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Subsequent Events | 3 Months Ended
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Dec. 31, 2024
Subsequent Events [Abstract] |
Subsequent Events | 17. Subsequent Events Reverse Stock Split Mesa authorized a 15-for-1 Reverse Stock Split of issued and outstanding common stock. The Reverse Stock Split is expected to occur on or about 5:00 p.m. Eastern Time on November 24, 2025, with the common stock trading on a post-split basis under the Company's expected new Nasdaq trading symbol, "RJET," at the market open on November 25, 2025. Amendment to Loan and Guarantee Agreement On October 24, 2025, the Company entered into an Amendment (the "Amendment") to its Loan and Guarantee Agreement, dated as of October 30, 2020 (as theretofore amended, the “Loan Agreement”), among Mesa, Mesa Airlines, the Guarantors party thereto from time to time, Jefferies Capital Services, LLC (as successor in interest to the United States Department of the Treasury) (the “Lender” or “Jefferies”), and The Bank of New York Mellon as Administrative Agent and Collateral Agent (the “Agents”) (collectively, the “Parties”). Capitalized terms used but not defined herein have the meanings ascribed to them in the Loan Agreement. Und er the terms of the Amendment, Jefferies agreed to: (a) extend the Maturity Date of the Loan Agreement from October 30, 2025 to November 28, 2025, subject to the Company’s further right to extend the Maturity Date by 30 days by providing notice to the Administrative Agent to no later than November 27, 2025; (b) reduce the interest rate under the Loan Agreement to zero percent (0%) for a period of 90 days from the date of the Amendment; (c) waive the restrictions on Fundamental Changes and Organizational Document amendments in connection with the Merger; (d) waive the Collateral Coverage Ratio through the Maturity Date, and (e) subject to the payment in full of the obligations under the Loan Agreement on the Maturity Date, reduce the principal amount of the Obligations under the Loan Agreement by $12.3 million (collectively, the “Amendments”). In con nection with the execution of the Amendment, (i) Mesa Airlines entered into a Security and Control Agreement with Jefferies pursuant to which Mesa Airlines deposited $31.9 million into a collateral account controlled by Jefferies and agreed to pledge an aircraft engine, each as collateral for the obligations under the Loan Agreement, and (ii) Mesa Airlines agreed to pay Jefferies a non-refundable advisory fee of $3.5 million, payable on the earlier of the approval of the Merger and the Maturity Date. One Big Beautiful Bill Act On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The tax changes enacted as a result of the OBBBA did not have a significant impact on the Company’s taxes. Merger Agreement On April 4, 2025, the Company entered into the Merger Agreement with Republic. Subject to the terms and conditions of the Merger Agreement, Republic will merge with and into the Company, with the Company continuing as the surviving corporation following the Merger. In connection with the Merger, immediately prior to the Effective Time, the Company will convert from a Nevada corporation to a Delaware corporation pursuant to the Conversion. Three Party Agreement Concurrently with the execution of the Merger Agreement, the Company entered into the Three Party Agreement between United, Republic, and the Company, which provides for, among other things, the following, each subject to the completion of the Merger Agreement: • Termination of the United CPA. • The Company to sell or dispose of all remaining Eligible Assets (as defined in the Three Party Agreement). • The Company to extinguish all remaining debt with cash and sale of assets. Any remaining debt will be assumed by the surviving corporation or forgiven by United. • A three percent (3%) increase in CPA block hour rates, retroactive to January 1, 2025. • The transfer of all of the Company's rights and obligations under its agreements with Archer (as discussed below). • The issuance by the Company (referred to in the Three Party Agreement as the "Primary Issuance") of shares of Company common stock equal to six percent (6%) of the issued and outstanding shares of Company common stock after giving effect to the issuance of Company common stock in the Merger, which shares will (a) first become available to United to the extent of certain financial contributions made by United to the Company at or prior to the effective time of the Merger, (b) second, to the extent of any remainder, become available to the surviving corporation to satisfy certain liabilities, and (c) third, to the extent of any remainder, become available on a pro rata basis to the persons who, as of immediately prior to the effective time of the Merger, held shares of Company common stock. The foregoing description of the Merger Agreement and the Three Party Agreement is only a summary, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement and the Three Party Agreement, which are attached as Exhibit 2.1 and 10.1, respectively, to the Current Report on Form 8-K filed by the Company with the SEC on April 8, 2025. Amendments to our Third Amended and Restated United CPA On April 4, 2025, we entered into the Sixth Amendment to our Third Amended and Restated United CPA which provides for the following: • The extension of the CPA rate increases agreed upon in the January 2024 United CPA Amendments, retroactive to January 1, 2025, through March 31, 2026. • The extension of incentives for achieving certain performance metrics, retroactive to July 1, 2024, through March 31, 2026. Transfer of Archer Obligations In connection with the Three Party Agreement, the Company has agreed to transfer all rights and obligations associated with its Archer warrants and aircraft purchase agreement obligations. If the Company is unable to transfer such rights and obligations, the Company will work with United to either cancel or transfer any remaining obligations to United. The Company will be released from its liability associated with Archer obligations due to the transfer due United Waiver to Second Amended and Restated Credit and Guaranty Agreement On April 4, 2025, we entered into the Sixth Amendment to our Second Amended and Restated Credit and Guaranty Agreement providing for the waiver of an existing financial covenant default with respect to the period ended March 31, 2025, and a projected financial covenant default with respect to the periods ending June 30, 2025, September 30, 2025, December 31, 2025, and March 31, 2026, each relating to a minimum liquidity requirement under our United Revolving Credit Facility. Sale of Airframes On April 3, 2025, our airframe purchase agreement with a third party was amended to include an additional 14 CRJ-900 airframes to be sold to the third party for expected gross proceeds of $9.1 million. Sale of Engines On April 3, 2025, we entered into an agreement with a third party which provides for the sale of 23 GE model CF34-8C engines to the third party for expected gross proceeds of $16.3 million, which will be used to pay down our UST Loan. • The Company recorded an impairment loss of approximately $14.7 million associated with held for sale accounting treatment of the 23 engines, which will be reflected in our financial statements for fiscal year 2025. • Subsequently, the Company closed the sale of 13 of the engines for gross proceeds of $9.2 million, which was used to pay down our UST Loan. Minimum CCR Covenant On March 18, 2025, we entered into a new CCR Modification Agreement with the UST to lower the minimum CCR covenant to .91 to 1.0 effective as of February 28, 2025, through the maturity date of the loan. Aircraft Sale to United and Assumption of EETC Note by United On January 31, 2025, the Company closed the sale of the remaining 10 E-175 aircraft to United, a related party, for gross proceeds of $122.9 million and net proceeds of $49.4 million after the assumption of debt by United. The Company recorded a loss of approximately $7.3 million on the sale of the remaining 10 aircraft, which will be reflected in our financial statements for the second quarters of fiscal year 2025. • As part of the sale of the remaining 10 aircraft, United assumed our EETC note with a remaining balance of $73.4 million at the time of assumption. Assets Held for Sale Subsequent to December 31, 2024, the Company closed the sale of 28 CRJ-900 airframes, and 4 5 GE model CF34-8C engines (25 and 4 5 of which, respectively, were held for sale as of December 31, 2024) as well as certain spare parts that were classified as held for sale as of December 31, 2024. The Company received $67.0 million in gross proceeds from the sale of such assets, $62.4 million of which was used to pay down our UST Loan. Held for Sale Inventory Subsequent to December 31, 2024, the Company reclassified certain spare parts related to its CRJ asset fleet to held for sale. • The Company recorded an impairment loss of approximately $38.8 million associated with held for sale accounting treatment of the spare parts, which will be reflected in our financial statements for fiscal year 2025.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
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