Flyexclusive (FLYX) risk factors, FY2025 10-K

Risks Relating to Our Business and Industry

1. 01The Proposed Merger of FlyX Merger Sub, Inc. and Jet.AI Merger Sub might not be completed on the terms or timeline currently contemplated, or at allNew
2. 02flyExclusive may experience negative reactions from employees, customers, or vendors; andNew
3. 03During the pendency of the A&R Merger Agreement, flyExclusive might not be able to enter into a business combination with another party at a favorable price because of restrictions in the A&R Merger Agreement, which could adversely affect its businessNew
4. 04We might not be able to successfully implement our growth strategies
5. 05Our operating results are expected to be difficult to predict based on a number of factors that also will affect our long-term performance21% rewritten
6. 06some of our potential losses might not be covered by insurance, and we may be unable to obtain or maintain adequate insurance coverage; andNew
7. 07In order to achieve our projected growth rate, we will require additional liquidity and capital resources that might not be available on terms that are favorable to us, or at all22% rewritten
8. 08We might not be able to grow our complementary products and service offerings through opportunistic acquisitions or otherwise as part of our growth strategy. Any failure to adequately integrate future acquisitions into our business could have a material adverse effect on us51% rewritten
9. 09the tax effects of any such acquisitionsNew
10. 10We are exposed to the risk of a decrease in demand for private aviation services
11. 11The private aviation industry is subject to competition
12. 12The loss of key personnel upon whom we depend on to operate our business or the inability to attract additional qualified personnel could adversely affect our business
13. 13The supply of pilots to the airline industry is limited and may negatively affect our operations and financial condition. Increases in our labor costs, which constitute a substantial portion of our total operating costs, may adversely affect our business, results of operations, and financial condition
14. 14Pilot attrition may negatively affect our operations and financial condition
15. 15We may be subject to unionization, work stoppages, slowdowns, or increased labor costs and the unionization of our pilots, maintenance workers, and inflight crewmembers could result in increased labor costs
16. 16We may never realize the full value of our intangible assets or our long-lived assets, causing us to record impairments that may materially adversely affect our financial conditions and results of operations
17. 17The residual value of our aircraft may be less than estimated in our depreciation policies
18. 18Significant reliance on Gulfstream, Textron and Bombardier aircraft and spare parts poses risks to our business and prospects29% rewritten
19. 19Significant reliance on certain third-party aircraft engine manufacturers and engine management companies poses risks to our owned and leased aircraft and operations
20. 20We may incur substantial maintenance costs as part of our leased aircraft return obligations
21. 21We are exposed to operational disruptions due to maintenance
22. 22Our transition to in-house maintenance, repair, and overhaul activities could prove unsuccessful or impact key relationships
23. 23Significant increases in fuel costs could have a material adverse effect on our business, financial condition, and results of operations
24. 24Our insurance may become too difficult or expensive to obtain. If we are unable to maintain sufficient insurance coverage, it may materially and adversely impact our results of operations and financial position
25. 25Our self-insurance programs may expose us to significant and unexpected costs and losses
26. 26We must continue to build and maintain strong brand identity for our products and services, which have expanded over time. We believe that strong brand identity will continue to be important in attracting and retaining customers
27. 27Any failure to offer high-quality customer support may harm our relationships with our customers and could adversely affect our reputation, brand, business, financial condition, and results of operations
28. 28A delay or failure to identify and devise, invest in, and implement certain important technology, business, and other initiatives could have a material impact on our business, financial condition, and results of operations84% rewritten
29. 29our operations or fleet with the latest technological advances in a timely manner, or at all, our business, financial condition, and results of operations could be negatively impactedNew
30. 30We may incur increased costs to comply with privacy and data protection laws, regulations, and industry standards and, to the extent we fail to comply, we could be subject to government enforcement actions, private claims and litigation, and adverse publicity
31. 31accept those payment cards, which could have a material adverse effect on our business, financial condition, and results of operationsNew
32. 32Our obligations in connection with our indebtedness and other contractual obligations could impair our liquidity and thereby harm our business, results of operations and financial condition40% rewritten
33. 33Our ability to obtain financing or access capital markets may be limited
34. 34We face a concentration of credit risk
35. 35Extreme weather, natural disasters, and other adverse events could have a material adverse effect on our business, results of operations, and financial condition
36. 36We are subject to risks associated with climate change, including the potential increased impacts of severe weather events on our operations and infrastructure
37. 37Our business is primarily focused on certain targeted geographic regions, making us vulnerable to risks associated with having geographically concentrated operations
38. 38The operation of aircraft is subject to various risks, and failure to maintain an acceptable safety record may have an adverse impact on our ability to obtain and retain customers
39. 39Any damage to our reputation or brand image could adversely affect our business or financial results
40. 40We could suffer losses and adverse publicity stemming from any accident involving our aircraft models operated by third parties28% rewritten
41. 41Global macroeconomic conditions, geopolitical developments and other events outside of our control could have a material adverse effect on our business, results of operations, financial condition, and cash flowsNew
42. 42We are subject to certain restrictions on our business as a result of our participation in governmental programs under the CARES Act
43. 43Terrorist activities or warnings have dramatically impacted the aviation industry and will likely continue to do so
44. 44We lease our corporate headquarters and operations facilities from third-party affiliates and a failure to renew such leases could adversely affect our business74% rewritten
45. 45It may ultimately be determined that we did not qualify for the Employee Retention Credit and we may be required to repay the ERC amounts received, which could have a material adverse effect on our business, results of operations and financial condition
46. 46We are subject to significant governmental regulation and changes in government regulations imposing additional requirements and restrictions on our operations could increase our operating costs and result in service delays and disruptions39% rewritten
47. 47If applicable in the future, compliance with foreign ownership regulations could adversely impact our businessNew
48. 48Revocation of permits, approvals, authorizations, and licenses may adversely affect us
49. 49We are subject to various environmental and noise laws and regulations, which could have a material adverse effect on our business, results of operations, and financial condition86% rewritten
50. 50Environmental regulation and liabilities, including new or developing laws and regulations, or our initiatives in response to pressure from our stakeholders may increase our costs of operations and adversely affect us
51. 51The issuance of operating restrictions applicable to one of the fleet types we operate could have a material adverse effect on our business, results of operations, and financial condition23% rewritten
52. 52We may become involved in litigation that may materially adversely affect us

Risks Relating to Our Organization and Structure

1. 53Our only significant asset is our ownership interest in LGM and such ownership might not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Class A Common Stock or satisfy our other financial obligations
2. 54We are a “controlled company” within the meaning of the NYSE American listing standards and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements
3. 55The multi-class structure of our Common Stock has the effect of concentrating voting power with our Chief Executive Officer, which will limit other stockholders’ ability to influence the outcomes of important transactions, including a change of control
4. 56We cannot predict the impact our multi-class structure may have on the stock price of our Class A Common Stock76% rewritten
5. 57Common Stock less attractive to other investors. As a result, the market price of shares of our Class A Common Stock could be adversely affectedNew
6. 58The requirements of being a public company may strain our resources and divert management’s attention
7. 59The Tax Receivable Agreement will require us to make cash payments to the Existing Equityholders in respect of certain tax benefits and such payments may be substantial. In certain cases, payments under the Tax Receivable Agreement may (i) exceed any actual tax benefits the Tax Group realizes or (ii) be accelerated82% rewritten
8. 60tax basis adjustments resulting from the repurchase by LGM of LGM Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) in accordance with the terms of the Equity Purchase AgreementNew
9. 61tax deductions in respect of portions of certain payments made under the Tax Receivable AgreementNew

Risks Related to Our Securities

1. 62There can be no assurance that we will be able to comply with the continued listing standards of NYSE American, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions
2. 63We may redeem our Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless35% rewritten
3. 64The Company's Certificate of Incorporation contains forum limitations for certain disputes between us and our stockholders that could limit the ability of stockholders to bring claims against us or our directors, officers, and employees in jurisdictions preferred by stockholders
4. 65We do not expect to declare any dividends in the foreseeable future
5. 66If securities or industry analysts do not publish or cease publishing research or reports about our Company, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities could decline
6. 67The issuance of shares of our Class A Common Stock upon the closing of the Proposed Merger of FlyX Merger Sub, Inc. and Jet.AI Merger Sub will dilute your ownershipNew
7. 68Substantial future sales of our Class A Common Stock by existing stockholders could cause the market price of our Class A Common Stock to decline56% rewritten