0001558370-23-018321 | 10-Q | XBRL Viewer

REVENUE

9 Months Ended

Sep. 30, 2023

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, 2023		December 31, 2022		Change
Contract assets	$	7,007	$	7,277	$	(270)

Contract assets are reported within deposits, prepaid expenses, and other current assets on our Condensed Consolidated Balance Sheets. Changes in contract assets primarily result 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 $1.4 million as of December 31, 2022, of which $1.1 million was related to contract liabilities for services to be performed. For the nine months ended September 30, 2023, the Company recognized as revenue the full amount 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. No such revenue was recognized for the three months ended September 30, 2023.

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, 2023 and 2022 (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023						2023
	Asset Management						Asset Management
	Solutions		Tech Ops		Total Revenues		Solutions		TechOps		Total Revenues
USM	$	17,754	$	3,884	$	21,638	$	49,348	$	9,709	$	59,057
Whole asset sales		44,812		-		44,812		89,811		218		90,029
Engineered solutions		-		392		392		-		874		874
Total products		62,566		4,276		66,842		139,159		10,801		149,960
Leasing		2,488		-		2,488		11,396		-		11,396
Services		-		23,154		23,154		-		78,725		78,725
Total revenues	$	65,054	$	27,430	$	92,484	$	150,555	$	89,526	$	240,081


	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

- 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
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Net (loss) income	$ (148)	$ (2,688)	$ 5	$ (9,013)	$ 26,455	$ 17,226	$ (2,831)	$ 34,668
Change in fair value of warrant liability	55			2,029			(1,004)	1,881
Net (loss) income for EPS - Diluted	$ (148)			$ (9,013)			$ (3,835)	$ 34,668
Weighted-average number of shares outstanding - basic	51,321,026			51,745,354			51,252,581	51,707,809
Additional shares from assumed exercise of warrants	126,154			188,150				179,695
Additional shares from assumed stock-settled restricted stock units								2,326,858
Additional shares from assumed exercise of public warrants							177,624	180
Additional shares issued under the employee stock purchase plan								1,555
Weighted-average number of shares outstanding - diluted	51,321,026			51,745,354			51,430,205	54,036,402
Earnings per share-basic
(Loss) earnings per share - basic:				$ (0.17)			$ (0.06)	$ 0.67
Earnings per share-diluted
(Loss) earnings per share - diluted:				$ (0.17)			$ (0.07)	$ 0.64
RSU member
Anti-dilutive shares/units excluded from earnings per share - diluted:
Anti-dilutive excluded from (loss) earnings per share	2,007,217			2,415,638			1,869,782
Employee Stock
Anti-dilutive shares/units excluded from earnings per share - diluted:
Anti-dilutive excluded from (loss) earnings per share	6,542			4,626			1,043

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Intangible assets
Goodwill	$ 19,860	$ 19,860
Total intangible assets with indefinite lives	30,190	30,190
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

9 Months Ended

Sep. 30, 2023

INTANGIBLE ASSETS

INTANGIBLE ASSETS

NOTE F — INTANGIBLE ASSETS

In accordance with ASC 350, Intangibles — Goodwill and Other (“ASC 350”), 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 Federal Aviation Administration (“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, 2023		December 31, 2022
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, 2023 and 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, 2023		December 31, 2022
Qwest:
Customer relationships	10	$	5,408	$	6,136
ALGS:
Customer relationships	10		35		50
ACS:
Customer relationships	10		1,085		1,243
ACT:
Customer relationships	10		5,663		6,353
Total intangible assets with definite lives		$	12,191	$	13,782

Total amortization expense amounted to $0.5 million for the three months ended September 30, 2023 and 2022. Total amortization expense amounted to $1.6 million for the nine months ended September 30, 2023 and 2022. Accumulated amortization amounted to $8.8 million and $7.2 million as of September 30, 2023 and December 31, 2022, 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.

STOCKHOLDERS' EQUITY - 2020 Plan and ESPP (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issuable	6,200,000		6,200,000
Performance-based Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting provisions			1,073,736
Share-based compensation expense	$ 2.0	$ 3.6	$ 6.0	$ 10.6
Vesting percentage			200.00%
Performance-based Awards \| Maximum level of 200% Vesting on December 22, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			33.33%
Performance-based Awards \| Maximum level of 200% Vesting on December 22, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			66.66%
Performance-based Awards \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			100.00%
Performance-based Awards \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			200.00%
2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting provisions			121,737	23,643,000
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issuable	500,000		500,000
Shares issued			21,551	30,099

SIGNIFICANT RISKS AND UNCERTAINTIES

9 Months Ended

Sep. 30, 2023

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 three leases in 2022 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 impaired this asset during the second quarter of 2022. Although the current sanctions prohibit the continuation of certain business activities, the three leases referenced were contractually scheduled to expire in 2022 and therefore did not have a material impact on our business. 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.

Emerging Military Conflict in Israel

On October 7, 2023, Hamas militants launched an extensive military operation into Israel’s southern border from the Gaza Strip and conducted a series of attacks, followed by an invasion of Israeli territory by land, air and sea directed at civilian and military targets. On October 8, 2023 Israel formally declared war on Hamas after their deadly attack. The intensity and duration of Israel’s current war against Hamas is difficult to predict, as are such war’s global economic impact and impact on the Company’s business and operations and on the businesses and operations of the Company’s suppliers, customers and other third parties with which the Company conducts business. Although we do not expect the current situation will have a material adverse effect on our results of operations, our supplier of most of the components in our Enhanced Flight Vision System “AerAware” and our ERP supplier are both based in Israel.

INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
INTANGIBLE ASSETS
Amortization expense	$ 0.5	$ 0.5	$ 1.6	$ 1.6
Accumulated amortization	$ 8.8		$ 8.8		$ 7.2

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net (loss) income	$ (2,831)	$ 34,668
Adjustments to reconcile net (loss) income to net cash (used in) operating activities:
Depreciation and amortization	7,585	8,589
Amortization of debt issuance costs	316	340
Amortization of operating lease assets	286
Inventory reserve	1,255	2,010
Impairment of aircraft held for lease		857
Provision for credit losses		(379)
Deferred income taxes	(2,331)	(2,655)
Change in fair value of warrant liability	(1,004)	1,881
Share-based compensation	8,939	12,029
Changes in operating assets and liabilities:
Deferred financing costs	(1,361)
Accounts receivable	(1,447)	3,730
Income tax receivable	(1,313)
Inventory	(168,313)	(26,441)
Deposits, prepaid expenses, and other current assets	(2,313)	(747)
Deferred customer incentives and other assets	93	661
Advance vendor payments	(8,212)	(10,097)
Accounts payable	17,824	2,082
Income tax payable		(2,205)
Accrued expenses	(5,015)	(594)
Deferred revenue	1,038	664
Lessee and customer purchase deposits	(10,641)	(24,996)
Other liabilities	(606)	(1,779)
Net cash (used in) operating activities	(168,051)	(2,382)
Cash flows from investing activities:
Proceeds from sale of assets	14,450	37,107
Acquisition of aircraft and engines held for lease, including capitalized cost		(6,945)
Purchase of property and equipment	(7,766)	(6,935)
Net cash provided by investing activities	6,684	23,227
Cash flows from financing activities:
Proceeds from long-term debt	8,559
Proceeds from Revolving Credit Facility	26,100
Repayments of Revolving Credit Facility	(17,500)
Taxes paid related to net share settlement of equity awards	(104)
Proceeds from the issuance of Employee Stock Purchase Plan shares	278	345
Net cash provided by financing activities	17,333	345
(Decrease) increase in cash and cash equivalents	(144,034)	21,190
Cash and cash equivalents, beginning of period	147,188	130,188
Cash and cash equivalents, end of period	3,154	151,378
Supplemental disclosure of cash activities
Income tax payments, net	1,306	14,637
Interest paid	575	856
Supplemental disclosure of noncash investing activities
Reclassification of aircraft and aircraft engines inventory to (from) aircraft and engine held for lease, net	$ 9,312	(25,025)
Reclassification of customer purchase deposits to sale of assets		$ 12,500

STOCKHOLDERS' EQUITY - Common Stock (Details) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
STOCKHOLDERS' EQUITY
Par value per share	$ 0.0001	$ 0.0001
Shares authorized	200,000,000	200,000,000
Shares issued	51,328,800	51,189,461
Shares outstanding	51,328,800	51,189,461

INVENTORY

9 Months Ended

Sep. 30, 2023

INVENTORY

INVENTORY

NOTE E — INVENTORY

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


	September 30, 2023		December 31, 2022
Used serviceable materials	$	91,680	$	73,827
Work-in-process		20,113		16,659
Whole assets		215,032		93,044
	$	326,825		183,530
Less short term		(200,807)		(117,488)
Long term	$	126,018	$	66,042

The Company recorded inventory scrap loss reserves of $0.5 million and $1.3 million for the three and nine months ended September 30, 2023, respectively.

The Company did not record an inventory reserve for the three and nine months ended September 30, 2023, and recorded an inventory reserve $1.8 million for the nine months ended September 30, 2022, due to the Company’s evaluation of the inventory’s net realizable value. Additions to inventory reserves are included in cost of products in the accompanying Condensed Consolidated Statements of Operations.

PROPERTY AND EQUIPMENT, NET

9 Months Ended

Sep. 30, 2023

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, 2023		December 31, 2022
Tooling and equipment	7 - 15	$	15,791	$	14,649
Furniture and other equipment	5		12,030		10,090
Computer software	5		2,244		2,152
Leasehold improvements	3 - 10		13,085		7,390
Equipment under capital lease	5		192		192
Flight equipment held for R&D	2		7,784		-
			51,126		34,473
Less accumulated depreciation			(26,034)		(21,835)
		$	25,092	$	12,638

Depreciation expense, which includes amortization of equipment under capital lease, amounted to $0.9 million and $0.6 million for the three months ended September 30, 2023 and 2022, respectively. Depreciation expense, which includes amortization of equipment under capital lease, amounted to $2.7 million and $1.6 million for the nine months ended September 30, 2023 and 2022, respectively.

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Condensed Consolidated Balance Sheets
Allowance for doubtful accounts	$ 979	$ 1,074
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	51,328,800	51,189,461
Common Stock, Shares, Outstanding	51,328,800	51,189,461

BUSINESS SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2023

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, 2023 and 2022 is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue
Asset Management Solutions
Aircraft	$	20,888	$	6,503	$	57,836	$	78,343
Engine		44,166		14,088		92,719		131,319
		65,054		20,591		150,555		209,662
TechOps
MRO services		23,154		26,390		78,725		72,258
Product sales		4,276		4,018		10,583		7,888
Whole asset sales		-		-		218		23,605
		27,430		30,408		89,526		103,751
Total	$	92,484	$	50,999	$	240,081	$	313,413

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Gross profit
Asset Management Solutions
Aircraft	$	6,656	$	2,480	$	16,871	$	29,779
Engine		11,881		6,210		31,080		60,439
		18,537		8,690		47,951		90,218
TechOps
MRO services		3,892		5,453		17,078		16,257
Product sales		1,045		1,346		2,600		3,174
Whole asset sales		-		-		376		7,523
		4,937		6,799		20,054		26,954
Total	$	23,474	$	15,489	$	68,005	$	117,172

					September 30, 2023		December 31, 2022
Total assets
Asset Management Solutions					$	382,624	$	233,034
Tech Ops						156,672		141,406
Corporate						14,606		157,139
					$	553,902	$	531,579

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

The following table reconciles segment gross profit to (loss) income before income tax provision for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Segment gross profit	$	23,474	$	15,489	$	68,005	$	117,172
Selling, general and administrative expenses		(25,403)		(23,983)		(77,724)		(71,252)
Interest (expense) income, net		(250)		393		1,178		15
Other income, net		127		45		498		526
Change in fair value of warrant liability		(55)		(2,029)		1,004		(1,881)
(Loss) income before income tax provision	$	(2,107)	$	(10,085)	$	(7,039)	$	44,580

Summary of intersegment revenues

Intersegment revenue for the three and nine months ended September 30, 2023 and 2022, is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Asset Management Solutions	$	168	$	1,705	$	1,241	$	4,886
TechOps		3,761		3,168		13,952		15,771
Total intersegment revenues	$	3,929	$	4,873	$	15,193	$	20,657

SIGNIFICANT RISKS AND UNCERTAINTIES - Impact of Ukraine Conflict and Russia Sanctions (Details)	1 Months Ended	12 Months Ended
	Feb. 28, 2022 aircraft engine	Dec. 31, 2022 lease
SIGNIFICANT RISKS AND UNCERTAINTIES
Number of leases terminated \| lease		3
Number of aircrafts \| aircraft	2
Number of engines \| engine	1

DESCRIPTION OF THE BUSINESS

9 Months Ended

Sep. 30, 2023

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 the previously announced 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” or the “Business Combination” and in connection therewith, Monocle merged with and into us, whereby we survived the Merger and became the successor issuer to Monocle by operation of Rule 12g-3 under the Securities Exchange Act, as amended.

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 Business Combination (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 continued as a wholly owned subsidiary of the Company.

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

WARRANT LIABILITY

9 Months Ended

Sep. 30, 2023

WARRANT LIABILITY

WARRANT LIABILITY

NOTE J – WARRANT LIABILITY

Warrants to purchase a total of 623,834 shares of the Company’s common stock were outstanding as of September 30, 2023 and December 31, 2022. 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, subject to adjustment. During 2022, a private 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, 2023 was 2.2 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 December 22, 2025, 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 Private 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 Statements of Operations. The fair value of the Private Warrants is determined using the Black-Scholes option pricing model. The following table represents the assumptions used in determining the fair value of the Private Warrants as of September 30, 2023:


		September 30, 2023
Risk-free interest rate		4.60%
Expected volatility of common stock		41.48%
Dividend yield		-
Expected option term in years		2.2

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 warrant liability adjustment recognized in the Company's Condensed Consolidated Statements of Operations related to the change in fair value of warrant liability was $0.1 million expense and $1.0 million income during the three and nine months ended September 30, 2023, respectively. The warrant liability 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.

FINANCING ARRANGEMENTS (Tables)

9 Months Ended

Sep. 30, 2023

FINANCING ARRANGEMENTS

Schedule of payments on the equipment loan

The schedule of payments on the Equipment Loan as of September 30, 2023 is as follows (in thousand):


Year ending December 31:
2023	$	-
2024		1,278
2025		2,727
2026		2,971
2027		1,583
Total payments	$	8,559

REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
REVENUE (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2023	Dec. 31, 2022
ASC impact, balance sheet
Contract assets	$ 7,007	$ 7,007	$ 7,277
Increase (decrease) customer asset		(270)
Customer liability, current	2,393	$ 2,393	1,355
Customer liability			$ 1,100
Contract liabilities, revenue recognized	$ 0

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2023	Nov. 06, 2023
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
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		51,328,800
Entity Central Index Key	0001754170
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

INVENTORY (Tables)

9 Months Ended

Sep. 30, 2023

INVENTORY

Schedule of inventory

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


	September 30, 2023		December 31, 2022
Used serviceable materials	$	91,680	$	73,827
Work-in-process		20,113		16,659
Whole assets		215,032		93,044
	$	326,825		183,530
Less short term		(200,807)		(117,488)
Long term	$	126,018	$	66,042

INTANGIBLE ASSETS - Estimated useful lives (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Intangible assets
Total intangible assets with definite lives	$ 12,191	$ 13,782
Asset Management Solutions \| Qwest \| Customer relationships
Intangible assets
Useful life (in years)	10 years
Total intangible assets with definite lives	$ 5,408	6,136
TechOps \| ALGS \| Customer relationships
Intangible assets
Useful life (in years)	10 years
Total intangible assets with definite lives	$ 35	50
TechOps \| ACS \| Customer relationships
Intangible assets
Useful life (in years)	10 years
Total intangible assets with definite lives	$ 1,085	1,243
TechOps \| ACT \| Customer relationships
Intangible assets
Useful life (in years)	10 years
Total intangible assets with definite lives	$ 5,663	$ 6,353

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2023

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, 2023 and 2022, respectively (in thousands, except share and per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net (loss) income	$	(148)	$	(9,013)	$	(2,831)	$	34,668
Change in fair value of warrant liability		-		-		(1,004)		-
Net (loss) income for EPS - Diluted	$	(148)	$	(9,013)	$	(3,835)	$	34,668

Weighted-average number of shares outstanding - basic		51,321,026		51,745,354		51,252,581		51,707,809
Additional shares from assumed stock-settled restricted stock units		-		-		-		2,326,858
Additional shares from assumed exercise of warrants		-		-		177,624		180
Additional shares issued under the employee stock purchase plan		-		-		-		1,555
Weighted-average number of shares outstanding - diluted		51,321,026		51,745,354		51,430,205		54,036,402

(Loss) earnings per share – basic:	$	-	$	(0.17)	$	(0.06)	$	0.67
(Loss) earnings per share – diluted:	$	-	$	(0.17)	$	(0.07)	$	0.64

Anti-dilutive shares/units excluded from earnings per share - diluted:
Additional shares from assumed exercise of warrants		126,154		188,150		-		179,695
Additional shares from assumed stock-settled restricted stock units		2,007,217		2,415,638		1,869,782		-
Additional shares purchasable for employee stock purchase plan		6,542		4,626		1,043		-

FINANCING ARRANGEMENTS

9 Months Ended

Sep. 30, 2023

FINANCING ARRANGEMENTS

FINANCING ARRANGEMENTS

NOTE M— FINANCING ARRANGEMENTS

$180.0 million Wells Fargo Senior Secured Revolving Credit Facility

On July 20, 2018, the Company and other subsidiary borrowers signatory thereto entered into a secured amended and restated revolving credit agreement (as amended, the “Revolving Credit Agreement”), which provides for a $150.0 million aggregate amount of revolver commitments subject to borrowing base limitations. Effective July 25, 2023, the Company amended the Revolving Credit Agreement to increase the maximum commitments thereunder to $180.0 million aggregate amount, expandable to $200.0 million, subject to borrowing base limitations, and to extend the maturity date to July 24, 2028.

The interest rate applicable to loans outstanding under the Revolving Credit Agreement is a floating rate of interest per annum of Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.75%. The applicable interest rate as of September 30, 2023 was 9.75%.

The Company’s ability to borrow under the Revolving Credit Agreement is subject to ongoing compliance by the Company and the borrowers with various customary affirmative and negative covenants. The Revolving Credit Agreement requires the Company and borrowers to meet certain financial and nonfinancial covenants. The Company was in compliance with these covenants as of September 30, 2023.

During the three and nine months ended September 30, 2023, the Company borrowed $26.1 million, and made repayments of $17.5 million under the Revolving Credit Agreement. As of September 30, 2023, the balance outstanding under this facility was $8.6 million, and the Company had $149.0 million of availability.

Interest expense on the Revolving Credit Agreement for the three and nine months ended September 30, 2023 was $0.1 million.

$10.0 million Synovus Property and Equipment Revolving Term Loan

On June 30, 2023, the Company entered into a Property and Equipment Revolving Term Loan (“Equipment Loan”) with a total advance commitment of $10.0 million for the purpose of financing capital expenditures on property and equipment. Once the total advance commitment is reached or commencing on June 30, 2024, whichever comes first, this facility will become a term loan with a maturity date of June 30, 2027. This loan is collateralized by the property and equipment it finances and requires interest only payment until converted to a term loan, at which point, principal and interest payments will be required.

The Equipment Loan bears interest at a rate per annum equal to one-month SOFR + 3.50%, which will be adjusted monthly. The effective rate on this facility as of September 30, 2023 was 8.83%.

The Equipment Loan is subject to ongoing compliance by the Company in the form of various customary affirmative and negative covenants, as well as certain financial covenants. The Company was in compliance with these covenants as of September 30, 2023.

During the nine months ended September 30, 2023 the Company borrowed $8.6 million under this facility, which remained outstanding as of September 30, 2023.

Interest expense on the Equipment Loan for the three and nine months ended September 30, 2023 was 0.2 million.

The schedule of payments on the Equipment Loan as of September 30, 2023 is as follows (in thousand):


Year ending December 31:
2023	$	-
2024		1,278
2025		2,727
2026		2,971
2027		1,583
Total payments	$	8,559

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Paragraph 1C
-Subparagraph (c)
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2023

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, 2022	1,374,383	$	10.72	$	2.88
Granted	359,036		15.01		2.30
Forfeited	(33,526)		14.86		2.10
Vested	(121,737)		14.28		-
Outstanding September 30, 2023	1,578,156	$	11.34	$	2.99


				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

PROPERTY AND EQUIPMENT, NET (Tables)

9 Months Ended

Sep. 30, 2023

PROPERTY AND EQUIPMENT, NET

Schedule of 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, 2023		December 31, 2022
Tooling and equipment	7 - 15	$	15,791	$	14,649
Furniture and other equipment	5		12,030		10,090
Computer software	5		2,244		2,152
Leasehold improvements	3 - 10		13,085		7,390
Equipment under capital lease	5		192		192
Flight equipment held for R&D	2		7,784		-
			51,126		34,473
Less accumulated depreciation			(26,034)		(21,835)
		$	25,092	$	12,638

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

9 Months Ended

Sep. 30, 2023

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 lease, net, as of the below dates consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Aircraft and engines held for lease	$	64,430	$	83,902
Less accumulated depreciation		(34,334)		(52,614)
	$	30,096	$	31,288

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 2023	$	1,256
2024		1,010
Total minimum lease payments	$	2,266

ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2023

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, 2023		December 31, 2022
Accrued compensation and related benefits	$	1,055	$	6,040
Accrued legal fees		686		716
Commission fee accrual		169		251
Accrued federal, state and local taxes and fees		188		142
Other		1,821		1,694
	$	3,919	$	8,843

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2023

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 Principles 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 (the “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, 2022 (the “2022 Form 10-K”), 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 in a contract with a customer, and excludes any sales commissions and taxes collected and remitted to government agencies. We recognize revenue when we satisfy a performance obligation by transferring control over a product 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, and the buyer is responsible for any loss in transit and the Company has a legal right to payment for the spare parts once shipped. We generally sell our 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”) 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 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 customers’ acceptance of the whole asset on the date of the transfer, unless the Company extends credit terms to customers it deems creditworthy.

Leasing Revenues

The Company leases aircraft and engines (“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 payments and other 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 are beyond the customers’ deposits held. Flight Equipment leases are billed in accordance with the lease agreement and invoices are due upon receipt.

Service Revenues

Service revenues are recognized as performance obligations are fulfilled and the benefits are transferred to the customer. At contract inception, we evaluate if the contract should be accounted for as a single performance obligation or if the contract contains multiple performance obligations. In some cases, our 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.

For most service contracts, our performance obligations are satisfied over time as work progresses or at a point in time based on transfer of control of products and services to our customers. We receive payments from our customers based on billing schedules or other terms as written in our contracts.

For our performance obligations that are satisfied over time, we measure progress in a manner that depicts the performance of transferring control to the customer. As such, we utilize 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. We are 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 our maintenance, repair and overhaul (“MRO”) contracts, if the contract is terminated for convenience, we are 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 we provide MRO services.

We have 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 and are included in cost of sales in our Condensed Consolidated Statements of Operations, and are not considered a performance obligation to our customers. Our reported revenue on our Condensed Consolidated Statements of Operations is net of any sales or related non-income taxes.

New Accounting Pronouncements Adopted

There have been no recent accounting pronouncements, changes in accounting pronouncements, or recently adopted accounting guidance during the nine months ended September 30, 2023 that are of significance or potential significance to us.

Payroll Support Programs

In connection with the financial assistance the Company received under the Payroll Support Program, the Company was required to comply with certain provisions of the Coronavirus Aid, Relief and Economic Security Act (“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 and 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 limited the payment of certain employees’ compensation, which lapsed on April 1, 2023. If the Company does not comply with these provisions, it may be required to reimburse up to 100% of any previously received relief funds. As of September 30, 2023, we were in compliance with all applicable provisions of the CARES Act, Payroll Support Program and American Rescue Plan Act of 2021.

BUSINESS SEGMENTS - Intersegment revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenue from contract with customer	$ 92,484	$ 50,999	$ 240,081	$ 313,413
Intersegment
Segment Reporting Information [Line Items]
Revenue from contract with customer	3,929	4,873	15,193	20,657
Asset Management Solutions \| Intersegment
Segment Reporting Information [Line Items]
Revenue from contract with customer	168	1,705	1,241	4,886
TechOps \| Intersegment
Segment Reporting Information [Line Items]
Revenue from contract with customer	$ 3,761	$ 3,168	$ 13,952	$ 15,771

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE - Future payments received (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Minimum future annual lease rentals contracted to be received
Remainder of 2023	$ 1,256
2024	1,010
Total minimum lease payments	$ 2,266

PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment
Property and equipment, gross	$ 51,126	$ 34,473
Less accumulated depreciation	(26,034)	(21,835)
Property and equipment, net	25,092	12,638
Tooling and equipment
Property, Plant and Equipment
Property and equipment, gross	15,791	14,649
Furniture and other equipment
Property, Plant and Equipment
Property and equipment, gross	$ 12,030	10,090
Useful life (in years)	5 years
Computer software
Property, Plant and Equipment
Property and equipment, gross	$ 2,244	2,152
Useful life (in years)	5 years
Leasehold improvements
Property, Plant and Equipment
Property and equipment, gross	$ 13,085	7,390
Equipment under capital lease
Property, Plant and Equipment
Property and equipment, gross	$ 192	$ 192
Useful life (in years)	5 years
Flight equipment held for R&D
Property, Plant and Equipment
Property and equipment, gross	$ 7,784
Useful life (in years)	2 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)	10 years

BUSINESS SEGMENTS (Details)	9 Months Ended
BUSINESS SEGMENTS (Details)	Sep. 30, 2023 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, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Segments
Revenue	$ 92,484	$ 50,999	$ 240,081	$ 313,413
Gross profit	23,474	15,489	68,005	117,172
Total assets	553,902	531,579	553,902	531,579	$ 531,579
Asset Management Solutions
Segments
Revenue	65,054	20,591	150,555	209,662
Gross profit	18,537	8,690	47,951	90,218
Total assets	382,624	233,034	382,624	233,034
Asset Management Solutions \| Aircraft
Segments
Revenue	20,888	6,503	57,836	78,343
Gross profit	6,656	2,480	16,871	29,779
Asset Management Solutions \| Engine
Segments
Revenue	44,166	14,088	92,719	131,319
Gross profit	11,881	6,210	31,080	60,439
TechOps
Segments
Revenue	27,430	30,408	89,526	103,751
Gross profit	4,937	6,799	20,054	26,954
Total assets	156,672	141,406	156,672	141,406
TechOps \| Product
Segments
Revenue	4,276	4,018	10,583	7,888
Gross profit	1,045	1,346	2,600	3,174
TechOps \| Whole Asset Sales
Segments
Revenue			218	23,605
Gross profit			376	7,523
TechOps \| MRO services
Segments
Revenue	23,154	26,390	78,725	72,258
Gross profit	3,892	5,453	17,078	16,257
Corporate
Segments
Total assets	$ 14,606	$ 157,139	$ 14,606	$ 157,139

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 3,154	$ 147,188
Accounts receivable, net of allowance for credit losses of $979 and $1,074 as of September 30, 2023 and December 31, 2022	29,721	28,273
Income tax receivable	1,313
Inventory:
Aircraft, airframes, engines, and parts, net	200,807	117,488
Advance vendor payments	35,798	27,585
Deposits, prepaid expenses, and other current assets	15,335	13,022
Total current assets	286,128	333,556
Fixed assets:
Aircraft and engines held for lease, net	30,096	31,288
Property and equipment, net	25,092	12,638
Inventory:
Aircraft, airframes, engines, and parts, net	126,018	66,042
Operating lease right-of-use assets	28,445	31,624
Deferred income taxes	13,618	11,287
Deferred financing costs, net	1,589	544
Deferred customer incentives and other assets, net	535	628
Goodwill	19,860	19,860
Other intangible assets, net	22,521	24,112
Total assets	553,902	531,579
Current liabilities:
Accounts payable	38,954	21,131
Accrued expenses	3,919	8,843
Lessee and customer purchase deposits	6,444	17,085
Current operating lease liabilities	4,578	4,426
Current portion of long-term debt	632
Deferred revenue	2,393	1,355
Total current liabilities	56,920	52,840
Revolving credit facility	8,600
Long-term debt	7,927
Long-term lease deposits	152	152
Long-term operating lease liabilities	25,238	28,283
Maintenance deposit payments and other liabilities	151	668
Warrant liability	3,652	4,656
Total liabilities	102,640	86,599
Commitments and contingencies
Stockholders' equity:
Common stock, $0.0001 par value. Authorized 200,000,000 shares; issued and outstanding 51,328,800 and 51,189,461 shares as of September 30, 2023 and December 31, 2022	5	5
Additional paid-in capital	315,254	306,141
Retained earnings	136,003	138,834
Total stockholders' equity	451,262	444,980
Total liabilities and stockholders' equity	$ 553,902	$ 531,579

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE - Components (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Depreciation expense	$ 1,100	$ 1,700		$ 3,300	$ 5,400
Contingent rental fees	$ 900		$ 3,600	$ 5,400	10,100
Lease term (in years)	2 years			2 years
Aircraft and Engines
Aircraft and engines held for lease	$ 64,430			$ 64,430		$ 83,902
Less accumulated depreciation	(34,334)			(34,334)		(52,614)
Property held for operating leases, net	30,096			30,096		$ 31,288
Flight Equipment
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Impairment of Flight Equipment	$ 0			$ 0	$ 900

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2023
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 Principles 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 (the “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, 2022 (the “2022 Form 10-K”), 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 in a contract with a customer, and excludes any sales commissions and taxes collected and remitted to government agencies. We recognize revenue when we satisfy a performance obligation by transferring control over a product 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, and the buyer is responsible for any loss in transit and the Company has a legal right to payment for the spare parts once shipped. We generally sell our 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”) 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 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 customers’ acceptance of the whole asset on the date of the transfer, unless the Company extends credit terms to customers it deems creditworthy. Leasing Revenues The Company leases aircraft and engines (“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 payments and other 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 are beyond the customers’ deposits held. Flight Equipment leases are billed in accordance with the lease agreement and invoices are due upon receipt. Service Revenues Service revenues are recognized as performance obligations are fulfilled and the benefits are transferred to the customer. At contract inception, we evaluate if the contract should be accounted for as a single performance obligation or if the contract contains multiple performance obligations. In some cases, our 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. For most service contracts, our performance obligations are satisfied over time as work progresses or at a point in time based on transfer of control of products and services to our customers. We receive payments from our customers based on billing schedules or other terms as written in our contracts. For our performance obligations that are satisfied over time, we measure progress in a manner that depicts the performance of transferring control to the customer. As such, we utilize 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. We are 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 our maintenance, repair and overhaul (“MRO”) contracts, if the contract is terminated for convenience, we are 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 we provide MRO services. We have 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 and are included in cost of sales in our Condensed Consolidated Statements of Operations, and are not considered a performance obligation to our customers. Our reported revenue on our Condensed Consolidated Statements of Operations is net of any sales or related non-income taxes.
New Accounting Pronouncements Adopted	New Accounting Pronouncements Adopted There have been no recent accounting pronouncements, changes in accounting pronouncements, or recently adopted accounting guidance during the nine months ended September 30, 2023 that are of significance or potential significance to us.
Payroll Support Programs	Payroll Support Programs In connection with the financial assistance the Company received under the Payroll Support Program, the Company was required to comply with certain provisions of the Coronavirus Aid, Relief and Economic Security Act (“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 and 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 limited the payment of certain employees’ compensation, which lapsed on April 1, 2023. If the Company does not comply with these provisions, it may be required to reimburse up to 100% of any previously received relief funds. As of September 30, 2023, we were in compliance with all applicable provisions of the CARES Act, Payroll Support Program and American Rescue Plan Act of 2021.

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Retained Earnings	Total
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 (loss) 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]
Net (loss) 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 (loss) 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]
Share-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 (loss) 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
Balance at beginning at Dec. 31, 2022	$ 5	306,141	138,834	444,980
Balance at beginning (in shares) at Dec. 31, 2022	51,189,461
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation		2,731		2,731
Shares issued under the 2020 Equity Incentive Plan (in shares)	31,925
Shares surrendered for tax withholdings on equity awards		(70)		(70)
Net (loss) income			5	5
Balance at ending at Mar. 31, 2023	$ 5	308,802	138,839	447,646
Balance at ending (in shares) at Mar. 31, 2023	51,221,386
Balance at beginning at Dec. 31, 2022	$ 5	306,141	138,834	444,980
Balance at beginning (in shares) at Dec. 31, 2022	51,189,461
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income				(2,831)
Balance at ending at Sep. 30, 2023	$ 5	315,254	136,003	451,262
Balance at ending (in shares) at Sep. 30, 2023	51,328,800
Balance at beginning at Mar. 31, 2023	$ 5	308,802	138,839	447,646
Balance at beginning (in shares) at Mar. 31, 2023	51,221,386
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation		3,028		3,028
Shares issued under the 2020 Employee Stock Purchase Plan		278		278
Shares issued under the 2020 Employee Stock Purchase Plan (in shares)	21,551
Shares issued under the 2020 Equity Incentive Plan (in shares)	7,470
Net (loss) income			(2,688)	(2,688)
Balance at ending at Jun. 30, 2023	$ 5	312,108	136,151	448,264
Balance at ending (in shares) at Jun. 30, 2023	51,250,407
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation		3,180		3,180
Shares issued under the 2020 Equity Incentive Plan (in shares)	78,393
Shares surrendered for tax withholdings on equity awards		(34)		(34)
Net (loss) income			(148)	(148)
Balance at ending at Sep. 30, 2023	$ 5	$ 315,254	$ 136,003	$ 451,262
Balance at ending (in shares) at Sep. 30, 2023	51,328,800

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2023

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 51,328,800 and 51,189,461 shares were issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

2020 Equity Incentive Plan

The Company maintains a 2020 Equity Incentive Plan (the “2020 Plan”) and has registered 6,200,000 shares of common stock issuable under the 2020 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, 2023 and 2022 was as follows:


				Weighted Average
		Weighted Average		Remaining Contractual
	Amount	Grant Date Fair Value		Life (Years)
Outstanding at December 31, 2022	1,374,383	$	10.72	$	2.88
Granted	359,036		15.01		2.30
Forfeited	(33,526)		14.86		2.10
Vested	(121,737)		14.28		-
Outstanding September 30, 2023	1,578,156	$	11.34	$	2.99


				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

The Company’s restricted stock units include 1,073,736 performance-based awards that have vesting provisions subject to both time vesting and the achievement of certain performance milestones at 100% and 200% vesting targets. Effective March 31, 2022, the performance-based awards granted in 2021 (the “2021 PSUs”) met the performance metric at the maximum level of 200% with one-third vested on December 22, 2022 and two-thirds vesting on December 22, 2023. For the three and nine months ended September 30, 2023, the Company recognized share-based compensation expense for the 2021 PSUs of $2.0 million and $6.0 million, respectively, given the achievement of the 200% performance milestone. 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.

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 the Aersale Corporation 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, 2023 and 2022, the Company issued 21,551 and 30,099 shares, respectively, pursuant to the ESPP.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

BUSINESS SEGMENTS - Gross profit to net income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
BUSINESS SEGMENTS
Segment gross profit	$ 23,474	$ 15,489	$ 68,005	$ 117,172
Selling, general, and administrative expenses	(25,403)	(23,983)	(77,724)	(71,252)
Interest (expense) income, net	(250)	393	1,178	15
Other income, net	127	45	498	526
Change in fair value of warrant liability	(55)	(2,029)	1,004	(1,881)
(Loss) income before income tax provision	$ (2,107)	$ (10,085)	$ (7,039)	$ 44,580

- 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

REVENUE (Tables)

9 Months Ended

Sep. 30, 2023

REVENUE

Schedule of contract assets

Contract assets are as follows (in thousands):


	September 30, 2023		December 31, 2022		Change
Contract assets	$	7,007	$	7,277	$	(270)

Schedule of revenue by segment, as well as total revenue


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023						2023
	Asset Management						Asset Management
	Solutions		Tech Ops		Total Revenues		Solutions		TechOps		Total Revenues
USM	$	17,754	$	3,884	$	21,638	$	49,348	$	9,709	$	59,057
Whole asset sales		44,812		-		44,812		89,811		218		90,029
Engineered solutions		-		392		392		-		874		874
Total products		62,566		4,276		66,842		139,159		10,801		149,960
Leasing		2,488		-		2,488		11,396		-		11,396
Services		-		23,154		23,154		-		78,725		78,725
Total revenues	$	65,054	$	27,430	$	92,484	$	150,555	$	89,526	$	240,081


	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

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2023

EARNINGS PER SHARE

Summary of reconciliation of the computation for basic and diluted earnings per share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net (loss) income	$	(148)	$	(9,013)	$	(2,831)	$	34,668
Change in fair value of warrant liability		-		-		(1,004)		-
Net (loss) income for EPS - Diluted	$	(148)	$	(9,013)	$	(3,835)	$	34,668

Weighted-average number of shares outstanding - basic		51,321,026		51,745,354		51,252,581		51,707,809
Additional shares from assumed stock-settled restricted stock units		-		-		-		2,326,858
Additional shares from assumed exercise of warrants		-		-		177,624		180
Additional shares issued under the employee stock purchase plan		-		-		-		1,555
Weighted-average number of shares outstanding - diluted		51,321,026		51,745,354		51,430,205		54,036,402

(Loss) earnings per share – basic:	$	-	$	(0.17)	$	(0.06)	$	0.67
(Loss) earnings per share – diluted:	$	-	$	(0.17)	$	(0.07)	$	0.64

Anti-dilutive shares/units excluded from earnings per share - diluted:
Additional shares from assumed exercise of warrants		126,154		188,150		-		179,695
Additional shares from assumed stock-settled restricted stock units		2,007,217		2,415,638		1,869,782		-
Additional shares purchasable for employee stock purchase plan		6,542		4,626		1,043		-

STOCKHOLDERS' EQUITY - Restricted Stock Unit Activity (Details) - 2020 Plan - $ / shares	9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Amount (in Shares)
Beginning balance	1,374,383	1,669,300,000	1,669,300,000
Granted	359,036	278,473,000
Forfeited	(33,526)	(11,048,000)
Vested	(121,737)	(23,643,000)
Ending balance	1,578,156	1,913,082,000	1,374,383	1,669,300,000
Weighted Average Grant Date Fair Value
Beginning Balance	$ 10.72	$ 10.10	$ 10.10
Granted	15.01	14.80
Forfeited	14.86	13.39
Vested	14.28	12.24
Ending Balance	$ 11.34	$ 10.74	$ 10.72	$ 10.10
Weighted Average Contractual Life (Years)
Granted	2 years 3 months 18 days	2 years 5 months 26 days
Forfeited	2 years 1 month 6 days	2 years 2 months 12 days
Outstanding	2 years 11 months 27 days	2 years 1 month 10 days	2 years 10 months 17 days	2 years 7 days

BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2023

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 revenue consists 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 (“R&D”) activities, which are expensed as incurred. The TechOps segment also engages in the repair and sale of USM inventory for which it has the overhaul capabilities and relationships to sell.

Gross profit is calculated by subtracting cost of sales from revenue. 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 income (expense) and income tax expense.

Selected financial information for each segment for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue
Asset Management Solutions
Aircraft	$	20,888	$	6,503	$	57,836	$	78,343
Engine		44,166		14,088		92,719		131,319
		65,054		20,591		150,555		209,662
TechOps
MRO services		23,154		26,390		78,725		72,258
Product sales		4,276		4,018		10,583		7,888
Whole asset sales		-		-		218		23,605
		27,430		30,408		89,526		103,751
Total	$	92,484	$	50,999	$	240,081	$	313,413

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Gross profit
Asset Management Solutions
Aircraft	$	6,656	$	2,480	$	16,871	$	29,779
Engine		11,881		6,210		31,080		60,439
		18,537		8,690		47,951		90,218
TechOps
MRO services		3,892		5,453		17,078		16,257
Product sales		1,045		1,346		2,600		3,174
Whole asset sales		-		-		376		7,523
		4,937		6,799		20,054		26,954
Total	$	23,474	$	15,489	$	68,005	$	117,172

					September 30, 2023		December 31, 2022
Total assets
Asset Management Solutions					$	382,624	$	233,034
Tech Ops						156,672		141,406
Corporate						14,606		157,139
					$	553,902	$	531,579

The following table reconciles segment gross profit to (loss) income before income tax provision for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Segment gross profit	$	23,474	$	15,489	$	68,005	$	117,172
Selling, general and administrative expenses		(25,403)		(23,983)		(77,724)		(71,252)
Interest (expense) income, net		(250)		393		1,178		15
Other income, net		127		45		498		526
Change in fair value of warrant liability		(55)		(2,029)		1,004		(1,881)
(Loss) income before income tax provision	$	(2,107)	$	(10,085)	$	(7,039)	$	44,580

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, 2023 and 2022, is as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Asset Management Solutions	$	168	$	1,705	$	1,241	$	4,886
TechOps		3,761		3,168		13,952		15,771
Total intersegment revenues	$	3,929	$	4,873	$	15,193	$	20,657

- 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
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Subparagraph (d)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

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-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2023

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, 2023		December 31, 2022
Accrued compensation and related benefits	$	1,055	$	6,040
Accrued legal fees		686		716
Commission fee accrual		169		251
Accrued federal, state and local taxes and fees		188		142
Other		1,821		1,694
	$	3,919	$	8,843

WARRANT LIABILITY (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Class of Warrant or Right [Line Items]
Number of warrants outstanding	623,834		623,834		623,834
Share price					$ 18.5306
Change in fair value of warrant liability	$ 55	$ 2,029	$ (1,004)	$ 1,881
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		$ 11.50
Number of warrants outstanding	750,000		750,000
Cashless exercise of warrants					126,166
Remaining term	2 years 2 months 12 days		2 years 2 months 12 days
Common stock issued based on fair value					47,867

WARRANT LIABILITY (Tables)

9 Months Ended

Sep. 30, 2023

WARRANT LIABILITY

Assumptions of Black-Scholes option pricing model


		September 30, 2023
Risk-free interest rate		4.60%
Expected volatility of common stock		41.48%
Dividend yield		-
Expected option term in years		2.2

FINANCING ARRANGEMENTS - Revolving credit facility (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
	Jun. 30, 2023	Sep. 30, 2023	Sep. 30, 2023
Financing arrangements
Proceeds from borrowings			$ 26,100
Repayments made			$ 17,500
Revolving credit agreement
Financing arrangements
Interest rate		9.75%	9.75%
Proceeds from borrowings		$ 26,100	$ 26,100
Repayments made			17,500
Outstanding borrowings		8,600	8,600
Aggregate amount committed		149,000	149,000
Interest expense		100	$ 100
Revolving credit agreement \| SOFR
Financing arrangements
Spread on variable rate			2.75%
Equipment Loan \| Synovus
Financing arrangements
Debt instrument, face		$ 10,000	$ 10,000
Maximum borrowing capacity	$ 10,000
Interest rate		8.83%	8.83%
Available borrowing capacity		$ 8,600	$ 8,600
Interest expense			$ 200
Equipment Loan \| SOFR \| Synovus
Financing arrangements
Spread on variable rate	3.50%

INVENTORY (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
INVENTORY
Used serviceable materials	$ 91,680	$ 91,680		$ 73,827
Work-in-process	20,113	20,113		16,659
Whole assets	215,032	215,032		93,044
Inventory, Net, Total	326,825	326,825		183,530
Less short term	(200,807)	(200,807)		(117,488)
Long term	126,018	126,018		$ 66,042
Inventory scrap loss reserves	$ 500	1,300
Inventory reserve		$ 1,255	$ 2,010

FINANCING ARRANGEMENTS - Equipment Loan (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Debt Instrument [Line Items]
Total payments	$ 7,927
Equipment Loan \| Synovus
Debt Instrument [Line Items]
2024	1,278
2025	2,727
2026	2,971
2027	1,583
Total payments	$ 8,559

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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-Paragraph 1
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 3
-Subparagraph (SX 210.12-04(a))
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

Amount, after deduction of unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
ACCRUED EXPENSES
Accrued compensation and related benefits	$ 1,055	$ 6,040
Accrued legal fees	686	716
Commission fee accrual	169	251
Accrued federal, state and local taxes and fees	188	142
Other	1,821	1,694
Total accrued expenses	$ 3,919	$ 8,843

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2023

INTANGIBLE ASSETS

Schedule of intangible assets with indefinite lives

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


	September 30, 2023		December 31, 2022
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

The Company performed its annual quantitative impairment analysis on the indefinite lived intangible assets as of July 1, 2023 and 2022 and concluded there was no impairment.


	Useful Life
	In Years	September 30, 2023		December 31, 2022
Qwest:
Customer relationships	10	$	5,408	$	6,136
ALGS:
Customer relationships	10		35		50
ACS:
Customer relationships	10		1,085		1,243
ACT:
Customer relationships	10		5,663		6,353
Total intangible assets with definite lives		$	12,191	$	13,782

WARRANT LIABILITY - Black-Scholes option pricing model (Details)	Sep. 30, 2023 Y
Risk-free interest rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and rights outstanding, measurement input	0.0460
Expected volatility of common stock
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and rights outstanding, measurement input	0.4148
Expected option term in years
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Warrants and rights outstanding, measurement input	2.2

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue:
Total revenue	$ 92,484	$ 50,999	$ 240,081	$ 313,413
Cost of sales and operating expenses:
Total cost of sales	69,010	35,510	172,076	196,241
Gross profit	23,474	15,489	68,005	117,172
Selling, general, and administrative expenses	25,403	23,983	77,724	71,252
(Loss) income from operations	(1,929)	(8,494)	(9,719)	45,920
Other income (expenses):
Interest (expense) income, net	(250)	393	1,178	15
Other income, net	127	45	498	526
Change in fair value of warrant liability	(55)	(2,029)	1,004	(1,881)
Total other (expenses) income	(178)	(1,591)	2,680	(1,340)
(Loss) income before income tax provision	(2,107)	(10,085)	(7,039)	44,580
Income tax benefit (expense)	1,959	1,072	4,208	(9,912)
Net (loss) income	$ (148)	$ (9,013)	$ (2,831)	$ 34,668
EARNINGS PER SHARE
(Loss) earnings per share - basic		$ (0.17)	$ (0.06)	$ 0.67
(Loss) earnings per share - diluted		$ (0.17)	$ (0.07)	$ 0.64
Weighted average shares outstanding:
Weighted average shares outstanding - Basic	51,321,026	51,745,354	51,252,581	51,707,809
Weighted average shares outstanding - Diluted	51,321,026	51,745,354	51,430,205	54,036,402
Products
Revenue:
Total revenue	$ 66,842	$ 16,823	$ 149,960	$ 217,813
Cost of sales and operating expenses:
Total cost of sales	48,697	12,755	107,176	133,702
Leasing
Revenue:
Total revenue	2,488	7,786	11,396	23,342
Cost of sales and operating expenses:
Total cost of sales	1,051	1,818	3,253	6,538
Services
Revenue:
Total revenue	23,154	26,390	78,725	72,258
Cost of sales and operating expenses:
Total cost of sales	$ 19,262	$ 20,937	$ 61,647	$ 56,001

PROPERTY AND EQUIPMENT, NET - Depreciation expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
PROPERTY AND EQUIPMENT, NET
Depreciation expense	$ 0.9	$ 0.6	$ 2.7	$ 1.6

LEASE RENTAL REVENUES AND AIRCRAFT AND ENGINES HELD FOR LEASE

9 Months Ended

Sep. 30, 2023

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 lease, net, as of the below dates consisted of the following (in thousands):


	September 30, 2023		December 31, 2022
Aircraft and engines held for lease	$	64,430	$	83,902
Less accumulated depreciation		(34,334)		(52,614)
	$	30,096	$	31,288

Total depreciation expense amounted to $1.1 million and $1.7 million for the three months ended September 30, 2023 and 2022, respectively. Total depreciation expense amounted to $3.3 million and $5.4 million for the nine months ended September 30, 2023 and 2022, respectively, and is included in cost of leasing in the Condensed Consolidated Statements of Operations.

The Company did not record any impairment of Flight Equipment for the three and nine months ended September 30, 2023. The Company recorded 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 $0.9 million and $3.6 million for the three months ended September 30, 2023 and 2022, respectively. Supplemental rents recognized as revenue totaled $5.4 million and $10.1 million for the nine months ended September 30, 2023 and 2022, 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 2023	$	1,256
2024		1,010
Total minimum lease payments	$	2,266

REVENUE - Disaggregation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
REVENUE - Disaggregation (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenue disaggregation
Total revenue	$ 92,484	$ 50,999	$ 240,081	$ 313,413
Product
Revenue disaggregation
Total revenue	66,842	16,823	149,960	217,813
Leasing
Revenue disaggregation
Total revenue	2,488	7,786	11,396	23,342
Services
Revenue disaggregation
Total revenue	23,154	26,390	78,725	72,258
Operating segments
Revenue disaggregation
Total revenue	92,484	50,999	240,081	313,413
Operating segments \| Product
Revenue disaggregation
Total revenue	66,842	16,823	149,960	217,813
Operating segments \| USM
Revenue disaggregation
Total revenue	21,638	13,583	59,057	44,078
Operating segments \| Whole Asset Sales
Revenue disaggregation
Total revenue	44,812	2,677	90,029	171,056
Operating segments \| Engineered Solutions
Revenue disaggregation
Total revenue	392	563	874	2,679
Operating segments \| Leasing
Revenue disaggregation
Total revenue	2,488	7,786	11,396	23,342
Operating segments \| Services
Revenue disaggregation
Total revenue	23,154	26,390	78,725	72,258
Asset Management Solutions \| Operating segments
Revenue disaggregation
Total revenue	65,054	20,591	150,555	209,662
Asset Management Solutions \| Operating segments \| Product
Revenue disaggregation
Total revenue	62,566	12,805	139,159	186,320
Asset Management Solutions \| Operating segments \| USM
Revenue disaggregation
Total revenue	17,754	10,128	49,348	38,869
Asset Management Solutions \| Operating segments \| Whole Asset Sales
Revenue disaggregation
Total revenue	44,812	2,677	89,811	147,451
Asset Management Solutions \| Operating segments \| Leasing
Revenue disaggregation
Total revenue	2,488	7,786	11,396	23,342
TechOps \| Operating segments
Revenue disaggregation
Total revenue	27,430	30,408	89,526	103,751
TechOps \| Operating segments \| Product
Revenue disaggregation
Total revenue	4,276	4,018	10,801	31,493
TechOps \| Operating segments \| USM
Revenue disaggregation
Total revenue	3,884	3,455	9,709	5,209
TechOps \| Operating segments \| Whole Asset Sales
Revenue disaggregation
Total revenue			218	23,605
TechOps \| Operating segments \| Engineered Solutions
Revenue disaggregation
Total revenue	392	563	874	2,679
TechOps \| Operating segments \| Services
Revenue disaggregation
Total revenue	$ 23,154	$ 26,390	$ 78,725	$ 72,258

FINANCING ARRANGEMENTS (Details) - Revolving credit agreement - USD ($) $ in Millions	Sep. 30, 2023	Jul. 25, 2023	Jul. 20, 2018
Financing arrangements
Outstanding borrowings	$ 8.6
Wells Fargo
Financing arrangements
Debt instrument, face	$ 180.0
Maximum borrowing capacity		$ 180.0	$ 150.0
Maximum borrowing capacity, expandable amount		$ 200.0

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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- Definition

The carrying value as of the balance sheet date of the noncurrent portion of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

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