flyExclusive, a provider of premium private jet charter experiences, today announced that it has entered into a securities purchase agreement with an investment vehicle managed by EnTrust Global pursuant to which the Investor purchased 25,000 shares of Series A Non-Convertible Redeemable Preferred Stock, par value of $0.0001 per share (the “Series A Preferred Stock”), at a purchase price of $1,000 per share. The Company received approximately $25 million in cash proceeds in connection with the transaction, which closed on March 4, 2024.
“We’re thrilled to expand our relationship with EnTrust Global, a partner that recognizes the significant opportunity flyExclusive has to become the nation’s first vertically integrated private aviation company,” said Jim Segrave, Founder and CEO of flyExclusive. “Expanding our fleet will allow us to further build out our fractional program and bring greater reliability and convenience to our customers.”
The Series A Preferred Stock accrues dividends beginning on the Issue Date and ending on the first-year anniversary of the Issue Date at 10.00% per annum, at 12.00% per annum for the second year, at 14.00% per annum for the third year and at 16.00% per annum for the fourth year and thereafter. The dividends will compound annually for the first two years. On the third annual dividend payment date, the Company must pay at least 43% of the dividends in cash, and on each subsequent annual dividend payment date the Company must pay 100% of the dividends in cash. After the first-year anniversary of the Issue Date, flyExclusive may elect to redeem all or a portion of the outstanding shares of Series A Preferred Stock, or any portion thereof, for cash at a redemption price per share as detailed in the Series A Certificate of Designation. After the fifth-year anniversary of the Issue Date, each holder of the Series A Preferred Stock may elect to require the Company to redeem all or a portion of its outstanding shares of Series A Preferred Stock for cash at a redemption price per share as detailed in the Series A Certificate of Designation. The Series A Preferred Stock is generally not entitled to any vote but holds certain consent rights as described in the Series A Certificate of Designation. If voting is required by applicable law or otherwise, each holder of Series A Preferred Stock will be entitled to one vote per share.
On the Effective Date, flyExclusive also issued the Investor a warrant, granting the Investor the right to purchase shares of the Company’s Class A common stock (“Common Stock”) in an aggregate amount equal to 1.5% of the Company’s outstanding Common Stock on a fully diluted basis (the “Share Count Cap”), calculated in accordance with the terms of the Warrant, at an exercise price of $0.01 per share (the “Warrant”). The Warrant is not exercisable until the second anniversary of its issuance, at which time only one half of the Share Count Cap may be purchased. Beginning on the third anniversary of the issuance, 100% of the Share Count Cap may be purchased. The Warrant expires on the fifth anniversary of the Effective Date and may not be exercised for a number of shares of Common Stock having an aggregate value in excess of $11,250,000, calculated in accordance with the terms of the Warrant.
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