SCHEDULE 13D/A: flyExclusive Insider Group Boosts Stake to 79.7% Through Debt-to-Equity Conversion and New Warrants

A group of entities led by Gregg S. Hymowitz has significantly increased its beneficial ownership in flyExclusive, Inc. to 79.7% through a recent securities purchase agreement that converted a $4.2 million promissory note into equity and warrants.

Summary

• Gregg S. Hymowitz and affiliated entities (EG Sponsor LLC, EnTrust Global Partners Offshore LP, EnTrust Global Group LLC, EnTrust Global LLC, GH EP Holdings LLC, EnTrust Emerald (Cayman) LP, ETG Omni LLC, and EnTrust Global Partners LLC) collectively beneficially own 24,553,145 shares of flyExclusive Class A Common Stock, representing 79.7% of the outstanding shares as of March 14, 2025.
• This beneficial ownership includes direct shares, warrants to purchase Class A Common Stock, and Series B Convertible Preferred Stock.
• On March 21, 2025, pursuant to a Securities Purchase Agreement, the Issuer issued and sold a warrant to EG Sponsor LLC to purchase up to 1,268,100 shares of Class A Common Stock at an exercise price of $0.01 per share, expiring March 21, 2030.
• This warrant, along with 20,408 shares of Series B Convertible Preferred Stock, was received by EG Sponsor LLC in exchange for the cancellation of a promissory note under which flyExclusive owed Sponsor $4,227,040.06 (principal plus accrued interest).
• The Series B Preferred Stock will automatically convert into Common Stock on the earlier of December 31, 2025, or the closing date of a subsequent capital raise exceeding $25,000,000, and cannot be converted by the Reporting Persons before December 31, 2025.
• The percentage of ownership is calculated based on 20,199,586 shares of Class A Common Stock outstanding as of March 14, 2025, as reported in the Issuer's Form 10-K filed on March 24, 2025, plus warrants beneficially owned by the respective Reporting Persons.
• The calculation methodology under Rule 13d-3 of the Exchange Act excludes 59,930,000 LGM Common Units (convertible to Class A Common Stock) and 5,805,544 public warrants from the denominator, as these are not beneficially held by the Reporting Persons.

Sentiment

Score: 6

Explanation: The conversion of debt to equity is a positive step for balance sheet health, and increased insider ownership signals confidence. However, the need for such a transaction implies prior financial strain, and future dilution from warrants/preferred stock conversion is a consideration.

Positives

• The conversion of a $4,227,040.06 promissory note into equity strengthens flyExclusive's balance sheet by reducing debt liabilities.
• The significant increase in beneficial ownership by Gregg S. Hymowitz and the EnTrust Global group demonstrates a strong commitment and vote of confidence from key insiders and their affiliates.

Negatives

• The debt-to-equity conversion suggests that flyExclusive required capital, potentially indicating ongoing financial needs or challenges.
• The issuance of warrants and convertible preferred stock introduces potential future dilution for existing shareholders upon their exercise or conversion.

Risks

• Potential future dilution of Class A Common Stock from the exercise of 5,333,333 warrants, 1,268,100 warrants, and the conversion of 20,408 shares of Series B Convertible Preferred Stock.
• The Series B Preferred Stock conversion is tied to a future capital raise, indicating a potential need for additional financing which may or may not materialize on favorable terms.
• Concentrated ownership by the Reporting Persons, while showing commitment, could also lead to less liquidity or control for other shareholders.

Future Outlook

The Series B Convertible Preferred Stock is designed to automatically convert into Common Stock by December 31, 2025, or earlier if flyExclusive completes a subsequent capital raise exceeding $25,000,000, indicating a potential future financing event.

Industry Context

This filing pertains to flyExclusive, Inc., a company operating in the private aviation sector. The transaction reflects a capital restructuring and increased insider commitment within this industry.

Related Party Transactions

• The Securities Purchase Agreement dated March 21, 2025, between flyExclusive, Inc. and EG Sponsor LLC, is a related party transaction. EG Sponsor LLC is controlled by entities affiliated with Gregg S. Hymowitz, who is also a Reporting Person.

Stakeholder Impact

• Shareholders: Potential future dilution from the exercise of warrants and conversion of Series B Preferred Stock. Increased control and influence by the Reporting Persons due to their significant beneficial ownership.
• Creditors: The cancellation of a promissory note reduces the company's debt obligations to the Sponsor, improving the balance sheet.

Next Steps

• Automatic conversion of Series B Convertible Preferred Stock into Common Stock by December 31, 2025, or earlier upon a qualifying capital raise.
• Potential future capital raise exceeding $25,000,000, which would trigger the conversion of Series B Preferred Stock.

Key Dates

Keywords

flyExclusive, SEC filing, Schedule 13D, beneficial ownership, Class A Common Stock, warrants, convertible preferred stock, debt conversion, EG Sponsor LLC, EnTrust Global, Gregg Hymowitz, private aviation, capital restructuring