FLYEXCLUSIVE INC. current report, 16 November 2021

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Business Context and Reporting Period

Registrant: EG Acquisition Corp., a special purpose acquisition company, reported under Form 8-K Item 4.02 on November 16, 2021. The filing was signed November 22, 2021. The filing text identifies EG Acquisition Corp.; it does not identify FlyEXCLUSIVE Inc. as the registrant.

The filing addresses previously issued financial statements for the May 28, 2021 audited balance sheet and the quarter ended June 30, 2021 unaudited interim financial statements.

Financial Reporting and Key Metrics

  • Management determined that all redeemable Class A common shares issued in the initial public offering should be classified as temporary equity rather than partially as permanent equity.
  • The filing does not provide revised revenue, profit, cash flow, margin, debt, liquidity, or share-classification amounts.
  • The company stated that the accounting change is not expected to affect cash or cash held in the IPO trust account.

Material Changes Versus Prior Periods

  • The previously issued financial statements for the affected periods should no longer be relied upon.
  • The company expects to restate those financial statements in its Form 10-Q for the quarter ended September 30, 2021.
  • Management concluded that the classification error represents a material weakness in internal control over financial reporting and that disclosure controls and procedures were ineffective.

Outlook, Risks, and Unusual Items

  • The remediation plan for the material weakness was expected to be described in greater detail in the Q3 Form 10-Q.
  • Management discussed the matter with Marcum LLP, the independent registered public accounting firm.
  • The timing and impact of the expected restatement are forward-looking matters subject to risks and uncertainties.
  • The principal unusual item is the required reclassification of redeemable shares under ASC 480-10-S99-3A.

Investor Verification Items

  1. Verify the restated financial statements and revised temporary-equity classification in the September 30, 2021 Form 10-Q.
  2. Review the detailed remediation plan for the material weakness and any subsequent assessment of control effectiveness.
  3. Confirm that cash, trust-account balances, and other economic amounts were unaffected by the restatement.
  4. Confirm the registrant and transaction relationship, because the supplied filing names EG Acquisition Corp., not FlyEXCLUSIVE Inc.