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]

Fleet and Operations - As of June 30, 2024, the company had a fleet of 93 aircraft, including light, midsize, super-midsize, and large jets[158]. - The company began a fleet modernization process in Q4 2023, planning to sell older aircraft and replace them with newer models over the next two years[168]. - Average aircraft on certificate grew from 93 in June 2023 to 98 in June 2024, indicating a 5.4% increase[177]. Revenue and Financial Performance - The company generated revenue through various programs, including a jet club membership program, which requires a minimum deposit of $0.1 million and a maximum of $0.5 million[159]. - The Guaranteed Revenue Program (GRP) ended in June 2023, resulting in no anticipated future revenue from this program, which previously accounted for a significant portion of revenue[165]. - The termination of the GRP Agreement is expected to have a material impact on financial statements beyond 2023 until the company can replace the lost revenue[167]. - Revenue decreased by $18,385 thousand, or 10.4%, from $177,370 thousand in the six months ended June 30, 2023, to $158,985 thousand in 2024[190]. - Jet club and charter revenue increased by $40.1 million, or 37.5%, to $146.9 million for the six months ended June 30, 2024 compared to the same period in 2023[191]. - 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[191]. - Fractional ownership revenue increased by $6.5 million, or 360.7%, for the six months ended June 30, 2024, driven by fractional membership growth[192]. - Maintenance, repair, and overhaul revenue increased by $1.9 million, or 105.5%, for the six months ended June 30, 2024 due to increased external services[192]. - Total revenue for the three months ended June 30, 2024 was $79.0 million, a decrease of $21.3% compared to $100.3 million for the same period in 2023[196]. Expenses and Losses - Cost of revenue increased by $16,715 thousand, or 12.8%, from $130,274 thousand in 2023 to $146,989 thousand in 2024[190]. - Selling, general and administrative expenses rose by $12,188 thousand, or 35.3%, from $34,485 thousand in 2023 to $46,673 thousand in 2024[190]. - Net income for the six months ended June 30, 2024, was $(60,844) thousand, compared to $(5,881) thousand for the same period in 2023, representing a significant decline[175]. - Adjusted EBITDA for the six months ended June 30, 2024, was $(35,485) thousand, compared to $20,296 thousand in 2023[175]. - Net loss attributable to flyExclusive, Inc. was $5.2 million for the three months ended June 30, 2024, compared to a net income of $7.5 million for the same period in 2023, representing a decrease of 168.3%[196]. Membership and Usage - Active members increased from 631 in June 2023 to 723 in June 2024, reflecting a growth of 14.6%[177]. - Members contributing to revenues rose from 639 in June 2023 to 816 in June 2024, an increase of 27.8%[177]. - Total flight hours increased from 28,118 in June 2023 to 32,770 in June 2024, a rise of 16.5%[177]. - Jet club and charter flight hours increased by 61.1% for the six months ended June 30, 2024, despite a 14.6% decrease in effective hourly rates[191]. Cash Flow and Financing - As of June 30, 2024, the company had $9.3 million in cash and cash equivalents, $69.4 million in short-term investments, and $4.4 million available borrowing capacity under the 2018 Term Loan[204]. - The company anticipates cash requirements for the next 12 months to be approximately $121.6 million, including accounts payable of $30.7 million and short-term notes payable of $28.5 million[213]. - Net cash used in operating activities for the six months ended June 30, 2024, was $42.2 million, resulting from a net loss of $60.8 million[217]. - The company issued $15.7 million in senior secured notes in December 2023, with a stated rate of 14% and maturing in December 2024[208]. - The company entered into a long-term promissory note agreement with a principal amount of $13.9 million in March 2024, bearing a fixed interest rate of 9.45%[209]. - The company raised approximately $25 million through the issuance of 25,000 shares of Series A Non-Convertible Redeemable Preferred Stock in March 2024[212]. - Net cash provided by financing activities for the six months ended June 30, 2024 was $36.4 million, up from $13.8 million in the same period of 2023, primarily due to proceeds from debt of $71.4 million[220]. Asset Management - The company recorded proceeds from the sale of property and equipment of $23.7 million and investments of $44.5 million during the first half of 2024[218]. - The company incurred purchases of property and equipment totaling $28.1 million and engine overhauls of $9.8 million in the first half of 2024[218]. - The company has maintained a working capital deficit, with current liabilities exceeding current assets, primarily due to deferred revenue related to prepaid flights[204]. Risks and Legal Matters - The principal market risks for the company include interest rates and aircraft fuel costs, with no material changes reported since the last annual report[230]. - The company is involved in various litigation matters but believes that outcomes will not materially affect its financial position[221]. Regulatory and Reporting - The company continues to rely on the JOBS Act provisions, which allow for reduced reporting requirements as an emerging growth company[227]. - The company determined that its warrants should be classified as liabilities, impacting the financial statements due to fair value adjustments[222].

Fleet and Operations - As of March 31, 2024, the company operates a fleet of 100 aircraft, including light, midsize, super-midsize, and large jets[160] - The company began a fleet modernization process in Q4 2023, planning to sell older aircraft and replace them with newer models over the next two years[169] - Average aircraft on certificate increased to 101 in March 2024, compared to 92 in March 2023, indicating a growth of 9.8%[178] - The company experienced significant volatility in pilot attrition rates, which could adversely affect operations and financial results[165] Revenue and Financial Performance - Revenue for the three months ended March 31, 2024, was $79,972,000, a 3.8% increase from $77,032,000 in the same period of 2023[194] - Total revenue for the three months ended March 31, 2024, was $79.972 million, an increase of $2.94 million, or 4%, compared to the same period in 2023[195] - Jet club and charter revenue increased by $23.9 million, or 47%, to $74.4 million for the three months ended March 31, 2024, compared to the same period in 2023[195] - Guaranteed revenue program revenue decreased by $25.0 million, or 100%, to $0 due to the termination of the WUP agreement on June 30, 2023[196] - Fractional ownership revenue increased by $3.2 million, or 379%, for the three months ended March 31, 2024, attributed to fractional membership growth[196] - Maintenance, repair, and overhaul revenue increased by $0.8 million, or 112%, for the three months ended March 31, 2024, due to increased external services[196] - Net loss for the three months ended March 31, 2024, was $32,990,000, compared to a net loss of $11,706,000 for the same period in 2023, representing an increase in loss of 181.4%[194] - Loss from operations for the three months ended March 31, 2024, was $27,425,000, compared to a loss of $8,401,000 in the same period of 2023, reflecting a significant increase in operational losses[194] Costs and Expenses - Total costs and expenses increased by 25.7% to $107,397,000 for the three months ended March 31, 2024, compared to $85,433,000 in 2023[194] - Cost of revenue rose by 13.9% to $74,234,000 in Q1 2024, up from $65,190,000 in Q1 2023[194] - Selling, general and administrative expenses surged by 58.1% to $25,183,000 in Q1 2024, compared to $15,931,000 in Q1 2023[194] - Cost of revenue increased by $9.0 million, or 14%, primarily due to increases in salaries, aircraft lease, and maintenance expenses[196] - Selling, general and administrative expenses increased by $9.3 million, or 58%, primarily due to higher personnel-related expenses and professional fees[196] Membership and Flight Activity - Active members increased to 515 in March 2024, up from 438 in March 2023, reflecting a growth of 17.6%[178] - Members contributing to revenues rose to 791 in March 2024, compared to 608 in March 2023, marking a 30.1% increase[178] - Total flight hours for the three months ended March 31, 2024, were 16,284, an increase from 13,929 hours in the same period of 2023, representing a growth of 16.9%[178] Cash Flow and Financing - As of March 31, 2024, the company had $5.3 million in cash and cash equivalents and $71.4 million in short-term investments[199] - Net cash used in operating activities for Q1 2024 was $26.0 million, resulting from a net loss of $33.0 million and a $10.8 million decrease in operating assets and liabilities[212] - Net cash used in investing activities for Q1 2024 was $30.1 million, primarily due to property and equipment purchases of $38.5 million and engine overhauls of $2.7 million[213] - Net cash provided by financing activities for Q1 2024 was $49.8 million, mainly from debt proceeds of $39.1 million and preferred equity issuance of $24.2 million[214] - The company issued $15.7 million in senior secured notes due in December 2024 to fund aircraft purchases[203] - The company anticipates cash expenditures of approximately $124.4 million over the next 12 months, including accounts payable of $32.1 million and short-term debt principal payments of $24.9 million[208] Future Outlook and Strategic Initiatives - The company expects revenue growth over time due to fleet expansion and forecasted membership growth[196] - The company views private aviation increasingly as a health-conscious decision post-COVID-19, which may lead to increased flight demand over time[170] - The company has maintained a positive relationship with debtholders and expects to secure necessary refinancing based on historical experience and current creditworthiness[208] - The company plans to settle accounts payable and accrued expenses using a combination of operational cash flow, investment sales, and potential borrowing[208] Legal and Market Risks - The company is involved in various litigation matters but believes that outcomes will not materially affect its financial position[216] - The company has not experienced any material changes in market risks related to interest rates and aircraft fuel costs[224] - As of March 31, 2024, the company has classified 25,000 shares of Series A Preferred Stock as temporary equity due to certain redemption rights[219] Employee Retention and Credits - As of March 31, 2024, the company applied for $9.5 million and received $9.0 million of the Employee Retention Credit (ERC)[173]