries have received $16.4 million from the U.S. Treasury Department (“Treasury”) through the Payroll Support Program under the CARES Act, of which $3.7 million was received and recognized as payroll support program proceeds during the nine months ended September 30, 2021. No amount was received or recognized under the CARES Act during the quarter ended September 30, 2022. As part of the Payroll Support Extension Law, the Company entered into an agreement with the Treasury on March 4, 2021 for the receipt of relief funds of $5.5 million. During the nine months ended September 30, 2021, we received $5.5 million in grant proceeds under the Payroll Support Extension Law. During the three- and nine- month periods ended September 30, 2021, $0.0 million and $5.5 million was recognized as payroll support program proceeds in the Condensed Consolidated Statements of Operations. Pursuant to the American Rescue Plan Act of 2021 (“ARP”), we entered into an agreement with the Treasury on April 16, 2021 for the receipt of relief funds of an additional $5.5 million. During the three- and nine- month periods ended September 30, 2021, $0.0 million and $5.5 million was recognized as payroll support program proceeds in the Condensed Consolidated Statements of Operations. In connection with the financial assistance the Company received under the Payroll Support Program, it was required to comply with certain provisions of the CARES Act, including the requirement that funds provided pursuant to the Payroll Support Program be used exclusively for the continuation of payment of employee wages, salaries and benefits; the requirement against involuntary terminations and furloughs and reductions in employee pay rates and benefits from the signing date of the Payroll Support Program agreement through September 30, 2021. The agreement also required the Company to issue a recall to any employee who was terminated or furloughed between October 1, 2020 and March 4, 2021 and enable such employee to return to employment. In addition, the Company was subject to provisions prohibiting the repurchase of common stock and the payment of common stock dividends through September 30, 2022, and remains limited on the payment of certain employee compensation through April 1, 2023. These restrictions may affect the Company’s operations and if the Company does not comply with these provisions, it may be required to reimburse up to 100% of any previously received relief funds. In particular, limitations on compensation may adversely impact our ability to attract and retain senior management or attract other key employees during this critical time. As of September 30, 2022, we were in compliance with all applicable provisions of the CARES Act, Payroll Support Program and ARP.

REVENUE (Tables)

9 Months Ended

Sep. 30, 2022

REVENUE.

Schedule of contract assets

Contract assets are as follows (in thousands):


	September 30, 2022		December 31, 2021		Change
Contract assets	$	7,580	$	13,221	$	(5,641)

Schedule of revenue by segment, as well as total revenue


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022						2022
	Asset Management						Asset Management
	Solutions		Tech Ops		Total Revenues		Solutions		TechOps		Total Revenues
USM	$	10,128	$	3,455	$	13,583	$	38,869	$	5,209	$	44,078
Whole asset sales		2,677		-		2,677		147,451		23,605		171,056
Engineered solutions		-		563		563		-		2,679		2,679
Total products		12,805		4,018		16,823		186,320		31,493		217,813
Leasing		7,786		-		7,786		23,342		-		23,342
Services		-		26,390		26,390		-		72,258		72,258
Total revenues	$	20,591	$	30,408	$	50,999	$	209,662	$	103,751	$	313,413


	Three Months Ended September 30,						Nine Months Ended September 30,
	2021						2021
	Asset Management						Asset Management
	Solutions		Tech Ops		Total Revenues		Solutions		TechOps		Total Revenues
USM	$	13,466	$	1,315	$	14,781	$	33,935	$	3,574	$	37,509
Whole asset sales		27,408		-		27,408		83,868		-		83,868
Engineered solutions		-		1,424		1,424		-		3,537		3,537
Total products		40,874		2,739		43,613		117,803		7,111		124,914
Leasing		8,002		-		8,002		20,624		-		20,624
Services		-		21,683		21,683		-		78,116		78,116
Total revenues	$	48,876	$	24,422	$	73,298	$	138,427	$	85,227	$	223,654

INVENTORY (Tables)

9 Months Ended

Sep. 30, 2022

INVENTORY

Schedule of inventory

Following are the major classes of inventory as of the below dates (in thousands):


	September 30, 2022		December 31, 2021
Used serviceable materials	$	73,551	$	65,496
Work-in-process		21,145		12,462
Whole assets		92,889		81,335
	$	187,585		159,293
Less short term		(107,150)		(81,759)
Long term	$	80,435	$	77,534

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2022

INTANGIBLE ASSETS

Schedule of intangible assets with indefinite lives

Goodwill and other intangibles as of the below dates are (in thousands):


	September 30, 2022		December 31, 2021
Qwest:
FAA Certifications	$	724	$	724
Goodwill		13,416		13,416
ALGS:
FAA Certifications		710		710
Goodwill		379		379
ACS:
Trademarks		600		600
FAA Certifications		7,300		7,300
Goodwill		63		63
ACT:
Trademarks		200		200
FAA Certificates		796		796
Goodwill		6,002		6,002
Total intangible assets with indefinite lives	$	30,190	$	30,190

Schedule of intangible assets with definite lives


	Useful Life
	In Years	September 30, 2022		December 31, 2021
Qwest:
Customer relationships	10	$	6,381	$	7,109
ALGS:
Customer relationships	10		55		70
ACS:
Customer relationships	10		1,295		1,453
ACT:
Customer relationships	10		6,586		7,276
Total intangible assets with definite lives		$	14,317	$	15,908

PROPERTY AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2022

PROPERTY AND EQUIPMENT, NET

Schedule of Property, Plant and equipment

Property and equipment, net, as of the below dates consisted of the following (in thousands):


	Useful Life
	In Years	September 30, 2022		December 31, 2021
Tooling and equipment	7 - 15	$	14,445	$	13,530
Furniture and other equipment	5		9,740		7,928
Computer software	5		2,152		1,998
Leasehold improvements	3 - 6		6,680		3,632
Equipment under capital lease	5		192		192
			33,209		27,280
Less accumulated depreciation			(21,246)		(19,930)
		$	11,963	$	7,350

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE (Tables)

9 Months Ended

Sep. 30, 2022

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE

Summary of aircraft and engines held for operating leases, net

Aircraft and engines held for operating leases, net, as of the below dates consisted of the following (in thousands):


	September 30, 2022		December 31, 2021
Aircraft and engines held for operating leases	$	100,650	$	197,397
Less accumulated depreciation		(67,532)		(124,033)
	$	33,118	$	73,364

Summary of minimum future annual lease rentals contracted to be received under existing operating leases of flight equipment

Minimum future annual lease rentals contracted to be received under existing operating leases of flight equipment were as follows (in thousands):


Year ending December 31:
Remainder of 2022	$	3,976
2023		4,867
2024		132
Total minimum lease payments	$	8,975

ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2022

ACCRUED EXPENSES.

Schedule of Accrued expenses

The following is a summary of the components of accrued expenses as of the below dates (in thousands):


	September 30, 2022		December 31, 2021
Accrued compensation and related benefits	$	5,050	$	6,294
Accrued legal fees		680		377
Commission fee accrual		211		115
Accrued federal, state and local taxes and fees		183		243
Other		1,705		1,395
	$	7,829	$	8,424

WARRANT LIABILITY (Tables)

9 Months Ended

Sep. 30, 2022

WARRANT LIABILITY

Assumptions of Black-Scholes option pricing model


		September 30, 2022
Risk-free interest rate		3.98%
Expected volatility of common stock		42.37%
Dividend yield		-
Expected option term in years		3.2

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2022

EARNINGS PER SHARE

Summary of reconciliation of the computation for basic earnings per share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net (loss) income	$	(9,013)	$	(1,636)	$	34,668	$	24,930
Net (loss) income for EPS - diluted	$	(9,013)	$	(1,636)	$	34,668	$	24,930

Weighted-average number of shares outstanding - basic		51,745,354		42,599,261		51,707,809		42,358,069
Additional shares from assumed stock-settled restricted stock units		-		-		2,326,858		24,299
Additional shares from assumed exercise of public warrants		-		-		180		-
Additional shares purchasable for employee stock purchase plan		-		-		1,555		7,875
Weighted-average number of shares outstanding - diluted		51,745,354		42,599,261		54,036,402		42,390,243

(Loss) earnings per share – basic:	$	(0.17)	$	(0.04)	$	0.67	$	0.59
(Loss) earnings per share – diluted:	$	(0.17)	$	(0.04)	$	0.64	$	0.59

Anti-dilutive shares/units excluded from (loss) earnings per share - diluted:
Additional shares from assumed exercise of warrants		188,150		1,063,357		179,695		1,666,400
Additional shares from assumed stock-settled restricted stock units		2,415,638		21,501		-		-
Additional shares purchasable for employee stock purchase plan		4,626		5,257		-		-

BUSINESS SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2022

BUSINESS SEGMENTS

Summary of selected financial information for each segment

Selected financial information for each segment for the three and nine months ended September 30, 2022 and 2021 is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues
Asset Management Solutions
Aircraft	$	6,503	$	15,204	$	78,343	$	49,925
Engine		14,088		33,672		131,319		88,502
		20,591		48,876		209,662		138,427
TechOps
MRO services		26,390		21,683		72,258		78,116
Product sales		4,018		2,739		7,888		7,111
Whole asset sales		-		-		23,605		-
		30,408		24,422		103,751		85,227
Total	$	50,999	$	73,298	$	313,413	$	223,654


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Gross profit
Asset Management Solutions
Aircraft	$	2,480	$	6,729	$	29,779	$	16,370
Engine		6,210		10,084		60,439		33,129
		8,690		16,813		90,218		49,499
TechOps
MRO services		5,453		6,407		16,257		22,481
Product sales		1,346		1,412		3,174		3,225
Whole asset sales		-		-		7,523		-
		6,799		7,819		26,954		25,706
Total	$	15,489	$	24,632	$	117,172	$	75,205


	September 30, 2022		December 31, 2021
Total Assets
Asset Management Solutions	$	369,040	$	370,378
Tech Ops		131,352		112,742
Corporate		9,372		4,365
	$	509,764	$	487,485

Summary of reconciliation segment gross profit to income before income tax provision

The following table reconciles segment gross profit to income before income tax provision for the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Segment gross profit	$	15,489	$	24,632	$	117,172	$	75,205
Selling, general and administrative expenses		(23,983)		(22,803)		(71,252)		(53,079)
Payroll support program proceeds		-		-		-		14,768
Interest expense, net		393		(241)		15		(750)
Other income, net		45		9		526		258
Change in fair value of warrant liability		(2,029)		(2,104)		(1,881)		(2,735)
(Loss) income before income tax provision	$	(10,085)	$	(507)	$	44,580	$	33,667

Summary of intersegment revenues

Intersegment revenue for the three and nine months ended September 30, 2022 and 2021, is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Asset Management Solutions	$	1,705	$	959	$	4,886	$	2,942
TechOps		3,168		6,015		15,771		14,747
Total intersegment revenues	$	4,873	$	6,974	$	20,657	$	17,689

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2022

COMMITMENTS AND CONTINGENCIES.

Summary of future minimum lease payments under non-cancelable operating leases

Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) are (in thousands):


	Operating
	Leases
Year ending December 31:
Remainder of 2022	$	1,270
2023		6,350
2024		5,976
2025		5,071
2026		4,873
Thereafter		19,526
Total minimum lease payments	$	43,066

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2022

STOCKHOLDERS' EQUITY

Schedule of Restricted Stock Unit activity


				Weighted Average
		Weighted Average		Remaining Contractual
	Amount	Grant Date Fair Value		Life (Years)
Outstanding at December 31, 2021	1,669,300	$	10.10	$	2.02
Granted	278,473		14.80		2.49
Forfeited	(11,048)		13.39		2.20
Vested	(23,643)		12.24		-
Outstanding September 30, 2022	1,913,082	$	10.74	$	2.11


				Weighted Average
		Weighted Average		Remaining Contractual
	Amount	Grant Date Fair Value		Life (Years)
Outstanding at December 31, 2020	-	$	-	$	-
Granted	1,702,280		10.10		2.24
Forfeited	(2,210)		12.46		2.40
Outstanding September 30, 2021	1,700,070	$	10.10	$	2.24

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New Accounting Pronouncements Not Yet Adopted (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jan. 01, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right of use assets	$ 33,118		$ 73,364
Cumulative Effect, Period of Adoption, Adjustment \| Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right of use assets		$ 13,800
Operating lease liabilities		$ 14,900

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cares Act (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Mar. 31, 2021	Sep. 30, 2021	Apr. 16, 2021	Mar. 04, 2021	Jun. 08, 2020
Short term debt
Payroll support program proceeds				$ (14,768,000)
Paycheck Protection Program, Cares Act
Short term debt
Debt instrument, face					$ 5,500,000	$ 5,500,000	$ 16,400,000
Proceeds from short term debt			$ 3,700,000
Payroll support program proceeds	$ 0
Payroll Support Programs
Short term debt
Payroll support program proceeds		$ 0.0		$ 5,500,000

SIGNIFICANT RISKS AND UNCERTAINTIES - Impact of Ukraine Conflict and Russia Sanctions (Details)	1 Months Ended
	Feb. 28, 2022 aircraft engine lease
SIGNIFICANT RISKS AND UNCERTAINTIES
Number of leases terminated \| lease	3
Number of aircrafts \| aircraft	2
Number of engines \| engine	1

REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
REVENUE (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2022	Dec. 31, 2021
ASC impact, balance sheet
Contract assets	$ 7,580	$ 7,580	$ 13,221
Increase (decrease) customer asset		(5,641)
Customer liability, current	3,524	3,524	2,860
Customer liability			$ 2,600
Contract liabilities, revenue recognized	$ 100	$ 2,300

REVENUE - Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
REVENUE - Disaggregation (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue disaggregation
Total revenue	$ 50,999	$ 73,298	$ 313,413	$ 223,654
Product
Revenue disaggregation
Total revenue	16,823	43,613	217,813	124,914
USM
Revenue disaggregation
Total revenue	13,583	14,781	44,078	37,509
Whole Asset Sales
Revenue disaggregation
Total revenue	2,677	27,408	171,056	83,868
Engineered Solutions
Revenue disaggregation
Total revenue	563	1,424	2,679	3,537
Leasing
Revenue disaggregation
Total revenue	7,786	8,002	23,342	20,624
Services
Revenue disaggregation
Total revenue	26,390	21,683	72,258	78,116
Asset Management Solutions
Revenue disaggregation
Total revenue	20,591	48,876	209,662	138,427
Asset Management Solutions \| Product
Revenue disaggregation
Total revenue	12,805	40,874	186,320	117,803
Asset Management Solutions \| USM
Revenue disaggregation
Total revenue	10,128	13,466	38,869	33,935
Asset Management Solutions \| Whole Asset Sales
Revenue disaggregation
Total revenue	2,677	27,408	147,451	83,868
Asset Management Solutions \| Leasing
Revenue disaggregation
Total revenue	7,786	8,002	23,342	20,624
TechOps
Revenue disaggregation
Total revenue	30,408	24,422	103,751	85,227
TechOps \| Product
Revenue disaggregation
Total revenue	4,018	2,739	31,493	7,111
TechOps \| USM
Revenue disaggregation
Total revenue	3,455	1,315	5,209	3,574
TechOps \| Whole Asset Sales
Revenue disaggregation
Total revenue			23,605
TechOps \| Engineered Solutions
Revenue disaggregation
Total revenue	563	1,424	2,679	3,537
TechOps \| Services
Revenue disaggregation
Total revenue	$ 26,390	$ 21,683	$ 72,258	$ 78,116

INVENTORY (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
INVENTORY
Used serviceable materials	$ 73,551		$ 73,551		$ 65,496
Work-in-process	21,145		21,145		12,462
Whole assets	92,889		92,889		81,335
Inventory, Net, Total	187,585		187,585		159,293
Less short term	(107,150)		(107,150)		(81,759)
Inventory, Noncurrent	80,435		80,435		$ 77,534
Inventory reserve	$ 0	$ 0	$ 1,800	$ 4,800

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Jul. 01, 2022	Sep. 30, 2022	Dec. 31, 2021
Intangible assets
Goodwill		$ 19,860	$ 19,860
Intangible assets with indefinite lives and goodwill		30,190	30,190
Impairment of intangible assets	$ 0
TechOps \| ACS
Intangible assets
Goodwill		63	63
TechOps \| ACS \| Certifications
Intangible assets
Intangible assets with indefinite lives excluding goodwill		7,300	7,300
TechOps \| ACS \| Trademarks
Intangible assets
Intangible assets with indefinite lives excluding goodwill		600	600
TechOps \| ALGS
Intangible assets
Goodwill		379	379
TechOps \| ALGS \| Certifications
Intangible assets
Intangible assets with indefinite lives excluding goodwill		710	710
TechOps \| ACT
Intangible assets
Goodwill		6,002	6,002
TechOps \| ACT \| FAA Certificates
Intangible assets
Intangible assets with indefinite lives excluding goodwill		796	796
TechOps \| ACT \| Trademarks
Intangible assets
Intangible assets with indefinite lives excluding goodwill		200	200
Asset Management Solutions \| Qwest \| Certifications
Intangible assets
Intangible assets with indefinite lives excluding goodwill		724	724
Goodwill		$ 13,416	$ 13,416

INTANGIBLE ASSETS - Estimated useful lives (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Intangible assets
Total intangible assets with definite lives	$ 14,317	$ 15,908
Asset Management Solutions \| Qwest \| Customer relationships
Intangible assets
Useful life (in years)	10 years
Total intangible assets with definite lives	$ 6,381	7,109
TechOps \| ACS \| Customer relationships
Intangible assets
Useful life (in years)	10 years
Total intangible assets with definite lives	$ 1,295	1,453
TechOps \| ALGS \| Customer relationships
Intangible assets
Useful life (in years)	10 years
Total intangible assets with definite lives	$ 55	70
TechOps \| ACT \| Customer relationships
Intangible assets
Useful life (in years)	10 years
Total intangible assets with definite lives	$ 6,586	$ 7,276

INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
INTANGIBLE ASSETS
Amortization expense	$ 0.5	$ 0.5	$ 1.6	$ 1.6
Accumulated amortization	$ 6.7		$ 6.7		$ 5.1

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment
Property and equipment, gross	$ 33,209	$ 27,280
Less accumulated depreciation	(21,246)	(19,930)
Property and equipment, net	11,963	7,350
Tooling and equipment
Property, Plant and Equipment
Property and equipment, gross	14,445	13,530
Furniture and other equipment
Property, Plant and Equipment
Property and equipment, gross	$ 9,740	7,928
Useful life (in years)	5 years
Computer software
Property, Plant and Equipment
Property and equipment, gross	$ 2,152	1,998
Useful life (in years)	5 years
Leasehold improvements
Property, Plant and Equipment
Property and equipment, gross	$ 6,680	3,632
Equipment under capital lease
Property, Plant and Equipment
Property and equipment, gross	$ 192	$ 192
Useful life (in years)	5 years
Minimum \| Tooling and equipment
Property, Plant and Equipment
Useful life (in years)	7 years
Minimum \| Leasehold improvements
Property, Plant and Equipment
Useful life (in years)	3 years
Maximum \| Tooling and equipment
Property, Plant and Equipment
Useful life (in years)	15 years
Maximum \| Leasehold improvements
Property, Plant and Equipment
Useful life (in years)	6 years

PROPERTY AND EQUIPMENT, NET - Depreciation expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
PROPERTY AND EQUIPMENT, NET
Depreciation expense	$ 0.6	$ 0.5	$ 1.6	$ 1.5

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE - Components (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Depreciation expense	$ 1,700	$ 2,100	$ 5,400	$ 6,800
Contingent rental fees	$ 3,600	$ 2,300	$ 10,100	$ 5,200
Lease term (in years)	2 years		2 years
Aircraft and Engines
Aircraft and engines held for operating leases	$ 100,650		$ 100,650		$ 197,397
Less accumulated depreciation	(67,532)		(67,532)		(124,033)
Property held for operating leases, net	$ 33,118		33,118		$ 73,364
Flight Equipment
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Impairment of Flight Equipment			$ 900

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE - Future payments received (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Minimum future annual lease rentals contracted to be received
Remainder of 2022	$ 3,976
2023	4,867
2024	132
Total minimum lease payments	$ 8,975

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
ACCRUED EXPENSES.
Accrued compensation and related benefits	$ 5,050	$ 6,294
Accrued legal fees	680	377
Commission fee accrual	211	115
Accrued federal, state and local taxes and fees	183	243
Other	1,705	1,395
Total accrued expenses	$ 7,829	$ 8,424

WARRANT LIABILITY (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Class of Warrant or Right [Line Items]
Exercise price of warrants	$ 11.50		$ 11.50
Number of warrants outstanding	623,834		623,834		835,014
Change in fair value of warrant liability	$ 2,029	$ 2,104	$ 1,881	$ 2,735
Cashless exercise of warrants	126,166
Remaining term	3 years 2 months 12 days		3 years 2 months 12 days
Common stock issued based on fair value	47,867
Share price	$ 18.5306		$ 18.5306
Private Placement
Class of Warrant or Right [Line Items]
Number of shares of common stock called by each warrant	1		1
Exercise price of warrants	$ 11.50		$ 11.50
Number of warrants outstanding	750,000		750,000

WARRANT LIABILITY - Black-Scholes option pricing model (Details)	Sep. 30, 2022 Y
Risk-free interest rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input	3.98
Expected volatility of common stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input	42.37
Expected option term in years
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and Rights Outstanding, Measurement Input	3.2

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Net income	$ (9,013)	$ 26,455	$ 17,226	$ (1,636)	$ 16,548	$ 10,018	$ 34,668	$ 24,930
Change in fair value of warrant liability	2,029			2,104			1,881	2,735
Net income for EPS - diluted	$ (9,013)			$ (1,636)			$ 34,668	$ 24,930
Weighted-average number of shares outstanding - basic	51,745,354			42,599,261			51,707,809	42,358,069
Additional shares from assumed stock-settled restricted stock units							2,326,858	24,299
Additional shares from assumed exercise of public warrants							180
Additional shares purchasable for employee stock purchase plan							1,555	7,875
Weighted-average number of shares outstanding - diluted	51,745,354			42,599,261			54,036,402	42,390,243
Earnings per share-basic
Earnings per share-basic:	$ (0.17)			$ (0.04)			$ 0.67	$ 0.59
Earnings per share-diluted
Earnings per share-diluted:	$ (0.17)			$ (0.04)			$ 0.64	$ 0.59
Private warrants
Anti-dilutive shares/units excluded from (loss) earnings per share - diluted
Anti-dilutive excluded from (loss) earnings per share	188,150			1,063,357			179,695	1,666,400
RSU member
Anti-dilutive shares/units excluded from (loss) earnings per share - diluted
Anti-dilutive excluded from (loss) earnings per share	2,415,638			21,501
Employee Stock
Anti-dilutive shares/units excluded from (loss) earnings per share - diluted
Anti-dilutive excluded from (loss) earnings per share	4,626			5,257

BUSINESS SEGMENTS (Details)	9 Months Ended
BUSINESS SEGMENTS (Details)	Sep. 30, 2022 segment
BUSINESS SEGMENTS
Number of business segments	2

BUSINESS SEGMENTS - Selected financial information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Segments
Revenues	$ 50,999	$ 73,298	$ 313,413	$ 223,654
Gross profit	15,489	24,632	117,172	75,205
Total assets	509,764		509,764		$ 487,485
Asset Management Solutions
Segments
Revenues	20,591	48,876	209,662	138,427
Gross profit	8,690	16,813	90,218	49,499
Total assets	369,040		369,040		370,378
Asset Management Solutions \| Aircraft
Segments
Revenues	6,503	15,204	78,343	49,925
Gross profit	2,480	6,729	29,779	16,370
Asset Management Solutions \| Engine
Segments
Revenues	14,088	33,672	131,319	88,502
Gross profit	6,210	10,084	60,439	33,129
TechOps
Segments
Revenues	30,408	24,422	103,751	85,227
Gross profit	6,799	7,819	26,954	25,706
Total assets	131,352		131,352		112,742
TechOps \| Product
Segments
Revenues	4,018	2,739	7,888	7,111
Gross profit	1,346	1,412	3,174	3,225
TechOps \| Whole Asset Sales
Segments
Revenues			23,605
Gross profit			7,523
TechOps \| MRO services
Segments
Revenues	26,390	21,683	72,258	78,116
Gross profit	5,453	$ 6,407	16,257	$ 22,481
Corporate
Segments
Total assets	$ 9,372		$ 9,372		$ 4,365

BUSINESS SEGMENTS - Gross profit to net income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
BUSINESS SEGMENTS
Segment gross profit	$ 15,489	$ 24,632	$ 117,172	$ 75,205
Selling, general, and administrative expenses	(23,983)	(22,803)	(71,252)	(53,079)
Payroll support program proceeds				14,768
Interest expense, net	393	(241)	15	(750)
Other income, net	45	9	526	258
Change in fair value of warrant liability	(2,029)	(2,104)	(1,881)	(2,735)
(Loss) income before income tax provision	$ (10,085)	$ (507)	$ 44,580	$ 33,667

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

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- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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+ Details

BUSINESS SEGMENTS - Intersegment revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenue from contract with customer	$ 50,999	$ 73,298	$ 313,413	$ 223,654
Intersegment
Segment Reporting Information [Line Items]
Revenue from contract with customer	4,873	6,974	20,657	17,689
Asset Management Solutions
Segment Reporting Information [Line Items]
Revenue from contract with customer	20,591	48,876	209,662	138,427
Asset Management Solutions \| Intersegment
Segment Reporting Information [Line Items]
Revenue from contract with customer	1,705	959	4,886	2,942
TechOps
Segment Reporting Information [Line Items]
Revenue from contract with customer	30,408	24,422	103,751	85,227
TechOps \| Intersegment
Segment Reporting Information [Line Items]
Revenue from contract with customer	$ 3,168	$ 6,015	$ 15,771	$ 14,747

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

COMMITMENTS AND CONTINGENCIES - Future minimum lease payments under non-cancelable operating leases (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Future minimum lease payments under non-cancelable operating leases
Remainder of 2022	$ 1,270
2023	6,350
2024	5,976
2025	5,071
2026	4,873
Thereafter	19,526
Total minimum lease payments	$ 43,066

COMMITMENTS AND CONTINGENCIES - Expense charged to operations under the operating lease agreements (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
COMMITMENTS AND CONTINGENCIES.
Rent expense	$ 2.9	$ 1.4	$ 4.3	$ 4.6

STOCKHOLDERS EQUITY - Cumulative Preferred Shares (Details)	Sep. 30, 2022 $ / shares
STOCKHOLDERS' EQUITY
Share price	$ 18.5306

STOCKHOLDERS' EQUITY - Common Stock (Details) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Class of Stock [Line Items]
Par value per share	$ 0.0001	$ 0.0001
Shares authorized	200,000,000	200,000,000
Shares issued	51,774,665	51,673,099
Shares outstanding	51,774,665	51,673,099
AerSale Aviation
Class of Stock [Line Items]
Shares issued	51,774,665	51,673,099
Shares outstanding	51,774,665	51,673,099

STOCKHOLDERS' EQUITY - Earn-Out Shares (Details) - shares	Oct. 22, 2021	Feb. 08, 2021	Dec. 22, 2020	Sep. 30, 2022	Dec. 31, 2021
Class of Stock [Line Items]
Number of earn-out shares issuable	1,854,169	1,855,634
Contingent earn-out shares outstanding				0	0
Monocle's founder shareholders
Class of Stock [Line Items]
Number of earn-out shares issuable			746,876
AerSale Aviation \| Pre-closing holders of AerSale Aviation's common stock and the holders of In-the-Money SARs \| Maximum
Class of Stock [Line Items]
Number of earn-out shares issuable			3,000,000

STOCKHOLDERS' EQUITY - Unvested Founder Shares (Details) - $ / shares	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested founder shares outstanding	0	0
If the closing price per share of the Company's common stock is greater than $13.50
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance Of Unvested Founder Shares, Stock Price Trigger	$ 13.50
If the closing price per share of the Company's common stock is greater than $15.00
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Issuance Of Unvested Founder Shares, Stock Price Trigger	$ 15.00
Pre-closing holders of AerSale Aviation's common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested Founder Shares, Number of Shares Deferred for Vesting	700,000

STOCKHOLDERS' EQUITY - 2020 Equity Incentive Plan (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued under the 2020 Employee Stock Purchase Plan (in shares)			30,099	0
2020 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issuable	4,200,000		4,200,000
Performance-based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issuable	3,190,000		3,190,000
Vesting provisions			1,595,000
Share-based compensation expense	$ 3.6	$ 8.5	$ 10.6	$ 8.5
Performance-based Awards \| Vesting on December 22, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			33.33%
Performance-based Awards \| Vesting on December 22, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			66.66%
2020 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issuable	500,000		500,000
Vesting provisions			23,643

STOCKHOLDERS' EQUITY - Restricted Stock Unit Activity (Details) - 2020 Employee Stock Purchase Plan - $ / shares	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Stock Option (in Shares)
Outstanding, beginning balance	1,669,300
Granted	278,473	1,702,280
Forfeited	(11,048)	(2,210)
Vested	(23,643)
Outstanding, ending balance	1,913,082	1,700,070	1,669,300
Weighted Average Grant Date Fair Value
Weighted Average Fair Value Beginning Balance	$ 10.10
Weighted Average Fair Value Granted	14.80	$ 10.10
Weighted Average Fair Value Forfeited	13.39	12.46
Weighted Average Fair Value Vested	12.24
Weighted Average Fair Value Ending Balance	$ 10.74	$ 10.10	$ 10.10
Weighted Average Contractual Life
Weighted Average Contractual Life Granted	2 years 5 months 26 days	2 years 2 months 26 days
Weighted Average Contractual Life Forfeited	2 years 2 months 12 days	2 years 4 months 24 days
Weighted Average Contractual Life	2 years 1 month 9 days	2 years 2 months 26 days	2 years 7 days