FLYX

Business Context and Reporting Period

Company: flyExclusive, Inc. (FLYX)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: March 31, 2026
Business Overview: flyExclusive is a premier owner/operator of jet aircraft focusing on private jet charter, fractional ownership, jet club memberships, and maintenance, repair, and overhaul (MRO) services. The company operates as a single reportable segment: private aviation services.

Key Financial Metrics

Note: Total Debt includes short-term notes, long-term notes, and related party notes. Working Capital Deficit is calculated as Current Assets minus Current Liabilities.

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased by 9.3% ($8.2 million) year-over-year, driven by a 7.9% increase in Jet Club and charter revenue and a 26.7% increase in fractional ownership revenue.
• Improved Loss Profile: Net loss decreased by 42.0% to $13.4 million, primarily due to a $4.2 million reduction in "Loss on extinguishment of debt" (which occurred in Q1 2025 but not Q1 2026) and a $1.1 million decrease in depreciation and amortization.
• Operating Cash Flow: Net cash used in operating activities improved significantly, decreasing from $10.5 million in Q1 2025 to $0.6 million in Q1 2026.
• Capital Structure: The company issued 4.0 million shares of Class A common stock and redeemed 10 million Class B common shares (converted from LGM units) during the quarter. Series B Preferred Stock fully converted to Class A Common Stock on December 31, 2025.

Guidance, Outlook, Risks, and Unusual Items

• Merger Activity: The company is pursuing a proposed merger with a subsidiary of Jet.AI, Inc. The closing is subject to conditions, including Jet.AI's net cash position. Additionally, the company entered into an Asset Purchase Agreement with Volato Group, Inc. on March 6, 2026, acquiring assets for $1.33 million in stock.
• Liquidity and Going Concern: The company maintains a working capital deficit and has incurred net losses. Management believes current cash, operating cash flows, and proceeds from the fractional program are sufficient for at least 12 months, but additional capital may be required for growth plans.
• Debt Covenants: As of December 31, 2025, the company was not in compliance with certain financial covenants but obtained waivers from lenders extending through December 31, 2026.
• Legal Proceedings: Ongoing litigation with Wheels Up Partners LLC regarding the termination of a Fleet Guaranteed Revenue Program Agreement. The case was remanded to New York State Supreme Court and subsequently dismissed without prejudice, with Wheels Up re-filing in North Carolina.
• Unusual Items:
  • Warrant Liabilities: Recorded a non-cash gain of $1.2 million due to changes in the fair value of warrant liabilities.
  • Employee Retention Credit (ERC): $9.0 million of ERC payments received are recorded as a liability due to uncertainty regarding eligibility qualifications.

Investor Verification Checklist

• Liquidity Sufficiency: Verify if the $18.7 million cash balance and projected operating cash flows are sufficient to cover the $149 million in anticipated cash requirements over the next 12 months without further dilution or refinancing.
• Debt Covenant Compliance: Confirm the status of the waivers obtained for financial covenants and the risk of default if future performance metrics are not met.
• Merger Certainty: Assess the likelihood of the Jet.AI merger closing, specifically the "net cash condition" and its impact on ownership dilution.
• ERC Liability: Monitor the resolution of the Employee Retention Credit eligibility; a requirement to repay the $9.0 million would materially impact liquidity.
• Wheels Up Litigation: Track the outcome of the re-filed lawsuit in North Carolina, as damages could be material.