flyExclusive Inc

Item 1A. Risk Factors

There have been no material changes to the Companys risk factors as disclosed in the Companys Annual Report on Form 10-K for the year ended December 31, 2024, except as set forth below:

The Proposed Merger of FlyX Merger Sub, Inc. and Jet.AI Merger Sub may not be completed on t and the terms or timeline currently contemplated, or at all.

The consummation of the proposed merger (the Proposed Merger) of FlyX MergerSub (MergerSub) and Jet.AI SpinCo, Inc.(SpinCo) is subject to numerous conditions, including (1) the effectiveness of the registration statement on Form S-4 filed by flyExclusive as part of the Proposed Merger, (2) the approval by Jet.AIs stockholders of the Proposed Merger, and (3) other customary closing conditions, and there can be no assurance that the Proposed Merger will be consummated. 

If the Proposed Merger is not completed for any reason, the price of flyExclusives Class A Common Stock may decline to the extent that the market price of flyExclusives Class A Common Stock reflects or previously reflected positive market assumptions that the Proposed Merger would be completed and the related benefits would be realized. In addition, flyExclusive has expended and will continue to expend significant management time and resources and has incurred and will continue to incur significant expenses due to legal, advisory, printing, and financial services fees related to the Proposed Merger. These expenses must be paid regardless of whether the Proposed Merger is consummated.

The Amended and Restated Merger Agreement and Plan of Reorganization, dated May 6, 2025, by and among flyExclusive, Jet.AI, MergerSub, and SpinCo (the AR Merger Agreement) may be terminated by either flyExclusive or Jet.AI if the Proposed Merger is not completed by June 30, 2025, except that this right to terminate the AR Merger Agreement will not be available to any party whose failure to fulfill any material covenant or agreement under the AR Merger Agreement is the primary cause of or resulted in the failure of the transactions to be consummated on or before that date. flyExclusive and Jet.AI can also mutually decide to terminate the AR Merger Agreement at any time, before or after Jet.AI stockholder approval is obtained. In addition, flyExclusive and Jet.AI may elect to terminate the AR Merger Agreement in certain other circumstances.

If the Proposed Merger is not completed for any reason, flyExclusives ongoing business and financial results may be adversely affected and, without realizing any of the benefits of having completed the Proposed Merger, flyExclusive will be subject to a number of risks, including the following:

flyExclusive will be required to pay its costs relating to the Proposed Merger, which are substantial, such as legal, accounting, financial advisory, and printing fees, whether or not the ProposeCompanys Quarterly Report on Form 10-Q for the quarter ended Merger is completed;

time and resources committed by flyExclusives management to matters relating to the Proposed Merger could otherwise have been devoted to pursuing other beneficial opportunities;

flyExclusive may experience negative reactions from financial markets, including negative impacts on the price of its Class A common stock, including to the extent that the current market price reflects a market assumption that the Proposed Merger will be completed;

flyExclusive may experience negative reactions from employees, customers, or vendors; and

since the AR Merger Agreement restricts the conduct of flyExclusives business prior to completion of the Proposed Merger, flyExclusive may not have been able to take certain actions during the pendency of the Proposed Merger that would have benefited it as an independent company and the opportunity to take such actions may no longer be available.

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During the pendency of the AR Merger Agreement, flyExclusive may not be able to enter into a business combination with another party at a favorable price because of restrictions in the AR Merger Agreement, which could adversely affect its business.

Covenants in the AR Merger Agreement impede the ability of flyExclusive to make acquisitions, subject to specified exceptions relating to fiduciary duties, or complete other mergers, sales of assets, or other business combinations pending completion of the Proposed Merger. As a result, if the Proposed Merger is not completed, flyExclusive may be at a disadvantage to its competitors during that period. In addition, while the AR Merger Agreement is in effect, flyExclusive is generally prohibited from soliciting, initiating, encouraging, or entering into specified extraordinary transactions, such as a merger, sale of assets, or other business combination, with any third party, subject to specified exceptions, even if any such transaction could be favorable to flyExclusives stockholders.

The issuance of shares of our Class A Common Stock upon the closing of the Proposed Merger of FlyX Merger Sub, Inc. and Jet.AI Merger Sub will dilute your ownership.

The issuance of shares of our Class A Common Stock upon the closing of the Proposed Merger will cause dilution to the ownership of our then existing holders of Class A Common Stock. The number of shares to be issued to Jet.AI stockholders at closing will be based on the closing exchange ratio set out in the merger agreement which will be based on, in part, SpinCos net cash at closing and the volume weighted average closing sale price of flyExclusives Class A Common Stock for the arch 30 trading days ending three days prior to the closing date, subject to certain adjustments. The actual amount of shares issued will depend on the Class A Common Stock price and SpinCos net cash, which could result in fewer or more shares being issued.

Substantial future sales of our Class A Common Stock by existing stockholders could cause the market price of our Class A Common Stock to decline.

We are required to register for resale with the SEC an aggregate of 92,430,476 shares of Class A Common Stock and have filed registration statements to effect that registration. These registered shares represent approximately 78% of our total shares of Class A Common Stock outstanding on a fully diluted basis as of April 30, 2025. Of these registered shares, 59,930,000 shares beneficially owned by Thomas James Segrave Jr., our CEO and Chairman, and 28,487,045 are beneficially owned by EG Sponsor LLC, of which 5,625,000 shares are subject to a lock-up period ending on December 27, 2026, subject to the terms of the letter agreement executed in connection with the initial public offering of EG Acquisition Corp.

For existing stockholders who are not subject to contractual lock-up restrictions, and for EG Sponsor LLC once its lock-up period expires, after the respective registration statements for the resale of such shares are effective and until such time that they are no longer effective, the resale of these shares will be permitted pursuant to the respective registration statement. The resale, or expected or potential resale, of a substantial number of our shares of Class A Common Stock in the public market could adversely affect the market price for our Class A Common Stock and make it more difficult for investors to sell their shares of Class A Common Stock at such times and at such prices that they deem desirable. Furthermore, we expect that because of the large number of shares registered pursuant to each registration statement, those existing selling stockholders will continue to offer the shares covered by the registration statement for a significant period of time, the precise duration of which cannot be predicted. Accordingly, the adverse market and price pressures resulting from an offering pursuant to either registration statement may continue for an extended period of time. In addition, the market reaction to such sales of our Class A Common Stock could also negatively affect the price of our publicly traded warrants. 1, 2025.