(Exact name of registrant as specified in its charter) Delaware 001-40444 86-1740840 (State or other jurisdiction CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) August 13, 2025 WASHINGTON, D.C. 20549 ____________________ flyExclusive, Inc. FORM 8-K (Commission File Number) (IRS Employer Identification No.) 2860 Jetport Road, Kinston, NC 28504 (Address of principal executiv ...

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents flyExclusive, Inc.'s unaudited consolidated financial statements and management's financial analysis [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents flyExclusive, Inc.'s unaudited consolidated financial statements, including balance sheets, income, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets decreased to **$443.4 million**, liabilities to **$496.0 million**, and stockholders' deficit worsened to **$(254.9) million** Condensed Consolidated Balance Sheets (Unaudited) | Metric | Dec 31, 2024 (Revised, in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :-------------------------- | :--------------------------------- | :-------------------------- | :-------------------- | | Cash and cash equivalents | $31,694 | $15,819 | $(15,875) | | Investments in securities | $65,541 | $0 | $(65,541) | | Total current assets | $143,969 | $65,508 | $(78,461) | | Total assets | $538,290 | $443,443 | $(94,847) | | Total current liabilities | $294,753 | $260,169 | $(34,584) | | Total liabilities | $549,962 | $496,036 | $(53,926) | | Total stockholders' (deficit) / equity | $(210,058) | $(254,904) | $(44,846) | [Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)) Net loss improved to **$(39.2) million** for the six months ended June 30, 2025, with revenue up **12.9%** to **$179.5 million**, aided by warrant fair value changes Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - Six Months Ended June 30 | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Revenue | $179,457 | $158,985 | $20,472 | 12.9% | | Total costs and expenses | $206,553 | $208,252 | $(1,699) | (0.8)% | | Loss from operations | $(27,096) | $(49,267) | $22,171 | (45.0)% | | Net loss | $(39,176) | $(60,844) | $21,668 | (35.6)% | | Net loss attributable to flyExclusive, Inc. | $(10,213) | $(10,994) | $781 | (7.1)% | | Basic and Diluted EPS | $(0.55) | $(0.67) | $0.12 | (17.9)% | Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - Three Months Ended June 30 | Metric (Three Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Revenue | $91,332 | $79,013 | $12,319 | 15.6% | | Total costs and expenses | $103,692 | $100,855 | $2,837 | 2.8% | | Loss from operations | $(12,360) | $(21,842) | $9,482 | (43.4)% | | Net loss | $(16,129) | $(27,854) | $11,725 | (42.1)% | | Net loss attributable to flyExclusive, Inc. | $(4,764) | $(5,153) | $389 | (7.5)% | | Basic and Diluted EPS | $(0.26) | $(0.32) | $0.06 | (18.8)% | [Condensed Consolidated Statements of Stockholders' Equity (Deficit) / Members' Equity (Deficit) and Temporary Equity (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)%20%2F%20Members'%20Equity%20(Deficit)%20and%20Temporary%20Equity%20(Unaudited)) Accumulated deficit increased to **$(287.0) million**, with temporary equity from redeemable noncontrolling interest and preferred stock showing changes Condensed Consolidated Statements of Stockholders' Equity (Deficit) / Members' Equity (Deficit) and Temporary Equity (Unaudited) | Metric | Dec 31, 2024 (Revised, in thousands) | Jun 30, 2025 (in thousands) | Change (in thousands) | | :------------------------------------------ | :--------------------------------- | :-------------------------- | :-------------------- | | Redeemable noncontrolling interest | $159,514 | $155,122 | $(4,392) | | Series A preferred stock | $23,799 | $25,838 | $2,039 | | Series B preferred stock | $15,073 | $21,351 | $6,278 | | Additional paid-in capital | $0 | $25,599 | $25,599 | | Accumulated deficit | $(233,441) | $(286,958) | $(53,517) | | Total flyExclusive stockholders' (deficit) / equity | $(233,489) | $(261,351) | $(27,862) | | Noncontrolling interests | $23,431 | $6,447 | $(16,984) | | Total stockholders' (deficit) / equity | $(210,058) | $(254,904) | $(44,846) | - The company corrected an error in prior period financial statements related to the allocation of redeemable non-controlling interest accretion, which had no impact on previously reported loss from operations, net loss, loss per share, temporary equity, or permanent equity[36](index=36&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash decreased by **$15.9 million**, primarily from **$87.7 million** used in financing and **$10.1 million** in operations, offset by **$81.9 million** from investing Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | | :-------------------------------------------- | :------------------ | :------------------ | :-------------------- | | Net cash flows from operating activities | $(10,101) | $(42,170) | $32,069 | | Net cash flows from investing activities | $81,949 | $3,451 | $78,498 | | Net cash flows from financing activities | $(87,723) | $36,432 | $(124,155) | | Net increase (decrease) in cash and cash equivalents | $(15,875) | $(2,287) | $(13,588) | | Cash and cash equivalents at end of period | $15,819 | $9,339 | $6,480 | - Cash used in operating activities significantly decreased from **$42.17 million** in 2024 to **$10.10 million** in 2025, primarily due to a lower net loss and favorable changes in certain non-cash adjustments[241](index=241&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk) - Investing activities provided substantial cash in 2025 (**$81.95 million**) compared to 2024 (**$3.45 million**), driven by higher proceeds from sales of property and equipment and investments[241](index=241&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk) - Financing activities shifted from providing cash in 2024 (**$36.43 million**) to using significant cash in 2025 (**$87.72 million**), mainly due to higher debt repayments and net cash distributions to non-controlling interests[27](index=27&type=chunk)[363](index=363&type=chunk)[364](index=364&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section details accounting policies and financial line items, covering organization, EPS, segments, fair value, VIEs, revenue, and asset/liability accounts [1. Organization and Operations](index=14&type=section&id=1.%20Organization%20and%20Operations) flyExclusive operates a private jet charter and MRO business; despite deficits, management expects sufficient liquidity for 12 months post-December 2023 merger - flyExclusive is a premier owner/operator of jet aircraft and aircraft sales, focusing on private jet charter, with offerings including ad hoc flights, jet club, partnership, and fractional programs[30](index=30&type=chunk) - The company launched its MRO operations in 2021, providing maintenance and refurbishment services to third parties and its own fleet[31](index=31&type=chunk) - On December 27, 2023, EG Acquisition Corp. and LGM consummated a business combination (Merger), with EGA changing its name to flyExclusive, Inc[32](index=32&type=chunk) - As of June 30, 2025, the Company had an accumulated deficit of **$286.96 million** and a working capital deficit of **$194.66 million**; net losses were **$39.18 million** for the six months ended June 30, 2025[42](index=42&type=chunk) - Management believes current cash, operating cash flows, and fractional program proceeds will fund operations for at least 12 months, but additional capital may be needed for growth[45](index=45&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Key accounting policies include estimates, single operating segment, warrant classification, noncontrolling interests, aircraft sales, and recent accounting pronouncements - The company operates and manages its business as one operating segment: private aviation services, with all ancillary revenue sources supporting this core service[47](index=47&type=chunk) - Public Warrants, Private Placement Warrants, and Series A Penny Warrants are classified as derivative liabilities and measured at fair value, with changes recognized in the income statement[50](index=50&type=chunk)[51](index=51&type=chunk) - Series B Penny Warrants are classified as permanent equity because they are indexed to the Company's own stock and settled in a fixed number of Class A Common Stock shares[50](index=50&type=chunk) - Redeemable noncontrolling interest is classified as temporary equity because redemption for cash is not solely within the company's control, and changes in redemption value are accreted using the interest method[63](index=63&type=chunk)[64](index=64&type=chunk) - Aircraft held for sale are recorded at the lower of carrying value and fair value less costs to sell, with depreciation discontinued[69](index=69&type=chunk) - The company adopted ASU 2023-07 (Segment Reporting) in Q4 2024, expanding segment disclosures, and is evaluating ASU 2024-03 (Expense Disaggregation) for future impact[75](index=75&type=chunk)[77](index=77&type=chunk) [3. Earnings (Loss) Per Share](index=22&type=section&id=3.%20Earnings%20(Loss)%20Per%20Share) Basic and diluted EPS improved to **$(0.55)** from **$(0.67)** for the six months ended June 30, 2025, based on net loss and weighted average shares Earnings (Loss) Per Share | Metric (Six Months Ended June 30) | 2025 | 2024 | | :-------------------------------- | :--- | :--- | | Basic Net loss attributable to common stockholders (in thousands) | $(14,549) | $(12,251) | | Weighted Average Common Shares Outstanding (Basic & Diluted) | 26,471,721 | 18,237,732 | | Basic and Diluted Earnings (Loss) Per Share | $(0.55) | $(0.67) | - Weighted average shares issuable under Series A and Series B Penny Warrants are included in the denominator for basic and diluted EPS calculations[78](index=78&type=chunk)[79](index=79&type=chunk) - Potentially dilutive securities, including Public Warrants, Private Placement Warrants, Series A Penny Warrants, and Class B Common Stock, were excluded from diluted EPS calculation because their effect would have been anti-dilutive[79](index=79&type=chunk) [4. Segment Information](index=22&type=section&id=4.%20Segment%20Information) flyExclusive operates as a single reportable segment, private aviation services, encompassing charters, fractional ownership, MRO, and aircraft management - The company has one reportable segment, private aviation services, managed on a consolidated basis by the CEO[80](index=80&type=chunk) - The private aviation services segment encompasses charters, aircraft partnerships, jet club memberships, fractional ownership shares, MRO, and aircraft management services[81](index=81&type=chunk) Segment Information | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | | :-------------------------------- | :------------------ | :------------------ | | Total Revenue | $179,457 | $158,985 | | Cost of revenue | $154,434 | $146,989 | | Selling, general and administrative | $41,288 | $46,673 | | Depreciation and amortization | $12,021 | $13,173 | | Net Loss | $(39,176) | $(60,844) | [5. Fair Value Measurements](index=23&type=section&id=5.%20Fair%20Value%20Measurements) Assets and liabilities are measured at fair value, classified into Level 1 (cash equivalents), Level 2 (Private Placement Warrants), and Level 3 (Series A Penny Warrants) Fair Value Measurements at June 30, 2025 | Fair Value Measurements at June 30, 2025 (in thousands) | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------------- | :------ | :------ | :------ | :---- | | Cash equivalents: Money market mutual funds | $5,156 | — | — | $5,156 | | Warrant liability - public warrants | $277 | — | — | $277 | | Warrant liability - private placement warrants | — | $476 | — | $476 | | Warrant liability - Series A penny warrants | — | — | $1,480 | $1,480 | | Total Liabilities | $277 | $476 | $1,480 | $2,233 | Fair Value Measurements at December 31, 2024 | Fair Value Measurements at December 31, 2024 (in thousands) | Level 1 | Level 2 | Level 3 | Total | | :------------------------------------------ | :------ | :------ | :------ | :---- | | Cash equivalents: Money market mutual funds | $2,710 | — | — | $2,710 | | Investments in Securities | $849 | $64,692 | — | $65,541 | | Total Assets | $3,559 | $64,692 | — | $68,251 | | Warrant liability - public warrants | $454 | — | — | $454 | | Warrant liability - private placement warrants | — | $780 | — | $780 | | Warrant liability - Series A penny warrants | — | — | $1,780 | $1,780 | | Total Liabilities | $454 | $780 | $1,780 | $3,014 | - The fair value of Series A Penny Warrants is determined using a Monte Carlo simulation with unobservable inputs for volatility, classifying it as a Level 3 measurement[88](index=88&type=chunk) [6. Variable Interest Entities](index=25&type=section&id=6.%20Variable%20Interest%20Entities) The company consolidates Variable Interest Entities (VIEs), including single-asset LLCs and a paint facility, as the primary beneficiary - flyExclusive has variable interests in single-asset LLCs (SAEs) holding aircraft and a Paint Entity, which are classified as VIEs[92](index=92&type=chunk)[94](index=94&type=chunk) - The company is the primary beneficiary of these VIEs, consolidating their financial statements, due to its control over their activities and exposure to their economic performance[95](index=95&type=chunk)[96](index=96&type=chunk) VIE Assets and Liabilities | VIE Assets and Liabilities (in thousands) | June 30, 2025 | Dec 31, 2024 | | :-------------------------------------- | :------------ | :----------- | | Cash | $655 | $737 | | Property and equipment, net | $55,685 | $61,769 | | Long-term notes payable, current portion | $7,565 | $7,690 | | Long-term notes payable, non-current portion | $26,244 | $29,619 | - The company provided financial contributions to VIEs of **$633 thousand** and **$260 thousand** during the six months ended June 30, 2025 and 2024, respectively[98](index=98&type=chunk) [7. Revenue](index=27&type=section&id=7.%20Revenue) Revenue is disaggregated by service type, with flights as the largest component; deferred revenue decreased from **$149.5 million** to **$144.4 million** Revenue by Service Type | Revenue by Service Type (Six Months Ended June 30, in thousands) | 2025 | 2024 | | :------------------------------------------------- | :-------- | :-------- | | Flights | $168,516 | $150,504 | | Aircraft Management Services | $1,317 | — | | Memberships | $1,323 | $2,806 | | MRO | $4,633 | $3,734 | | Fractional ownership purchase price | $3,668 | $1,941 | | Total Revenue | $179,457 | $158,985 | Deferred Revenue Rollforward | Deferred Revenue Rollforward (Six Months Ended June 30, 2025, in thousands) | Amount | | :-------------------------------------------------------- | :-------- | | Balance as of December 31, 2024 | $149,517 | | Revenue recognized | $(160,006) | | Revenue deferred | $154,852 | | Balance as of June 30, 2025 | $144,363 | - Revenue streams include membership fees and flight charges for Jet Club and Charter, time and materials for MRO, allocated purchase price and flight charges for Fractional Ownership, and fixed monthly fees for Aircraft Management Services[102](index=102&type=chunk) [8. Other Receivables](index=27&type=section&id=8.%20Other%20Receivables) Other receivables, primarily federal excise tax and rebate receivables, increased from **$7.1 million** to **$7.9 million** Other Receivables | Other Receivables (in thousands) | June 30, 2025 | Dec 31, 2024 | | :----------------------------- | :------------ | :----------- | | Rebate receivables | $1,256 | $1,117 | | Federal excise tax receivable | $6,121 | $5,414 | | Insurance settlement in process | $15 | — | | Income tax receivable | $460 | $460 | | Other | $44 | $149 | | Total | $7,896 | $7,140 | [9. Parts and Supplies Inventory](index=28&type=section&id=9.%20Parts%20and%20Supplies%20Inventory) Parts and supplies inventory, net of reserve, increased from **$5.7 million** to **$6.3 million** due to higher materials Parts and Supplies Inventory | Parts and Supplies Inventory (in thousands) | June 30, 2025 | Dec 31, 2024 | | :---------------------------------------- | :------------ | :----------- | | Aircraft parts | $5,206 | $5,101 | | Materials and supplies | $1,325 | $753 | | Less: parts and supplies inventory reserve | $(206) | $(196) | | Total | $6,325 | $5,658 | [10. Prepaid Expenses and Other Current Assets](index=28&type=section&id=10.%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets increased from **$7.8 million** to **$9.4 million**, driven by higher prepaid insurance Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets (in thousands) | June 30, 2025 | Dec 31, 2024 | | :----------------------------------------------------- | :------------ | :----------- | | Prepaid vendor expenses | $3,109 | $3,239 | | Prepaid insurance | $3,133 | $690 | | Prepaid directors and officers insurance | $1,097 | $2,032 | | Prepaid maintenance | $391 | $154 | | Prepaid non-aircraft subscriptions | $187 | $407 | | MRO revenue in excess of billings | $672 | $326 | | Deferred commission | $854 | $923 | | Total | $9,443 | $7,771 | [11. Investments in Securities](index=28&type=section&id=11.%20Investments%20in%20Securities) The company held no investments in securities as of June 30, 2025, a significant change from **$65.5 million** in bonds at December 31, 2024 - The company had no investments in securities as of June 30, 2025[106](index=106&type=chunk) Investments in Securities at December 31, 2024 | Investments in Securities at December 31, 2024 (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | | :---------------------------------------------------------- | :------------- | :--------------------- | :---------------------- | :--------- | | U.S. Treasury bills | $55,009 | $190 | — | $55,199 | | Municipal bonds | $9,631 | $38 | $(351) | $9,318 | | Corporate/government bonds | $479 | $33 | — | $512 | | Other bonds | $478 | $34 | — | $512 | | Total | $65,597 | $295 | $(351) | $65,541 | [12. Property and Equipment, Net](index=29&type=section&id=12.%20Property%20and%20Equipment,%20Net) Property and equipment, net, decreased from **$259.9 million** to **$232.8 million**, due to reduced transportation equipment and increased depreciation Property and Equipment, Net | Property and Equipment, Net (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--------------------------------------- | :------------ | :----------- | | Transportation equipment | $303,458 | $329,416 | | Deposits on transportation equipment | $17,269 | $14,165 | | Less: Accumulated depreciation | $(93,805) | $(89,487) | | Property and equipment, net | $232,781 | $259,874 | - Depreciation expense for property and equipment was **$10.97 million** for the six months ended June 30, 2025, compared to **$12.52 million** for the same period in 2024[108](index=108&type=chunk) [13. Intangible Assets](index=29&type=section&id=13.%20Intangible%20Assets) Intangible assets, net, decreased from **$1.6 million** to **$1.3 million** due to software amortization; the FAA certificate remains at **$0.7 million** Intangible Assets, Net | Intangible Assets, Net (in thousands) | June 30, 2025 | Dec 31, 2024 | | :------------------------------------ | :------------ | :----------- | | Software - in service | $676 | $950 | | FAA certificate | $650 | $650 | | Total acquired intangible assets | $1,326 | $1,600 | - Amortization of intangible assets was **$297 thousand** for the six months ended June 30, 2025, compared to **$602 thousand** for the same period in 2024[110](index=110&type=chunk) Estimated Amortization Expense | Estimated Amortization Expense | Amount (in thousands) | | :----------------------------- | :-------------------- | | Remainder of 2025 | $256 | | 2026 | $332 | | 2027 | $87 | | 2028 | $1 | | 2029 | — | | Thereafter | — | | Total | $676 | [14. Other Current Liabilities](index=30&type=section&id=14.%20Other%20Current%20Liabilities) Other current liabilities remained stable at **$30.2 million**, with **$9.0 million** in ERC payments classified as a liability due to eligibility uncertainty Other Current Liabilities | Other Current Liabilities (in thousands) | June 30, 2025 | Dec 31, 2024 | | :------------------------------------- | :------------ | :----------- | | Accrued vendor payments | $6,322 | $6,528 | | Accrued ERC payments | $9,044 | $9,044 | | Accrued directors and officers insurance | $1,780 | $1,780 | | Accrued employee-related expenses | $9,595 | $10,239 | | Accrued engine expenses | $932 | $713 | | Accrued tax expenses | $1,496 | $1,072 | | Accrued interest | $920 | $472 | | Other | $96 | $96 | | Total | $30,185 | $29,944 | - The company has received **$9.04 million** in Employee Retention Credit (ERC) payments but has classified this amount as a current liability due to uncertainty regarding eligibility[115](index=115&type=chunk) [15. Other Non-Current Liabilities](index=31&type=section&id=15.%20Other%20Non-Current%20Liabilities) Other non-current liabilities, primarily fractional ownership deposits, increased from **$30.3 million** to **$36.7 million** Other Non-Current Liabilities | Other Non-Current Liabilities (in thousands) | June 30, 2025 | Dec 31, 2024 | | :----------------------------------------- | :------------ | :----------- | | Fractional ownership deposits | $36,716 | $30,342 | | Other | — | — | | Total | $36,716 | $30,342 | [16. Debt](index=31&type=section&id=16.%20Debt) Total long-term notes payable decreased from **$189.1 million** to **$111.7 million** due to repayments and a closed revolving line of credit Short-term notes payable | Short-term notes payable (in thousands) | June 30, 2025 | Dec 31, 2024 | | :------------------------------------ | :------------ | :----------- | | Bank 1 | $3,160 | — | | Bank 2 | $5,155 | $5,962 | | Total short-term notes payable | $8,315 | $5,962 | Long-term notes payable | Long-term notes payable (in thousands) | June 30, 2025 | Dec 31, 2024 | | :------------------------------------- | :------------ | :----------- | | Total Long-term notes payable | $111,733 | $189,143 | | Less: Unamortized debt issuance costs and debt discount | $(180) | $(233) | | Less: current portion | $(19,552) | $(84,883) | | Long-term notes payable, non-current portion | $92,001 | $104,027 | - The company closed its **$60 million** revolving line of credit in March 2025, with the full **$59.54 million** balance paid[146](index=146&type=chunk) - The company was not in compliance with certain financial covenants as of December 31, 2024, but obtained waiver letters from lenders; as of June 30, 2025, the aggregate balance of debt with waivers was **$0**[147](index=147&type=chunk)[149](index=149&type=chunk) - New long-term promissory notes were issued in February, March, April, and May 2024, totaling approximately **$38.5 million**, with varying interest rates and maturity dates[151](index=151&type=chunk)[152](index=152&type=chunk) - A Senior Secured Note of up to **$25.77 million** was entered into in January 2024 to finance aircraft for the fractional ownership program, with an interest rate of **13.00%** for withdrawn amounts[195](index=195&type=chunk)[197](index=197&type=chunk) [17. Leases](index=33&type=section&id=17.%20Leases) The company has various operating and finance lease arrangements for real estate and aircraft, with lease costs totaling **$13.7 million** and significant future obligations - The company leases real estate and **35** aircraft (as of June 30, 2025) under non-cancellable operating leases, and **2** aircraft under finance leases[153](index=153&type=chunk) Lease Costs | Lease Costs (Six Months Ended June 30, in thousands) | 2025 | 2024 | | :------------------------------------------------- | :-------- | :-------- | | Operating lease cost | $11,244 | $10,787 | | Short-term lease cost | $905 | $727 | | Finance lease cost: Amortization of right-of-use assets | $695 | — | | Finance lease cost: Interest on lease liabilities | $819 | — | | Total lease costs | $13,663 | $11,514 | Future Operating Lease Payments as of June 30, 2025 | Future Operating Lease Payments as of June 30, 2025 (in thousands) | Amount | | :--------------------------------------------------------------- | :-------- | | Remainder of 2025 | $10,681 | | 2026 | $19,775 | | 2027 | $15,210 | | 2028 | $7,896 | | 2029 | $5,395 | | Thereafter | $40,524 | | Total undiscounted cash flows | $99,481 | | Present value of lease liabilities | $69,690 | Future Finance Lease Payments as of June 30, 2025 | Future Finance Lease Payments as of June 30, 2025 (in thousands) | Amount | | :--------------------------------------------------------------- | :-------- | | Remainder of 2025 | $3,972 | | 2026 | $6,736 | | 2027 | $5,445 | | 2028 | $4,411 | | 2029 | $3,121 | | Thereafter | $790 | | Total undiscounted cash flows | $24,475 | | Present value of lease liabilities | $20,737 | Future Repurchase Contingencies as of June 30, 2025 | Future Repurchase Contingencies as of June 30, 2025 (in thousands) | Amount | | :--------------------------------------------------------------- | :-------- | | Remainder of 2025 | $2,400 | | 2026 | $21,562 | | 2027 | $23,486 | | 2028 | $5,037 | | 2029 | $5,556 | | Thereafter | $1,642 | | Total | $59,683 | [18. Warrant Liabilities](index=37&type=section&id=18.%20Warrant%20Liabilities) Public, Private Placement, and Series A Penny Warrants are derivative liabilities; Series B Penny Warrants are equity; a **$0.8 million** gain on warrant fair value was recorded - Public Warrants, Private Placement Warrants, and Series A Penny Warrants are classified as derivative liabilities and remeasured at fair value each reporting period[163](index=163&type=chunk) - As of June 30, 2025, there were **4,333,333** Private Placement Warrants and **2,519,869** Public Warrants outstanding, in addition to Penny Warrants[166](index=166&type=chunk) - For the six months ended June 30, 2025, the company recorded a gain of **$781 thousand** on the change in fair value of warrants, compared to a loss of **$3.68 million** for the same period in 2024[168](index=168&type=chunk) Warrant Liabilities | Warrant Liabilities (in thousands) | June 30, 2025 | Dec 31, 2024 | | :------------------------------- | :------------ | :----------- | | Total Warrant Liabilities | $2,233 | $3,014 | [19. Employee Benefits](index=39&type=section&id=19.%20Employee%20Benefits) The company offers a 401(k) plan with a **50%** match on the first **8%** of compensation, vesting after **2 years**, with **$0.9 million** in contributions - The company matches **50%** of the first **8%** of employee contributions to its 401(k) plan, with **100%** vesting after **2 years** of service[169](index=169&type=chunk) - Company contributions to the 401(k) plan were **$905 thousand** for the six months ended June 30, 2025, compared to **$839 thousand** for the same period in 2024[170](index=170&type=chunk) [20. Stock-based Compensation](index=39&type=section&id=20.%20Stock-based%20Compensation) The 2023 Equity Incentive Plan has **6 million** shares reserved, with **$7.9 million** unrecognized compensation expense; the ESPP has **1.5 million** shares reserved but no purchases - The 2023 Equity Incentive Plan has **6,000,000** shares of Class A Common Stock reserved for future issuance, with **1,200,000** shares available as of June 30, 2025[172](index=172&type=chunk) - Unrecognized compensation expense associated with outstanding stock options was **$7.94 million** at June 30, 2025[172](index=172&type=chunk) - The Employee Stock Purchase Plan (ESPP) has **1,500,000** shares of Class A Common Stock reserved, but no shares have been purchased by employees as of June 30, 2025[175](index=175&type=chunk) [21. Income Taxes](index=40&type=section&id=21.%20Income%20Taxes) The effective tax rate was **0%** due to losses allocated to non-controlling interest, with a full valuation allowance against deferred tax assets - The company's effective tax rate was **0%** for the three and six months ended June 30, 2025, differing from the statutory rate of **21%** due to losses allocated to non-controlling interest[177](index=177&type=chunk) - A full valuation allowance has been recorded against deferred tax assets as of June 30, 2025, and will be maintained until sufficient evidence supports its reversal[178](index=178&type=chunk) - Tax years from 2021 to present generally remain open to examination by relevant taxing jurisdictions[179](index=179&type=chunk) [22. Related Party Transactions](index=40&type=section&id=22.%20Related%20Party%20Transactions) The company engages in regular related party transactions, including fuel purchases, leases, and charter revenue, with its majority owner's entities, reporting related receivables, payables, and notes - The company purchased **$706 thousand** in fuel from LGMV subsidiaries for the six months ended June 30, 2025, representing approximately **2%** of total fuel purchases[182](index=182&type=chunk) - Rent expense to LGMV subsidiaries totaled **$2.07 million** for the six months ended June 30, 2025[183](index=183&type=chunk) - Charter flight revenue from owners of subsidiaries and Lessor VIEs was **$7.29 million** for the six months ended June 30, 2025[185](index=185&type=chunk) - Short-term accounts receivable from related parties totaled **$1.23 million** as of June 30, 2025[187](index=187&type=chunk) - A senior secured note of **$15.87 million** was issued to the Sponsor in December 2023, with a **14%** interest rate and maturity extended to January 1, 2027[189](index=189&type=chunk) - An additional promissory note with the EGA Sponsor for **$3.95 million** was cancelled on March 21, 2025, in exchange for Series B Preferred Stock and warrants[191](index=191&type=chunk)[193](index=193&type=chunk) [23. Commitments and Contingencies](index=43&type=section&id=23.%20Commitments%20and%20Contingencies) The company faces a legal dispute with Wheels Up, a Tax Receivable Agreement with potential **$7 million** payment, and **$59.7 million** in future leased aircraft repurchase contingencies - flyExclusive is involved in a lawsuit with Wheels Up Partners, LLC (WUP) following the termination of their Fleet Guaranteed Revenue Program Agreement, with WUP alleging breach of contract and seeking unspecified compensatory damages[203](index=203&type=chunk)[204](index=204&type=chunk) - The company has a Tax Receivable Agreement (TRA) with existing equity holders, potentially requiring a lump sum payment of up to **$7 million** upon an Early Termination Event[207](index=207&type=chunk)[209](index=209&type=chunk) Future Repurchase Contingencies as of June 30, 2025 | Future Repurchase Contingencies as of June 30, 2025 (in thousands) | Amount | | :--------------------------------------------------------------- | :-------- | | Remainder of 2025 | $2,400 | | 2026 | $21,562 | | 2027 | $23,486 | | 2028 | $5,037 | | 2029 | $5,556 | | Thereafter | $1,642 | | Total | $59,683 | [24. Stockholders' Equity / Members' Deficit and Noncontrolling Interests](index=45&type=section&id=24.%20Stockholders'%20Equity%20%2F%20Members'%20Deficit%20and%20Noncontrolling%20Interests) Authorized stock includes preferred and common shares; Series A and B Preferred Stock are temporary equity, and redeemable noncontrolling interest was **$155.1 million** - The company is authorized to issue **325,000,000** shares, including **25,000,000** preferred, **200,000,000** Class A Common, and **100,000,000** Class B Common shares[213](index=213&type=chunk) - **25,000** shares of Series A Preferred Stock were issued in March 2024, accruing dividends annually and subject to redemption by the company or holder after certain anniversaries[214](index=214&type=chunk)[216](index=216&type=chunk)[220](index=220&type=chunk) - **29,737** shares of Series B Preferred Stock were issued in August 2024 and March 2025, accruing dividends quarterly and automatically converting to Class A Common Stock by December 31, 2025, or upon a Subsequent Capital Raise[225](index=225&type=chunk)[226](index=226&type=chunk)[228](index=228&type=chunk)[233](index=233&type=chunk) - Both Series A and Series B Preferred Stock are classified as temporary equity due to redemption rights outside the company's control[223](index=223&type=chunk)[232](index=232&type=chunk) - The redeemable noncontrolling interest, related to **59,930,000** LGM Common Units, was **$155.12 million** at June 30, 2025[237](index=237&type=chunk)[239](index=239&type=chunk) - Noncontrolling interests in consolidated entities are comprised of varying ownership percentages across **11** entities, with net income/loss allocated proportionally[247](index=247&type=chunk)[248](index=248&type=chunk) [25. Subsequent Events](index=50&type=section&id=25.%20Subsequent%20Events) On July 25, 2025, a lock-up restriction on **5.6 million** Class A common shares and warrants was waived for EG Sponsor LLC, aiming for a Russell 2000 Index listing - On July 25, 2025, the company waived a lock-up restriction on **5,625,000** Class A common shares and warrants owned by EG Sponsor LLC to facilitate a potential Russell 2000 Index listing[249](index=249&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section overviews flyExclusive's vertically integrated private aviation business, discussing key operational factors, non-GAAP measures, operating metrics, financial results, liquidity, and critical accounting policies - flyExclusive aims to be the world's most vertically integrated private aviation company, focusing on capital-efficient growth, industry-leading pricing, optimal dispatch availability, in-house training, and a controlled premium customer experience[251](index=251&type=chunk) - The company's business model is diversified, generating charter revenue through jet club, fractional, and MRO programs, and operates as one reportable segment: private aviation services[252](index=252&type=chunk) - Key factors affecting results include economic conditions, competition, pilot availability, the termination of the Wheels Up agreement, and fleet modernization efforts[260](index=260&type=chunk)[261](index=261&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk)[266](index=266&type=chunk) - The company uses non-GAAP measures like Adjusted EBITDA and Adjusted EBITDAR to assess operating performance and adjust for non-cash and non-core expenses[275](index=275&type=chunk)[276](index=276&type=chunk) [Overview of Our Business](index=51&type=section&id=Overview%20of%20Our%20Business) flyExclusive is a vertically integrated private aviation company with over **100** aircraft, offering jet club, fractional ownership, MRO, and new aircraft management services - flyExclusive operates a fleet of over **100** owned and leased aircraft, including various Citation and Challenger models, and aims for vertical integration in private aviation[251](index=251&type=chunk) - The company's diversified business model includes jet club membership, fractional ownership, and MRO programs, all contributing to charter revenue[252](index=252&type=chunk) - In September 2024, flyExclusive entered an Aircraft Management Services Agreement with Volato Group, Inc., becoming the exclusive provider of such services to Volato, with an option to merge with Volato[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk) [Key Factors Affecting Results of Operations](index=52&type=section&id=Key%20Factors%20Affecting%20Results%20of%20Operations) Key factors include economic conditions, competition, pilot availability, Wheels Up agreement termination, fleet modernization, and **$23.6 million** CARES Act support, with **$9.0 million** ERC received - Economic downturns could reduce demand for private aviation services, as customers may view it as a luxury, impacting jet club growth and program interest[260](index=260&type=chunk) - The private aviation market is highly competitive, with factors like price, reliability, safety, and aircraft availability influencing market share[262](index=262&type=chunk) - Volatility in pilot attrition due to training delays and wage increases in the industry poses a risk to operations and financial results[263](index=263&type=chunk) - The termination of the GRP Agreement with Wheels Up in June 2023 had a material impact on revenue, with **$59.0 million** in billed but unrecorded amounts through June 30, 2025[264](index=264&type=chunk) - The company is modernizing its fleet by selling older aircraft and replacing them with newer models to improve availability and operating efficiency, expecting this to continue through fiscal 2025[266](index=266&type=chunk) - The company received **$23.6 million** in grants under the CARES Act's Payroll Support Program and has applied for **$9.5 million** in Employee Retention Credits, receiving **$9.0 million**, though eligibility is still uncertain[268](index=268&type=chunk)[271](index=271&type=chunk) [Non-GAAP Financial Measures](index=54&type=section&id=Non-GAAP%20Financial%20Measures) flyExclusive uses non-GAAP measures, Adjusted EBITDA and Adjusted EBITDAR, to supplement GAAP results, adjusting net loss for interest, taxes, D&A, non-recurring items, and aircraft lease costs - Adjusted EBITDA and Adjusted EBITDAR are non-GAAP measures used to assess operating performance and provide supplemental information to investors[273](index=273&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) - Adjusted EBITDA is calculated by adjusting net loss for interest, income tax, depreciation and amortization, litigation costs, acquisition costs, equity-based compensation, non-cash loss on assets held for sale, realized losses on aircraft sold, loss on extinguishment of debt, change in fair value of warrant liabilities, and SOX control remediation[275](index=275&type=chunk) - Adjusted EBITDAR further adjusts Adjusted EBITDA for aircraft lease costs, offering an alternative view that accounts for different aircraft acquisition methods (outright purchase, finance lease, operating lease)[276](index=276&type=chunk) Adjusted EBITDA and Adjusted EBITDAR Reconciliation | Adjusted EBITDA and Adjusted EBITDAR Reconciliation (Six Months Ended June 30, in thousands) | 2025 | 2024 | | :--------------------------------------------------------------------------------------- | :-------- | :-------- | | Net loss | $(39,176) | $(60,844) | | Interest income | $(939) | $(2,440) | | Interest expense | $9,817 | $10,321 | | Depreciation and amortization | $12,021 | $13,173 | | Loss on extinguishment of debt | $4,161 | — | | Change in fair value of warrant liabilities | $(781) | $3,679 | | Adjusted EBITDA | $(11,598) | $(35,485) | | Aircraft lease costs | $10,290 | $10,167 | | Adjusted EBITDAR | $(1,307) | $(25,318) | [Key Operating Metrics](index=56&type=section&id=Key%20Operating%20Metrics) Key operating metrics, including members contributing to revenues (up **32%** YoY) and total flight hours (up **9.7%** YoY), are monitored for business performance Key Operating Metrics | Key Operating Metrics | June 30, 2025 | June 30, 2024 | Change (%) | | :-------------------- | :------------ | :------------ | :--------- | | Ending aircraft on certificate | 93 | 93 | 0.0% | | Total aircraft operated | 93 | 93 | 0.0% | | Members contributing to revenues* | 1,077 | 816 | 32.0% | | Active members | 984 | 723 | 36.1% | | Average aircraft on certificate | 96 | 98 | (2.0)% | | Aircraft contributing to revenues | 86 | 91 | (5.5)% | | Total flight hours | 35,947 | 32,770 | 9.7% | | Total hours per aircraft | 374.8 | 333.5 | 12.4% | | Members per aircraft* | 12.5 | 9.7 | 28.9% | - Members contributing to revenues increased by **32.0%** for the six months ended June 30, 2025, reflecting growth in contractual retail members[281](index=281&type=chunk)[282](index=282&type=chunk) - Total flight hours increased by **9.7%** for the six months ended June 30, 2025, indicating increased usage of programs and fleet scale[281](index=281&type=chunk)[287](index=287&type=chunk) - Total hours per aircraft increased by **12.4%** to **374.8**, suggesting improved operational efficiency and aircraft utilization[281](index=281&type=chunk)[288](index=288&type=chunk) - **97.1%** of customers were fulfilled on the company's fleet without reliance on third parties for the six months ended June 30, 2025[289](index=289&type=chunk) [Components of Results of Our Operations](index=57&type=section&id=Components%20of%20Results%20of%20Our%20Operations) This section details revenue components (charter, MRO, aircraft management) and expense components (cost of revenue, SG&A, D&A, aircraft sales gains/losses, other income/expense) - Revenue sources include charter flights (jet club, fractional, wholesale, retail), MRO services, and aircraft management fees[290](index=290&type=chunk) - Jet club revenue and membership fees are recognized monthly as the company stands ready to provide flight services[291](index=291&type=chunk) - Fractional revenue from ownership interests is recognized over the contract term on a straight-line basis, with variable flight service consideration recognized in the period of performance[293](index=293&type=chunk) - MRO revenue is recognized over time based on the cost of parts and supplies consumed and labor hours worked[294](index=294&type=chunk) - Cost of revenue includes aircraft lease costs, fuel, payroll, crew travel, insurance, maintenance, subscriptions, and third-party flight costs[296](index=296&type=chunk) - Selling, general and administrative expenses cover non-flight related employee compensation, professional fees, corporate travel, advertising, and corporate lease expenses[297](index=297&type=chunk) [Results of Operations](index=58&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of flyExclusive's financial performance for the six and three months ended June 30, 2025, detailing changes in revenue, costs, and other items [Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=58&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030,%202024) For the six months ended June 30, 2025, revenue increased **12.9%** to **$179.5 million**, and net loss improved **35.6%** to **$(39.2) million** due to lower SG&A and favorable warrant fair value changes Financial Performance - Six Months Ended June 30 | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Revenue | $179,457 | $158,985 | $20,472 | 12.9% | | Cost of revenue | $154,434 | $146,989 | $7,445 | 5.1% | | Selling, general and administrative | $41,288 | $46,673 | $(5,385) | (11.5)% | | Loss from operations | $(27,096) | $(49,267) | $22,171 | (45.0)% | | Net loss | $(39,176) | $(60,844) | $21,668 | (35.6)% | Revenue by Type - Six Months Ended June 30 | Revenue by Type (Six Months Ended June 30, in thousands) | 2025 | 2024 | Change (in thousands) | Change (%) | | :------------------------------------------------------- | :-------- | :-------- | :-------------------- | :--------- | | Jet club and charter | $156,452 | $146,917 | $9,535 | 6.5% | | Fractional ownership | $17,055 | $8,334 | $8,721 | 104.6% | | Maintenance, repair, and overhaul | $4,633 | $3,734 | $899 | 24.1% | | Aircraft management services | $1,317 | — | $1,317 | 100.0% | - Cost of revenue increased by **$7.4 million** (**5.1%**), primarily due to increases in overhaul program expense, affiliate lift expense, and salaries/wages, partially offset by a decrease in fuel expenses[309](index=309&type=chunk)[311](index=311&type=chunk) - Selling, general and administrative expenses decreased by **$5.4 million** (**11.5%**), mainly due to lower professional fees, advertising, marketing, and bad debt expense, reflecting cost optimization efforts[310](index=310&type=chunk)[312](index=312&type=chunk) - The change in fair value of warrant liabilities resulted in a **$4.5 million** positive impact, shifting from a loss in 2024 to a gain in 2025[305](index=305&type=chunk)[317](index=317&type=chunk) [Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024](index=61&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030,%202024) For the three months ended June 30, 2025, revenue increased **15.6%** to **$91.3 million**, and net loss improved **42.1%** to **$(16.1) million** due to lower SG&A and interest expense Financial Performance - Three Months Ended June 30 | Metric (Three Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Revenue | $91,332 | $79,013 | $12,319 | 15.6% | | Cost of revenue | $77,609 | $72,755 | $4,854 | 6.7% | | Selling, general and administrative | $20,298 | $21,490 | $(1,192) | (5.5)% | | Loss from operations | $(12,360) | $(21,842) | $9,482 | (43.4)% | | Net loss | $(16,129) | $(27,854) | $11,725 | (42.1)% | Revenue by Type - Three Months Ended June 30 | Revenue by Type (Three Months Ended June 30, in thousands) | 2025 | 2024 | Change (in thousands) | Change (%) | | :------------------------------------------------------- | :-------- | :-------- | :-------------------- | :--------- | | Jet club and charter | $79,454 | $72,493 | $6,961 | 9.6% | | Fractional ownership | $8,454 | $4,276 | $4,178 | 97.7% | | Maintenance, repair, and overhaul | $2,872 | $2,244 | $628 | 28.0% | | Aircraft management services | $552 | — | $552 | 100.0% | - Cost of revenue increased by **$4.9 million** (**7%**), primarily due to increases in overhaul program expense, affiliate lift expense, and salaries/wages, partially offset by a decrease in aircraft repair and maintenance[322](index=322&type=chunk)[329](index=329&type=chunk) - Selling, general and administrative expenses decreased by **$1.2 million** (**6%**), mainly due to lower professional fees, advertising, and marketing costs[323](index=323&type=chunk) - Interest expense decreased by **$1.2 million** (**21.8%**) due to decreased debt[326](index=326&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity primarily from financing and operating cash flows, with **$15.8 million** in cash; management expects sufficient funds for 12 months despite a working capital deficit - Principal liquidity sources are financing activities (equity, convertible debt, Merger proceeds) and operating cash flows, primarily from deferred revenue[330](index=330&type=chunk) - As of June 30, 2025, the company had **$15.8 million** in cash and cash equivalents and **$12.2 million** available borrowing capacity under the term loan[330](index=330&type=chunk) - The company consistently maintains a working capital deficit, common in the private aviation industry, largely due to prepaid flights classified as deferred revenue[331](index=331&type=chunk) - Management believes existing cash, operating cash flows, and available borrowings will be sufficient for the next 12 months, but additional capital may be sought for growth[333](index=333&type=chunk) - Material cash requirements include debt service, lease and purchase obligations, capital expenditures, and general corporate purposes[331](index=331&type=chunk)[334](index=334&type=chunk) - Short-term expenditures for the next 12 months are anticipated to be approximately **$137.4 million**, which the company plans to refinance or settle with cash from operations, investment sales, or incremental borrowing[355](index=355&type=chunk) [Critical Accounting Policies and Estimates](index=68&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section reiterates critical accounting policies for warrant classification, temporary equity for preferred stock, and accounting for aircraft sales and assets held for sale - Public Warrants, Private Placement Warrants, and Series A Penny Warrants are classified as derivative liabilities and measured at fair value[372](index=372&type=chunk) - Series B Penny Warrants are classified as permanent equity because they are indexed to the company's own stock and settled in Class A Common Stock[371](index=371&type=chunk) - Series A and Series B Preferred Stock are classified as temporary equity due to redemption rights outside the company's control[373](index=373&type=chunk) - Gains or losses on aircraft sales are recognized upon completion, and aircraft held for sale are recorded at the lower of carrying value and fair value less costs to sell, with depreciation discontinued[374](index=374&type=chunk)[375](index=375&type=chunk) [Recently Issued/Adopted Accounting Standards](index=70&type=section&id=Recently%20Issued%2FAdopted%20Accounting%20Standards) This section refers to Note 2 for details on recently adopted accounting pronouncements, including ASU 2023-07 (Segment Reporting) and ASU 2024-03 (Expense Disaggregation) - The company adopted ASU 2023-07, "Segment Reporting," in the fourth quarter of 2024, expanding segment disclosures[75](index=75&type=chunk)[377](index=377&type=chunk) - The company is currently evaluating the impact of ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures," which is effective for annual periods beginning after December 15, 2026[77](index=77&type=chunk)[377](index=377&type=chunk) [JOBS Act Accounting Election](index=70&type=section&id=JOBS%20Act%20Accounting%20Election) As an "emerging growth company" under the JOBS Act, flyExclusive uses the extended transition period for new accounting standards and benefits from reduced reporting requirements - flyExclusive has elected to use the extended transition period for complying with new or revised accounting standards as an "emerging growth company" under the JOBS Act[378](index=378&type=chunk) - The company benefits from reduced reporting requirements, such as not being required to provide an auditor's attestation report on internal control over financial reporting (Section 404 of SOX)[379](index=379&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates and aircraft fuel costs, with no material changes reported compared to the 2024 Annual Report on Form 10-K - The company's principal market risks are related to interest rates and aircraft fuel costs[381](index=381&type=chunk) - There have been no material changes to the market risks disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[381](index=381&type=chunk) [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting, as previously reported - As of June 30, 2025, the company's disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[383](index=383&type=chunk) - These material weaknesses were previously reported in the Annual Report on Form 10-K for the year ended December 31, 2024[383](index=383&type=chunk) - No other material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, apart from ongoing remediation efforts[384](index=384&type=chunk) [PART II. OTHER INFORMATION](index=72&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, equity sales, defaults, mine safety, other disclosures, and exhibits [Item 1. Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings, including the Wheels Up Partners, LLC lawsuit, are described in Note 23 "Commitments and Contingencies" of the financial statements - Legal proceedings are described in Note 23 "Commitments and Contingencies" of the condensed consolidated financial statements[386](index=386&type=chunk) [Item 1A. Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported compared to previous Annual Report on Form 10-K and Quarterly Report on Form 10-Q filings - No material changes to the company's risk factors were reported compared to previous filings[387](index=387&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported, nor were any common stock purchases made during the three months ended June 30, 2025 - No unregistered sales of equity securities or use of proceeds occurred[388](index=388&type=chunk) - The company did not make any purchases of its common stock during the three months ended June 30, 2025[389](index=389&type=chunk) [Item 3. Defaults Upon Senior Securities](index=72&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - No defaults upon senior securities were reported[390](index=390&type=chunk) [Item 4. Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported - No mine safety disclosures were reported[391](index=391&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the quarter - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during the quarter ended June 30, 2025[392](index=392&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including merger agreements, a waiver letter, Sarbanes-Oxley Act certifications, and Inline XBRL financial statements - Exhibits include merger agreements (Amended and Restated Agreement and Plan of Merger and Reorganization, Amendment No. 1), a Waiver Letter, and certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[394](index=394&type=chunk) - The financial statements (Balance Sheets, Statements of Operations, Stockholders' Equity, Cash Flows, and Notes) are formatted in Inline XBRL[394](index=394&type=chunk) [SIGNATURES](index=74&type=section&id=SIGNATURES) This section contains the duly signed attestations from the company's CEO, CFO, and Chief Accounting Officer [SIGNATURES](index=74&type=section&id=SIGNATURES) The report is duly signed by flyExclusive, Inc.'s CEO, CFO, and Chief Accounting Officer on August 13, 2025 - The report is signed by Thomas James Segrave, Jr. (CEO and Chairman), Brad G. Garner (CFO), and Zachary M. Nichols (Chief Accounting Officer) on August 13, 2025[398](index=398&type=chunk)

Core Points - flyExclusive reported its first quarter 2025 financial results, which were announced after market close [2] - The company continues to undergo a transformation that began in 2024, with benefits now becoming evident [5] Financial Information - The company filed its Form 10-Q for the quarter ended March 31, 2025, which includes important disclosures and reconciliations of non-GAAP information [2][3] - Non-GAAP information will be discussed during the earnings call, with a reference to the SEC filings for detailed reconciliations [3] Leadership and Participation - The earnings call featured key participants including Jim Segrave, the Founder and CEO, and Brad Garner, the CFO [2][4] - Kyle Nagarkar from Solebury Strategic Communications facilitated the call [1]

Fleet and Operations - As of March 31, 2025, the company had over 100 aircraft in its owned and leased fleet, including light, midsize, super-midsize, and large jets[243]. - The company began fleet modernization in Q4 2023, planning to sell older aircraft and replace them with newer models to enhance availability and efficiency[258]. - Aircraft contributing to revenues decreased to 80 in Q1 2025 from 86 in Q1 2024, indicating a 6.9% decline[271]. - Ending aircraft on certificate was 96 in Q1 2025, down from 100 in Q1 2024, reflecting a 4.0% reduction[271]. Revenue Generation - The jet club membership program generates revenue through flight operations and membership fees, with new members paying a deposit ranging from $0.1 million to $0.5 million[245]. - The fractional ownership program allows members to purchase a fractional interest in an aircraft for up to five years, with revenue generated from daily and hourly flight rates[246]. - Jet club and charter revenue rose by $2,574 thousand, or 3.5%, to $76,998 thousand in Q1 2025, with flight hours increasing by 0.4% and effective hourly rates up by 3.0%[299]. - Members contributing to revenues grew to 1,023 in Q1 2025, up from 791 in Q1 2024, representing a 29.3% increase[271]. - Fractional ownership revenue increased by $4.5 million for the three months ended March 31, 2025, compared to the same period in 2024, driven by fractional membership growth[300]. - Aircraft management services revenue rose by $0.8 million, or 100%, for the three months ended March 31, 2025, due to new services provided under the Volato Agreement[301]. Financial Performance - Adjusted EBITDA for Q1 2025 was $(6,356) thousand, an improvement from $(19,440) thousand in Q1 2024, reflecting a reduction in net loss by 67.3%[268]. - Total revenue for Q1 2025 increased by $8,153 thousand, or 10.2%, to $88,125 thousand compared to $79,972 thousand in Q1 2024[297]. - The company reported a net loss of $(23,047) thousand for Q1 2025, a decrease of 30.1% from $(32,990) thousand in Q1 2024[297]. - Total costs and expenses decreased by $4,536 thousand, or 4.2%, to $102,861 thousand in Q1 2025 compared to $107,397 thousand in Q1 2024[297]. Cash Flow and Financing - For the three months ended March 31, 2025, net cash used in operating activities was $10.5 million, compared to $26.0 million for the same period in 2024[344][345]. - Net cash provided by investing activities for the three months ended March 31, 2025 was $66.1 million, primarily from the sale of investments totaling $72.3 million[347]. - Net cash used in financing activities for the three months ended March 31, 2025 was $72.6 million, mainly due to debt repayment of $67.0 million[349]. - The company anticipates cash expenditures of approximately $125.8 million over the next 12 months, including accounts payable of $23.6 million and lease payments of $22.1 million[341]. - The company entered into a senior secured note in January 2024 to borrow up to $25.8 million, with a maturity date of January 26, 2026[329]. - The company issued $25 million of Series A Non-Convertible Redeemable Preferred Stock in March 2024, providing significant capital[333]. - The company issued a total of 25,510 shares of Series B Convertible Preferred Stock, raising approximately $25.5 million in gross proceeds[336]. Agreements and Partnerships - The company entered into an Aircraft Management Services Agreement with Volato Group, which includes a twelve-month term and the potential for a merger[249][251]. - The termination of the agreement with Wheels Up on June 30, 2023, resulted in a significant impact on revenue, with $15.7 million in receivables eliminated[256]. Accounting and Compliance - The company reported non-GAAP financial measures to provide supplemental information about its financial performance, which may not be directly comparable to other companies[264]. - The company has elected to use the extended transition period for complying with new accounting standards as an "emerging growth company" under the JOBS Act[364]. - The company is not required to provide an auditor's attestation report on internal control over financial reporting due to its status as an "emerging growth company"[365]. - The company may remain an "emerging growth company" until the end of the fiscal year following the fifth anniversary of its IPO, unless certain revenue or debt thresholds are met[365]. Market Risks - The principal market risks for the company are related to interest rates and aircraft fuel costs, with no material changes reported since the last annual report[367].

Financial Data and Key Metrics Changes - In Q4 2024, the company reported revenues of approximately $91 million, reflecting a 20% year-over-year increase despite a 17% reduction in fleet size [34][46] - Gross profit for Q4 was nearly $16 million, up 300% from the same quarter last year and up 88% from Q3, with gross margin improving to 18% [23][46] - Adjusted EBITDA loss narrowed to $6 million, a significant improvement from the $19 million loss in Q1 and the $10.3 million loss in Q3 [24][54] Business Line Data and Key Metrics Changes - The Jet Club Program membership grew 26% year-over-year, finishing at 1,195 members, with a 19% increase from Q3 alone [19][47] - Fractional ownership contributed roughly $9 million in revenue in Q4, marking a 73% increase quarter-over-quarter and a 275% increase year-over-year [48] - The MRO business grew revenues by $2.6 million, representing a 55% increase over 2023, indicating strong demand for these services [50] Market Data and Key Metrics Changes - Flight hours increased 36% in Q4 year-over-year, with the company being the third fastest-growing private jet operator based on flight hours flown [14][16] - The company achieved a 29% increase in departures in December compared to the same period in 2023, leading the industry [49] Company Strategy and Development Direction - The company plans to grow its Challenger fleet to 15 by year-end 2025, which is expected to improve dispatch availability and enhance customer experience [39] - The proposed merger with Jet.AI is viewed as a strategic move to bring capital and additional customers into the company, facilitating growth [28][56] - The company aims to reduce the number of SG&A employees per aircraft to 2 by the end of 2025, enhancing operational efficiency [26] Management's Comments on Operating Environment and Future Outlook - Management highlighted that demand remains strong, with more requests than the company can currently fulfill, indicating a healthy market environment [66] - The company anticipates that tax policy clarity will lead to increased fractional sales in the first half of 2025 [40] - Management expressed confidence in achieving sustainable EBITDA growth and enhanced margins in 2025, supported by operational improvements and strategic initiatives [58] Other Important Information - The company ended 2024 with $29 million in cash, reflecting improved liquidity and disciplined funding strategies for fleet refresh [27] - The company has implemented SOX compliance protocols and filed all SEC reports on time since the new leadership team was established [59] Q&A Session Summary Question: What tax policy items are potential customers focusing on? - Management indicated that bonus depreciation is a key focus for customers, with expectations for it to be included in new tax laws [64][65] Question: How is demand and pricing shaping up? - Management noted that demand remains strong, with more requests than available aircraft, and pricing has been able to increase to offset rising costs [66][67] Question: What is the plan for acquiring additional Challengers? - Management expects a smooth addition of Challengers throughout the year, supported by a new financing facility [71][72]

Financial Performance - Revenue for the year ended December 31, 2024, was $327,274,000, an increase of 3% from $315,362,000 in 2023[420]. - Total costs and expenses for 2024 were $410,053,000, up from $352,683,000 in 2023, reflecting a 16% increase[420]. - The net loss attributable to flyExclusive, Inc. for 2024 was $21,074,000, compared to a net loss of $46,835,000 in 2023, indicating an improvement[420]. - Basic and diluted loss per share for 2024 was $(1.07)[420]. - The company reported a loss from operations of $(82,779,000) for 2024, worsening from $(37,321,000) in 2023[420]. - The company incurred net losses of $101,495 and $54,738 for the years ended December 31, 2024 and 2023, respectively[444]. Assets and Liabilities - As of December 31, 2024, total assets increased to $538.29 million from $521.03 million in 2023, representing a growth of approximately 3.9%[416]. - Total liabilities increased to $549,962,000 in 2024 from $485,700,000 in 2023, representing a 13% rise[418]. - Current liabilities rose to $294,753,000 in 2024, compared to $221,536,000 in 2023, marking a 33% increase[418]. - The accumulated deficit for flyExclusive, Inc. reached $(244,177,000) in 2024, up from $(80,456,000) in 2023[418]. - Total stockholders' equity showed a deficit of $(210,058,000) in 2024, compared to a positive equity of $70,855,000 in 2023[418]. Cash Flow and Financing - Cash and cash equivalents rose significantly to $31.69 million, up from $11.63 million, indicating a growth of approximately 172%[416]. - The company experienced a net cash outflow from operating activities of $10.929 million for the year ended December 31, 2024, compared to a net cash inflow of $8.665 million for the previous year[431]. - flyExclusive's total cash flows from investing activities resulted in a net outflow of $7.869 million for the year ended December 31, 2024, compared to a net outflow of $62.031 million in 2023[433]. - The company raised $71.413 million from the issuance of debt in 2024, down from $131.840 million in 2023[433]. - The company reported a total of $48.379 million in proceeds from preferred temporary equity issuance, net of issuance costs, in 2024[433]. Debt and Interest - The company had $67.3 million in variable rate debt as of December 31, 2024, with a potential increase of $0.2 million in interest expense for a 100-basis points rise in interest rates[404]. - The company recorded total interest expense related to long-term debt of $11,587 million for the year ended December 31, 2024, compared to $9,251 million in 2023, reflecting an increase of approximately 25.3%[573]. - The company has approximately $12,124 million in additional available borrowing capacity under the term loan as of December 31, 2024, up from $2,102 million in 2023[584]. - The company entered into a revolving line of credit loan with a maximum borrowing amount of $60,000 million, maturing on March 9, 2024[585]. Operational Risks and Challenges - The company reported a significant reliance on third-party aircraft engine manufacturers, posing risks to operations[423]. - The company identified material weaknesses in internal control over financial reporting, which could affect the accuracy of financial results[422]. - The company is exposed to risks associated with a decrease in demand for private aviation services, which could adversely impact operations[423]. - The company expects to incur operating losses in the near term as it advances its fleet modernization and associated cost savings initiatives[444]. Strategic Initiatives - The company is focusing on market expansion and new product development as part of its strategic initiatives moving forward[422]. - The company aims to expand its operations by enhancing its maintenance, repair, and overhaul (MRO) services, which were launched in 2021 to support both its fleet and third-party clients[439]. Stock and Equity - The total stockholders' equity as of December 31, 2023, was $(35,525) thousand, reflecting a decrease from previous periods[424]. - The issuance of Series A Preferred stock amounted to $20,540 thousand, while Series B Preferred stock issuance was $13,526 thousand[424]. - The total flyExclusive Common Stock outstanding immediately after the Merger was 76,577,529 shares, including 59,930,000 Class B shares held by LGM Existing Equityholders[526]. Market Performance - Unrealized gains on available-for-sale securities were recorded at $156,000, indicating positive market performance in this area[422]. - The company reported unrealized gains on available-for-sale securities of $13 thousand, indicating a positive adjustment in asset valuation[424]. - The fair value of public warrants is classified as Level 1, while private placement warrants are classified as Level 2, with a total warrant liability of $3,014,000 as of December 31, 2024[535].

Group 1: Industry Overview - The private aviation industry has faced significant challenges in recent years, including supply chain delays affecting commercial airlines and business jet dispatch reliability [3] - Labor and other operational costs have increased dramatically, impacting the overall profitability and efficiency of aircraft operators [3] Group 2: Key Individual Profile - Jessie Naor, former President and COO of GrandView Aviation, successfully exited the company with a nine-figure deal to a private equity platform [1] - Naor has a strong background in aviation, holding multiple degrees and certifications, including an MBA in Finance and Management [1] - She has been actively involved in various aviation organizations, including serving on the NATA Board of Directors and being recognized as a Top 40 under 40 by NBAA in 2020 [1]

Financial Data and Key Metrics Changes - Revenue for Q3 2024 totaled approximately $77 million, up 24% compared to the same period last year, driven by a 20% expansion of the membership base [10][33] - Gross margins improved significantly, increasing from approximately 8% in the first two quarters of 2024 to over 12% in Q3 [15] - SG&A expenses as a percentage of revenue decreased from 31% in Q1 to 26% in Q3, representing a reduction of over $5 million [16][38] - Total debt was reduced by $29 million in Q3 [17] Business Line Data and Key Metrics Changes - Flight hours for aircraft on flyExclusive's certificate, excluding Volato aircraft, increased by 49% year-to-date, with hours per aircraft rising by 35% [13] - Revenue generated from the MRO operation increased by 25% [33] - The company achieved a 122% growth in flight hours since 2019, marking the highest increase among the top four operators in the private aviation sector [14] Market Data and Key Metrics Changes - The membership base expanded by 20%, now boasting well over 1,000 members [10] - The company added 178 Volato Insider members to its Jet Club program following the agreement with Volato [21] Company Strategy and Development Direction - The company is focused on a fleet refresh, having eliminated over half of its non-performing aircraft and replacing them with more economical models [9] - The agreement with Volato is seen as a strategic opportunity to acquire their customer base without purchasing the company, enhancing service offerings [21][24] - The company aims to achieve positive adjusted EBITDA early in 2025 and generate positive cash flow in Q4 2024 [19][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA and free cash flow, highlighting the transition year of 2024 as a period of significant improvement [30][32] - The demand for private aviation services remains strong and stable, with healthy rates and strong utilization [36] Other Important Information - The company completed a $25.5 million preferred stock issuance to support fleet expansion and debt reduction [41] - The fourth quarter is expected to be particularly busy, with substantial cash inflows anticipated from the fractional sale program [42] Summary of Q&A Session - There were no questions during the Q&A session, and the call concluded without further inquiries [43]

Fleet and Operations - As of September 30, 2024, the company operates a fleet of 88 aircraft, including light, midsize, super-midsize, and large jets[166] - The company plans to modernize its fleet over the next two years, selling older aircraft and replacing them with newer models to enhance availability and efficiency[175] - The company entered into a twelve-month Aircraft Management Services Agreement with Volato Group, managing a fleet of 25 aircraft[169] - Total flight hours increased to 48,862 for the nine months ended September 30, 2024, up from 40,561 hours in the same period of 2023, demonstrating growth in operational activity[186] - The total number of aircraft operated increased to 113 as of September 30, 2024, from 100 in the same period of 2023, reflecting fleet expansion efforts[184] - Ending aircraft on certificate decreased to 88 as of September 30, 2024, down from 100 in the previous year, suggesting a need for strategic fleet management[184] - The average aircraft on certificate increased to 104 for the nine months ended September 30, 2024, from 94 in the same period of 2023, indicating improved fleet utilization[186] Financial Performance - Adjusted EBITDA for the nine months ended September 30, 2024, was $(45,746) thousand, compared to $13,081 thousand for the same period in 2023, indicating a significant decline in operating performance[182] - The net loss for the nine months ended September 30, 2024, was $(84,980) thousand, compared to $(30,451) thousand for the same period in 2023, reflecting increased financial challenges[182] - Revenue for the nine months ended September 30, 2024, was $235.9 million, a decrease of $3.5 million or 1.5% compared to $239.4 million for the same period in 2023[200] - Jet club and charter revenue increased by $50.3 million, or 30.3%, to $216.5 million for the nine months ended September 30, 2024, driven by a 47% increase in flight hours[201] - Guaranteed revenue program (GRP) revenue decreased by $66.9 million, or 100%, to $0 due to the termination of the WUP agreement on June 30, 2023[202] - Total costs and expenses for the nine months ended September 30, 2024, increased by $52.8 million, or 20.9%, to $306.1 million compared to $253.3 million in 2023[200] - Net loss attributable to flyExclusive, Inc. for the nine months ended September 30, 2024, was $17.3 million, a decrease of $6.4 million or 27.1% compared to a net loss of $23.7 million in 2023[200] - Loss from operations for the nine months ended September 30, 2024, was $70.2 million, compared to a loss of $13.9 million in 2023, representing an increase of $56.3 million or 406.1%[200] Membership and Engagement - The company generated revenue from its jet club membership program, with new members paying deposits ranging from $0.1 million to $0.5 million[166] - Active members rose to 854 as of September 30, 2024, compared to 747 in the previous year, indicating a positive trend in membership engagement[186] - Members contributing to revenues increased to 1,005 for the nine months ended September 30, 2024, compared to 836 in the same period of 2023, highlighting growth in revenue-generating memberships[186] Cash Flow and Financing - As of September 30, 2024, the company had $18.7 million in cash and cash equivalents and $61.4 million in short-term investments[215] - The company has a working capital deficit, with current liabilities exceeding current assets, common in the private aviation industry[215] - The company anticipates cash expenditures of approximately $177.4 million over the next 12 months, including $81.4 million in long-term debt principal payments and $14.7 million in lease payments[225] - Net cash used in operating activities for the nine months ended September 30, 2024 was $54.4 million, resulting from a net loss of $85.0 million[227] - Net cash provided by investing activities for the nine months ended September 30, 2024 was $22.1 million, primarily due to proceeds from the sale of property and equipment of $28.5 million[229] - Net cash provided by financing activities for the nine months ended September 30, 2024 was $39.4 million, primarily from proceeds of $71.4 million in debt[230] - The company issued 25,000 shares of Series A Non-Convertible Redeemable Preferred Stock at a purchase price of $1,000 per share, raising approximately $25 million[222] - The company issued 25,510 shares of Series B Convertible Preferred Stock and received gross proceeds of approximately $25.5 million[222] Market and Competition - The company faces competition from various private aviation operators and luxury commercial airline services, impacting market share and pricing strategies[171] - Pilot attrition has been volatile, affecting operational capacity and financial results, with challenges in hiring and retaining qualified pilots[173] Accounting and Compliance - The Company determined that Series A Penny Warrants, Public Warrants, and Private Placement Warrants must be classified as liabilities, while Series B Penny Warrants are classified as permanent equity[235] - 25,000 shares of Series A Preferred Stock and 25,510 shares of Series B Preferred Stock are presented as temporary equity at redemption value due to certain redemption rights[236] - The Company recognizes gains or losses from aircraft sales upon completion of the sale, with aircraft held for sale recorded at the lower of carrying value or fair value less costs to sell[237] - The Company is exposed to market risks primarily related to interest rates and aircraft fuel costs, with no material changes reported since the last annual report[241] - The Company has elected to use the extended transition period for complying with new accounting standards as an "emerging growth company" under the JOBS Act[240] - The Company’s financial statements may not be comparable to those of companies that comply with new accounting pronouncements as of public company effective dates[240]

Financial Data and Key Metrics Changes - flyExclusive reported first half revenues of $159 million, a decrease of 10% year-over-year, attributed to a higher composition of light and midsize jets despite increased member flight hours [21][22] - The adjusted EBITDA loss for the first half of 2024 was $35 million, driven by revenue headwinds and higher operating and SG&A costs compared to the previous year [23] - The net loss attributable to common shareholders for the first half of 2024 totaled $12.3 million, compared to $1.6 million in the first half of 2023 [24] Business Line Data and Key Metrics Changes - The Jet Club membership increased by 28% year-to-date, with total flight hours growing by nearly 17% compared to the top 25 operators, which only saw mid-single-digit growth [7][8] - The company eliminated 15 of the 37 non-performing aircraft, which contributed to a reduction in monthly losses from these aircraft to less than $2 million [12][15] - The fleet refresh initiative involves replacing non-performing jets with approximately 20 Challenger-350 jets, which are expected to operate at 18% lower costs and provide significantly better dispatch availability [14][15] Market Data and Key Metrics Changes - The company has successfully replaced a significant customer that represented 38% of revenue in the first half of 2023, achieving growth through wholesale, retail, club, and fractional channels [8] - The wholesale business remains a crucial channel, with expectations for continued strong growth in the club and fractional business [9] - The demand for Supermid aircraft remains strong, with indications that customers in this category are less affected by economic pressures [16] Company Strategy and Development Direction - The company is focused on executing a transformational business plan following its public listing, which includes eliminating non-performing aircraft and optimizing operations [4][5] - The strategic investment in the Challenger-350 fleet is seen as a key driver for profitability and market share capture in the Supermid space [16][17] - The leadership team has been strengthened to support the company's growth and operational efficiency, with significant reductions in consulting expenses [18][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver profitability and cash flow, citing aggressive cost optimization and a strong customer pipeline [7][9] - The company anticipates easing revenue pressures in the second half of 2024 as the fleet refresh progresses and the Challenger-350 fleet expands [22] - Management noted that the competitive advantage is increasing due to the rising quality of the fleet and differentiated service offerings [10][16] Other Important Information - flyExclusive raised an additional $25.5 million in preferred equity to support its business plan and fleet refresh initiative [24] - The company is in discussions for broader financing to further fund the fleet refresh, with multiple term sheets received [24] Q&A Session Summary Question: Update on the fractional sales pipeline and performance of CJ3s and Challengers - Management indicated there are roughly 50 potential customers in the pipeline for the Challenger 350, with eight contracts under review [27] Question: Discussion on margins excluding non-performing aircraft - Management acknowledged modest margin pressure due to decreased rates and increased competition, but emphasized that the primary driver of margin issues was the operating costs of the legacy fleet [28][29]