DEFM14A 1 d446572ddefm14a.htm DEFM14A DEFM14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Under to §240.14a-12

EG Acquisition Corp.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

 

No fee required.

 

Fee paid previously with preliminary materials.

 

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 

 


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EG ACQUISITION CORP.

375 Park Avenue, 24th Floor

New York, NY 10152

PROXY STATEMENT REGARDING THE SPECIAL MEETING

OF STOCKHOLDERS OF

EG ACQUISITION CORP.

To the Stockholders of EG Acquisition Corp.:

You are cordially invited to attend the Special Meeting of the stockholders of EG Acquisition Corp. (“EGA,” “we,” “our,” or “us”), which will be held via live webcast at 10:00 a.m., New York time, on December 7, 2023 (the “Special Meeting”). EGA is a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities, which we refer to as a “target business.”

On October 17, 2022, EGA entered into an equity purchase agreement (as amended on April 21, 2023 (the “First Amendment”) and as it may be further amended and/or restated from time to time, the “Equity Purchase Agreement”) with LGM Enterprises, LLC, a North Carolina limited liability company (“LGM”) and the parent company of Exclusive Jets, LLC d/b/a “flyExclusive” (“flyExclusive”), the existing equityholders of LGM (the “Existing Equityholders”), EG Sponsor LLC, a Delaware limited liability company (“Sponsor”) and Thomas James Segrave, Jr. (“Segrave” or “Existing Equityholder Representative”) in his capacity as Existing Equityholder Representative. The transactions contemplated by the Equity Purchase Agreement are referred to herein as the “Business Combination.” A copy of the Equity Purchase Agreement is attached to the accompanying proxy statement as Annex A and Annex A-1.

In connection with the execution of the Equity Purchase Agreement, on October 17, 2022, LGM entered into a senior subordinated convertible note with EnTrust Emerald (Cayman) LP and, for certain limited provisions thereof, EGA, pursuant to which LGM borrowed an aggregate principal amount of $50,000,000 at a rate of 10% per annum, payable in kind in additional shares of PubCo (as defined below) upon the Closing of the Business Combination. On October 28, 2022, LGM also entered into an Incremental Amendment with ETG OMNI LLC and EnTrust Magnolia Partners LP (together with EnTrust Emerald (Cayman) LP, the “Bridge Note Lenders”) on the same terms for an aggregate principal amount of $35,000,000 (together with the subordinated convertible note discussed in this paragraph, the “Bridge Notes”), bringing the total principal amount of the Bridge Notes to $85,000,000 in the aggregate. Concurrently with the closing of the Business Combination (the “Closing”), the Bridge Notes will automatically be converted into the number of shares of PubCo Class A Common Stock (as defined below) equal to the quotient of (a) the total amount owed by LGM under the Bridge Notes (including accrued payable-in-kind interest) divided by (b) $10.00 (subject to adjustment in certain instances, as described in the Bridge Notes). Unless otherwise consented to by the Bridge Note Lenders, the proceeds of the Bridge Notes are to be used primarily for the acquisition of additional aircraft and payment of expenses related thereto.

Following the Closing, we will have an umbrella partnership-C corporation (“Up-C”) structure, in which substantially all of the operating assets of LGM’s business will be held by LGM, and EGA’s only assets will be its equity interests in LGM. EGA will be renamed “flyExclusive, Inc.” (“PubCo”) at the Closing. After the Closing, assuming no EGA stockholders elect to have their stock redeemed and no LGM Common Units are repurchased (pursuant to the rights of the Existing Equityholders to have repurchased up to the Closing Date Cash Repurchase Amount described elsewhere in this proxy statement), current EGA stockholders, together with the Bridge Note Lenders, are expected to own approximately 24.3% of the equity interests in PubCo. After the Closing, assuming no EGA stockholders elect to have their stock redeemed and the maximum number of LGM Common Units are repurchased, current EGA stockholders, together with the Bridge Note Lenders, are expected to own approximately 24.8% of the equity interests in


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PubCo. After the Closing, assuming EGA stockholders elect to have the maximum shares of EGA Class A Common Stock redeemed and no LGM Common Units are repurchased, current EGA stockholders, together with the Bridge Note Lenders, are expected to own approximately 22.5% of the equity interests in PubCo. After the Closing, assuming EGA stockholders elect to have the maximum shares of EGA Class A Common Stock redeemed and the maximum number of LGM common units are repurchased, current EGA stockholders, together with the Bridge Note Lenders, are expected to own approximately 22.8% of the equity interests in PubCo. The percentages above assume that none of the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the Sponsor) are exercised. The date upon which the Closing occurs is referred to herein as the “Closing Date.”

At the Closing, we will (i) amend and restate our Amended and Restated Certificate of Incorporation, dated as of May 25, 2021, as amended on May 25, 2023, (the “Existing Certificate of Incorporation,” and, such amended and restated Existing Certificate of Incorporation, the “A&R PubCo Charter,” attached to the accompanying proxy statement as Annex B) to, among other things, (a) change the name of EGA to “flyExclusive, Inc.,” (b) convert all then-outstanding shares of class B common stock, par value $0.0001 per share, of EGA (“EGA Class B Common Stock”) held by Sponsor (the “Founder Shares”) into shares of class A common stock, par value $0.0001 per share, of PubCo (the “PubCo Class A Common Stock”) and (c) authorize the issuance of class B common stock, par value $0.0001 per share, of PubCo (the “PubCo Class B Common Stock,” and, together with the PubCo Class A Common Stock, the “PubCo Common Stock”) and (ii) replace the bylaws of EGA (the “Existing Bylaws”), with the bylaws of PubCo (the “PubCo Bylaws”), a copy of which is attached to the accompanying proxy statement as Annex E.

As described above, following the Closing, we will be organized with an Up-C structure and, in connection with the consummation of the Business Combination, the existing shareholders of LGM will receive a class of noneconomic common shares in PubCo (PubCo Class B Common Stock) while retaining economic interests in LGM (LGM Common Units) that are exchangeable for PubCo Class A Common Stock. All the business of LGM will be held directly by LGM and PubCo’s only direct asset will consist of the LGM Common Units.

Each share of PubCo Class A Common Stock and each share of PubCo Class B Common Stock will entitle the holder thereof to one vote on all matters on which stockholders are generally entitled to vote. The PubCo Class B Common Stock will carry one vote per share but no economic right. The holders of PubCo Class B Common Stock will not have any right to receive dividends other than stock dividends (as described in the accompanying proxy statement) consisting of shares of PubCo Class B Common Stock, in each case paid proportionally with respect to each outstanding share of PubCo Class B Common Stock. The holders of PubCo Class A Common Stock are entitled to receive dividends, as and if declared by the PubCo Board of Directors (the “PubCo Board”) out of legally available funds. With respect to stock dividends, holders of PubCo Class A Common Stock must receive PubCo Class A Common Stock. Upon PubCo’s liquidation or dissolution, the holders of all classes of PubCo Common Stock are entitled to their respective par value, and the holders of PubCo Class A Common Stock will then be entitled to share ratably in those assets of PubCo that are legally available for distribution to stockholders after payment of liabilities and subject to the prior rights of any holders of preferred stock then outstanding. Other than their par value, the holders of PubCo Class B Common Stock will not have any right to receive a distribution upon a liquidation or dissolution of PubCo. Holders of PubCo Class A Common Stock and PubCo Class B Common Stock will not be entitled to vote on any amendment to the A&R PubCo Charter that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon.

Also at the Closing, the Existing Equityholders, PubCo and LGM will enter into an Amended and Restated Limited Liability Company Operating Agreement of LGM, in substantially the form attached to the accompanying proxy statement as Annex C (the “A&R Operating Agreement”) which, among other things, will (i) restructure the capitalization of LGM to (a) authorize the issuance of units of ownership interest in LGM which entitle the holder thereof to the distributions, allocations, and other rights under the A&R Operating Agreement (the “LGM Common Units”) to PubCo and (b) reclassify the existing LGM Common Units (the “Existing LGM Common Units”) held by the Existing Equityholders into LGM


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Common Units and (ii) appoint PubCo as the managing member of LGM. As consideration for issuing LGM Common Units to PubCo, PubCo will contribute (or, in the case of the Bridge Note proceeds received by LGM, be deemed to have contributed) up to $122.6 million to LGM, assuming no EGA stockholders exercise Redemption Rights (as defined below).

Pursuant to the Equity Purchase Agreement, at the Closing, each Existing LGM Common Unit held by each Existing Equityholder will automatically be reclassified into the number of LGM Common Units equal to 60,000,000 multiplied by the percentage set forth next to each Existing Equityholder’s name on Schedule I of the Equity Purchase Agreement. Following this reclassification, any certificates outstanding evidencing ownership of Existing LGM Common Units will be of no further force or effect.

As consideration for the transactions set forth in the Equity Purchase Agreement, we will contribute to LGM the amount held in the trust fund established for the benefit of our stockholders (the “Trust Fund”) in a Trust Account (the “Trust Account”), less the amount of cash required to fund the redemption of any EGA Class A Common Stock (as defined below) redeemed in connection with the Closing (the “EGA Stock Redemption”), plus the aggregate proceeds received from any potential PIPE investment, plus the aggregate proceeds received by LGM from the funding of the Bridge Notes (which will be deemed to have been contributed by us to LGM), less the deferred underwriting commission payable to EGA’s financial advisor with respect to the Business Combination, BTIG, LLC (the “Contribution Amount”). Immediately after the contribution of the Contribution Amount, LGM will pay the unpaid fees, commissions, costs and expenses that have been incurred by LGM or EGA in connection with the Business Combination (the “Transaction Expenses”). For further discussion of the consideration exchanged in the Business Combination, please see the section entitled “Proposal No. 1 — The Transaction Proposal — General; Structure of the Business Combination; Consideration.

In addition, at the Closing, PubCo, LGM, the Existing Equityholders and Segrave (in the capacity of “TRA Holder Representative”) will enter into the Tax Receivable Agreement (the “Tax Receivable Agreement”), in substantially the form attached to the accompanying proxy statement as Annex G. Please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — Tax Receivable Agreement,” for a discussion of the Tax Receivable Agreement and the section entitled “Risk Factors — Risks Relating to Tax” for certain specified risks related to the Tax Receivable Agreement.

Immediately after the Delaware Secretary of State accepts the A&R PubCo Charter, and without any action on the part of any holder of a warrant (each an “EGA Warrant”) to purchase one whole share of class A common stock, par value $0.0001 per share, of EGA (“EGA Class A Common Stock” and, together with the EGA Class B Common Stock, the “EGA Common Stock”), prior to the effectiveness of the A&R PubCo Charter, each EGA Warrant that is issued and outstanding immediately prior to the Closing will become a warrant to purchase PubCo Class A Common Stock (which will be in the identical form of the EGA Warrant, but in the name of PubCo) exercisable for PubCo Class A Common Stock in accordance with its terms (each a “PubCo Warrant”), and EGA and LGM will enter into Warrant Agreements (as defined in the A&R Operating Agreement), pursuant to which EGA will agree that, in the event any holder exercises a PubCo Warrant, then EGA will cause a corresponding exercise of an LGM warrant with similar terms (exercisable for LGM Common Units) held by it, such that the number of shares of PubCo Class A Common Stock issued in connection with the exercise of such PubCo Warrant will match with a corresponding number of LGM Common Units issued by LGM pursuant to such Warrant Agreements.

At the Closing, the Existing Equityholders, our Sponsor and PubCo will enter into that certain Stockholders’ Agreement (the “Stockholders’ Agreement”), a form of which is attached to the accompanying proxy statement as Annex H. Pursuant to the Stockholders’ Agreement, among other things, the Existing Equityholders and our Sponsor will respectively agree to vote each of their respective securities of PubCo that may be voted in the election of PubCo’s directors in accordance with the provisions of the Stockholders’ Agreement. At the Closing, the PubCo Board is expected to initially consist of seven directors. The equityholders of PubCo will have the right to nominate directors as follows: the Sponsor, and its permitted transferees, by a majority of shares held by them, shall have the right to nominate, and the PubCo Board and the Existing Equityholders, and their permitted transferees, will appoint and vote for, two members of the PubCo Board, initially designated pursuant to the Stockholders’ Agreement as Gregg S. Hymowitz and Gary Fegel, and thereafter as designated by the Sponsor, and its permitted transferees, by a majority of shares held by them.


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Assuming that none of our current stockholders exercise their right to redeem their EGA Class A Common Stock and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 75.7% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 5.3% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.1% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 11.9% of the total voting power of PubCo. Assuming that none of our current stockholders exercise their right to redeem their EGA Class A Common Stock and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 75.2% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 5.5% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.2% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.1% of the total voting power of PubCo. Assuming our current stockholders elect to have 25% of their EGA Class A Common Stock redeemed and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 76.7% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 4.1% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.2% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.0% of the total voting power of PubCo. Assuming our current stockholders elect to have 25% of their EGA Class A Common Stock redeemed and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 76.3% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 4.1% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.3% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.3% of the total voting power of PubCo. Assuming that our current stockholders elect to have the maximum shares of EGA Class A Common Stock redeemed and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 77.5% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 3.0% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.3% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.2% of the total voting power of PubCo. Assuming our current stockholders elect to have the maximum shares of EGA Class A Common Stock redeemed and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 77.2% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 3.0% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.4% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.4% of the total voting power of PubCo. The percentages above assume that none of the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the Sponsor) are exercised.

By virtue of the combined voting power of the Existing Equityholders of more than 50% of the total voting power of the shares of capital stock of PubCo outstanding as of the Closing, PubCo will, as of the Closing, qualify as a “controlled company” within the meaning of the corporate governance standards of the NYSE. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of the PubCo Board consist of independent directors, (ii) we have a compensation committee that is composed entirely of independent directors and (iii) we have a nominating/corporate governance committee that is composed entirely of independent directors.

We expect to rely on certain of these exemptions after the Closing. As a result, we will not be required to have a compensation committee consisting entirely of independent directors and we will not be required to have a nominating/corporate governance committee that is composed entirely of independent directors. We may also rely on the other exemptions so long as we qualify as a “controlled company.” To the extent


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we rely on any of these exemptions, holders of PubCo Class A Common Stock will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Upon the completion of the Business Combination, Thomas James Segrave, Jr., who will serve as PubCo’s Chief Executive Officer, will control PubCo through his holdings of a percentage of outstanding PubCo Class B Common Stock constituting approximately 75.2% to 75.7% of the total voting power of PubCo, assuming no shares of EGA Class A Common Stock are redeemed and 77.2% to 77.5%, assuming the maximum number of shares of EGA Class A Common Stock are redeemed. The percentages above assume that none of the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the Sponsor) are exercised.

The Equity Purchase Agreement provides that the obligation of the parties thereto to consummate the Business Combination is conditioned on, among other things (i) the approval of the Proposals (as defined and set forth below), excluding the Adjournment Proposal (as defined below), by the EGA stockholders in accordance with EGA’s organizational documents (the “Required EGA Stockholder Approval”), (ii) that EGA has at least $5,000,001 in tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), immediately prior to closing and (iii) that EGA will remain listed on the New York Stock Exchange (the “NYSE”) and has not received any written notice from the NYSE that it has failed or would reasonably be expected to fail to meet NYSE listing requirements as of the Closing Date.

At the Special Meeting, you will be asked to consider and vote on the following proposals (the “Proposals”):

 

  1.

Proposal No. 1:    A proposal (the “Transaction Proposal”) to approve and adopt the Equity Purchase Agreement, a copy of which is attached to the accompanying proxy statement as Annex A and Annex A-1, and approve the other transactions contemplated by the Equity Purchase Agreement.

 

  2.

Proposal No. 2:    In order to comply with applicable NYSE rules, a proposal (the “NYSE Proposal”) to approve the issuance by PubCo, as successor to EGA, of PubCo Common Stock in the Business Combination in an amount equal to 20% or more of the amount of EGA’s issued and outstanding common stock immediately prior to the issuance. This proposal is conditioned upon approval of the Transaction Proposal.

 

  3.

Proposal No. 3:    A proposal to approve and adopt, effective upon the Closing, the A&R PubCo Charter, a copy of which is attached hereto as Annex B (the “Charter Proposal”). The Charter Proposal and the related Governance Proposals described below are conditioned upon approval of the Transaction Proposal and the NYSE Proposal.

In addition to the Charter Proposal, the stockholders are also separately being presented the following aspects of the A&R PubCo Charter, on a non-binding advisory basis, in accordance with Securities and Exchange Commission (the “SEC”) guidance to give stockholders the opportunity to present their separate view on important corporate governance provisions (the “Governance Proposals” and together with the Charter Proposal, the “Charter and Governance Proposals”):

 

   

Proposal No. 3(a):    To increase the total number of authorized shares of stock, par value $0.0001 per share, of PubCo to 325,000,000 shares consisting of (i) 25,000,000 shares of preferred stock, (ii) 200,000,000 shares of PubCo Class A Common Stock, and (iii) 100,000,000 shares of PubCo Class B Common Stock.

 

   

Proposal No. 3(b):    Certain additional changes, including among other things, (i) changing the post-Business Combination corporate name from “EG Acquisition Corp.” to “flyExclusive, Inc.,” (ii) making PubCo’s corporate existence perpetual, and (iii) removing certain provisions related to our status as a blank check company that will no longer apply upon the consummation of the Business Combination.

 

   

Proposal No. 3(c):    The provision that the number of authorized shares of any class or classes of stock may be increased or decreased by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock entitled to vote thereon, voting together as a single class.


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Proposal No. 3(d):    The provision that the number of directors of PubCo will be fixed from time to time by the vote of the majority of the PubCo Board, which number shall initially be seven.

 

   

Proposal No. 3(e):    The provision that the PubCo Bylaws may only be amended by the affirmative vote of the holders of at least the majority of the voting power of all the then-outstanding shares of voting stock of PubCo with the power to vote generally in an election of PubCo directors, voting together as a single class.

 

   

Proposal No. 3(f):    The provision that each share of PubCo Class A Common Stock and each share of PubCo Class B Common Stock will entitle the holder thereof to one vote on all matters on which stockholders are generally entitled to vote.

 

  4.

Proposal No. 4:    A proposal (the “Director Election Proposal”) for holders of EGA Class B Common Stock to elect seven directors of the PubCo Board to serve until the 2024 annual meeting of stockholders or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal. The Director Election Proposal is conditioned upon approval of the Transaction Proposal, the NYSE Proposal and the Charter Proposal.

 

  5.

Proposal No. 5:    A proposal (the “PubCo Equity Incentive Plan Proposal”) to approve and adopt the PubCo 2023 Incentive Award Plan (the “2023 Plan”), a copy of which is attached hereto as Annex D. The PubCo Equity Incentive Plan Proposal is conditioned upon approval of the Transaction Proposal, the NYSE Proposal and the Charter Proposal.

 

  6.

Proposal No. 6:    A proposal (the “PubCo ESPP Proposal”) to approve and adopt the PubCo 2023 Employee Stock Purchase Plan (the “ESPP”), a copy of which is attached hereto as Annex F. The PubCo ESPP Proposal is conditioned upon approval of the Transaction Proposal, the NYSE Proposal and the Charter Proposal.

 

  7.

Proposal No. 7:    A proposal (the “Adjournment Proposal”) to approve the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the Transaction Proposal, the NYSE Proposal, the Charter Proposal, the Director Election Proposal, the PubCo Equity Incentive Plan Proposal and the PubCo ESPP Proposal.

Each of these Proposals is more fully described in the accompanying proxy statement, which you are encouraged to read carefully. As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement (as defined below), the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

EGA Class A Common Stock and EGA Warrants held by the public (the “EGA Public Warrants”) are currently listed on the NYSE under the symbols “EGGF” and “EGGFW,” respectively. Certain shares of EGA Class A Common Stock and EGA Public Warrants currently trade as units consisting of one share of EGA Class A Common Stock and one-third of one redeemable warrant, and are listed on the NYSE under the symbol “EGGFU” (“EGA Units”). The EGA Units will automatically separate into their component securities upon consummation of the Business Combination and, as a result, will no longer trade as an independent security. Upon consummation of the transactions contemplated by the Equity Purchase Agreement, we will change our name to “flyExclusive, Inc.” We intend to apply to continue the listing of EGA Class A Common Stock as PubCo Class A Common Stock and EGA Public Warrants as PubCo Warrants on the NYSE under the symbols “FLYX” and “FLYXW,” respectively, upon the Closing.

Only holders of record of shares of EGA Common Stock at the close of business on November 13, 2023 (the “Record Date”) are entitled to notice of and to vote and have their votes counted at the Special Meeting and any adjournments or postponements of the Special Meeting. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for 10 days before the Special Meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting and electronically during the Special Meeting at https://www.cstproxy.com/egacquisition/sm2023.


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We are providing the accompanying proxy statement and proxy card to our stockholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. Whether or not you plan to attend the Special Meeting, we urge you to read the accompanying proxy statement carefully and submit your proxy to vote on the Business Combination. Please pay particular attention to the section entitled “Risk Factors” beginning on page 60 of the accompanying proxy statement.

After careful consideration, our board of directors (the “Board”) has unanimously approved the Equity Purchase Agreement and the Business Combination contemplated thereby and determined that each of the Transaction Proposal, the NYSE Proposal, the Charter and Governance Proposals, the Director Election Proposal, the PubCo Equity Incentive Plan Proposal, the PubCo ESPP Proposal and the Adjournment Proposal is in the best interests of EGA and its stockholders, and unanimously recommends that you vote or give instruction to vote “FOR” each of those Proposals.

The existence of financial and personal interests of our directors and officers may result in conflicts of interest, including a conflict between what may be in the best interests of EGA and its stockholders and what may be best for a director’s personal interests when determining to recommend that stockholders vote for the proposals. See the sections entitled “Proposal No. 1 — The Transaction Proposal — Interests of Certain Persons in the Business Combination,” “Risk Factors” and “Beneficial Ownership of Securities in the accompanying proxy statement for a further discussion.

Our Sponsor and other officers and directors entered into a letter agreement (the “Letter Agreement”) at the time of EGA’s initial public offering (the “IPO”), pursuant to which they agreed to vote any shares of capital stock of EGA owned by them in favor of the Business Combination and to waive their right to have their stock redeemed by EGA. As of the date of this proxy statement, the Sponsor currently holds 57% of our total outstanding shares of EGA Common Stock.

Pursuant to the Existing Certificate of Incorporation, if a stockholder vote is required for the Business Combination to be consummated, EGA must offer to redeem for cash (the “Redemption Rights”) all or a portion of the shares of EGA Class A Common Stock, other than the Converted Shares (as defined in the accompanying proxy statement), held by a holder of EGA Class A Common Stock (a “Public Stockholder”). You will be entitled to receive cash for any shares of EGA Class A Common Stock to be redeemed only if you:

 

  (i)

(a) hold shares of EGA Class A Common Stock, or (b) hold EGA Units and you elect to separate your EGA Units into the underlying shares of EGA Class A Common Stock and EGA Public Warrants prior to exercising your Redemption Rights with respect to the shares of EGA Class A Common Stock; and

 

  (ii)

prior to 5:00 p.m., New York time, on December 5, 2023 (two business days prior to the vote at the Special Meeting), (a) submit a written request to Continental Stock Transfer & Trust Company, our transfer agent (the “Transfer Agent”), that we redeem your shares of EGA Class A Common Stock for cash, and (b) deliver your shares of EGA Class A Common Stock to the Transfer Agent, physically or electronically through the Depository Trust Company (“DTC”).

Holders of EGA Units must elect to separate the underlying shares of EGA Class A Common Stock and EGA Public Warrants prior to exercising Redemption Rights with respect to the shares of EGA Class A Common Stock. If holders hold their EGA Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the EGA Units into the underlying shares of EGA Class A Common Stock and EGA Public Warrants, or if a holder holds EGA Units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so. Public Stockholders may elect to redeem all or a portion of their shares of EGA Class A Common Stock even if they vote for the Transaction Proposal. If the Business Combination is not consummated, the EGA Class A Common Stock will not be redeemed. If the Business Combination is consummated and a Public Stockholder properly exercises its right to redeem its shares of EGA Class A Common Stock and timely delivers its shares to the Transfer Agent, we will redeem each share of EGA Class A Common Stock for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the


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Trust Account (net of taxes payable), divided by the number of then-outstanding shares of EGA Class A Common Stock held by the Public Stockholders. For illustrative purposes, as of October 31, 2023 this would have amounted to approximately $10.59 per share of EGA Class A Common Stock. If a Public Stockholder exercises its Redemption Rights, then it will be exchanging its redeemed shares of EGA Class A Common Stock for cash and will no longer own such shares. Any request to redeem shares of EGA Class A Common Stock, once made, may be withdrawn at any time until the date of the Special Meeting, and thereafter, with our consent, until the Closing. Furthermore, if a holder of shares of EGA Class A Common Stock delivers its certificate in connection with an election of its redemption and subsequently decides prior to the date of the Special Meeting not to elect to exercise such rights, it may simply request that EGA instruct our Transfer Agent to return the certificate (physically or electronically). The holder can make such request by contacting the Transfer Agent, at the address or email address listed in the accompanying proxy statement. We will be required to honor such request only if made prior to the date of the Special Meeting. See the section entitled “Special Meeting of the EGA Stockholders — Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your shares of EGA Class A Common Stock for cash.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its shares of EGA Class A Common Stock with respect to more than an aggregate of 15% of the outstanding shares of EGA Class A Common Stock, without our prior consent. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the outstanding shares of EGA Class A Common Stock, then any such shares in excess of that 15% limit would not be redeemed without our prior consent.

Each redemption of shares of EGA Class A Common Stock by Public Stockholders will decrease the amount in the Trust Account, which held total assets of approximately $45.5 million as of October 31, 2023, which EGA intends to use for the purposes of consummating the Business Combination within the time period described in the accompanying proxy statement and to pay deferred underwriting commissions to the underwriters of the IPO. EGA will not consummate the Business Combination if the redemption of shares of EGA Class A Common Stock would result in EGA’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act (or any successor rule)) of less than $5,000,001.

Under the Equity Purchase Agreement, the approval of each of the condition precedent proposals (i.e., the Transaction Proposal, the NYSE Proposal, the Charter Proposal, the Director Election Proposal, the PubCo Equity Incentive Plan Proposal and the PubCo ESPP Proposal) is a condition to the consummation of the Business Combination. The adoption of each condition precedent proposal is conditioned on the approval of all of the condition precedent proposals. The Adjournment Proposal is not conditioned on the approval of any other Proposal. If our stockholders do not approve each of the condition precedent proposals, the Business Combination may not be consummated.

Approval of the Transaction Proposal requires the affirmative vote of the holders of a majority of the shares of the EGA Common Stock that are voted at the Special Meeting. The NYSE Proposal, the PubCo Equity Incentive Plan Proposal, the PubCo ESPP Proposal and the Adjournment Proposal each require the affirmative vote of a majority in voting power of the outstanding shares of EGA Common Stock present in person (which would include presence at the virtual Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting as a single class. Approval of the Charter and Governance Proposals requires the affirmative vote of holders of a majority of the outstanding shares of EGA Common Stock, the affirmative vote of the holders of a majority of the outstanding shares of EGA Class A Common Stock, voting separately as a single class, and the affirmative vote of the holders of a majority of the outstanding shares of EGA Class B Common Stock, voting separately as a single class, entitled to vote thereon at the Special Meeting. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the outstanding shares of EGA Class B Common Stock cast by holders of EGA Class B Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the virtual Special Meeting and entitled to vote thereon. Holders of shares of EGA Class A Common Stock have no right to vote on the election, removal or replacement of any director. As of


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the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

All our stockholders are cordially invited to attend the Special Meeting virtually. To ensure your representation at the Special Meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible.

If you are a stockholder of record holding shares of EGA Common Stock, you may also cast your vote in person (which would include voting at the virtual Special Meeting). If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the Special Meeting and vote in person (which would include voting at the virtual Special Meeting), obtain a proxy from your broker or bank.

If you fail to return a proxy card or fail to instruct a broker or other nominee how to vote, and do not attend the Special Meeting in person (which includes presence virtually at the Special Meeting), your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have the same effect as a vote “AGAINST” the Charter Proposal, but will have no effect on the outcome of the Transaction Proposal, Director Election Proposal, NYSE Proposal, PubCo Equity Incentive Plan Proposal or PubCo ESPP Proposal.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the Special Meeting virtually or not, please sign, date and return the enclosed proxy card as soon as possible in the envelope provided.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that your shares are represented and voted at the Special Meeting.

On behalf of the Board, I would like to thank you for your support of EG Acquisition Corp. and look forward to a successful completion of the Business Combination.

 

  By Order of the Board of Directors,
 

/s/ Gary Fegel

  Gary Fegel
November 13, 2023   Chairman

If you return your proxy card signed and without an indication of how you wish to vote, your shares will be voted in favor of each of the Proposals.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST (i) IF YOU HOLD SHARES OF EGA CLASS A COMMON STOCK THROUGH EGA UNITS, ELECT TO SEPARATE YOUR EGA UNITS INTO THE UNDERLYING SHARES OF EGA CLASS A COMMON STOCK AND EGA PUBLIC WARRANTS PRIOR TO EXERCISING YOUR REDEMPTION RIGHTS WITH RESPECT TO THE SHARES OF EGA CLASS A COMMON STOCK, (ii) SUBMIT A WRITTEN REQUEST TO THE TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE SPECIAL MEETING, THAT YOUR SHARES OF EGA CLASS A COMMON STOCK BE REDEEMED FOR CASH, AND (iii) DELIVER YOUR SHARES OF EGA CLASS A COMMON STOCK TO THE TRANSFER AGENT, PHYSICALLY OR ELECTRONICALLY USING THE DTC’S DWAC (DEPOSIT/WITHDRAWAL AT CUSTODIAN) SYSTEM, IN EACH CASE IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE SHARES OF EGA CLASS A COMMON STOCK WILL NOT BE REDEEMED. IF YOU HOLD YOUR SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR


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ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE THE SECTION ENTITLED “SPECIAL MEETING OF THE EGA STOCKHOLDERS — REDEMPTION RIGHTS” IN THE ACCOMPANYING PROXY STATEMENT FOR MORE SPECIFIC INSTRUCTIONS.

Neither the SEC nor any state securities commission has approved or disapproved of the transactions described in the accompanying proxy statement, passed upon the merits or fairness of the Equity Purchase Agreement or the transactions contemplated thereby, or passed upon the adequacy or accuracy of the accompanying proxy statement. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated November 13, 2023 and is first being mailed to our stockholders on or about November 13, 2023.


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EG ACQUISITION CORP.

375 Park Avenue, 24th Floor

New York, NY 10152

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF

EG ACQUISITION CORP.

To be Held on December 7, 2023

To the Stockholders of EG Acquisition Corp.:

NOTICE IS HEREBY GIVEN that a special meeting (the “Special Meeting”) of stockholders of EG Acquisition Corp., a Delaware corporation (“EGA,” the “Company,” “we,” “us,” or “our”), will be held at 10:00 a.m., New York time, on December 7, 2023. The Special Meeting will be a virtual meeting conducted exclusively via live webcast. You are cordially invited to attend the Special Meeting online by visiting https://www.cstproxy.com/egacquisition/sm2023 or vote by phone by calling toll-free (within the U.S. and Canada) 1 800-450-7155 (or +1 857-999-9155 if you are located outside the U.S. and Canada (standard rates apply)). To register and receive access to the virtual Special Meeting, registered stockholders and beneficial stockholders (those holding shares through a stock brokerage account or by a bank or other holder of record) will need to follow the instructions applicable to them provided in the accompanying proxy statement.

At the Special Meeting, you will be asked to consider and vote on the following proposals (the “Proposals”):

 

1.

Proposal No. 1: A proposal (the Transaction Proposal”) to approve and adopt the Equity Purchase Agreement, dated as of October 17, 2022, (as amended on April 21, 2023 (the “First Amendment”) and as it may be further amended and/or restated from time to time, the “Equity Purchase Agreement”), by and among EGA, LGM Enterprises, LLC, a North Carolina limited liability company (“LGM”), the existing equityholders of LGM (the “Existing Equityholders”), EG Sponsor LLC, a Delaware limited liability company (“Sponsor”), and Thomas James Segrave, Jr. (“Segrave” or “Existing Equityholder Representative”) in his capacity as Existing Equityholder Representative. The transactions contemplated by the Equity Purchase Agreement are referred to herein as the “Business Combination.” At the closing of the Business Combination (the “Closing”), we will (i) amend and restate our Amended and Restated Certificate of Incorporation, dated as of May 25, 2021, as amended on May 25, 2023 (the “Existing Certificate of Incorporation,” and, such amended and restated Existing Certificate of Incorporation, the “A&R PubCo Charter,” a copy of which is attached to the accompanying proxy statement as Annex B) to, among other things, (a) change the name of EGA to “flyExclusive, Inc.” (“PubCo”), (b) convert all then-outstanding shares of class B common stock, par value $0.0001 per share, of EGA, (“EGA Class B Common Stock”) held by Sponsor (the “Founder Shares”) into shares of class A common stock, par value $0.0001 per share, of PubCo (the “PubCo Class A Common Stock”) and (c) authorize the issuance of class B common stock, par value $0.0001 per share, of PubCo (the “PubCo Class B Common Stock,” and, together with the PubCo Class A Common Stock, the “PubCo Common Stock”) and (ii) replace the bylaws of EGA (the “Existing Bylaws”), by adopting the bylaws of PubCo (the “PubCo Bylaws”), a copy of which is attached to the accompanying proxy statement as Annex E.

The Equity Purchase Agreement also states that at the Closing, the Existing Equityholders, PubCo and LGM will enter into an Amended and Restated Limited Liability Company Operating Agreement of LGM, a copy of which is attached as Annex C (the “A&R Operating Agreement”), which, among other things, will (i) restructure the capitalization of LGM to (a) authorize the issuance of units of ownership interest in LGM which entitle the holder thereof to the distributions, allocations, and other rights under the A&R Operating Agreement (the “LGM Common Units”) to PubCo and (b) reclassify the existing LGM Common Units (the “Existing LGM Common Units”) held by the Existing Equityholders into LGM Common Units and (ii) appoint PubCo as the managing member of LGM. Pursuant to the Equity Purchase Agreement, at the Closing, each Existing LGM Common Unit held by each Existing Equityholder will automatically be reclassified into the number of LGM Common Units equal to 60,000,000 multiplied by the percentage set forth next to each Existing Equityholder’s name on Schedule I of the Equity Purchase Agreement. Following this reclassification, any certificates outstanding evidencing ownership of Existing LGM Common Units will be of no further force or effect.


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Each share of PubCo Class A Common Stock and each share of PubCo Class B Common Stock will entitle the holder thereof to one vote on all matters on which stockholders are generally entitled to vote. Holders of PubCo Class A Common Stock and PubCo Class B Common Stock will not be entitled to vote on any amendment to the A&R PubCo Charter that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon.

Pursuant to the Equity Purchase Agreement, immediately after the Delaware Secretary of State accepts the A&R PubCo Charter, and without any action on the part of any holder of a warrant (each an “EGA Warrant”) to purchase one whole share of class A common stock, par value $0.0001 per share, of EGA (“EGA Class A Common Stock” and, together with the EGA Class B Common Stock, the “EGA Common Stock”), prior to the effectiveness of the A&R PubCo Charter, each EGA Warrant that is issued and outstanding immediately prior to the Closing will become a warrant to purchase PubCo Class A Common Stock (which will be in the identical form of the EGA Warrant, but in the name of PubCo) exercisable for PubCo Class A Common Stock in accordance with its terms (each a “PubCo Warrant”), and EGA and LGM will enter into Warrant Agreements (as defined in the A&R Operating Agreement).

The Equity Purchase Agreement provides that the obligation of the parties thereto to consummate the Business Combination is conditioned on, among other things (i) the approval of the Proposals, excluding the Adjournment Proposal (as defined below), by the EGA stockholders in accordance with EGA’s organizational documents (the “Required EGA Stockholder Approval”), (ii) that EGA has at least $5,000,001 in tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), immediately prior to closing and (iii) that EGA will remain listed on the New York Stock Exchange (the “NYSE”) and has not received any written notice from the NYSE that it has failed or would reasonably be expected to fail to meet NYSE listing requirements as of the date upon which the Closing occurs.

At the Closing, PubCo, LGM, the Existing Equityholders and Segrave (in the capacity of “TRA Holder Representative”) will enter into the Tax Receivable Agreement (the “Tax Receivable Agreement”), a form of which is attached to the accompanying proxy statement as Annex G. Please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — Tax Receivable Agreement,” for a discussion of the Tax Receivable Agreement and the section entitled “Risk Factors — Risks Relating to Tax” for certain specified risks related to the Tax Receivable Agreement.

Assuming that none of our current stockholders exercise their right to redeem their EGA Class A Common Stock and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 75.7% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 5.3% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.1% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 11.9% of the total voting power of PubCo. Assuming that none of our current stockholders exercise their right to redeem their EGA Class A Common Stock and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 75.2% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 5.5% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.2% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.1% of the total voting power of PubCo. Assuming our current stockholders elect to have 25% of their EGA Class A Common Stock redeemed and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 76.7% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 4.1% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.2% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.0% of the total voting power of PubCo. Assuming our current stockholders elect to have 25% of their EGA Class A Common Stock redeemed and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 76.3% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of


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PubCo Common Stock representing 4.1% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.3% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.3% of the total voting power of PubCo. Assuming that our current stockholders elect to have the maximum shares of EGA Class A Common Stock redeemed and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 77.5% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 3.0% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.3% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.2% of the total voting power of PubCo. Assuming our current stockholders elect to have the maximum shares of EGA Class A Common Stock redeemed and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 77.2% of the total voting power of PubCo, our current Public Stockholders (as defined below) will hold shares of PubCo Common Stock representing 3.0% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.4% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.4% of the total voting power of PubCo. The percentages above assume that none of the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the Sponsor) are exercised.

 

2.

Proposal No. 2: A proposal (the “NYSE Proposal”) to approve, assuming the Transaction Proposal is approved and adopted, for purposes of complying with applicable NYSE listing rules, the issuance by PubCo, as successor to EGA, of PubCo Common Stock in the Business Combination in an amount equal to 20% or more of the amount of EGA’s issued and outstanding common stock immediately prior to the issuance.

 

3.

Proposal No. 3: A proposal (the “Charter Proposal”) to approve and adopt, assuming the Transaction Proposal and the NYSE Proposal are approved and adopted, the A&R PubCo Charter, which, if approved, would take effect upon the Closing, a copy of which is attached to the accompanying proxy statement as Annex B. In addition to the approval of the A&R PubCo Charter, the stockholders are also separately being presented the following Governance Proposals (the “Governance Proposals” and together with the Charter Proposal, the “Charter and Governance Proposals”):

 

   

Proposal No. 3(a):    A proposal to increase the total number of authorized shares and classes of stock of PubCo to 325,000,000 shares consisting of (i) 25,000,000 shares of preferred stock, par value $0.0001 per share, (ii) 200,000,000 shares of PubCo Class A Common Stock, par value $0.0001 per share, and (iii) 100,000,000 shares of PubCo Class B Common Stock, par value $0.0001 per share.

 

   

Proposal No. 3(b):    A proposal to provide for certain additional changes, including among other things, (i) changing the post-Business Combination corporate name from “EG Acquisition Corp.” to “flyExclusive, Inc.,” (ii) making PubCo’s corporate existence perpetual, and (iii) removing certain provisions related to our status as a blank check company that will no longer apply upon the consummation of the Business Combination.

 

   

Proposal No. 3(c):    A proposal to provide that the number of authorized shares of any class or classes of stock may be increased or decreased by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock entitled to vote thereon, voting together as a single class.

 

   

Proposal No. 3(d):    A proposal to provide that the number of directors of PubCo will be fixed from time to time by the vote of the majority of the PubCo Board of Directors (the “PubCo Board”), which number shall initially be seven.

 

   

Proposal No. 3(e):    A proposal to provide that the PubCo Bylaws may only be amended by the affirmative vote of the holders of at least the majority of the voting power of all the then-outstanding shares of voting stock of PubCo with the power to vote generally in an election of PubCo directors, voting together as a single class.


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Proposal No. 3(f):    A proposal that each share of PubCo Class A Common Stock and each share of PubCo Class B Common Stock will entitle the holder thereof to one vote on all matters on which stockholders are generally entitled to vote.

 

4.

Proposal No. 4: A proposal (the Director Election Proposal”) for holders of EGA Class B Common Stock to elect, assuming the Transaction Proposal, the NYSE Proposal and the Charter Proposal are approved and adopted, seven directors of the PubCo Board to serve until the 2024 annual meeting of stockholders or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal.

 

5.

Proposal No. 5: A proposal (the PubCo Equity Incentive Plan Proposal”) to approve and adopt, assuming the Transaction Proposal, the NYSE Proposal, and the Charter Proposal are approved and adopted, the PubCo 2023 Incentive Award Plan (the “2023 Plan”), a copy of which is attached to the accompanying proxy statement as Annex D.

 

6.

Proposal No. 6: A proposal (the “PubCo ESPP Proposal”) to approve and adopt, assuming the Transaction Proposal, the NYSE Proposal, the Charter Proposal and the PubCo Equity Incentive Plan Proposal are approved and adopted, the PubCo 2023 Employee Stock Purchase Plan (the “ESPP”), a copy of which is attached to the accompanying proxy statement as Annex F.

 

7.

Proposal No. 7: A proposal (the “Adjournment Proposal”) to approve the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the condition precedent proposals.

The above matters are more fully described in the accompanying proxy statement, which also includes, as Annex A and Annex A-1, a copy of the Equity Purchase Agreement. We urge you to read carefully the accompanying proxy statement in its entirety, including the annexes and accompanying financial statements.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

EGA Class A Common Stock and EGA Warrants held by the public (the “EGA Public Warrants”) are currently listed on the NYSE under the symbols “EGGF” and “EGGFW,” respectively. Certain shares of EGA Class A Common Stock and EGA Public Warrants currently trade as units consisting of one share of EGA Class A Common Stock and one-third of one redeemable warrant, and are listed on the NYSE under the symbol “EGGFU” (“EGA Units”). The EGA Units will automatically separate into their component securities upon consummation of the Business Combination and, as a result, will no longer trade as an independent security. Upon consummation of the transactions contemplated by the Equity Purchase Agreement, we will change our name to “flyExclusive, Inc.” We intend to apply to continue the listing of EGA Class A Common Stock as PubCo Class A Common Stock and EGA Public Warrants as PubCo public warrants on the NYSE under the symbols “FLYX” and “FLYXW,” respectively, upon the Closing.

Only holders of record of shares of EGA Common Stock at the close of business on November 13, 2023 (the “Record Date”) are entitled to notice of and to vote and have their votes counted at the Special Meeting and any adjournments or postponements of the Special Meeting. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for 10 days before the Special Meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting and electronically during the Special Meeting at https://www.cstproxy.com/egacquisition/sm2023.


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Pursuant to the Existing Certificate of Incorporation, if a stockholder vote is required for the Business Combination to be consummated, EGA must offer to redeem for cash (the “Redemption Rights”) all or a portion of the shares of EGA Class A Common Stock, other than the Converted Shares (as defined in the accompanying proxy statement), held by a holder of EGA Class A Common Stock (a “Public Stockholder”). You will be entitled to receive cash for any shares of EGA Class A Common Stock to be redeemed only if you:

(i) (a) hold shares of EGA Class A Common Stock, or (b) hold EGA Units and you elect to separate your EGA Units into the underlying shares of EGA Class A Common Stock and EGA Public Warrants prior to exercising your Redemption Rights with respect to the shares of EGA Class A Common Stock; and

(ii) prior to 5:00 p.m., New York time, on December 5, 2023 (two business days prior to the vote at the Special Meeting), (a) submit a written request to Continental Stock Transfer & Trust Company, our transfer agent (the “Transfer Agent”), that we redeem your shares of EGA Class A Common Stock for cash, and (b) deliver your shares of EGA Class A Common Stock to the Transfer Agent, physically or electronically through the Depository Trust Company (“DTC”).

Holders of EGA Units must elect to separate the underlying shares of EGA Class A Common Stock and EGA Public Warrants prior to exercising Redemption Rights with respect to the shares of EGA Class A Common Stock. If holders hold their EGA Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the EGA Units into the underlying shares of EGA Class A Common Stock and EGA Public Warrants, or if a holder holds EGA Units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so. Public Stockholders may elect to redeem all or a portion of their shares of EGA Class A Common Stock even if they vote for the Transaction Proposal. If the Business Combination is not consummated, the EGA Class A Common Stock will not be redeemed. If the Business Combination is consummated and a Public Stockholder properly exercises its right to redeem its shares of EGA Class A Common Stock and timely delivers its shares to the Transfer Agent, we will redeem each share of EGA Class A Common Stock for a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust fund established for the benefit of the EGA Stockholders (the “Trust Fund”) in a Trust Account (the “Trust Account”), calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account (net of taxes payable), divided by the number of then-outstanding shares of EGA Class A Common Stock held by the Public Stockholders. For illustrative purposes, as of October 31, 2023, this would have amounted to approximately $10.59 per share of EGA Class A Common Stock. If a Public Stockholder exercises its Redemption Rights, then it will be exchanging its redeemed shares of EGA Class A Common Stock for cash and will no longer own such shares. Any request to redeem shares of EGA Class A Common Stock, once made, may be withdrawn at any time until the date of the Special Meeting, and thereafter, with our consent, until the Closing. Furthermore, if a holder of shares of EGA Class A Common Stock delivers its certificate in connection with an election of its redemption and subsequently decides prior to the date of the Special Meeting not to elect to exercise such rights, it may simply request that EGA instruct our Transfer Agent to return the certificate (physically or electronically). The holder can make such request by contacting the Transfer Agent, at the address or email address listed in the accompanying proxy statement. We will be required to honor such request only if made prior to the date of the Special Meeting. See the section entitled “Special Meeting of the EGA Stockholders — Redemption Rights” in the accompanying proxy statement for a detailed description of the procedures to be followed if you wish to redeem your shares of EGA Class A Common Stock for cash.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its shares of EGA Class A Common Stock with respect to more than an aggregate of 15% of the shares of EGA Class A Common Stock outstanding, without our prior consent. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the shares of EGA Class A Common Stock outstanding, then any such shares in excess of that 15% limit would not be redeemed for cash, without our prior consent.

Each redemption of shares of EGA Class A Common Stock by Public Stockholders will decrease the amount in the Trust Account, which held total assets of approximately $45.5 million as of October 31, 2023,


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which EGA intends to use for the purposes of consummating the Business Combination within the time period described in the accompanying proxy statement and to pay deferred underwriting commissions to the underwriters of EGA’s Initial Public Offering. EGA will not consummate the Business Combination if the redemption of shares of EGA Class A Common Stock would result in EGA’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act (or any successor rule)) of less than $5,000,001.

Under the Equity Purchase Agreement, the approval of each of the condition precedent proposals (i.e., the Transaction Proposal, the NYSE Proposal, the Charter Proposal, the Director Election Proposal, the PubCo Equity Incentive Plan Proposal and the PubCo ESPP Proposal) is a condition to the consummation of the Business Combination. The adoption of each condition precedent proposal is conditioned on the approval of all of the condition precedent proposals. The Adjournment Proposal is not conditioned on the approval of any other Proposal. If our stockholders do not approve each of the condition precedent proposals, the Business Combination may not be consummated.

Approval of the Transaction Proposal requires the affirmative vote of the holders of a majority of the shares of the EGA Common Stock that are voted at the Special Meeting. The NYSE Proposal, the PubCo Equity Incentive Plan Proposal, the PubCo ESPP Proposal and the Adjournment Proposal each require the affirmative vote of a majority in voting power of the outstanding shares of EGA Common Stock present in person (which would include presence at the virtual Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting as a single class. Approval of the Charter and Governance Proposals requires the affirmative vote of holders of a majority of the outstanding shares of EGA Common Stock, the affirmative vote of the holders of a majority of the outstanding shares of EGA Class A Common Stock, voting separately as a single class, and the affirmative vote of the holders of a majority of the outstanding shares of EGA Class B Common Stock, voting separately as a single class, entitled to vote thereon at the Special Meeting. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the outstanding shares of EGA Class B Common Stock cast by holders of EGA Class B Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the virtual Special Meeting and entitled to vote thereon. Holders of shares of EGA Class A Common Stock have no right to vote on the election, removal or replacement of any director. As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

Your attention is directed to the proxy statement accompanying this notice (including the annexes thereto) for a more complete description of the proposed Business Combination and related transactions and each of the Proposals. We urge you to read the accompanying proxy statement carefully. If you have any questions or need assistance voting your shares of EGA Common Stock, please contact Morrow Sodali, our proxy solicitor, by calling toll-free (800) 662-5200, or banks and brokers may call at (203) 658-9400, or by emailing EGGF.info@investor.morrowsodali.com. This notice of Special Meeting and the proxy statement are available at https://www.cstproxy.com/egacquisition/sm2023.

 

  By Order of the Board of Directors,
 

/s/ Gary Fegel

  Gary Fegel
November 13, 2023   Chairman

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be Held on December 7, 2023. This notice of Special Meeting and the related proxy statement will be available at https://www.cstproxy.com/egacquisition/sm2023.


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PROXY STATEMENT FOR THE SPECIAL MEETING OF STOCKHOLDERS OF EG ACQUISITION CORP.

TABLE OF CONTENTS

 

Use of Certain Terms

     1  

Cautionary Note Regarding Forward-Looking Statements

     5  

Summary Term Sheet

     6  

Questions and Answers About the Business  Combination and the Special Meeting

     12  

Questions and Answers About the Business Combination

     12  

Questions and Answers About the Special Meeting for EGA’s Stockholders

     20  

Summary of the Proxy Statement

     29  

The Parties to the Business Combination

     29  

Summary of the Equity Purchase Agreement

     30  

Related Agreements

     31  

Organizational Structure

     38  

Proposals to be put to the Special Meeting

     45  

Voting Power; Record Date

     48  

Quorum and Vote of Stockholders

     48  

Redemption Rights

     50  

Appraisal Rights

     51  

Proxy Solicitation

     51  

Interests of Certain Persons in the Business Combination

     51  

Recommendation of the Board

     55  

Conditions to the Closing of the Business Combination

     56  

Sources and Uses of Funds for the Business Combination

     56  

Certain U.S. Federal Income Tax Considerations

     57  

Board of Directors Following the Business Combination

     57  

Anticipated Accounting Treatment

     57  

Regulatory Matters

     58  

Risk Factors

     58  

Sources of Industry and Market Data

     58  

Emerging Growth Company, Smaller Reporting Company and Controlled Company

     58  

Summary of Risk Factors

     59  

Comparative Share Information

     61  

RISK FACTORS

     65  

Risks Relating to LGM

     65  

Risks Relating to Our Organization and Structure

     85  

Risks Relating to EGA

     87  

Risks Relating to the Business Combination

     95  

Risks Relating to Redemptions

     108  

Risks Relating to Tax

     110  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     115  

Description of the Business Combination

     115  

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     129  

Special Meeting of the EGA Stockholders

     140  

General

     140  

Date, Time and Place

     140  

Purpose of the Special Meeting

     140  

Record Date; Who is Entitled to Vote

     142  

Quorum

     142  

 

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Abstentions and Broker Non-Votes

     142  

Vote Required for Approval

     143  

Voting Your Shares

     144  

Revoking Your Proxy

     144  

Who Can Answer Your Questions About Voting Your Shares

     144  

Vote of EGA’s Sponsor, Directors and Officers

     144  

Redemption Rights

     145  

Appraisal Rights

     146  

Proxy Solicitation Costs

     146  

Potential Purchases of Public Shares and/or Warrants

     146  

Proposal No. 1 — The Transaction Proposal

     147  

Proposal No. 2 — The NYSE Proposal

     202  

Proposal No. 3 — The Charter Proposal

     203  

Proposal No. 4 — The Director Election Proposal

     204  

Proposal No. 5 — The PubCo Equity Incentive Plan Proposal

     205  

Proposal No. 6 — The PubCo ESPP Proposal

     214  

Proposal No. 7 — The Adjournment Proposal

     219  

Other Information About EGA

     221  

Management’s Discussion and Analysis of Financial Condition and Results of Operations of EGA

     229  

Other Information About LGM

     234  

Management’s Discussion and Analysis  of Financial Condition and Results of Operations of LGM

     243  

EGA Current Management and Board of Directors

     266  

PubCo Management After the Business Combination

     279  

Executive and Director Compensation of LGM

     282  

Compensation of Executive Officers and Directors after the Business Combination

     286  

Beneficial Ownership of Securities

     287  

Certain Relationships and Related Party Transactions

     291  

EGA’s Related Party Transactions

     291  

LGM’s Related Party Transactions

     295  

Related Person Transactions Policy Following the Business Combination

     296  

Description of EGA Securities

     297  

Description of PubCo Securities

     312  

Anticipated Accounting Treatment

     321  

Appraisal Rights

     321  

Householding Information

     321  

Transfer Agent and Registrar

     321  

Submission of Stockholder Proposals

     321  

Future Stockholder Proposals

     322  

Where You Can Find More Information

     322  

Annex A — Equity Purchase Agreement

     A-1  

Annex A-1 — First Amendment

     A-1-1  

Annex B — A&R PubCo Charter

     B-1  

Annex C — A&R Operating Agreement

     C-1  

Annex D — 2023 Plan

     D-1  

Annex E — PubCo Bylaws

     E-1  

Annex F — ESPP

     F-1  

Annex G — Tax Receivable Agreement

     G-1  

Annex H — Stockholders’ Agreement

     H-1  

Annex I — Opinion of Duff & Phelps

     I-1  

Financial Statements

     F-1  

EGA’s Financial statements As of and for the Years Ended December 31, 2022 and December 31, 2021

     F-3  

 

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USE OF CERTAIN TERMS

Unless otherwise stated in this proxy statement:

 

   

“2023 Plan” refers to the PubCo 2023 Incentive Award Plan.

 

   

“A&R Operating Agreement” refers to the Amended and Restated Limited Liability Company Operating Agreement of LGM.

 

   

“A&R PubCo Charter” refers to the amended and restated Existing Certificate of Incorporation.

 

   

“A&R Registration Rights Agreement” refers to the Amended and Restated Registration Rights Agreement by and between the Existing Holders and the New Holders.

 

   

“Adjournment Proposal” refers to the proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the condition precedent proposals.

 

   

“Board” refers to the board of directors of EGA.

 

   

“Bridge Note Lenders” refers to the lender parties to the Bridge Notes.

 

   

“Bridge Notes” refers to the senior subordinated convertible note, dated October 17, 2022, and Incremental Amendment, dated October 28, 2022, by and among LGM and the Bridge Note Lenders.

 

   

“BTIG” refers to BTIG, LLC, EGA’s financial advisor with respect to the Business Combination.

 

   

“Business Combination” refers to the transactions contemplated by the Equity Purchase Agreement.

 

   

“CARES Act” refers to the Coronavirus Aid, Relief, and Economic Security Act.

 

   

“Charter Proposal” refers to the proposal to approve and adopt the A&R PubCo Charter.

 

   

“Closing” refers to the closing of the Business Combination.

 

   

“Closing Date” refers to the date upon which the Closing occurs.

 

   

“Code” refers to the U.S. Internal Revenue Code of 1986, as amended.

 

   

“Condition precedent proposals” refers to the Transaction Proposal, the NYSE Proposal, the Charter Proposal, the Director Election Proposal, the PubCo Equity Incentive Plan Proposal and the PubCo ESPP Proposal.

 

   

“Contribution Amount” refers to the consideration EGA will contribute to LGM for the transactions set forth in the Equity Purchase Agreement, which consists of the amount held in the Trust Fund, less the amount of cash required to fund the EGA Stock Redemption, plus the aggregate proceeds received from any potential PIPE investment, plus the aggregate proceeds received by LGM on or about October 17, 2022 and October 28, 2022 from the funding of the Bridge Notes (which will be deemed to have been contributed by EGA to LGM), less the deferred underwriting commission payable to BTIG.

 

   

“Converted Shares” refers to the 5,624,000 shares of EGA Class A Common Stock issued in connection with the Conversion.

 

   

“Conversion” refers to Sponsor’s conversion of 5,624,000 of the 5,625,000 Founder Shares into shares of EGA Class A Common Stock, following the approval of the amendment to EGA’s organizational documents.

 

   

“Demand Registration” refers to a written demand for registration under the Securities Act of all or part of the shares of PubCo Class A Common Stock pursuant to the A&R Registration Rights Agreement.

 

   

“DGCL” refers to the General Corporation Law of Delaware, as amended.

 

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“Director Election Proposal” refers to the proposal for holders of EGA Class B Common Stock to elect seven directors of the PubCo Board until the 2024 annual meeting of stockholders or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal.

 

   

“DTC” refers to Depository Trust Company.

 

   

“Early Termination Event” refers to certain events that will cause PubCo’s obligations under the Tax Receivable Agreement to accelerate.

 

   

“EGA” refers to EG Acquisition Corp., a Delaware corporation.

 

   

“EGA Class A Common Stock” refers to the outstanding shares of class A common stock, par value $0.0001 per share, of EGA.

 

   

“EGA Class B Common Stock” refers to the outstanding shares of class B common stock, par value $0.0001 per share, of EGA.

 

   

“EGA Common Stock” refers collectively to EGA Class A Common Stock and EGA Class B Common Stock.

 

   

“EGA Public Warrants” refers to EGA Warrants held by the public.

 

   

“EGA Stock Redemption” refers to the redemption of EGA Class A Common Stock held by eligible stockholders who elect to have their shares redeemed in connection with the closing of the Business Combination.

 

   

“EGA Units” refers to certain shares of EGA Class A Common Stock and EGA Public Warrants that currently trade as units consisting of one share of EGA Class A Common Stock and one-third of one redeemable warrant.

 

   

“EGA Warrant” refers to a warrant to purchase one whole share of EGA Class A Common Stock.

 

   

“Equity Purchase Agreement” refers to the equity purchase agreement, by and among EGA, LGM, the Existing Equityholders, Sponsor, and the Existing Equityholder Representative, as amended on April 21, 2023 and as it may be further amended and/or restated from time to time.

 

   

“ESPP” refers to the PubCo 2023 Employee Stock Purchase Plan.

 

   

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended.

 

   

“Existing Bylaws” refers to the bylaws of EGA.

 

   

“Existing Certificate of Incorporation” refers to the Amended and Restated Certificate of Incorporation of EGA, as amended on May 25, 2023.

 

   

“Existing Equityholder Representative” refers to Thomas James Segrave, Jr.

 

   

“Existing Equityholders” refers to the existing equityholders of LGM.

 

   

“Existing Holders” refers to PubCo and Sponsor.

 

   

“Existing LGM Common Unit” refers to those LGM Common Units existing before the issuance of the LGM Common Units to EGA under the A&R Operating Agreement.

 

   

“Extension Proxy Statement” refers to the proxy statement pursuant to which EGA sought approval from its stockholders, to amend the EGA organizational documents and the Trust Agreement to extend the time period to consummate EGA’s initial business combination from May 28, 2023 to a date that is no later than December 28, 2023.

 

   

“flyExclusive” refers to Exclusive Jets, LLC d/b/a flyExclusive.

 

   

“flyExclusive, Inc.” refers to PubCo, as successor to EGA following the Closing.

 

   

“Founder Shares” refer to the shares of EGA Class B Common Stock held by Sponsor.

 

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“Governance Proposals” refers to the Proposals to approve certain corporate governance provisions.

 

   

“IPO” refers to EGA’s initial public offering, which was consummated on May 28, 2021.

 

   

“JOBS Act” refers to the Jumpstart Our Business Startups Act of 2012, as amended.

 

   

“Letter Agreement” refers to the letter agreement by and among Sponsor and other officers and directors of EGA, entered into at the time of EGA’s IPO.

 

   

“LGM” refers to LGM Enterprises, LLC, a North Carolina limited liability company.

 

   

“LGM Common Units” refers to the units of ownership interest in LGM which entitle the holder thereof to the distributions, allocations, and other rights set forth in the A&R Operating Agreement.

 

   

“Lock-up Shares” refers to the shares of PubCo Common Stock owned by the Existing Equityholders that are subject to a one-year lock-up period pursuant to the Stockholders’ Agreement.

 

   

“New Holders” refers to the parties listed under “New Holders” on the signature page to the Amended and Restated Registration Rights Agreement.

 

   

“NYSE” refers to the New York Stock Exchange.

 

   

“NYSE Proposal” refers to the proposal to approve, for purposes of complying with applicable NYSE listing rules, the issuance by PubCo, as successor to EGA, of PubCo Common Stock in the Business Combination.

 

   

“PIPE Investment” refers to a contemplated equity issuance in connection with the Business Combination.

 

   

“Private Placement Warrants” refers to each warrant to purchase one whole share of EGA Class A Common Stock originally sold in a private placement to our Sponsor simultaneously with the closing of the IPO.

 

   

“Proposals” refers to the proposals on which holders of EGA Common Stock will be asked to vote at the Special Meeting.

 

   

“PubCo” refers to flyExclusive, Inc., as successor to EGA following the Closing.

 

   

“PubCo Board” refers to the board of directors of PubCo.

 

   

“PubCo Bylaws” refers to the bylaws of PubCo, attached hereto as Annex E.

 

   

“PubCo Class A Common Stock” refers to the shares of class A common stock, par value $0.0001 per share of PubCo.

 

   

“PubCo Class B Common Stock” refers to the shares of class B common stock, par value $0.0001 per share of PubCo.

 

   

“PubCo Common Stock” refers collectively to PubCo Class A Common Stock and PubCo Class B Common Stock.

 

   

“PubCo Equity Incentive Plan Proposal” refers to the proposal to approve and adopt, the 2023 Plan.

 

   

“PubCo ESPP Proposal” refers to the proposal to approve and adopt the ESPP.

 

   

“PubCo Warrant” refers to a warrant to purchase one whole share of PubCo Class A Common Stock.

 

   

“Public Stockholder” refers to a holder of EGA Class A Common Stock, other than the Converted Shares.

 

   

“Record Date” refers to the close of business on November 13, 2023.

 

   

“Redemption Rights” refers to the offer by EGA to redeem for cash all or a portion of the EGA Class A Common Stock held by a holder of EGA Class A Common Stock.

 

   

“Required EGA Stockholder Approval” means the approval of the Proposals, excluding the Adjournment Proposal, by the EGA stockholders in accordance with EGA’s organizational documents.

 

   

“SEC” refers to the Securities and Exchange Commission.

 

   

“Securities Act” refers to the Securities Act of 1933.

 

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“Segrave” refers to Thomas James Segrave, Jr., or Equityholder Representative, or TRA Holder Representative.

 

   

“Sky Night” refers to Sky Night, LLC, an entity LGM acquired via merger in 2020, which LGM plans to spin-out prior to the Closing.

 

   

“SOX” refers to the Sarbanes-Oxley Act of 2002, as amended.

 

   

“Special Meeting” refers to the Special Meeting of the stockholders of EGA, which will be held via live webcast at 10:00 a.m., New York time, on December 7, 2023.

 

   

“Sponsor” refers to EG Sponsor LLC, a Delaware limited liability company.

 

   

“Stockholders’ Agreement” refers to the stockholders’ agreement by and among the Existing Equityholders, Sponsor and PubCo.

 

   

“Subsidiary” refers to any Subsidiary as defined in the Tax Receivable Agreement.

 

   

“Tax Act” refers to the Tax Cuts and Jobs Act, enacted in December 2017.

 

   

“Tax Attributes” refers to certain tax attributes related to the Business Combination.

 

   

“Tax Group” refers to PubCo and applicable consolidated, unitary, or combined Subsidiaries (as defined in the Tax Receivable Agreement) thereof, if any.

 

   

“Tax Receivable Agreement” refers to that certain Tax Receivable Agreement to be entered into at the Closing.

 

   

“TRA Holder Representative” refers to Segrave.

 

   

“Transaction Expenses” refers to the amount of unpaid fees, commissions, costs and expenses that have been incurred by LGM or EGA in connection with the Business Combination.

 

   

“Transaction Proposal” refers to the proposal approve and adopt the Equity Purchase Agreement.

 

   

“Transfer Agent” refers to Continental Stock Transfer & Trust Company.

 

   

“Trust Account” refers to the account in which the Trust Fund is held.

 

   

“Trust Agreement” refers to the Investment Management Trust Agreement, dated May 25, 2021, by and between EGA and Continental Stock Transfer & Trust Company, as trustee.

 

   

“Trust Fund” refers to the trust fund established for the benefit of EGA stockholders.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this document, including but not limited to: (i) the risk that the Business Combination not be completed in a timely manner or at all, which may adversely affect the price of EGA’s securities, (ii) the risk that the Business Combination not be completed by EGA’s business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by EGA, (iii) the failure to satisfy the conditions to the consummation of the Business Combination, including the approval by the stockholders of EGA and the receipt of any required governmental and regulatory approvals, (iv) the lack of a third-party valuation in determining whether or not to pursue the Business Combination, (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the Equity Purchase Agreement, (vi) the effect of the announcement or pendency of the Business Combination on LGM’s business relationships, operating results and business generally, (vii) risks that the proposed Business Combination disrupts current plans and operations of LGM and potential difficulties in LGM employee retention as a result of the Business Combination, (viii) the outcome of any legal proceedings that may be instituted against LGM or against EGA related to the Equity Purchase Agreement or the Business Combination, (ix) the ability to maintain the listing of the EGA’s securities on a national securities exchange, (x) that the price of EGA’s securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated industries in which EGA plans to operate or LGM operates, variations in operating performance across competitors, changes in laws and regulations affecting EGA’s or LGM’s business and changes in the combined capital structure of the two companies after the Business Combination, (xi) the ability to implement business plans, forecasts, and other expectations after the completion of the proposed Business Combination, and identify and realize additional opportunities, (xii) the risk of downturns in the aviation industry, including due to increases in fuel costs including in light of the war in Ukraine and other global political and economic issues, (xiii) a changing regulatory landscape in the highly competitive aviation industry, and (xiv) risks associated with the overall economy, including recent and expected future increases in interest rates and the potential for recession. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of EGA’s registration statement on Form S-1, this proxy statement and other documents filed by EGA from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and LGM and EGA assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. LGM nor EGA gives any assurance that either LGM or EGA or the combined company will achieve its expectations.

EGA cautions that the foregoing list of factors is not exclusive. EGA cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of EGA’s Annual Report on Form 10-K filed with the SEC. EGA’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, EGA disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

 

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SUMMARY TERM SHEET

This Summary Term Sheet, together with the sections entitled “Questions and Answers About the Business Combination and the Special Meeting” and “Summary of the Proxy Statement,” summarize certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached annexes, for a more complete understanding of the matters to be considered at the Special Meeting.

EGA is a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities. For more information regarding EGA, see the section entitled “Other Information About EGA.

 

 

As of the date of this proxy statement, there are 9,856,829 shares of EGA Common Stock issued and outstanding, consisting of (i) 9,855,829 shares of EGA Class A Common Stock, including 4,231,829 shares of EGA Class A Common Stock held by the Public Stockholders and 5,624,000 Converted Shares held by Sponsor, and (ii) 1,000 shares of EGA Class B Common Stock, which does not include the Bridge Notes that will convert into shares of PubCo Class A Common Stock. In addition, there are currently 11,833,333 EGA Warrants outstanding, consisting of (i) 7,500,000 EGA Public Warrants originally sold as part of the EGA Units in the IPO and (ii) 4,333,333 private placement warrants, each to purchase one whole share of EGA Class A Common Stock, originally sold in a private placement to our Sponsor simultaneously with the closing of the IPO (the “Private Placement Warrants”). Each whole warrant entitles the holder to purchase one whole share of EGA Class A Common Stock for $11.50 per share. The warrants will become exercisable 30 days following the Closing, subject to certain lock-up restrictions. The EGA Warrants will expire five years after the completion of EGA’s initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. Once the EGA Warrants become exercisable, EGA may call the EGA Warrants for redemption, if, and only if, the reported last sale price of the EGA Class A Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before EGA sends the notice of redemption to the EGA Warrant holders.

 

 

LGM is a premier owner/operator of private jet aircraft to provide jet passengers experiences dedicated to surpassing expectations for quality, convenience and safety. LGM is currently the fifth largest private jet operator in North America, based on 2022 flight hours. LGM has a fleet of over 90 owned and leased aircraft. LGM is headquartered in Kinston, North Carolina with services provided across North America, the Caribbean, Central America, South America, and Europe. See “Other Information About LGM.

 

 

On October 17, 2022, EGA, LGM, the Existing Equityholders, Sponsor and the Existing Equityholder Representative, entered into the Equity Purchase Agreement, the terms of which are described in this proxy statement, and a copy of which is attached hereto as Annex A and Annex A-1. The Equity Purchase Agreement, among other things, provides that:

 

   

EGA will amend and restate our Existing Certificate of Incorporation with the A&R PubCo Charter to, among other things, (i) change the name of EGA to “flyExclusive, Inc.,” (ii) convert all then-outstanding Founder Shares into PubCo Class A Common Stock and (iii) authorize the issuance of PubCo Class B Common Stock;

 

   

the Existing Equityholders, PubCo and LGM will enter into the A&R Operating Agreement which, among other things, will (i) restructure the capitalization of LGM to (a) authorize the issuance of the LGM Common Units to PubCo and (b) reclassify the Existing LGM Common Units held by the Existing Equityholders into LGM Common Units and (ii) appoint PubCo as the managing member of LGM;

 

   

EGA will replace the Existing Bylaws, by adopting the PubCo Bylaws; and

 

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without any action on the part of any holder of an EGA Warrant, each EGA Warrant that is issued and outstanding immediately prior to the Closing will become a PubCo Warrant, exercisable for PubCo Class A Common Stock in accordance with its terms.

 

 

In connection with the Closing, the following documents and agreements will become effective:

 

   

A&R PubCo Charter and PubCo Bylaws. EGA will (i) subject to receipt of stockholder approval, amend and restate the Existing Certificate of Incorporation by adopting the A&R PubCo Charter and (ii) replace the Existing Bylaws with the PubCo Bylaws. The Existing Certificate of Incorporation will be amended to (i) change the name of EGA to “flyExclusive, Inc.,” (ii) convert all Founder Shares into shares of PubCo Class A Common Stock and (iii) authorize the issuance of PubCo Class B Common Stock. For more information about the A&R PubCo Charter and PubCo Bylaws see the sections entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — A&R PubCo Charter.”

 

   

A&R Operating Agreement of LGM. At the Closing, LGM, PubCo (as the managing member of LGM) and the Existing Equityholders, will enter into the A&R Operating Agreement, a copy of which is attached hereto as Annex C. The A&R Operating Agreement will, among other things, (i) restructure the capitalization of LGM to (a) authorize the issuance of LGM Common Units to PubCo and (b) reclassify the Existing LGM Common Units into LGM Common Units and (ii) appoint PubCo as the managing member of LGM. For more information about the A&R Operating Agreement, see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — A&R Operating Agreement of LGM.”

 

   

Stockholders’ Agreement. The Existing Equityholders, our Sponsor and PubCo will enter into a Stockholders’ Agreement pursuant to which, among other things, the Existing Equityholders and our Sponsor will respectively agree to vote each of their respective securities of PubCo that may be voted in the election of PubCo’s directors in accordance with the provisions of the Stockholders’ Agreement. At the Closing, the PubCo Board is expected to initially consist of seven directors. The equityholders of PubCo will have the right to nominate directors as follows: the Sponsor, and its permitted transferees, by a majority of shares held by them, shall have the right to nominate, and the PubCo Board and the Existing Equityholders, and their permitted transferees, will appoint and vote for, two members of the PubCo Board, initially designated pursuant to the Stockholders’ Agreement as Gregg S. Hymowitz and Gary Fegel, and thereafter as designated by the Sponsor, and its permitted transferees, by a majority of shares held by them.

 

   

Tax Receivable Agreement. At the Closing, PubCo, LGM, the Existing Equityholders and the TRA Holder Representative will enter into the Tax Receivable Agreement, a form of which is attached hereto as Annex G. Pursuant to the Tax Receivable Agreement, PubCo will generally be required to pay the Existing Equityholders 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that PubCo (and applicable consolidated, unitary, or combined Subsidiaries (as defined in the Tac Receivable Agreement) thereof, if any and collectively the “Tax Group”) realizes, or is deemed to realize, as a result of certain tax attributes, including:

 

   

tax basis adjustments resulting from the repurchase by LGM of LGM Common Units (including any such adjustments resulting from certain payments made by PubCo under the Tax Receivable Agreement) in accordance with the terms of the Equity Purchase Agreement;

 

   

tax basis adjustments resulting from taxable exchanges of LGM Common Units (including any such adjustments resulting from certain payments made by PubCo under the Tax Receivable Agreement) acquired by PubCo from an Existing Equityholder pursuant to the terms of the A&R Operating Agreement; and

 

   

tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement (each of the foregoing, collectively, the “Tax Attributes”).

 

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Please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — Tax Receivable Agreement” for a discussion of the Tax Receivable Agreement and the section entitled “Risk Factors — Risks Relating to Tax” for certain specified risks related to the Tax Receivable Agreement.

 

   

Amended and Restated Registration Rights Agreement. PubCo, Sponsor (together, the “Existing Holders”) and the other parties listed under “New Holders” (the “New Holders”) on the signature page to the Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”) will enter into an A&R Registration Rights Agreement, pursuant to which PubCo will grant the Existing Holders and New Holders certain registration rights with respect to the registrable securities of PubCo. Among other things, the holders of the Founder Shares, Converted Shares, Private Placement Warrants and EGA Warrants that may be issued upon conversion of working capital loans (and any shares of PubCo Class A Common Stock issuable upon the exercise of the Private Placement Warrants and EGA Warrants that may be issued upon conversion of working capital loans and upon conversion of the Founder Shares), PubCo Class A Common Stock issued upon the redemption of any LGM Common Units, and PubCo Class A Common stock issued upon conversion of the Bridge Notes (which, together, we expect to be approximately 79.3 million shares as of Closing, assuming no repurchases and maximum redemption of LGM Common Units) will be entitled to registration rights pursuant to A&R Registration Rights Agreement, requiring us to register such securities for resale. Pursuant to the A&R Registration Rights Agreement, the Existing Holders holding at least a majority in interest of the then-outstanding number of registrable securities held by the Existing Holders, or the New Holders holding at least a majority-in-interest of the then-outstanding number of registrable securities held by the New Holders will be entitled to, among other things, make a written demand for registration under the Securities Act of all or part of their shares of PubCo Class A Common Stock (each a “Demand Registration”). Under no circumstances shall PubCo be obligated to effect more than an aggregate of three registrations pursuant to a Demand Registration by the Existing Holders, or more than an aggregate of five registrations pursuant to a Demand Registration by the New Holders, with respect to any or all registrable securities held by such holders. In addition, the Existing Holders and the New Holders will be entitled to “piggy-back” registration rights to certain registration statements filed following the Business Combination. PubCo will bear all of the expenses incurred in connection with the filing of any such registration statements.

Unless waived by the parties to the Equity Purchase Agreement, and subject to applicable law, the consummation of the Business Combination is subject to a number of conditions set forth in the Equity Purchase Agreement including, among other things, (i) that EGA has received the Required EGA Stockholder Approval, (ii) that EGA has at least $5,000,001 in tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately prior to closing and (iii) that EGA will remain listed on the NYSE and has not received any written notice from the NYSE that it has failed or would reasonably be expected to fail to meet NYSE listing requirements as of the Closing Date. For more information about conditions to the consummation of the Business Combination, see the section entitled “Proposal No. 1 — The Transaction Proposal — The Equity Purchase Agreement — Conditions to the Closing of the Business Combination.”

The Equity Purchase Agreement may be terminated at any time prior to the Closing upon agreement of the parties thereto, or by EGA or LGM, acting alone, in specified circumstances. For more information about the termination rights under the Equity Purchase Agreement, see the section entitled “Proposal No. 1 — The Transaction Proposal — Termination.”

The proposed Business Combination involves numerous risks. For more information about these risks, please read the section entitled “Risk Factors.”

Pursuant to the Existing Certificate of Incorporation, a Public Stockholder may request that EGA redeem all or a portion of such Public Stockholder’s shares of EGA Class A Common Stock for cash if the Business Combination is consummated. If the Business Combination is consummated and a Public Stockholder

 

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properly exercises its right to redeem its shares of EGA Class A Common Stock and timely delivers its shares to the Transfer Agent, we will redeem each share of EGA Class A Common Stock for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account (net of taxes payable), divided by the number of then-outstanding shares of EGA Class A Common Stock held by the Public Stockholders. For illustrative purposes, as of October 31, 2023, this would have amounted to approximately $10.59 per share of EGA Class A Common Stock. If a Public Stockholder exercises its Redemption Rights, then it will be exchanging its redeemed shares of EGA Class A Common Stock for cash and will no longer own such shares. Any request to redeem shares of EGA Class A Common Stock, once made, may be withdrawn at any time until the date of the Special Meeting and thereafter, with our consent, until the Closing. See the section entitled “Special Meeting of the EGA Stockholders — Redemption Rights.”

It is anticipated that, upon completion of the Business Combination, assuming that none of our current stockholders exercise their right to redeem their EGA Class A Common Stock and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 75.7% of the total voting power of PubCo, our current Public Stockholders will hold shares of PubCo Common Stock representing 5.3% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.1% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 11.9% of the total voting power of PubCo. Assuming that none of our current stockholders exercise their right to redeem their EGA Class A Common Stock and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 75.2% of the total voting power of PubCo, our current Public Stockholders will hold shares of PubCo Common Stock representing 5.5% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.2% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.1% of the total voting power of PubCo. Assuming our current stockholders elect to have 25% of their EGA Class A Common Stock redeemed and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 76.7% of the total voting power of PubCo, our current Public Stockholders will hold shares of PubCo Common Stock representing 4.1% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.2% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.0% of the total voting power of PubCo. Assuming our current stockholders elect to have 25% of their EGA Class A Common Stock redeemed and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 76.3% of the total voting power of PubCo, our current Public Stockholders will hold shares of PubCo Common Stock representing 4.1% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.3% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.3% of the total voting power of PubCo. Assuming that our current stockholders elect to have the maximum shares of EGA Class A Common Stock redeemed and no LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 77.5% of the total voting power of PubCo, our current Public Stockholders will hold shares of PubCo Common Stock representing 3.0% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.3% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.2% of the total voting power of PubCo. Assuming our current stockholders elect to have the maximum shares of EGA Class A Common Stock redeemed and the maximum number of LGM Common Units are repurchased, as of Closing, the Existing Equityholders will hold shares of PubCo Common Stock representing 77.2% of the total voting power of PubCo, our current Public Stockholders will hold shares of PubCo Common Stock representing 3.0% of the total voting power of PubCo, Sponsor will hold shares of PubCo Common Stock representing 7.4% of the total voting power of PubCo and the Bridge Note Lenders will hold shares of PubCo Common Stock representing 12.4% of the total voting power of

 

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PubCo. The percentages above assume that none of the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the Sponsor) are exercised.

The Board considered various factors in determining whether to approve the Equity Purchase Agreement and the Business Combination. For more information about EGA’s decision-making process, see the section entitled “Proposal No. 1 — The Transaction Proposal — The Board’s Reasons for Approving the Business Combination.

In addition to voting on the Transaction Proposal at the Special Meeting, EGA’s stockholders will also be asked to vote on:

 

   

the NYSE Proposal to approve, assuming the Transaction Proposal is approved and adopted, for purposes of complying with applicable NYSE listing rules, the issuance by PubCo, as successor to EGA, of PubCo Common Stock in the Business Combination in an amount equal to 20% or more of the amount of EGA’s issued and outstanding common stock immediately prior to the issuance.

 

   

the Charter Proposal to approve and adopt, assuming the Transaction Proposal and the NYSE Proposal are approved and adopted, the A&R PubCo Charter, which if approved, would take effect upon the Closing. In addition to the approval of the A&R PubCo Charter, the stockholders are also separately being presented the following Governance Proposals:

 

   

A proposal to increase the total number of authorized shares and classes of stock of PubCo to 325,000,000 shares consisting of (i) 25,000,000 shares of preferred stock, par value $0.0001 per share, (ii) 200,000,000 shares of PubCo Class A Common Stock, par value $0.0001 per share, and (iii) 100,000,000 shares of PubCo Class B Common Stock, par value $0.0001 per share.

 

   

A proposal to provide for certain additional changes, including among other things, (i) changing the post-Business Combination corporate name from “EG Acquisition Corp.” to “flyExclusive, Inc.,” (ii) making PubCo’s corporate existence perpetual, and (iii) removing certain provisions related to our status as a blank check company that will no longer apply upon the consummation of the Business Combination.

 

   

A proposal to provide that the number of authorized shares of any class or classes of stock may be increased or decreased by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock entitled to vote thereon, voting together as a single class.

 

   

A proposal to provide that the number of directors of PubCo will be fixed from time to time by the vote of the majority of the PubCo Board, which number shall initially be seven.

 

   

A proposal to provide that the PubCo Bylaws may only be amended by the affirmative vote of the holders of at least the majority of the voting power of all the then-outstanding shares of voting stock of PubCo with the power to vote generally in an election of PubCo directors, voting together as a single class.

 

   

A proposal that each share of PubCo Class A Common Stock and each share of PubCo Class B Common Stock will entitle the holder thereof to one vote on all matters on which stockholders are generally entitled to vote.

 

   

the Director Election Proposal for holders of EGA Class B Common Stock to elect, assuming the Transaction Proposal, the NYSE Proposal, and the Charter Proposal are approved and adopted, seven directors of the PubCo Board to serve until the 2024 annual meeting of stockholders or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal.

 

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the PubCo Equity Incentive Plan Proposal to approve and adopt, assuming the Transaction Proposal, the NYSE Proposal, and the Charter Proposal are approved and adopted, the 2023 Plan, a copy of which is attached to this proxy statement as Annex D.

 

   

the PubCo ESPP Proposal to approve and adopt, assuming the Transaction Proposal, the NYSE Proposal, the Charter Proposal and the PubCo Equity Incentive Plan Proposal are approved and adopted, the ESPP, a copy of which is attached to this proxy statement as Annex F.

 

   

the Adjournment Proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the condition precedent proposals.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

For more information, see the sections entitled “Proposal No. 2 — The NYSE Proposal,” “Proposal No. 3 — The Charter and Governance Proposals,” “Proposal No. 4 — The Director Election Proposal,” “Proposal No. 5 — The PubCo Equity Incentive Plan Proposal,” “Proposal No. 6 — The PubCo ESPP Proposal,” and “Proposal No. 7 — The Adjournment Proposal.”

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION AND THE SPECIAL MEETING

Questions and Answers About the Business Combination

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the Special Meeting, including the Business Combination. The following questions and answers do not include all the information that is important to our stockholders. We urge our stockholders to read carefully this entire proxy statement, including the annexes and other documents referred to herein.

 

Q:

Why are EGA and LGM proposing to enter into the Business Combination?

 

A:

EGA is a blank check company formed specifically as a vehicle to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. In the course of EGA’s search for a business combination partner, EGA investigated the potential acquisition of many entities in various industries, including LGM, and concluded that LGM was the best candidate for a business combination with EGA. For more details on EGA’s search for a business combination partner and the Board’s reasons for selecting LGM as EGA’s Business Combination partner, see the section entitled “Proposal No. 1 — The Transaction Proposal — The Board’s Reasons for Approving the Business Combination” included in this proxy statement.

 

Q:

What is the purpose of this document?

 

A:

EGA is proposing to consummate a business combination with LGM. EGA, LGM, the Existing Equityholders, Sponsor and the Existing Equityholder Representative, have entered into the Equity Purchase Agreement, the terms of which are described in this proxy statement. You are being asked to consider and vote on the Business Combination. The Equity Purchase Agreement, among other things, contemplates that at the closing of the Business Combination:

 

  (i)

EGA will amend and restate the Existing Certificate of Incorporation with the A&R PubCo Charter to, among other things, (a) change the name of EGA to “flyExclusive, Inc.,” (b) convert all then outstanding Founder Shares into PubCo Class A Common Stock and (c) authorize the issuance of PubCo Class B Common Stock;

 

  (ii)

the Existing Equityholders, PubCo and LGM will enter into the A&R Operating Agreement which, among other things, will (a) restructure the capitalization of LGM to (1) authorize the issuance of the LGM Common Units to PubCo and (2) reclassify the Existing LGM Common Units held by the Existing Equityholders into LGM Common Units and (b) appoint PubCo as the managing member of LGM;

 

  (iii)

EGA will replace the Existing Bylaws, by adopting the PubCo Bylaws; and

 

  (iv)

without any action on the part of any holder of an EGA Warrant, each EGA Warrant that is issued and outstanding immediately prior to the Closing will become a PubCo Warrant, exercisable for Class A Common Stock in accordance with its terms.

Approval of the Transaction Proposal will require the affirmative vote of a majority of the votes cast by holders of EGA Class A Common Stock and EGA Class B Common Stock present in person (which includes presence at the virtual Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting as a single class.

 

Q:

Are any of the proposals conditioned on one another?

 

A:

Yes, the approval and adoption by the EGA stockholders of the Business Combination, the NYSE Proposal, the Charter Proposal, the Director Election Proposal, the PubCo Equity Incentive Plan Proposal and the PubCo ESPP Proposal is necessary for the Business Combination to be consummated. It is important for

 

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  you to note that in the event that the Required EGA Stockholder Approval is not received, EGA will not consummate the Business Combination. In the absence of stockholder approval for a further extension, if EGA does not consummate the Business Combination and fails to complete an initial business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board), EGA will be required to dissolve and liquidate. The Existing Certificate of Incorporation (absent an amendment thereto) does not provide any means to extend the December 28, 2023 deadline for completing a business combination.

The Charter Proposal is conditioned on the approval of the Transaction Proposal and the NYSE Proposal. Therefore, if either of the Transaction Proposal or the NYSE Proposal is not approved, the Charter Proposal will have no effect, even if approved by our Public Stockholders.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

 

Q:

When is the Business Combination expected to occur?

 

A:

The Closing is expected to take place on (a) a date no later than the second business day following the satisfaction or waiver of the conditions described in the section titled “Proposal No. 1 — The Transaction Proposal — Conditions to the Closing of the Business Combination” (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver thereof) or (b) such other date as agreed to by EGA and LGM, in each case, subject to the satisfaction or waiver of the Closing conditions. The Equity Purchase Agreement may be terminated by EGA and/or LGM upon the occurrence of certain events. For a description of the conditions to the completion of the Business Combination, see the section titled “Proposal No. 1 — The Transaction Proposal — Conditions to the Closing of the Business Combination.”

 

Q:

How will PubCo be managed following the Business Combination and who will manage it?

 

A:

Following the Closing, we will be organized as an umbrella partnership-C corporation (“Up-C”) structure, in which substantially all of the operating assets of PubCo will be held by LGM, and our only assets will be equity interests in LGM.

The current management team of LGM, including Thomas James Segrave, Jr., who currently serves as Chairman of the LGM board of directors and Chief Executive Officer, will serve in the same roles at PubCo following the consummation of the Business Combination. For more information on PubCo’s anticipated management, see the section entitled “PubCo Management After the Business Combination” in this proxy statement.

 

Q:

What happens to the funds deposited in the Trust Account after consummation of the Business Combination?

 

A:

Upon completion of the IPO, a total of $225,000,000 was placed in the Trust Account maintained by Continental Stock Transfer & Trust Company, acting as trustee. As of October 31, 2023, there were investments and cash held in the Trust Account of approximately $45,522,104. These funds will not be released until the earlier of the completion of the Business Combination and the redemption of shares of EGA Class A Common Stock if we are unable to complete an initial business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board), unless extended, although we may withdraw the interest earned on the funds held in the Trust Account to pay taxes.

 

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Q:

What happens if a substantial number of the Public Stockholders vote in favor of the Transaction Proposal and exercise their Redemption Rights?

 

A:

EGA’s Public Stockholders may vote in favor of the Business Combination and exercise their Redemption Rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Stockholders are reduced as a result of redemptions by Public Stockholders.

If a public stockholder exercises its redemption rights, such exercise will not result in the loss of any warrants that it may hold. Even if 100% or 4,231,829 shares of EGA Class A Common Stock held by our Public Stockholders were redeemed, the 7,500,000 EGA Public Warrants will remain outstanding and would have had an aggregate value of $702,750 (based on the closing price of the warrants of $0.0937 on the NYSE as of November 1, 2023). If a substantial number of, but not all, Public Stockholders exercise their redemption rights, any non-redeeming stockholders would experience dilution to the extent such warrants are exercised and to the extent that additional EGA Class A Common Stock is issued.

In addition, with fewer shares of EGA Class A Common Stock and Public Stockholders, the trading market for Class A Common Stock may be less liquid than the market for shares of EGA Class A Common Stock was prior to consummation of the Business Combination and EGA may not be able to meet the listing standards for NYSE or another national securities exchange. In addition, with less funds available from the Trust Account, the working capital infusion from the Trust Account into PubCo’s business will be reduced.

 

Q:

What happens if the Business Combination is not consummated?

 

A:

If the Business Combination is not consummated, EGA may seek another suitable business combination. In the absence of stockholder approval for a further extension, if EGA does not consummate a business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board), unless extended), EGA will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the EGA Class A Common Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding EGA Class A Common Stock, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no Redemption Rights or liquidating distributions with respect to the EGA Warrants, which will expire worthless if we fail to complete our initial business combination within the 31-month time period (assuming exercise of all five extension periods, or such earlier time period after 24 months as determined by the Board). If the Business Combination is not consummated, LGM will continue operating as a private company. If EGA does not consummate the Business Combination and fails to complete an initial business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board), in the absence of stockholder approval for an extension, EGA will be required to dissolve and liquidate. The Existing Certificate of Incorporation (absent an amendment thereto) does not provide any means to extend the December 28, 2023 deadline for completing a business combination.

 

Q:

Do any of EGA’s directors or officers or the Sponsor have interests that may conflict with the interests of EGA’s stockholders with respect to the Business Combination?

 

A:

EGA’s directors and officers may have interests in the Business Combination that are different from your interests as a stockholder. On January 29, 2021, the Sponsor purchased an aggregate of 5,750,000 Founder

 

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  Shares, for an aggregate offering price of $25,000 at an average purchase price of approximately $0.004 per share. On May 25, 2021, the Sponsor surrendered an aggregate of 718,750 shares of EGA Class B Common Stock for no consideration, which were cancelled, resulting in an aggregate of 6,468,750 shares of EGA Class B Common Stock outstanding and held by the Sponsor. In July 2021, 843,750 of the Founder Shares were forfeited because the underwriters’ over-allotment was not exercised, resulting in a decrease in the total number of shares of EGA Class B Common Stock outstanding to 5,625,000, such that the total number of Founder Shares represents 20% of the total number of shares of EGA Common Stock outstanding upon completion of the IPO. On May 19, 2023, EGA’s stockholders approved a proposal to amend EGA’s organizational documents to extend the deadline by which EGA’s initial business combination must be completed up to five times, initially from May 28, 2023 to August 28, 2023, and thereafter for additional one month periods commencing on August 28, 2023 through and until December 28, 2023 (or such earlier date after May 28, 2023 as determined by our Board). Following the approval of the amendment to EGA’s organizational documents, Sponsor elected to convert 5,624,000 of the 5,625,000 Founder Shares into shares of EGA Class A Common Stock (the “Conversion”). The 5,624,000 shares of EGA Class A Common Stock issued in connection with the Conversion (the “Converted Shares”) are subject to the same restrictions as applied to the Founder Shares before the Conversion, including, among other things, certain transfer restrictions, waiver of redemption rights and the obligation to vote in favor of an initial business combination as described in the prospectus for the IPO. The Sponsor, with respect to itself, acknowledged that it has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as a result of any liquidation of EGA with respect to the Converted Shares held by it. In addition, Sponsor purchased an aggregate of 4,333,333 Private Placement Warrants at a price of $1.50 per warrant. This purchase took place on a private placement basis simultaneously with the completion of the IPO.

In the absence of stockholder approval for an extension, if EGA does not consummate the Business Combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board), EGA will be required to dissolve and liquidate and the securities held by our Sponsor, will be of no value because our Sponsor has agreed to waive its rights to any liquidation distributions. The Existing Certificate of Incorporation (absent an amendment thereto) does not provide any means to extend the December 28, 2023 deadline for completing a business combination.

Please also see the sections entitled “Proposal No. 1 — The Transaction Proposal — Interests of Certain Persons in the Business Combination; Risk Factors — Risks Relating to EGA — Directors of EGA have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination and approval of the other proposals described in this proxy statement.; and Risk Factors — Risks Relating to the Business Combination — Our Sponsor, directors and officers have potential conflicts of interest in recommending that EGA stockholders vote in favor of approval of the Business Combination and approval of the other Proposals described in this proxy statement.; and Risk Factors — Risks Relating to EGA.” For more information on the interests and relationships of Sponsor and current officers and directors of EGA.

 

Q:

What voting interests will EGA’s current stockholders, Sponsor, Bridge Note Lenders, and the Existing Equityholders hold in PubCo immediately after the consummation of the Business Combination?

 

A:

As of the date of this proxy statement, there were 9,856,829 shares of EGA Common Stock outstanding, comprised of 9,855,829 shares of EGA Class A Common Stock, including 4,231,829 shares of EGA Class A Common Stock held by Public Stockholders and 5,624,000 Converted Shares held by Sponsor, and 1,000 shares of EGA Class B Common Stock held by our Sponsor. In connection with the Closing, (i) each then-outstanding share of EGA Class B Common Stock will automatically convert into a share of PubCo Class A Common Stock on a one-for-one basis and (ii) the outstanding principal of the Bridge Notes, including accrued payable-in-kind (“PIK”) interest, will be automatically converted into shares of PubCo Class A Common Stock.

 

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The tables directly below present the anticipated ownership of shares outstanding and voting power in PubCo upon completion of the Business Combination assuming that none of the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the Sponsor) are exercised. As these warrants are the only potentially dilutive securities, the tables directly below present the anticipated ownership and voting power in PubCo upon the Closing of the Business Combination assuming no dilution. The tables also illustrate the impact of the maximum Closing Date Cash Repurchase Amount which, as described under the section entitled “Summary of the Proxy Statement — Summary of the Equity Purchase Agreement,” represents the maximum amount of shares that the Existing Equityholders may request to be repurchased at the Closing (which depends on the size of the Closing Date Cash Contribution Amount). The table below titled, “Assuming No Redemptions” assumes that there are no additional redemptions of EGA Class A Common Stock subject to possible redemption. The table below titled, “Assuming 25% Redemptions,” assumes that 25% of the outstanding shares of EGA Class A Common Stock held by the EGA Public Stockholders are redeemed. The table below titled, “Assuming Maximum Redemptions,” assumes the redemption of the maximum number of shares of EGA Class A Common Stock subject to possible redemption that can be redeemed while allowing the Business Combination to close. Refer to the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for additional information regarding the assumptions of no redemptions, interim redemptions and maximum redemptions.

 

    Assuming No Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Voting %     Number of Shares Owned     Voting %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       75.7     58,500       75.2

EGA Public Stockholders holding PubCo Class A Common Stock

    4,232       5.3     4,232       5.5

EGA Sponsor holding PubCo Class A Common Stock

    5,625       7.1     5,625       7.2

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       11.9     9,413       12.1
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    79,270       100.0     77,770       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

 

    Assuming 25% Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Voting %     Number of Shares Owned     Voting %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       76.7     58,500       76.3

EGA Public Stockholders holding PubCo Class A Common Stock

    3,174       4.1     3,174       4.1

EGA Sponsor holding PubCo Class A Common Stock

    5,625       7.2     5,625       7.3

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       12.0     9,413       12.3
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    78,212       100.0     76,712       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

 

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    Assuming Maximum Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Voting %     Number of Shares Owned     Voting %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       77.5     58,500       77.2

EGA Public Stockholders holding PubCo Class A Common Stock

    2,297       3.0     2,297       3.0

EGA Sponsor holding PubCo Class A Common Stock

    5,625       7.3     5,625       7.4

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       12.2     9,413       12.4
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    77,335       100.0     75,835       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

The tables directly below present the anticipated ownership of shares outstanding and voting power in PubCo upon the completion of the Business Combination assuming that all 11,833,333 warrants to purchase shares of EGA Class A Common Stock are exercised. As these warrants are the only potentially dilutive securities, the tables directly below present the anticipated ownership and voting power in PubCo upon the Closing of the Business Combination assuming full dilution. The table below titled, “Assuming No Redemptions” assumes that there are no additional redemptions of EGA Class A Common Stock subject to possible redemption. The table below titled, “Assuming 25% Redemptions,” assumes that 25% of the outstanding shares of EGA Class A Common Stock held by the EGA Public Stockholders are redeemed. The table below titled, “Assuming Maximum Redemptions,” assumes the redemption of the maximum number of shares of EGA Class A Common Stock subject to possible redemption that can be redeemed while allowing the Business Combination to close. Refer to the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for additional information regarding the assumptions of no redemptions, interim redemptions and maximum redemptions.

 

       
    Assuming No Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Ownership %     Number of Shares Owned     Ownership %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       65.9     58,500       65.3

EGA Public Stockholders holding PubCo Class A Common Stock

    11,732       12.9     11,732       13.1

EGA Sponsor holding PubCo Class A Common Stock

    9,958       10.9     9,958       11.1

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       10.3     9,413       10.5
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    91,103       100.0     89,603       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

 

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     Assuming 25% Redemptions  
     Assuming No Repurchases     Assuming Maximum Repurchases  
     Number of Shares Owned      Voting %     Number of Shares Owned      Voting %  

(Shares in thousands)

          

LGM Equity Holders holding PubCo Class B Common Stock

     60,000        66.5     58,500        66.1

EGA Public Stockholders holding PubCo Class A Common Stock

     10,674        11.9     10,674        12.1

EGA Sponsor holding PubCo Class A Common Stock

     9,958        11.1     9,958        11.2

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

     9,413        10.5     9,413        10.6
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

     90,045        100.0     88,545        100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

 

    Assuming Maximum Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Ownership %     Number of Shares Owned     Ownership %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       67.2     58,500       66.7

EGA Public Stockholders holding PubCo Class A Common Stock

    9,797       11.0     9,797       11.2

EGA Sponsor holding PubCo Class A Common Stock

    9,958       11.2     9,958       11.4

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       10.6     9,413       10.7
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    89,168       100.0     87,668       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

In addition to the changes in anticipated ownership of shares outstanding and voting power in PubCo upon the completion of the Business Combination, variations in the levels of redemptions will impact the dilutive effect of certain equity issuances related to the Business Combination, which would not otherwise be present in an underwritten public offering. Increasing levels of redemptions will increase the dilutive effect of these issuances on non-redeeming stockholders. The tables directly below illustrate the potential impact

 

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of redemptions on the per share value of PubCo Class A Common Stock owned by non-redeeming stockholders under a range of scenarios, as described below:

 

     Assuming No Repurchases  
     Assuming No
Redemptions(1)
     Assuming 25%
Redemptions(2)
     Assuming Maximum
Redemptions(3)
 
     (shares in thousands)  
     Shares      Value Per
Share (4)
     Shares      Value Per
Share (5)
     Shares      Value Per
Share (6)
 

Base scenario(7)

     79,270      $ 1.29        78,212      $ 1.16        77,335      $ 1.05  

Base scenario less shares held by EGA Sponsor and EGA Sponsor Affiliates

     64,232      $ 1.59        63,174      $ 1.44        62,297      $ 1.31  

Base scenario plus assumed exercise of all warrants(9)(10)

     91,103      $ 1.12        90,045      $ 1.01        89,168      $ 0.91  

 

     Assuming Maximum Repurchases  
     Assuming No
Redemptions(1)
     Assuming 25%
Redemptions(2)
     Assuming Maximum
Redemptions(3)
 
     (shares in thousands)  
     Shares      Value Per
Share (4)
     Shares      Value Per
Share (5)
     Shares      Value Per
Share (6)
 

Base scenario(8)

     77,770      $ 1.12        76,712      $ 0.98        75,835      $ 0.87  

Base scenario less shares held by EGA Sponsor and EGA Sponsor Affiliates

     62,732      $ 1.39        61,674      $ 1.22        60,797      $ 1.08  

Base scenario plus assumed exercise of all warrants(9)(10)

     89,603      $ 0.97        88,545      $ 0.85        87,668      $ 0.75  

 

(1)

Assumes that no additional shares of EGA Common Stock are redeemed.

(2)

Assumes that 1,057,957 shares of EGA Common Stock, or 25% of our remaining public shares outstanding, are redeemed.

(3)

Assumes that 1,935,209 shares of EGA Common Stock, or the maximum number of public shares outstanding that can be redeemed while allowing the minimum tangible net assets requirement to be met, are redeemed.

(4)

Based on a post-transaction equity value of PubCo of $102.4 million under the no repurchases scenario and $87.1 million under the maximum repurchases scenario, respectively.

(5)

Based on a post-transaction equity value of PubCo of $90.7 million under the no repurchases scenario and $75.3 million under the maximum repurchases scenario, respectively.

(6)

Based on a post-transaction equity value of PubCo of $81.3 million under the no repurchases scenario and $66.0 million under the maximum repurchases scenario, respectively.

(7)

The base scenario represents the post-Closing share ownership of PubCo assuming various levels of redemption by holders of EGA Common Stock and no repurchases of LGM Common Units held by Existing Equityholders. The base scenario (assuming no redemptions and no repurchases) includes 60,000,000 shares of PubCo Class B Common Stock to be held by the Existing Equityholders, 4,231,829 shares to be held by EGA Public Stockholders, 5,625,000 shares to be held by the EGA Sponsor, and 9,412,877 shares to be held by an affiliate of the EGA Sponsor in connection with the conversion of the Bridge Notes upon Closing.

(8)

The base scenario represents the post-Closing share ownership of PubCo assuming various levels of redemption by holders of EGA Common Stock and maximum repurchases of LGM Common Units held by Existing Equityholders. The base scenario (assuming no redemptions and maximum repurchases) includes 58,500,000 shares of PubCo Class B Common Stock to be held by the Existing Equityholders, 4,231,829 shares to be held by EGA Public Stockholders, 5,625,000 shares to be held by the EGA Sponsor, and 9,412,877 shares to be held by an affiliate of the EGA Sponsor in connection with the conversion of the Bridge Notes upon Closing.

(9)

Represents the base scenario plus the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the EGA Sponsor).

(10)

Does not account for any proceeds being paid to PubCo in connection with the payment of the exercise prices for any warrants.

 

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Q:

How is the payment of the deferred underwriting commissions going to affect the amount left in the trust account upon the completion of the Business Combination?

 

A:

Each redemption of shares of EGA Class A Common Stock by EGA Public Stockholders will decrease the amount in the Trust Account, which held total assets of approximately $45.1 million as of October 31, 2023, which EGA intends to use for the purposes of consummating the Business Combination within the time period described in this proxy statement and to pay deferred underwriting commissions to the underwriters of the IPO. The following table presents the deferred underwriting commission as a percentage of the funds left in the Trust Account following redemptions across the range of redemption scenarios described in the question above.

 

     Assuming
No
Redemptions
    Assuming
25%
Redemptions
    Assuming
Maximum
Redemptions
 

Deferred Underwriting Commission

   $ 7,875,000     $ 7,875,000     $ 7,875,000  

Deferred Underwriting Commission as a percentage of cash left in the Trust Account Following Redemptions

     17.5     23.27     32.15

 

Q:

What is an “Up-C” Structure?

 

A:

Our corporate structure following the Business Combination, as described under the section entitled “Proposal No. 1 — The Transaction Proposal — The Equity Purchase Agreement,” is commonly referred to as an “Up-C” structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering either directly or through a business combination with a special purpose acquisition company, such as EGA. In connection with the organization of PubCo as an “Up-C” structure, in consummation of the Business Combination, the existing shareholders of LGM will receive a class of noneconomic common shares (Class B Common Stock) in PubCo while retaining economic interests in LGM that are exchangeable to Class A Common Stock. All the business of LGM will be held directly by LGM and PubCo’s only direct asset will consist of the LGM Common Units.

The Up-C structure will allow the Existing Equityholders to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass through” entity, for U.S. federal income (and certain state and local) tax purposes following the Business Combination. One of these benefits is that, for U.S. federal income (and certain state and local) purposes, future taxable income of LGM that is allocated to the Existing Equityholders will be taxed on a flow-through basis and therefore LGM will generally not for U.S. federal income (and certain state and local) purposes, be subject to corporate income taxes at the entity level (that it would generally be subject to if it were treated as a corporation for such applicable tax purposes). See the sections entitled “Proposal No. 1 — The Transaction Proposal” for more information.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

Unless waived by the parties to the Equity Purchase Agreement, and subject to applicable law, the consummation of the Business Combination is subject to a number of conditions set forth in the Equity Purchase Agreement including, among other things, that (i) EGA has received the Required EGA Stockholder Approval, (ii) EGA has at least $5,000,001 in tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately prior to closing and (iii) EGA will remain listed on the NYSE and has not received any written notice from the NYSE that it has failed or would reasonably be expected to fail to meet NYSE listing requirements as of the Closing Date.

Questions and Answers About the Special Meeting for EGA’s Stockholders

 

Q:

Who is the sponsor?

 

A:

The Sponsor is EG Sponsor LLC, a Delaware limited liability company, which currently owns 5,624,000 shares of EGA Class A Common Stock and 1,000 shares of EGA Class B Common Stock. The Sponsor is

 

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  affiliated with EnTrust Global Partners LLC (“EnTrust Global”). An affiliate of EnTrust Global, EnTrust Global Management GP LLC, has sole voting and dispositive power over the Founder Shares and Converted Shares owned by the Sponsor. Gregg Hymowitz is the Chairman, Chief Executive Officer, Founder and Managing Partner of EnTrust Global and is a U.S. citizen. In addition, Gary Fegel, a non-U.S. person indirectly owns a substantial minority position in the Sponsor. EGA does not believe that the Business Combination would be subject to regulatory review, including review by the Committee on Foreign Investment in the United States (“CFIUS”). As a minority investor in the Sponsor, Gary Fegel would not acquire control of a U.S. business as a result of the Business Combination. Furthermore, EGA has undertaken a preliminary TID U.S. business analysis in support of the view that the Business Combination would not be considered a covered investment. Finally, the Company does not believe that if such a review were conceivable that a potential business combination ultimately would be prohibited.

However, if a potential business combination were to become subject to CFIUS review, CFIUS could decide to block or delay our proposed initial business combination, impose conditions with respect to such initial business combination or request the President of the United States to order us to divest all or a portion of the U.S. target business of our initial business combination that we acquired without first obtaining CFIUS approval. The time required for CFIUS to conduct its review and any remedy imposed by CFIUS could prevent EGA from completing its initial business combination and require EGA to liquidate. In that case, investors would be entitled to redeem the EGA Class A Common Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding EGA Class A Common Stock, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law. Moreover, investors would lose the investment opportunity in a target company, any price appreciation in the combined companies, and the EGA Warrants would expire worthless.

 

Q:

What is being voted on at the Special Meeting?

 

A:

Below are the Proposals that EGA’s stockholders are being asked to vote on:

 

   

the Transaction Proposal to approve and adopt the Equity Purchase Agreement and approve the other transactions contemplated by the Equity Purchase Agreement;

 

   

the NYSE Proposal to approve, for purposes of complying with applicable NYSE listing rules, the issuance by PubCo, as successor to EGA, of PubCo Common Stock in the Business Combination in an amount equal to 20% or more of the amount of EGA’s issued and outstanding common stock immediately prior to the issuance;

 

   

the Charter Proposal to approve and adopt the A&R PubCo Charter, which, if approved, would take effect upon the Closing, and the Governance Proposals, to approve certain corporate governance provisions;

 

   

the Director Election Proposal for holders of EGA Class B Common Stock to elect seven directors of the PubCo Board to serve until the 2024 annual meeting of stockholders or until such directors’ successors have been duly elected and qualified, or until such directors’ earlier death, resignation, retirement or removal;

 

   

the PubCo Equity Incentive Plan Proposal to approve and adopt the 2023 Plan;

 

   

the PubCo ESPP Proposal to approve and adopt the ESPP; and

 

   

the Adjournment Proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the condition precedent proposals.

Approval of the Transaction Proposal requires the affirmative vote of the holders of a majority of the shares of the EGA Common Stock that are voted at the Special Meeting. The NYSE Proposal, the PubCo Equity Incentive Plan Proposal, the PubCo ESPP Proposal and the Adjournment Proposal each require the

 

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affirmative vote of a majority in voting power of the outstanding shares of EGA Common Stock present in person (which would include presence at the virtual Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting as a single class. Approval of the Charter and Governance Proposals requires the affirmative vote of holders of a majority of the outstanding shares of EGA Common Stock, the affirmative vote of the holders of a majority of the outstanding shares of EGA Class A Common Stock, voting separately as a single class, and the affirmative vote of the holders of a majority of the outstanding shares of EGA Class B Common Stock, voting separately as a single class, entitled to vote thereon at the Special Meeting. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the outstanding shares of EGA Class B Common Stock cast by holders of EGA Class B Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the virtual Special Meeting and entitled to vote thereon. Holders of shares of EGA Class A Common Stock have no right to vote on the election, removal or replacement of any director. As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

 

Q:

When and where is the Special Meeting?

 

A:

The Special Meeting will be held via live webcast on December 7, 2023, at 10:00 a.m., New York Time. The Special Meeting will be a virtual meeting conducted exclusively via live webcast at the following URL:

https://www.cstproxy.com/egacquisition/sm2023

 

Q:

Who may vote at the Special Meeting?

 

A:

Only holders of record of shares of EGA Common Stock as of the close of business on November 13, 2023 may vote at the Special Meeting. As of the Record Date, there were 9,856,829 shares of EGA Common Stock outstanding and entitled to vote. Please see the section entitled “Special Meeting of the EGA Stockholders — Record Date; Who is Entitled to Vote” for further information.

 

Q:

How many votes do I have at the Special Meeting?

 

A:

EGA stockholders are entitled to one vote on all matters on which they are entitled to vote at the Special Meeting for each share of EGA Common Stock held of record as of November 13, 2023, the Record Date for the Special Meeting. As of the close of business on the Record Date, there were 9,856,829 shares of EGA Common Stock issued and outstanding.

 

Q:

What is the quorum requirement for the Special Meeting?

 

A:

The holders present in person (which includes presence virtually at the Special Meeting) or by proxy of shares of outstanding capital stock of EGA representing a majority of the voting power of all outstanding shares of capital stock of EGA entitled to vote at the Special Meeting will constitute a quorum. Our Sponsor will count towards this quorum, and, pursuant to that certain Letter Agreement, entered into at the time of our IPO, by and among EGA, our Sponsor, and other officers and directors of EGA (the “Letter Agreement”) our Sponsor, officers and directors have agreed to vote any shares of capital stock of EGA owned by them in favor of the Business Combination.

The Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor’s attendance at the Special Meeting (represented in person or by proxy) would be sufficient to satisfy the quorum requirement. Pursuant to the Letter Agreement, the Sponsor has agreed to

 

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vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and accordingly, no shares of EGA Common Stock held by the Public Stockholders will be needed to for a quorum.

 

Q:

What vote is required to approve the Proposals?

 

A:

Approval of the Transaction Proposal requires the affirmative vote of the holders of a majority of the shares of the EGA Common Stock that are voted at the Special Meeting. The NYSE Proposal, the PubCo Equity Incentive Plan Proposal, the PubCo ESPP Proposal and the Adjournment Proposal each require the affirmative vote of a majority in voting power of the outstanding shares of EGA Common Stock present in person (which would include presence at the virtual Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting as a single class. Approval of the Charter and Governance Proposals requires the affirmative vote of holders of a majority of the outstanding shares of EGA Common Stock, the affirmative vote of the holders of a majority of the outstanding shares of EGA Class A Common Stock, voting separately as a single class, and the affirmative vote of the holders of a majority of the outstanding shares of EGA Class B Common Stock, voting separately as a single class, entitled to vote thereon at the Special Meeting. The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the outstanding shares of EGA Class B Common Stock cast by holders of EGA Class B Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the virtual Special Meeting and entitled to vote thereon. Holders of shares of EGA Class A Common Stock have no right to vote on the election, removal or replacement of any director.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

 

Q:

What will happen if I abstain from voting or fail to vote at the Special Meeting?

 

A:

Abstentions will be counted in connection with the determination of whether a valid quorum is established but their effect on the Proposals in this proxy statement differ as follows:

 

   

An abstention will have no effect on the Transaction Proposal or the Director Election Proposal.

 

   

In contrast, an abstention will have the same effect as a vote “AGAINST” the NYSE Proposal, Charter Proposal, the Governance Proposals, PubCo Equity Incentive Plan Proposal, PubCo ESPP Proposal and the Adjournment Proposal.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

 

Q:

How will the Sponsor vote?

 

A:

Pursuant to the Letter Agreement, our Sponsor, officers and directors agreed to vote any shares of capital stock of EGA owned by them in favor of the Business Combination. As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in

 

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  favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

 

Q:

Do I have Redemption Rights?

 

A:

If you are a holder of shares of EGA Class A Common Stock, you have the right to request that EGA redeem all or a portion of your EGA Class A Common Stock for cash, but you must follow the procedures and deadlines described elsewhere in this proxy statement. Public Stockholders may elect to redeem all or a portion of such Public Stockholder’s shares of EGA Class A Common Stock even if they vote for the Transaction Proposal. We refer to these rights to elect to redeem all or a portion of the EGA Class A Common Stock into a pro rata portion of the cash held in the Trust Account as “Redemption Rights.” If you wish to exercise your Redemption Rights, please see the answer to the next question, “— How do I exercise my Redemption Rights?

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its shares of EGA Class A Common Stock with respect to more than an aggregate of 15% of the shares of EGA Class A Common Stock outstanding, without our prior consent. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the shares of EGA Class A Common Stock outstanding, then any such shares in excess of that 15% limit would not be redeemed, without our prior consent.

Pursuant to the Letter Agreement, our Sponsor, directors and officers have agreed to waive their right to an EGA Stock Redemption.

The consummation of the Business Combination is conditioned upon, among other things, approval by EGA’s stockholders of the Equity Purchase Agreement and the Business Combination. Unless waived, if any of these conditions are not satisfied, the Business Combination may not be consummated. Furthermore, in no event will we redeem our EGA Class A Common Stock in an amount that would cause our net tangible assets to be less than $5,000,001. See the section entitled “Proposal No. 1 — The Transaction Proposal — The Equity Purchase Agreement.”

 

Q:

How do I exercise my Redemption Rights?

 

A:

Pursuant to the Existing Certificate of Incorporation, if a stockholder vote is required for the Business Combination to be consummated, EGA must offer to redeem for cash all or a portion of the shares of EGA Class A Common Stock held by a Public Stockholder. You will be entitled to receive cash for any shares of EGA Class A Common Stock to be redeemed only if you:

(i) (a) hold shares of EGA Class A Common Stock, or (b) hold EGA Units and you elect to separate your EGA Units into the underlying shares of EGA Class A Common Stock and EGA Public Warrants prior to exercising your Redemption Rights with respect to the shares of EGA Class A Common Stock; and

(ii) prior to 5:00 p.m., New York time, on December 5, 2023 (two business days prior to the vote at the Special Meeting), (a) submit a written request to the Transfer Agent, that we redeem your shares of EGA Class A Common Stock for cash, and (b) deliver your shares of EGA Class A Common Stock to the Transfer Agent, physically or electronically through the Depository Trust Company (“DTC”).

Holders of EGA Units must elect to separate the underlying shares of EGA Class A Common Stock and EGA Public Warrants prior to exercising Redemption Rights with respect to the shares of EGA Class A Common Stock. If holders hold their EGA Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the EGA Units into the underlying shares of EGA Class A Common Stock and EGA Public Warrants, or if a holder holds EGA Units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so. Public Stockholders may

 

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elect to redeem all or a portion of their shares of EGA Class A Common Stock even if they vote for the Transaction Proposal. If the Business Combination is not consummated, the EGA Class A Common Stock will not be redeemed. If the Business Combination is consummated and a Public Stockholder properly exercises its right to redeem its shares of EGA Class A Common Stock and timely delivers its shares to the Transfer Agent, we will redeem each share of EGA Class A Common Stock for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account (net of taxes payable), divided by the number of then-outstanding shares of EGA Class A Common Stock held by the Public Stockholders. For illustrative purposes, as of October 31, 2023, this would have amounted to approximately $10.59 per share of EGA Class A Common Stock. If a Public Stockholder exercises its Redemption Rights, then it will be exchanging its redeemed shares of EGA Class A Common Stock for cash and will no longer own such shares. Any request to redeem shares of EGA Class A Common Stock, once made, may be withdrawn at any time until the date of the Special Meeting, and thereafter, with our consent, until the Closing. Furthermore, if a holder of shares of EGA Class A Common Stock delivers its certificate in connection with an election of its redemption and subsequently decides prior to the date of the Special Meeting not to elect to exercise such rights, it may simply request that EGA instruct our Transfer Agent to return the certificate (physically or electronically). The holder can make such request by contacting the Transfer Agent, at Continental Stock Transfer & Trust Company, 1 State Street, 30th Floor, New York, NY 10004, Attention: SPAC Redemption Team, or by email at spacredemptions@continentalstock.com. We will be required to honor such request only if made prior to the date of the Special Meeting. See the section entitled “Special Meeting of the EGA Stockholders — Redemption Rights” in this proxy statement for a detailed description of the procedures to be followed if you wish to redeem your shares of EGA Class A Common Stock for cash.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its shares of EGA Class A Common Stock with respect to more than an aggregate of 15% of the shares of EGA Class A Common Stock outstanding, without our prior consent. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the shares of EGA Class A Common Stock outstanding, then any such shares in excess of that 15% limit would not be redeemed, without our prior consent.

 

Q:

Will how I vote on the Transaction Proposal affect my ability to exercise Redemption Rights?

 

A:

No. You may exercise your Redemption Rights irrespective of whether you vote for or against the Transaction Proposal or any other Proposal described by this proxy statement. As a result, the Equity Purchase Agreement can be approved by stockholders who will redeem their EGA Class A Common Stock and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a less liquid trading market, fewer stockholders, less cash and the potential inability to meet the listing standards of the NYSE.

 

Q:

Do I have appraisal rights in connection with the proposed Business Combination?

 

A:

No. Neither our stockholders nor our warrant holders have appraisal rights in connection with the Business Combination under the General Corporation Law of Delaware, as amended (the “DGCL”).

 

Q:

What do I need to do now?

 

A:

We urge you to read carefully and consider the information contained in this proxy statement, including the annexes and accompanying financial statements, and consider how the Business Combination will affect you as an EGA stockholder or warrant holder. You should vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card.

 

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Q:

How do I vote?

 

A:

The Special Meeting will be held via live webcast on December 7, 2023, at 10:00 a.m., New York time. The Special Meeting can be accessed by visiting https://www.cstproxy.com/egacquisition/sm2023, where you will be able to listen to the meeting live and vote during the meeting, or vote by phone by calling toll-free (within the U.S. and Canada) 1 800-450-7155 (or +1 857-999-9155 if you are located outside the U.S. and Canada (standard rates apply)). Please note that you will only be able to access the Special Meeting by means of remote communication. Please have your control number, which can be found on your proxy card, to join the Special Meeting. If you do not have a control number, please contact the Transfer Agent.

If you are a holder of record of shares of EGA Common Stock on the Record Date, you may vote at the Special Meeting or by submitting a proxy for the Special Meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the Special Meeting and vote, obtain a proxy from your broker, bank or nominee.

 

Q:

If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

 

A:

No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent.

As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.” Broker non-votes will have the same effect as a vote “AGAINST” the Charter Proposal and Governance Proposals, NYSE Proposal, PubCo Equity Incentive Plan Proposal, PubCo ESPP Proposal and the Adjournment Proposal, but will have no effect on the outcome of the Transaction Proposal or Director Election Proposal.

For the Proposals in this proxy statement, your broker will not have the discretionary authority to vote your shares. Accordingly, your bank, broker, or other nominee can vote your shares at the Special Meeting only if you provide instructions on how to vote. You should instruct your broker to vote your shares as soon as possible in accordance with directions you provide.

 

Q:

What happens if I sell my EGA Common Stock before the Special Meeting?

 

A:

The Record Date for the Special Meeting is earlier than the date of the Special Meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of EGA Common Stock after the Record Date, but before the Special Meeting, unless you grant a proxy to the transferee, you will retain your right to vote at the Special Meeting with respect to such shares, but the transferee, and not you, will have the ability to redeem such shares (if time permits).

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by EGA without an indication of how the stockholder intends to vote on a Proposal will be voted “FOR” each Proposal presented to the stockholders at the Special Meeting. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting.

 

Q:

If I am not going to attend the Special Meeting, should I return my proxy card instead?

 

A:

Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

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Q:

Can I change my vote after I have mailed my proxy card?

 

A:

Yes. Stockholders may send a later-dated, signed proxy card to Morrow Sodali LLC at the address set forth below so that it is received prior to the vote at the Special Meeting (which is scheduled to take place on December 7, 2023) or attend the Special Meeting in person (which would include presence at the virtual Special Meeting), revoke their proxy, and vote. Stockholders also may revoke their proxy by sending a notice of revocation EGA’s President at EG Acquisition Corp., 375 Park Avenue, 24th Floor, New York, NY 10152, which must be received by EGA’s President prior to the vote at the Special Meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote.

 

Q:

What should I do with my stock certificates, warrant certificates and/or EGA Unit certificates?

 

A:

Stockholders who exercise their Redemption Rights must deliver their stock certificates to the Transfer Agent (either physically or electronically) through DTC prior to 5:00 p.m., New York time, on December 5, 2023 (two business days prior to the vote at the Special Meeting).

Holders of EGA Warrants should not submit the certificates relating to their warrants. Public Stockholders who do not elect to have their shares of EGA Class A Common Stock redeemed for the pro rata share of the Trust Account should not submit the certificates relating to their shares of EGA Class A Common Stock.

Upon effectiveness of the Business Combination, holders of EGA Units, EGA Common Stock and EGA Warrants will receive units, Class A Common Stock and PubCo Warrants without needing to take any action and accordingly such holders should not submit the certificates relating to their EGA Units, EGA Common Stock and EGA Warrants.

In addition, upon consummation of the Business Combination, each outstanding EGA Unit (each of which consists of one share of EGA Class A Common Stock and one-third of one EGA Public Warrant) will be separated into its component share of EGA Class A Common Stock and EGA Public Warrant.

 

Q:

What are the material U.S. federal income tax consequences of exercising my Redemption Rights?

 

A:

The tax consequences of an exercise of Redemption Rights depends on your particular facts and circumstances. Please see the section entitled “Proposal No. 1 — The Transaction Proposal — Certain U.S. Federal Income Tax Considerations to Holders of EGA Class A Common Stock Exercising Redemption Rights.” We urge you to consult your tax advisors regarding the tax consequences of exercising your Redemption Rights.

TAX MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES OF EXERCISING YOUR REDEMPTION RIGHTS WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE EXERCISE OF REDEMPTION RIGHTS TO YOU IN YOUR PARTICULAR CIRCUMSTANCES.

 

Q:

If I am an EGA Warrant holder, can I exercise redemption rights with respect to my EGA Warrants?

 

A:

No. The holders of EGA Warrants have no redemption rights with respect to EGA Warrants. If a public stockholder exercises its redemption rights, such exercise will not result in the loss of any warrants that it may hold. Even if 100% or 4,231,829 shares of EGA Class A Common Stock held by our public shareholders were redeemed, the 7,500,000 EGA Public Warrants will remain outstanding and would have had an aggregate value of $702,750 (based on the closing price of the warrants of $0.0937 on the NYSE as of November 1, 2023). If a substantial number of, but not all, Public Stockholders exercise their redemption rights, any non-redeeming stockholders would experience dilution to the extent such warrants are exercised and to the extent that additional EGA Class A Common Stock is issued.

 

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Q:

What should I do if I receive more than one set of voting materials?

 

A:

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies?

 

A:

EGA will pay the cost of soliciting proxies for the Special Meeting. EGA has engaged Morrow Sodali LLC, which we refer to as “Morrow Sodali,” to assist in the solicitation of proxies for the Special Meeting. EGA has agreed to pay a fee of $15,000, plus disbursements. EGA will reimburse Morrow Sodali for reasonable out-of-pocket expenses and will indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses. EGA will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of EGA Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the EGA Common Stock and in obtaining voting instructions from those owners. EGA’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person, but will not be paid any additional amounts for soliciting proxies.

 

Q:

Who can help answer my questions?

 

A:

If you have questions about the Proposals or if you need additional copies of this proxy statement or the enclosed proxy card you should contact EGA’s proxy solicitor at:

Morrow Sodali LLC

333 Ludlow Street, 5th Floor, South Tower

Stamford, CT 06902

Individuals call toll-free (800) 662-5200

Banks and brokers call (203) 658-9400

Email: EGGF.info@investor.morrowsodali.com

To obtain timely delivery, EGA Stockholders must request the materials no later than November 30, 2023.

You may also obtain additional information about EGA from documents filed with the SEC by following the instructions in “Where You Can Find More Information.”

If you intend to seek redemption of your EGA Class A Common Stock, you will need to send written request to the Transfer Agent, that we redeem your Shares of EGA Class A Common Stock for cash and deliver your shares of EGA Class A Common Stock to the Transfer Agent, physically or electronically through DTC prior to 5:00 p.m., New York time, on December 5, 2023 (two business days prior to the vote at the Special Meeting), in accordance with the procedures detailed under the question “How do I exercise my Redemption Rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attn: SPAC Redemption Team

E-mail: spacredemptions@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information from this proxy statement and might not contain all of the information that is important to you. To better understand the proposals to be submitted for a vote at the Special Meeting, including the Business Combination, you should read this entire proxy statement carefully, including the Equity Purchase Agreement a copy of which is attached as Annex A and Annex A-1 to this proxy statement. The Equity Purchase Agreement is the legal document that governs the Business Combination and the other transactions that will be undertaken in connection therewith. The Equity Purchase Agreement is also described in detail in this proxy statement in the section entitled “Proposal No. 1 — The Transaction Proposal — The Equity Purchase Agreement.” You should also review all of the Annexes and the financial statements included in this proxy statement for information on your rights in PubCo after the Closing, information on LGM and its business and other information about the Business Combination. This proxy statement also includes forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.”

The Parties to the Business Combination

EG Acquisition Corp.

EGA is a blank check company formed as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities. Based on our business activities, EGA is a “shell company” as defined under the Exchange Act because we have no operations and nominal assets consisting almost entirely of cash.

EGA Class A Common Stock and EGA Public Warrants are currently listed on the NYSE under the symbols “EGGF” and “EGGFW,” respectively. Certain shares of EGA Class A Common Stock and EGA Public Warrants currently trade as EGA Units, which consist of one share of EGA Class A Common Stock and one-third of one redeemable warrant. The EGA Units will automatically separate into their component securities upon consummation of the Business Combination and, as a result, will no longer trade as an independent security. Upon consummation of the transactions contemplated by the Equity Purchase Agreement, we will change our name to “flyExclusive, Inc.” We intend to apply to continue the listing of EGA Class A Common Stock as PubCo Class A Common Stock and EGA Public Warrants as PubCo Warrants on the NYSE under the symbols “FLYX” and “FLYXW,” respectively, upon the Closing.

The mailing address of EGA’s principal executive office is 375 Park Avenue, 24th Floor, New York, NY 10152. Our telephone number is (212) 888-1040.

EG Sponsor, LLC

EG Sponsor LLC is a Delaware limited liability company, headquartered in New York, New York, that is the sponsor of EGA.

LGM Enterprises, LLC

LGM is a premier owner/operator of private jet aircraft to provide jet passengers experiences dedicated to surpassing expectations for quality, convenience and safety. LGM is currently the fifth largest private jet operator in North America, based on 2022 flight hours. LGM is headquartered in Kinston, North Carolina with services provided across North America, the Caribbean, Central America, South America, and Europe. See “Other Information About LGM.” LGM is a North Carolina limited liability company and the mailing address of LGM is 2860 Jetport Road, Kinston, North Carolina 28504.

Existing Equityholders

The Existing Equityholders are the equityholders of LGM as of immediately prior to the Closing of the transactions contemplated by the Equity Purchase Agreement. The Existing Equityholders include Thomas James

 

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Segrave, Jr., Thomas James Segrave, Jr., as Custodian for Laura Grace Segrave, Thomas James Segrave, Jr., as Custodian for Madison Lee Segrave, Thomas James Segrave, Jr., as Custodian for Lillian May Segrave, and Thomas James Segrave, Jr., as Custodian for Thomas James Segrave, III.

Summary of the Equity Purchase Agreement

On October 17, 2022, EGA, LGM, the Existing Equityholder Representative and, for certain limited purposes, the Existing Equityholders and Sponsor entered into the Equity Purchase Agreement.

Pursuant to the Equity Purchase Agreement, following the closing of the Business Combination, PubCo will be organized in an Up-C structure, in which substantially all of the operating assets of LGM’s business will be held by LGM, and PubCo’s only assets will be its equity interests in LGM. After the Closing, current EGA stockholders, together with the Bridge Note Lenders, are expected to own between approximately 22.5% and 24.8% of the equity interests in PubCo and PubCo will be entitled to the same percentage of distributions made by LGM. At the Closing, among other things:

 

   

EGA will (i) adopt the A&R PubCo Charter, a copy of which is attached hereto as Annex B, which will, among other things, (a) change its name to “flyExclusive, Inc.” and (b) convert all then-outstanding Founder Shares into shares of PubCo Class A Common Stock and (ii) issue to the Existing Equityholders PubCo Class B Common Stock, which carries one vote per share but no economic right, and (iii) replace the Existing Bylaws by adopting the PubCo Bylaws, a copy of which is attached to this proxy statement as Annex E;

 

   

The Existing Equityholders, PubCo and LGM will enter into the A&R Operating Agreement, a copy of which is attached hereto as Annex C, which, among other things, will (i) restructure the capitalization of LGM to (a) issue to PubCo the number of LGM Common Units equal to the number of outstanding shares of EGA Class A Common Stock immediately after giving effect to the Business Combination (taking into account any redemption of EGA Class A Common Stock, potential PIPE investment, and the conversion of the Bridge Notes to PubCo Class A Common Stock), and (b) reclassify the Existing LGM Common Units into LGM Common Units, and (ii) appoint PubCo as the managing member of LGM;

 

   

As consideration for issuing LGM Common Units to PubCo, PubCo will contribute (or, in the case of the Bridge Note proceeds received by LGM, be deemed to have contributed) the Contribution Amount to LGM. Immediately after the contribution of the Contribution Amount, LGM will pay the Transaction Expenses by wire transfer of immediately available funds on behalf of LGM and EGA to those persons to whom such amounts are owed;

 

   

Immediately following the contribution of the Contribution Amount as described above, at the election of the Existing Equityholders, LGM shall repurchase an aggregate number of LGM Common Units from the Existing Equityholders equal to the Closing Date Cash Repurchase Amount, as defined below, divided by $10.00 per unit (such number, the “Closing Date Repurchased Units”), with each Existing Equityholder selling such number of LGM Common Units equal to the total number of Closing Date Repurchased Units multiplied by the percentage set forth next to such Existing Equityholder’s name on Schedule I to the Equity Purchase Agreement, for a per LGM Common Unit purchase price of ten $10.00 per unit (the “Closing Date Repurchase”). The “Closing Date Cash Repurchase Amount” is an amount equal to: (i) $0, in the event the Contribution Amount is $85,000,000 or less; (ii) the lesser of (A) $15,000,000 and (B) the excess of the Contribution Amount over $85,000,000, in the event the Contribution Amount is more than $85,000,000 and less than $185,000,000; and (iii) the lesser of (A) $20,000,000 and (B) $15,000,000 plus the excess of the Contribution Amount over $185,000,000, in the event the Contribution Amount is more than $185,000,000; provided that should the Closing Date Cash Repurchase Amount result in the Existing Equityholders owning, in the aggregate, less than 51% of the outstanding LGM Common Units as of immediately following the Closing, the Closing Date Cash Repurchase Amount shall be capped at such amount as would result in the Existing Equityholders owning, in the aggregate 51% of the LGM Common Units;

 

   

In addition, at the Closing, PubCo, LGM, the Existing Equityholders, and the TRA Holder Representative will enter into the Tax Receivable Agreement, in substantially the form attached hereto as Annex G. Please

 

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see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — Tax Receivable Agreement,” for a discussion of the Tax Receivable Agreement and the section entitled “Risk Factors — Risks Relating to Tax” for certain specified risks related to the Tax Receivable Agreement; and

 

   

Without any action on the part of any holder of an EGA Warrant, each EGA Warrant that is issued and outstanding immediately prior to the Closing will become a PubCo Warrant.

The consummation of the Business Combination is subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, without limitation: (i) the representations and warranties of the respective parties being true and correct subject to the materiality standards contained in the Equity Purchase Agreement; (ii) material compliance by the parties of their respective pre-closing covenants and agreements, subject to the standards contained in the Equity Purchase Agreement; (iii) that EGA has received the Required EGA Stockholder Approval; (iv) the absence of a Company Material Adverse Effect (as defined in the Equity Purchase Agreement) since the effective date of the Equity Purchase Agreement; (v) EGA having at least $5,000,001 in tangible net assets immediately prior to the Closing; and (vi) EGA remaining listed on the NYSE.

The Equity Purchase Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including by written notice from LGM or EGA to the other party if the Closing has not occurred by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board) (the deadline for EGA to consummate the initial business combination), unless extended.

For additional information about the Equity Purchase Agreement and the Business Combination and other transactions contemplated thereby, see the section entitled “Proposal No. 1 — The Transaction Proposal — The Equity Purchase Agreement.”

Related Agreements

Bridge Notes

In connection with the execution of the Equity Purchase Agreement, on October 17, 2022, LGM entered into a senior subordinated convertible note with EnTrust Emerald (Cayman) LP and, for certain limited provisions thereof, EGA, pursuant to which LGM borrowed an aggregate principal amount of $50,000,000 at a rate of 10% per annum payable in kind in additional shares of PubCo upon the Closing of the Business Combination. On October 28, 2022, LGM also entered into an Incremental Amendment with ETG OMNI LLC and EnTrust Magnolia Partners LP on the same terms for an aggregate principal amount of $35,000,000, bringing the total principal amount of the Bridge Notes to $85,000,000 in the aggregate. Concurrently with the Closing, the Bridge Notes will automatically be converted into the number of shares of PubCo Class A Common Stock equal to the quotient of (a) the total amount owed by LGM under the Bridge Notes (including accrued PIK interest) divided by (b) $10.00 (subject to adjustment in certain instances, as described in the Bridge Notes). The proceeds of the Bridge Notes are to be used primarily for the acquisition of additional aircraft and payment of expenses related thereto, provided that, with the consent of the Bridge Note Lenders, the proceeds of the Bridge Notes may be used for other general and corporate working capital purposes.

Tax Receivable Agreement

At the Closing, PubCo, LGM, the Existing Equityholders and the TRA Holder Representative will enter into the Tax Receivable Agreement, in substantially the form attached hereto as Annex G.

Pursuant to the Tax Receivable Agreement, PubCo will generally be required to pay the Existing Equityholders 85% of the amount of savings, if any, in U.S. federal, state, local and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that the Tax Group (i.e.,

 

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PubCo and applicable consolidated, unitary, or combined Subsidiaries (as defined in the Tax Receivable Agreement)) realizes, or is deemed to realize, as a result of certain Tax Attributes, including:

 

   

tax basis adjustments resulting from the repurchase by LGM of LGM Common Units (including any such adjustments resulting from certain payments made by PubCo under the Tax Receivable Agreement) in accordance with the terms of the Equity Purchase Agreement;

 

   

tax basis adjustments resulting from taxable exchanges of LGM Common Units (including any such adjustments resulting from certain payments made by PubCo under the Tax Receivable Agreement) acquired by PubCo from an Existing Equityholder pursuant to the terms of the A&R Operating Agreement; and

 

   

tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement.

Under the Tax Receivable Agreement, the Tax Group will generally be treated as realizing a tax benefit from the use of a Tax Attribute on a “with and without” basis, thereby generally treating the Tax Attributes as the last item used, subject to several exceptions. Payments under the Tax Receivable Agreement generally will be based on the tax reporting positions that PubCo determines (with the amount of subject payments determined in consultation with an advisory firm and subject to the TRA Holder Representative’s review and consent). The IRS or another taxing authority may challenge all or any part of a position taken with respect to Tax Attributes or the utilization thereof, as well as other tax positions that PubCo takes, and a court may sustain such a challenge. In the event that any Tax Attributes initially claimed or utilized by the Tax Group are disallowed, the Existing Equityholders will not be required to reimburse PubCo for any excess payments previously made pursuant to the Tax Receivable Agreement, for example, due to adjustments resulting from examinations by taxing authorities. Rather, any excess payments made to such Existing Equityholder will be applied against and reduce any future cash payments otherwise required to be made by PubCo to the applicable Existing Equityholders under the Tax Receivable Agreement, if any, after the determination of such excess. However, a challenge to any Tax Attributes initially claimed or utilized by the Tax Group might not arise for a number of years following the initial time of such payment and, even if challenged earlier, such excess cash payment may be greater than the amount of future cash payments that PubCo might otherwise be required to make under the terms of the Tax Receivable Agreement. As a result, there might not be future cash payments against which such excess can be applied and PubCo could be required to make payments under the Tax Receivable Agreement in excess of the Tax Group’s actual savings in respect of the Tax Attributes.

The Tax Receivable Agreement defines each of the following events as an “Early Termination Event:

 

  (i)

PubCo exercises its early termination rights under the Tax Receivable Agreement,

 

  (ii)

certain changes of control of PubCo or LGM occur (as described in the A&R Operating Agreement),

 

  (iii)

PubCo, in certain circumstances, fails to make a payment required to be made pursuant to the Tax Receivable Agreement by its final payment date, which non-payment continues for 30 days following such final payment date, unless certain liquidity related or restrictive covenant related exceptions apply, or

 

  (iv)

PubCo materially breaches (or is deemed to materially breach) any of its material obligations under the Tax Receivable Agreement other than as described in the foregoing clause (iii), unless certain liquidity related or restrictive covenant related exceptions apply.

Upon an Early Termination Event, PubCo’s obligations under the Tax Receivable Agreement will accelerate (except in certain limited circumstances, if the TRA Holder Representative so elects in the case of clauses (ii)-(iv)) and PubCo will be required to make a lump-sum cash payment to all the Existing Equityholders equal to the present value of all forecasted future payments that would have otherwise been made under the Tax Receivable Agreement. This lump-sum payment would be based on certain assumptions, including those relating to there being sufficient future taxable income of the Tax Group to fully utilize the Tax Attributes over certain specified time periods and that all LGM Common Units that had not yet been

 

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exchanged for PubCo Class A Common Stock or cash are deemed exchanged for cash. The lump-sum payment could be material and could materially exceed any actual tax benefits that the Tax Group realizes subsequent to such payment.

As a result of the foregoing, in some circumstances (i) PubCo could be required to make payments under the Tax Receivable Agreement that are greater than or less than the actual tax savings that the Tax Group realizes in respect of the Tax Attributes and (ii) it is possible that PubCo may be required to make payments years in advance of the actual realization of tax benefits (if any, and may never actually realize the benefits paid for) in respect of the Tax Attributes (including if any Early Termination Event occurs).

Please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — Tax Receivable Agreement,” for a discussion of the Tax Receivable Agreement and the section entitled “Risk Factors — Risks Relating to Tax” for certain specified risks related to the Tax Receivable Agreement.

Stockholders’ Agreement

At the Closing, the Existing Equityholders, Sponsor and PubCo will enter into the Stockholders’ Agreement in substantially the form attached hereto as Annex H.

Pursuant to the Stockholders’ Agreement, among other things, the Existing Equityholders and our Sponsor will agree to vote their respective securities of PubCo that may be voted in the election of PubCo’s directors in accordance with the provisions of the Stockholders’ Agreement.

The PubCo Board will initially consist of seven directors. The equityholders of PubCo will have the right to nominate directors as follows: the Sponsor, and its permitted transferees, by a majority of shares held by them, shall have the right to nominate, and the PubCo Board and the Existing Equityholders, and their permitted transferees, will appoint and vote for, two members of the PubCo Board, initially designated pursuant to the Stockholders’ Agreement as Gregg S. Hymowitz and Gary Fegel, and thereafter as designated by the Sponsor, and its permitted transferees, by a majority of shares held by them.

Each Existing Equityholder also agreed to a one-year lock-up period following the Closing with respect to the shares of PubCo Common Stock received by the Existing Equityholder in the Business Combination and certain other shares owned by the Existing Equityholder (the “Lock-up Shares”). However, prior to the expiration of the lock-up period, any Existing Equityholder is permitted to transfer the Lock-up Shares through (i) a pledge of up to 25% of each individual Existing Equityholder’s Lock-up Shares in connection with a bona fide transaction with a lender and disclosed in writing to the PubCo Board or (ii) a liquidation, merger, stock exchange, reorganization, or tender offer approved by the PubCo Board or a duly authorized committee thereof or other similar transaction that results in all of the PubCo’s stockholders having the right to exchange their shares of PubCo Common Stock for cash, securities or other property subsequent to the Closing Date.

The Stockholders’ Agreement also contains certain provisions intended to maintain, following the Closing, PubCo’s qualification as a “controlled company” for purposes of compliance with certain NYSE and SEC rules. Please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — Stockholders’ Agreement,” for further discussion of the Stockholders’ Agreement.

Amended and Restated Registration Rights Agreement

At the Closing, the Existing Holders and New Holders will enter into the A&R Registration Rights Agreement. Among other things, the holders of the Founder Shares, Converted Shares, Private Placement Warrants and EGA Warrants that may be issued upon conversion of working capital loans (and any shares of PubCo Class A Common Stock issuable upon the exercise of the Private Placement Warrants and EGA Warrants that may be issued upon conversion of working capital loans and upon conversion of the Founder Shares), PubCo

 

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Class A Common Stock issued upon the redemption of any LGM Common Units, and PubCo Class A Common stock issued upon conversion of the Bridge Notes (which, together, we expect to be approximately 79.3 million shares as of Closing, assuming no repurchases and maximum redemption of LGM Common Units) will be entitled to registration rights pursuant to A&R Registration Rights Agreement, requiring us to register such securities for resale. Pursuant to the A&R Registration Rights Agreement, the Existing Holders holding at least a majority in interest of the then-outstanding number of registrable securities held by the Existing Holders, or the New Holders holding at least a majority-in-interest of the then-outstanding number of registrable securities held by the New Holders will be entitled to, among other things, make a Demand Registration for registration under the Securities Act of all or part of their shares of PubCo Class A Common Stock. Under no circumstances shall PubCo be obligated to effect more than an aggregate of three registrations pursuant to a Demand Registration by the Existing Holders, or more than an aggregate of five registrations pursuant to a Demand Registration by the New Holders, with respect to any or all registrable securities held by such holders. In addition, the Existing Holders and the New Holders will be entitled to “piggy-back” registration rights to certain registration statements filed following the Business Combination. PubCo will bear all of the expenses incurred in connection with the filing of any such registration statements.

2023 Equity Incentive Plan

Prior to the Closing, our Board will approve the 2023 Plan, subject to receipt of stockholder approval. The 2023 Plan will become effective as of the date it is adopted by the Board, subject to approval from the EGA stockholders. The purpose of the 2023 Plan is to promote the success and enhance the value of PubCo and LGM by attracting, motivating and retaining the best available personnel to serve as employees, consultants and directors of PubCo and LGM through the granting of stock-based compensation awards, including without limitation, incentive and nonstatutory stock options, stock appreciation rights (“SARs”), restricted stock awards, restricted stock unit awards, and dividend equivalent awards.

2023 ESPP

Prior to the Closing, our Board will approve the ESPP, subject to receipt of stockholder approval. The ESPP will become effective immediately prior to the Business Combination, subject to approval from the Board and EGA stockholders. The purpose of the ESPP is to assist our eligible employees in acquiring a stock ownership interest in PubCo, aligning their long-term interests with those of our stockholders and to help our eligible employees provide for their future security. We believe the ESPP will play an important role in recruiting and retaining the best available personnel.

A&R PubCo Charter and PubCo Bylaws

Prior to the Closing, EGA will (i) subject to receipt of stockholder approval, amend and restate the Existing Certificate of Incorporation by adopting the A&R PubCo Charter and (ii) replace the Existing Bylaws with the PubCo Bylaws. The Existing Certificate of Incorporation will be amended to (i) change the name of EGA to “flyExclusive, Inc.,” (ii) convert all then-outstanding Founder Shares into shares of PubCo Class A Common Stock and (iii) authorize the issuance of PubCo Class B Common Stock (as more fully described herein).

A&R Operating Agreement of LGM

At the Closing, the Existing Equityholders, LGM and PubCo (as the managing member of LGM) will enter into the A&R Operating Agreement, in substantially the form attached hereto as Annex C. The A&R Operating Agreement will, among other things, (i) restructure the capitalization of LGM to (a) authorize the issuance of LGM Common Units to PubCo and (b) reclassify the Existing LGM Common Units held by the Existing Equityholders into LGM Common Units and (ii) appoint PubCo as the managing member of LGM.

 

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Management of LGM

The business and affairs of LGM will be managed by and under the direction of PubCo. PubCo will have full, exclusive discretion to manage and control the business and affairs of LGM. No member of LGM, as such, other than PubCo, will take part in the day-to-day management and operation of LGM.

Restrictions on Transfers

Except as otherwise provided in the A&R Operating Agreement, (i) PubCo may not transfer all or any part of its ownership interest in LGM without the consent of the members of LGM (other than PubCo) holding at least a majority of the aggregate LGM Common Units then outstanding and held by such members and (ii) to the fullest extent permitted by law, the members of LGM are restricted from transferring all or any part of such member’s ownership interests in LGM without the prior written consent of PubCo, which consent may be given or withheld in PubCo’s sole discretion. However, members of LGM may transfer their shares to certain permitted persons.

Conversion, Transferability and Exchange.

Subject to the terms of the A&R Operating Agreement, each member of LGM may from time to time cause LGM to redeem any or all of such member’s LGM Common Units in exchange for, at PubCo’s election (subject to certain exceptions), either an equal number of shares of PubCo Class A Common Stock or cash (based on the daily per share volume-weighted average price of PubCo Class A Common Stock for the ten trading days immediately prior to the date of the delivery to PubCo of written notice of such member’s desire to redeem its LGM Common Units). At PubCo’s election, such transaction may also be effectuated via a direct exchange of PubCo Class A Common Stock or cash by PubCo for the redeemed LGM Common Units. Please see the section entitled “Proposal No. 1 — The Transaction Proposal — Related Agreements — A&R Operating Agreement of LGM,” for further discussion of the A&R Operating Agreement.

Equity Ownership and Voting Power Upon Closing

As of the date of this proxy statement, there were 9,856,829 shares of EGA Common Stock outstanding, comprised of 9,855,829 shares of EGA Class A Common Stock, including 4,231,829 shares of EGA Class A Common Stock held by Public Stockholders and 5,624,000 Converted Shares held by Sponsor and 1,000 shares of EGA Class B Common Stock held by our Sponsor, which does not include the Bridge Notes that will convert into shares of PubCo Class A Common Stock. In connection with the Closing, (i) each then-outstanding share of EGA Class B Common Stock will automatically convert into a share of PubCo Class A Common Stock on a one-for-one basis and (ii) the outstanding principal of the Bridge Notes, including accrued PIK interest, will automatically be converted into shares of PubCo Class A Common Stock.

 

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The tables directly below present the anticipated ownership of shares outstanding and voting power in PubCo upon completion of the Business Combination assuming that none of the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the Sponsor) are exercised. As these warrants are the only potentially dilutive securities, the tables directly below present the anticipated ownership and voting power in PubCo upon the Closing of the Business Combination assuming no dilution. The tables also illustrate the impact of the maximum Closing Date Cash Repurchase Amount which, as described under the section entitled “Summary of the Proxy Statement — Summary of the Equity Purchase Agreement,” represents the maximum amount of shares that the Existing Equityholders may request to be repurchased at the Closing (which depends on the size of the Closing Date Cash Contribution Amount). The table below titled, “Assuming No Redemptions” assumes that there are no additional redemptions of EGA Class A Common Stock subject to possible redemption. The table below titled, “Assuming 25% Redemptions,” assumes that 25% of the outstanding shares of EGA Class A Common Stock held by the EGA Public Stockholders are redeemed. The table below titled, “Assuming Maximum Redemptions,” assumes the redemption of the maximum number of shares of EGA Class A Common Stock subject to possible redemption that can be redeemed while allowing the Business Combination to close. Refer to the section of the entitled “Unaudited Pro Forma Condensed Combined Financial Information” for additional information regarding the assumptions of no redemptions, interim redemptions and maximum redemptions.

 

    Scenario 1 - Assuming No Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Voting %     Number of Shares Owned     Voting %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       75.7     58,500       75.2

EGA Public Stockholders holding PubCo Class A Common Stock

    4,232       5.3     4,232       5.5

EGA Sponsor holding PubCo Class A Common Stock

    5,625       7.1     5,625       7.2

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       11.9     9,413       12.1
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    79,270       100.0     77,770       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

 

    Scenario 2 - Assuming 25% Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Voting %     Number of Shares Owned     Voting %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       76.7     58,500       76.3

EGA Public Stockholders holding PubCo Class A Common Stock

    3,174       4.1     3,174       4.1

EGA Sponsor holding PubCo Class A Common Stock

    5,625       7.2     5,625       7.3

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       12.0     9,413       12.3
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    78,212       100.0     76,712       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

 

    Scenario 3 - Assuming Maximum Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Voting %     Number of Shares Owned     Voting %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       77.5     58,500       77.2

EGA Public Stockholders holding PubCo Class A Common Stock

    2,297       3.0     2,297       3.0

EGA Sponsor holding PubCo Class A Common Stock

    5,625       7.3     5,625       7.4

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       12.2     9,413       12.4
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    77,335       100.0     75,835       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

 

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The tables directly below present the anticipated ownership of shares outstanding and voting power in PubCo upon the completion of the Business Combination assuming that all 11,833,333 warrants to purchase shares of EGA Class A Common Stock are exercised. As these warrants are the only potentially dilutive securities, the tables directly below present the anticipated ownership and voting power in PubCo upon the Closing of the Business Combination assuming full dilution. The table below titled, “Assuming No Redemptions” assumes that there are no additional redemptions of EGA Class A Common Stock subject to possible redemption. The table below titled, “Assuming 25% Redemptions,” assumes that 25% of the outstanding shares of EGA Class A Common Stock held by the EGA Public Stockholders are redeemed. The table below titled, “Assuming Maximum Redemptions,” assumes the redemption of the maximum number of shares of EGA Class A Common Stock subject to possible redemption that can be redeemed while allowing the Business Combination to close. Refer to the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for additional information regarding the assumptions of no redemptions, interim redemptions and maximum redemptions.

 

    Scenario 1 - Assuming No Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Ownership %     Number of Shares Owned     Ownership %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       65.9     58,500       65.3

EGA Public Stockholders holding PubCo Class A Common Stock

    11,732       12.9     11,732       13.1

EGA Sponsor holding PubCo Class A Common Stock

    9,958       10.9     9,958       11.1

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       10.3     9,413       10.5
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    91,103       100.0     89,603       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

 

    Scenario 2 - Assuming 25% Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Voting %     Number of Shares Owned     Voting %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       66.5     58,500       66.1

EGA Public Stockholders holding PubCo Class A Common Stock

    10,674       11.9     10,674       12.1

EGA Sponsor holding PubCo Class A Common Stock

    9,958       11.1     9,958       11.2

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       10.5     9,413       10.6
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    90,945       100.0     88,545       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

 

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    Scenario 3 - Assuming Maximum Redemptions  
    Assuming No Repurchases     Assuming Maximum Repurchases  
    Number of Shares Owned     Ownership %     Number of Shares Owned     Ownership %  

(Shares in thousands)

       

LGM Equity Holders holding PubCo Class B Common Stock

    60,000       67.2     58,500       66.7

EGA Public Stockholders holding PubCo Class A Common Stock

    9,797       11.0     9,797       11.2

EGA Sponsor holding PubCo Class A Common Stock

    9,958       11.2     9,958       11.4

Affiliate of EGA Sponsor holding PubCo Class A Common Stock in connection with conversion of Bridge Notes upon Closing

    9,413       10.6     9,413       10.7
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

    89,168       100.0     87,668       100.0
 

 

 

   

 

 

   

 

 

   

 

 

 

Organizational Structure

The following diagram illustrates the ownership of EGA prior to the Closing:

 

LOGO

The following diagrams illustrate the ownership of PubCo immediately following the Closing, on the basis of the assumptions described in the footnotes to the tables below.

We calculated the equity interests shown in the diagrams below based on the amounts set forth in the sources and uses tables on pages 56 and 149 of this proxy statement and they represent the scenarios where (i) there is no redemption of EGA Class A Common Stock, there is a redemption of 25% of the outstanding shares of EGA Class A Common Stock held by the EGA Public Stockholders, and there is a redemption of the maximum number of outstanding shares of EGA Class A Common Stock that can be redeemed while allowing the Business Combination to close (refer to the section entitled “Unaudited Pro Forma Condensed Combined Financial Information” for additional information regarding the assumptions of no redemptions, interim redemptions and maximum redemptions),(ii) there is no dilution for the warrants to purchase 11,833,333 shares of EGA Class A Common Stock outstanding and there is full dilution for such warrants and (iii) there is no repurchase of LGM Common Units (pursuant to the rights of the Existing Equityholders to have repurchased up to the Closing Date Cash Repurchase Amount described elsewhere in this proxy statement) and there is maximum repurchase of such LGM Common Units.

 

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Assuming No Dilution and No Repurchases of LGM Common Units upon Closing of the Business Combination

 

 

LOGO

 

(1)

Represents economic interests in PubCo in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(2)

Represents economic interests in PubCo in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(3)

Represents economic interests in PubCo in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(4)

Represents voting interests in PubCo in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(5)

Represents voting interests in PubCo in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(6)

Represents voting interests in PubCo in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(7)

Represents economic interests in LGM in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(8)

Represents economic interests in LGM in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(9)

Represents economic interests in LGM in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

 

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(10)

PubCo Class B Common Stock has no economic rights in PubCo.

(11)

Holders of LGM Common Units will not have voting rights in LGM. Subject to certain exceptions, LGM Common Units are redeemable for, at PubCo’s election, either cash or an equal number of shares of PubCo Class A Common Stock.

(12)

In its capacity as the managing member of LGM, PubCo will operate and control all of LGM’s business and affairs.

(13)

The voting and economic interest percentages of the Bridge Note Lenders assume that they will hold 9,412,877 shares of PubCo Class A Common Stock as a result of the conversion of the entire principal balance (inclusive of accrued PIK interest) of the Bridge Notes into shares of PubCo Class A Common Stock upon Closing.

(14)

“Operating Subsidiaries” does not include (a) single-asset LLC entities of which LGM owns less than 100% and (b) the aircraft paint facility LGM owns a 50% non-controlling ownership interest in.

 

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Assuming No Dilution and Maximum Repurchases of LGM Common Units upon Closing of the Business Combination

 

 

LOGO

 

(1)

Represents economic interests in PubCo in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(2)

Represents economic interests in PubCo in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(3)

Represents economic interests in PubCo in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(4)

Represents voting interests in PubCo in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(5)

Represents voting interests in PubCo in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(6)

Represents voting interests in PubCo in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(7)

Represents economic interests in LGM in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(8)

Represents economic interests in LGM in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(9)

Represents economic interests in LGM in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(10)

PubCo Class B Common Stock has no economic rights in PubCo.

 

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(11)

Holders of LGM Common Units will not have voting rights in LGM. Subject to certain exceptions, LGM Common Units are redeemable for, at PubCo’s election, either cash or an equal number of shares of PubCo Class A Common Stock.

(12)

In its capacity as the managing member of LGM, PubCo will operate and control all of LGM’s business and affairs.

(13)

The voting and economic interest percentages of the Bridge Note Lenders assume that they will hold 9,412,877 shares of PubCo Class A Common Stock as a result of the conversion of the entire principal balance (inclusive of accrued PIK interest) of the Bridge Notes into shares of PubCo Class A Common Stock upon Closing.

(14)

“Operating Subsidiaries” does not include (a) single-asset LLC entities of which LGM owns less than 100% and (b) the aircraft paint facility LGM owns a 50% non-controlling ownership interest in.

Assuming Full Dilution and No Repurchases of LGM Common Units upon Closing of the Business Combination

 

 

LOGO

 

(1)

Represents economic interests in PubCo in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(2)

Represents economic interests in PubCo in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(3)

Represents economic interests in PubCo in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(4)

Represents voting interests in PubCo in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(5)

Represents voting interests in PubCo in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

 

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(6)

Represents voting interests in PubCo in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(7)

Represents economic interests in LGM in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(8)

Represents economic interests in LGM in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(9)

Represents economic interests in LGM in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(10)

PubCo Class B Common Stock has no economic rights in PubCo.

(11)

Holders of LGM Common Units will not have voting rights in LGM. Subject to certain exceptions, LGM Common Units are redeemable for, at PubCo’s election, either cash or an equal number of shares of PubCo Class A Common Stock.

(12)

In its capacity as the managing member of LGM, PubCo will operate and control all of LGM’s business and affairs.

(13)

In a full dilution scenario it is assumed that the Public Stockholders exercise all 7,500,000 of their warrants to purchase PubCo Class A Common Stock and that the Sponsor exercises all 4,333,333 of its warrants to purchase PubCo Class A Common Stock. In addition, the A&R Operating Agreement specifies that in the event any holder of a warrant (other than an Excluded Instrument, as defined in the A&R Operating Agreement) to purchase shares of PubCo Class A Common Stock exercises, then PubCo agrees that it shall cause a corresponding exercise of a warrant to purchase LGM Common Units with similar terms held by it, such that the number of shares of PubCo Class A Common Stock issued in connection with the exercise of such warrants to purchase PubCo Class A Common Stock shall match with a corresponding number of Common Units issued by LGM pursuant to the respective warrant agreements to purchase LGM Common Units. As a result, the full dilution scenario assumes that 11,833,333 LGM Common Units are issued to the PubCo due to the assumed exercise of 7,500,000 warrants to purchase PubCo Class A Common Stock held by Public Stockholders and the assumed exercise of 4,333,333 warrants to purchase PubCo Class A Common Stock held by the Sponsor.

(14)

The voting and economic interest percentages of the Bridge Note Lenders assume that they will hold 9,412,877 shares of PubCo Class A Common Stock as a result of the conversion of the entire principal balance (inclusive of accrued PIK interest) of the Bridge Notes into shares of PubCo Class A Common Stock upon Closing.

(15)

“Operating Subsidiaries” does not include (a) single-asset LLC entities of which LGM owns less than 100% and (b) the aircraft paint facility LGM owns a 50% non-controlling ownership interest in.

 

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Assuming Full Dilution and Maximum Repurchases of LGM Common Units upon Closing of the Business Combination

 

 

LOGO

 

(1)

Represents economic interests in PubCo in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(2)

Represents economic interests in PubCo in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) of EGA Class A Common Stock exercise their Redemption Rights with respect to such shares.

(3)

Represents economic interests in PubCo in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(4)

Represents voting interests in PubCo in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(5)

Represents voting interests in PubCo in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(6)

Represents voting interests in PubCo in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(7)

Represents economic interests in LGM in a scenario in which no EGA stockholders exercise their Redemption Rights with respect to their EGA Class A Common Stock.

(8)

Represents economic interests in LGM in a scenario in which EGA Public Stockholders holding 1.1 million shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

(9)

Represents economic interests in LGM in a scenario in which EGA Public Stockholders holding 1.9 million shares of EGA Class A Common Stock (which represents the maximum outstanding shares of EGA Class A Common Stock subject to possible redemption) exercise their Redemption Rights with respect to such shares.

 

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(10)

PubCo Class B Common Stock has no economic rights in PubCo.

(11)

Holders of LGM Common Units will not have voting rights in LGM. Subject to certain exceptions, LGM Common Units are redeemable for, at PubCo’s election, either cash or an equal number of shares of PubCo Class A Common Stock.

(12)

In its capacity as the managing member of LGM, PubCo will operate and control all of LGM’s business and affairs.

(13)

In a full dilution scenario it is assumed that the Public Stockholders exercise all 7,500,000 of their warrants to purchase PubCo Class A Common Stock and that the Sponsor exercises all 4,333,333 of its warrants to purchase PubCo Class A Common Stock. In addition, the A&R Operating Agreement specifies that in the event any holder of a warrant (other than an Excluded Instrument as defined in the A&R Operating Agreement) to purchase shares of PubCo Class A Common Stock exercises, then PubCo agrees that it shall cause a corresponding exercise of a warrant to purchase LGM Common Units with similar terms held by it, such that the number of shares of PubCo Class A Common Stock issued in connection with the exercise of such warrants to purchase PubCo Class A Common Stock shall match with a corresponding number of Common Units issued by LGM pursuant to the respective warrant agreements to purchase LGM Common Units. As a result, the full dilution scenario assumes that 11,833,333 LGM Common Units are issued to the PubCo due to the assumed exercise of 7,500,000 warrants to purchase PubCo Class A Common Stock held by Public Stockholders and the assumed exercise of 4,333,333 warrants to purchase PubCo Class A Common Stock held by the Sponsor.

(14)

The voting and economic interest percentages of the Bridge Note Lenders assume that they will hold 9,412,877 shares of PubCo Class A Common Stock as a result of the conversion of the entire principal balance (inclusive of accrued PIK interest) of the Bridge Notes into shares of PubCo Class A Common Stock upon Closing.

(15)

“Operating Subsidiaries” does not include (a) single-asset LLC entities of which LGM owns less than 100% and (b) the aircraft paint facility LGM owns a 50% non-controlling ownership interest in.

Proposals to be put to the Special Meeting

The following is a summary of the Proposals to be put to the Special Meeting.

If any proposal is not approved by EGA’s stockholders at the Special Meeting, the Board may submit the Adjournment Proposal for a vote.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

The Transaction Proposal

The stockholders are being asked to approve and adopt the Equity Purchase Agreement, a copy of which is attached to the accompanying proxy statement as Annex A and Annex A-1, and approve the other transactions contemplated by the Equity Purchase Agreement.

Pursuant to the Equity Purchase Agreement, at the Closing, we will (i) amend and restate our Existing Certificate of Incorporation to, among other things, (a) change the name of EGA to “flyExclusive, Inc.,” (b) convert all then-outstanding Founder Shares into shares of PubCo Class A Common Stock and (c) authorize the issuance of PubCo Class B Common Stock and (ii) replace the Existing Bylaws, by adopting the PubCo Bylaws.

The Equity Purchase Agreement also states that at the Closing, the Existing Equityholders, PubCo and LGM will enter into the A&R Operating Agreement which, among other things, will (i) restructure the capitalization of

 

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LGM to (a) authorize the issuance of LGM Common Units to PubCo and (b) reclassify the Existing LGM Common Units held by the Existing Equityholders into LGM Common Units and (ii) appoint PubCo as the managing member of LGM. Pursuant to the Equity Purchase Agreement, at the Closing, each Existing LGM Common Unit held by each Existing Equityholder will automatically be reclassified into the number of LGM Common Units equal to 60,000,000 multiplied by the percentage set forth next to each Existing Equityholder’s name on Schedule I of the Equity Purchase Agreement. Following this reclassification, any certificates outstanding evidencing ownership of Existing LGM Common Units will be of no further force or effect.

Following the Closing, we will be organized as an Up-C structure, in which substantially all of the operating assets of LGM’s business will be held by LGM, and PubCo’s only assets will be its equity interests in LGM. Current EGA stockholders, together with the Bridge Note Lenders, are expected to own between approximately 22.5% and 24.8% of the equity interests in PubCo and PubCo will be entitled to the same percentage of distributions made by LGM.

After consideration of the factors identified and discussed in the section entitled “Proposal No. 1 — The Transaction Proposal — The Equity Purchase Agreement — The Board’s Reasons for Approving the Business Combination,” the Board concluded that the Business Combination met all of the requirements disclosed in the prospectus for our IPO, including that the business of LGM had a fair market value of at least 80% of the balance of the funds in the Trust Account at the time of execution of the Equity Purchase Agreement.

For additional information, see “Proposal No. 1 — The Transaction Proposal” section of this proxy statement.

The NYSE Proposal

Assuming the Transaction Proposal is approved, our stockholders are also being asked to approve the NYSE Proposal.

EGA may issue 20% or more of our outstanding common stock or 20% or more of the voting power, in each case outstanding before the issuance, in connection with the Business Combination, assuming the Transaction Proposal and the Charter Proposal are approved and adopted. The NYSE Proposal is a proposal to approve, for the purposes of complying with the applicable listing rules of the NYSE, (i) the issuance of more than 20% of our issued and outstanding common stock pursuant to the terms of the Equity Purchase Agreement and (ii) the issuance of PubCo Class A Common Stock to the Bridge Note Lenders in connection with the Business Combination, in each case, that may result in LGM or any other investor owning more than 20% of our outstanding common stock, or more than 20% of the voting power, which could constitute a “change of control” under the NYSE rules.

For additional information, see “Proposal No. 2 — The NYSE Proposal” section of this proxy statement.

The Charter and Governance Proposals

If the Transaction Proposal and the NYSE Proposal are approved and the Business Combination is to be consummated, prior to the Closing, EGA will amend and restate the Existing Certificate of Incorporation with the A&R PubCo Charter under the DGCL to:

 

   

increase the total number of authorized shares and classes of stock of PubCo to 325,000,000 shares consisting of (i) 25,000,000 shares of preferred stock, par value $0.0001 per share, (ii) 200,000,000 shares of PubCo Class A Common Stock, par value $0.0001 per share, and (iii) 100,000,000 shares of PubCo Class B Common Stock, par value $0.0001 per share.

 

   

provide for certain additional changes, including among other things, (i) changing the post-Business Combination corporate name from “EG Acquisition Corp.” to “flyExclusive, Inc.,” (ii) making

 

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PubCo’s corporate existence perpetual, and (iii) removing certain provisions related to our status as a blank check company that will no longer apply upon the consummation of the Business Combination.

 

   

provide that the number of authorized shares of any class or classes of stock may be increased or decreased by the affirmative vote of the holders of a majority of the total voting power of the outstanding shares of capital stock entitled to vote thereon, voting together as a single class.

 

   

provide that the number of directors of PubCo will be fixed from time to time by the vote of the majority of the PubCo Board, which number shall initially be seven.

 

   

provide that the PubCo Bylaws may only be amended by the affirmative vote of the holders of at least the majority of the voting power of all the then-outstanding shares of voting stock of PubCo with the power to vote generally in an election of PubCo directors, voting together as a single class.

 

   

provide that each share of PubCo Class A Common Stock and each share of PubCo Class B Common Stock will entitle the holder thereof to one vote on all matters on which stockholders are generally entitled to vote.

The A&R PubCo Charter differs in material respects from the Existing Certificate of Incorporation and we urge stockholders to carefully consult the information set out in the Section “Proposal No. 3 — The Charter and Governance Proposals” and the full text of the A&R PubCo Charter, attached hereto as Annex B.

The Charter Proposal is conditioned on the approval of the Transaction Proposal and the NYSE Proposal. Therefore, if either of the Transaction Proposal or the NYSE Proposal is not approved, the Charter Proposal will have no effect, even if approved by our Public Stockholders.

The Director Election Proposal

Assuming the Transaction Proposal, the NYSE Proposal and the Charter Proposal are approved, the Board will nominate seven directors to serve terms on the PubCo Board. Holders of EGA Class B Common Stock are being asked to elect these directors to serve until their respective successors are duly elected and qualified pursuant to the terms of the A&R PubCo Charter.

For additional information, see “Proposal No. 4 — The Director Election Proposal” section of this proxy statement.

The PubCo Equity Incentive Plan Proposal

Assuming the Transaction Proposal, the Charter Proposal and the NYSE Proposal are approved, our stockholders are also being asked to approve the PubCo Equity Incentive Plan Proposal. We expect that, prior to the consummation of the Business Combination, our Board will approve and adopt the 2023 Plan. Our stockholders should carefully read the entire 2023 Plan, a copy of which is attached to this proxy statement as Annex D, before voting on this proposal.

For additional information, see “Proposal No. 5 — The PubCo Equity Incentive Plan Proposal” section of this proxy statement.

The PubCo ESPP Proposal

Assuming the Transaction Proposal, the Charter Proposal, the NYSE Proposal and the PubCo Equity Incentive Plan Proposal are approved, our stockholders are also being asked to approve the PubCo ESPP Proposal. We expect that, prior to the consummation of the Business Combination, our Board will approve and adopt the ESPP. Our stockholders should carefully read the entire ESPP, a copy of which is attached to this proxy statement as Annex F, before voting on this proposal.

For additional information, see “Proposal No. 6 — The PubCo ESPP Proposal” section of this proxy statement.

 

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The Adjournment Proposal

The Adjournment Proposal allows the Board to submit a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary or appropriate, to permit further solicitation of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the proposals.

For additional information, see “Proposal No. 7 — The Adjournment Proposal” section of this proxy statement.

Date, Time and Place of Special Meeting of EGA’s Stockholders

The Special Meeting will be held via live webcast at 10:00 a.m., New York time, on December 7, 2023, to consider and vote upon the proposals to be put to the Special Meeting, including if necessary, the Adjournment Proposal. The Special Meeting can be accessed by visiting https://www.cstproxy.com/egacquisition/sm2023, where you will be able to listen to the meeting live, or vote by phone by calling toll-free (within the U.S. and Canada) 1 800-450-7155 (or +1 857-999-9155 if you are located outside the U.S. and Canada (standard rates apply)), and, if you were a holder of record (as opposed to a beneficial owner of shares held in a brokerage or similar account) of our stock as of the Record Date, vote during the meeting. Please note that you will only be able to access the Special Meeting by means of remote communication. Please have your control number, which can be found on your proxy card, to join the Special Meeting. If you do not have a control number, please contact the Transfer Agent.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

Voting Power; Record Date

Stockholders will be entitled to vote or direct votes to be cast at the Special Meeting if they owned shares of EGA Common Stock at the close of business on November 13, 2023, which is the Record Date for the Special Meeting. Stockholders will have one vote for each share of EGA Common Stock owned on the Record Date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. EGA Warrants do not have voting rights. On the record date, there were 9,856,829 shares of EGA Common Stock outstanding, of which 9,855,829 were shares of EGA Class A Common Stock, including 4,231,829 shares of EGA Class A Common Stock held by Public Stockholders and 5,624,000 Converted Shares held by Sponsor, with the rest being 1,000 shares of EGA Class B Common Stock, all of which is held by our Sponsor.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

Quorum and Vote of Stockholders

A quorum of our stockholders is necessary to hold a valid meeting. The presence, in person (which includes presence virtually at the Special Meeting) or by proxy of shares of outstanding EGA Common Stock representing

 

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a majority of the voting power of all outstanding shares of EGA Common Stock entitled to vote at the Special Meeting will constitute a quorum. In the absence of a quorum, any officer entitled to preside at, or act as secretary of the Special Meeting has the power to adjourn the Special Meeting. As of the Record Date 4,928,416 shares of EGA Common Stock would be required to achieve a quorum.

Our Sponsor will count towards this quorum and pursuant to the Letter Agreement, our Sponsor, officers and directors have agreed to vote any shares of capital stock of EGA owned by them in favor of the Business Combination. The Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor’s attendance at the Special Meeting (represented in person or by proxy) would be sufficient to satisfy the quorum requirement. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and accordingly, no shares of EGA Common Stock held by the Public Stockholders will be needed to form a quorum.

The following votes are required for each Proposal at the Special Meeting:

 

   

The Transaction Proposal:    The approval of the Transaction Proposal requires the affirmative of the holders of a majority of the shares of the EGA Common Stock that are voted at the Special Meeting.

 

   

The NYSE Proposal:    The approval of the NYSE Proposal requires the affirmative vote of a majority in voting power of the outstanding shares of EGA Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting together as a single class.

 

   

The Charter and Governance Proposals:    Approval of the Charter and Governance Proposals requires the affirmative vote of holders of a majority of the outstanding shares of EGA Common Stock, the affirmative vote of the holders of a majority of the outstanding shares of EGA Class A Common Stock, voting separately as a single class, and the affirmative vote of the holders of a majority of the outstanding shares of EGA Class B Common Stock, voting separately as a single class, entitled to vote thereon at the Special Meeting.

 

   

The Director Election Proposal:    The election of the director nominees pursuant to the Director Election Proposal requires the affirmative vote of a plurality of the outstanding shares of EGA Class B Common Stock cast by holders of EGA Class B Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the virtual Special Meeting and entitled to vote thereon.

 

   

The PubCo Equity Incentive Plan Proposal:    The approval of the PubCo Equity Incentive Plan Proposal requires the affirmative vote of a majority in voting power of the outstanding shares of EGA Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting together as a single class.

 

   

The PubCo ESPP Proposal:    The approval of the PubCo ESPP Proposal requires the affirmative vote of a majority in voting power of the outstanding shares of EGA Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting together as a single class.

 

   

The Adjournment Proposal:    The approval of the Adjournment Proposal requires the affirmative vote of a majority in voting power of the outstanding shares of EGA Common Stock present in person (which includes presence virtually at the Special Meeting) or by proxy at the Special Meeting and entitled to vote thereon, voting together as a single class.

With respect to each Proposal in this proxy statement, you may vote “FOR,” “AGAINST” or “ABSTAIN.” If a stockholder fails to return a proxy card or fails to instruct a broker or other nominee how to vote, and does not attend the Special Meeting in person (which includes presence virtually at the Special Meeting), then the

 

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stockholder’s shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. If a valid quorum is established, any such failure to vote or to provide voting instructions will have the same effect as a vote “AGAINST” the Charter Proposal, but will have no effect on the outcome of the Transaction Proposal, Director Election Proposal, NYSE Proposal, PubCo Equity Incentive Plan Proposal or PubCo ESPP Proposal.

Abstentions will be counted in connection with the determination of whether a valid quorum is established but their effect on the Proposals in this proxy statement differ as follows:

 

   

An abstention will have no effect on the Transaction Proposal or the Director Election Proposal.

 

   

In contrast, an abstention will have the same effect as a vote “AGAINST” the NYSE Proposal, Charter Proposal, PubCo Equity Incentive Plan Proposal and PubCo ESPP Proposal.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

Redemption Rights

Pursuant to the Existing Certificate of Incorporation, if a stockholder vote is required for the Business Combination to be consummated, EGA must offer to redeem for cash all or a portion of the shares of EGA Class A Common Stock held by a Public Stockholder. You will be entitled to receive cash for any shares of EGA Class A Common Stock to be redeemed only if you:

(i) hold shares of EGA Class A Common Stock, or (b) hold EGA Units and you elect to separate your EGA Units into the underlying shares of EGA Class A Common Stock and EGA Public Warrants prior to exercising your Redemption Rights with respect to the shares of EGA Class A Common Stock; and

(ii) prior to 5:00 p.m., New York time, on December 5, 2023 (two business days prior to the vote at the Special Meeting), (a) submit a written request to the Transfer Agent, that we redeem your shares of EGA Class A Common Stock for cash, and (b) deliver your shares of EGA Class A Common Stock to the Transfer Agent, physically or electronically through DTC.

Holders of EGA Units must elect to separate the underlying shares of EGA Class A Common Stock and EGA Public Warrants prior to exercising Redemption Rights with respect to the shares of EGA Class A Common Stock. If holders hold their EGA Units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the EGA Units into the underlying shares of EGA Class A Common Stock and EGA Public Warrants, or if a holder holds EGA Units registered in its own name, the holder must contact the Transfer Agent directly and instruct it to do so. Public Stockholders may elect to redeem all or a portion of their shares of EGA Class A Common Stock even if they vote for the Transaction Proposal. If the Business Combination is not consummated, the EGA Class A Common Stock will not be redeemed. If the Business Combination is consummated and a Public Stockholder properly exercises its right to redeem its shares of EGA Class A Common Stock and timely delivers its shares to the Transfer Agent, we will redeem each share of EGA Class A Common Stock for a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business days prior to the consummation of the Business Combination, including interest earned on the funds held in the Trust Account (net of taxes payable), divided by the number of then-outstanding shares of EGA Class A Common Stock held by the Public Stockholders. For illustrative purposes, as of October 31, 2023, this would have amounted to approximately $10.59 per share of EGA Class A Common Stock. If a Public Stockholder exercises its Redemption Rights, then it will be exchanging its redeemed

 

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shares of EGA Class A Common Stock for cash and will no longer own such shares. Any request to redeem shares of EGA Class A Common Stock, once made, may be withdrawn at any time until the date of the Special Meeting, and thereafter, with our consent, until the Closing. Furthermore, if a holder of shares of EGA Class A Common Stock delivers its certificate in connection with an election of its redemption and subsequently decides prior to the date of the Special Meeting not to elect to exercise such rights, it may simply request that EGA instruct our Transfer Agent to return the certificate (physically or electronically). The holder can make such request by contacting the Transfer Agent, at Continental Stock Transfer & Trust Company, 1 State Street, 30th Floor, New York, NY 10004, Attention: SPAC Redemption Team, or by email at spacredemptions@continentalstock.com. We will be required to honor such request only if made prior to the date of the Special Meeting. See the section entitled “Special Meeting of EGA Stockholders — Redemption Rights” in this proxy statement for a detailed description of the procedures to be followed if you wish to redeem your shares of EGA Class A Common Stock for cash.

Notwithstanding the foregoing, a Public Stockholder, together with any affiliate of such Public Stockholder or any other person with whom such Public Stockholder is acting in concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from redeeming its shares of EGA Class A Common Stock with respect to more than an aggregate of 15% of the shares of EGA Class A Common Stock outstanding, without our prior consent. Accordingly, if a Public Stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the shares of EGA Class A Common Stock outstanding, then any such shares in excess of that 15% limit would not be redeemed, without our prior consent.

In order for Public Stockholders to exercise their Redemption Rights in respect of the Transaction Proposal, Public Stockholders must properly exercise their Redemption Rights and deliver their shares of EGA Class A Common Stock (either physically or electronically) to the Transfer Agent prior to 5:00 p.m., New York time, on December 5, 2023 (two business days prior to the vote at the Special Meeting). Immediately following the consummation of the Business Combination, EGA will satisfy the exercise of Redemption Rights by redeeming the shares of EGA Class A Common Stock issued to the Public Stockholders that validly exercised their Redemption Rights.

Holders of EGA Warrants will not have Redemption Rights with respect to the warrants.

Appraisal Rights

Neither our stockholders nor our warrant holders have appraisal rights in connection with the Business Combination under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, telephone or in person. EGA has engaged Morrow Sodali to assist in the solicitation of proxies.

If a stockholder submits a proxy card, it may still attend the Special Meeting in person (which would include presence at the virtual Special Meeting), revoke its proxy and vote. A stockholder also may change its vote by submitting a later-dated proxy card as described in the section entitled “Special Meeting of the EGA Stockholders — Revoking Your Proxy.”

Interests of Certain Persons in the Business Combination

In considering the recommendation of our Board to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, our Sponsor and our directors and officers and the Existing Equityholders have interests in the Business Combination that are different from, or in addition to, those of our other stockholders generally. Our directors were aware of and considered these interests, among

 

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other matters, in evaluating the Business Combination, and in recommending to our stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

 

   

the anticipated election of Gregg S. Hymowitz, our existing Chief Executive Officer and director, and Gary Fegel, our existing Chairman, as directors of PubCo after the consummation of the Business Combination. As such, in the future they will receive any cash fees, stock options or stock awards that the PubCo Board determines to pay to directors;

 

   

the fact that, pursuant to the Stockholders’ Agreement, our Sponsor, and its permitted transferees, by a majority of shares held by them, will have the right to nominate, and the PubCo Board and the Existing Equityholders, and their permitted transferees, will appoint and vote for, two members of the PubCo Board, initially designated pursuant to the Stockholders’ Agreement as Gregg S. Hymowitz and Gary Fegel, and thereafter as designated by the Sponsor, and its permitted transferees, by a majority of shares held by them;

 

   

the fact that (i) each of Gregg Hymowitz (through his affiliation with EnTrust Global Management GP LLC) and Gary Fegel (through his affiliation with GMF Venture LP) beneficially owns and has a substantial economic interest in Sponsor and (ii) each of Louise Curbishley, Linda Hall Daschle, Jonathan Silver and Noorsurainah (Su) Tengah individually owns and has a small (less than 1%) economic interest in Sponsor (in each case, which is immaterial to their respective net worth and which the Board believes is not material to the Business Combination), and, as such, given Sponsor’s ownership of the outstanding EGA Class B Common Stock and warrants as well as certain governance rights that Sponsor will receive under the Stockholders Agreement, each of the foregoing directors of EGA may have an interest in the Business Combination that is different from the Public Stockholders generally;

 

   

the fact that (i) Noorsurainah (Su) Tengah serves as the Executive Manager and Head of Alternative Assets, for the Brunei Investment Agency, which is an investor in EnTrust Global and certain investment vehicles affiliated with EnTrust Global, including EnTrust Emerald (Cayman) LP, which is purchasing $50 million of the Bridge Notes, and (ii) Gregg Hymowitz serves as the Founder and Chief Executive Officer of EnTrust Global, an affiliate of which serves as the general partner of EnTrust Emerald (Cayman) LP and other investment vehicles, which are purchasing $85 million in the aggregate of the Bridge Notes, and in respect of which certain affiliates of EnTrust Global may receive certain management and other fees, and, as such, Ms. Tengah and Mr. Hymowitz may have an interest in the Business Combination that is different from the Public Stockholders generally;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that our Sponsor has waived its right to redeem any of the shares of capital stock of EGA owned by it in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that our Sponsor has to waive its rights to liquidating distributions from the Trust Account with respect to any Founder Shares or Converted Shares held by it if we fail to complete our initial business combination by December 28, 2023, (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board);

 

   

the fact that if we do not complete our initial business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board), the proceeds of the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of our EGA Class A Common Stock, and the Private Placement Warrants will expire worthless;

 

   

the fact that, with certain limited exceptions, the Founder Shares and the Converted Shares will not be transferable or assignable by our Sponsor until the earlier of: (A) three years after the completion of our initial business combination (or with respect to any Founder Shares or Converted Shares transferred or

 

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distributed by the Sponsor to one of our independent directors, one year) and (B) subsequent to our initial business combination, the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of EGA Class A Common Stock for cash, securities or other property. With certain limited exceptions, the Private Placement Warrants and the EGA Class A Common Stock underlying such warrants, will not be transferable, assignable or saleable by our Sponsor or its permitted transferees until three years after the completion of our initial business combination. This lock-up is longer than what is common practice generally for special purpose acquisition companies. The rationale for this longer lock-up period is the belief that it would better align the interests of the Sponsor with those of our investors, and that it would also provide a competitive advantage when approaching potential target companies, compared to special purpose acquisition companies where the founder shares and private placement warrants are subject to a shorter lock-up period. Since our Sponsor and officers and directors may directly or indirectly own common stock and warrants, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination;

 

   

the fact that our Sponsor, officers or directors may have a conflict of interest with respect to evaluating the Business Combination and financing arrangements because we have obtained or may obtain loans from our Sponsor or an affiliate of our Sponsor or any of our officers or directors to finance transaction costs in connection with the Business Combination, of which up to $1,500,000 of such loans could be made convertible into warrants (although no such loans made to date are convertible) identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period, at a price of $1.50 per warrant at the option of the lender;

 

   

the fact that our Sponsor purchased an aggregate of 5,750,000 Founder Shares, for an aggregate offering price of $25,000 at an average purchase price of approximately $0.004 per share. In March 2021, EGA effected a stock dividend resulting in an increase in the total number of shares of EGA Class B Common Stock outstanding from 5,750,000 to 7,187,500. On May 25, 2021, the Sponsor surrendered and EGA cancelled an aggregate of 718,750 shares of EGA Class B Common Stock for no consideration, resulting in an aggregate of 6,468,750 shares of EGA Class B Common Stock outstanding and held by the Sponsor. In July 2021, 843,750 of the Founder Shares were forfeited because the underwriters’ over-allotment granted in the IPO was not exercised, resulting in a decrease in the total number of shares of EGA Class B Common Stock outstanding to 5,625,000, such that the total number of Founder Shares represented 20% of the total number of shares of EGA Common Stock outstanding. On May 19, 2023, EGA’s stockholders approved a proposal to amend EGA’s organizational documents to extend the deadline by which EGA’s initial business combination must be completed up to five times, initially from May 28, 2023 to August 28, 2023, and thereafter for additional one month periods commencing on August 28, 2023 through and until December 28, 2023 (or such earlier date after May 28, 2023 as determined by the Board). In connection with the vote to amend EGA’s organizational documents, the holders of 18,268,171 shares of EGA Class A Common Stock properly exercised their right to redeem their shares for cash. Following the approval of the amendment to EGA’s organizational documents, Sponsor elected to convert 5,624,000 of the 5,625,000 Founder Shares into the Converted Shares. After giving effect to the redemptions described above and the conversion of the Founder Shares, there is an aggregate of 9,856,829 shares of EGA Common Stock outstanding, consisting of 9,855,829 shares of EGA Class A Common Stock, including 4,231,829 shares of EGA Class A Common Stock held by Public Shareholders and 5,624,000 Converted Shares, and 1,000 Founder Shares, such that the total number of Founder Shares and Converted Shares held by Sponsor represents 57% of the total number of shares of EGA Common Stock outstanding, and such securities will have a significantly higher value at the time of the Business Combination, estimated at approximately $60.0 million based on the closing price of $10.66 per share of EGA Class A Common Stock on the NYSE on November 1, 2023 and, in light of the relatively small average price per share originally paid by Sponsor for the Founder Shares, Sponsor and its affiliates can earn a positive rate of return on their investment even if EGA Public Stockholders experience a negative return following the consummation of the Business Combination;

 

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the fact that our Sponsor paid $6,500,000 for an aggregate of 4,333,333 Private Placement Warrants at a price of $1.50 per warrant in a private placement simultaneously with the completion of the IPO, with each Private Placement Warrant being exercisable commencing 30 days following the Closing, subject to certain lock-up restrictions, for one share of PubCo Class A Common Stock at $11.50 per share; the warrants held by our Sponsor had an aggregate market value of approximately $406 thousand based upon the closing price of $0.0937 per warrant on the NYSE on November 1, 2023;

 

   

the fact that our Existing Certificate of Incorporation provides that, except in limited circumstances, the doctrine of corporate opportunity does not apply with respect to any of EGA’s officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have and that, in the course of their other business activities, EGA’s officers and directors may have, or may become, aware of other investment and business opportunities which may be appropriate for presentation to EGA as well as the other entities with which they are affiliated and owe fiduciary duties to and that, given the corporate opportunity waiver described above, such EGA directors and officers may not have, or may not, present such opportunity to EGA; however, EGA does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target;

 

   

the fact that the Existing Equityholders, who (i) will have the right to designate directors to the PubCo Board pursuant to the Stockholders’ Agreement, and (ii) include members of LGM’s management team who will become executive officers and directors of PubCo following the Business Combination, will hold a significant number of shares of PubCo Class A Common Stock and PubCo Class B Common Stock;

 

   

the fact that Segrave will be the Chief Executive Officer following consummation of the Business Combination and will hold a majority of the PubCo Class B Common Stock following the Business Combination; and

 

   

The fact that if the Trust Account is liquidated, including in the event that we are unable to complete an initial business combination within the required time period, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

Our Sponsor or its affiliates may purchase shares of EGA Class A Common Stock or EGA Public Warrants in privately negotiated transactions or in the open market. There is no limit on the number of shares of EGA Class A Common Stock or EGA Public Warrants our Sponsor or its affiliates may purchase in such transactions, subject to compliance with applicable law and the NYSE rules. If our Sponsor or its affiliates engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. Any such purchases will satisfy the following conditions:

 

   

the purpose of any such purchases of shares of EGA Class A Common Stock could be to increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain

 

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amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of EGA Public Warrants could be to reduce the number of EGA Public Warrants outstanding. Any such purchases of EGA Class A Common Stock or EGA Public Warrants may result in the completion of our initial business combination that may not otherwise have been possible;

 

   

our Sponsor and its affiliates will purchase the shares of EGA Class A Common Stock or EGA Public Warrants at a price no higher than the price offered through the redemption process described herein;

 

   

the shares of EGA Class A Common Stock or EGA Public Warrants purchased by our Sponsor or its affiliates will not be voted in favor of approving the Business Combination;

 

   

our Sponsor and its affiliates will waive any Redemption Rights it would otherwise have with respect to the shares of EGA Class A Common Stock or EGA Public Warrants purchased; and

 

   

we will disclose in a Form 8-K, prior to the Special Meeting, the following:

 

   

the amount of shares of EGA Class A Common Stock or EGA Public Warrants outside of the redemption offer purchased by our Sponsor or its affiliates, along with the purchase price;

 

   

the purpose of the purchases by our Sponsor or its affiliates;

 

   

the impact, if any, of the purchases by our Sponsor or its affiliates on the likelihood that the Business Combination will be approved;

 

   

the identities of holders of EGA Class A Common Stock or EGA Public Warrants who sold to our Sponsor or its affiliates (if not purchased on the open market) or the nature of the holders of EGA Class A Common Stock or EGA Public Warrants (e.g., 5% security holders) who sold to our Sponsor or its affiliates; and

 

   

the number of shares of EGA Class A Common Stock or EGA Public Warrants for which we received redemption requests pursuant to our redemption offer.

The existence of financial and personal interests of our directors and officers may result in conflicts of interest, including a conflict between what may be in the best interests of EGA and its stockholders and what may be best for a director’s personal interests. These conflicts should be considered by you in determining how to vote on the Proposals. See the sections entitled “Risk Factors — Risks Relating to EGA — Directors of EGA have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination and approval of the other Proposals described in this proxy statement,” “Risk Factors — Risks Relating to the Business Combination — Our Sponsor, directors and officers have potential conflicts of interest in recommending that EGA stockholders vote in favor of approval of the Business Combination and approval of the other Proposals described in this proxy statement,” “Proposal No. 1 — The Transaction Proposal — Interests of Certain Persons in the Business Combination” and “Beneficial Ownership of Securities” for more information and other risks.

Recommendation of the Board

The Board believes that the Transaction Proposal and the other proposals to be presented at the Special Meeting are in the best interest of EGA’s stockholders and unanimously recommends that our stockholders vote “FOR” all the Proposals. See the sections entitled “Proposal No. 1 — The Transaction Proposal — Recommendation of the Board,” “Proposal No. 2 — The NYSE Proposal — Recommendation of the Board,” “Proposal No. 3 — The Charter and Governance Proposals — Recommendation of the Board,” “Proposal No. 4 — The Director Election Proposal — Recommendation of the Board,” “Proposal No. 5 — The PubCo Equity Incentive Plan Proposal — Recommendation of the Board,” “Proposal No. 6 — The PubCo ESPP Proposal, — Recommendation of the Board,” and “Proposal No. 7 — The Adjournment Proposal — Recommendation of the Board” for more information.

As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

 

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Conditions to the Closing of the Business Combination

Unless waived by the parties to the Equity Purchase Agreement, and subject to applicable law, the consummation of the Business Combination is subject to a number of conditions set forth in the Equity Purchase Agreement including, among other things, that (i) EGA has received the Required EGA Stockholder Approval, (ii) EGA has at least $5,000,001 in tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) immediately prior to closing and (iii) EGA will remain listed on the NYSE and has not received any written notice from the NYSE that it has failed or would reasonably be expected to fail to meet NYSE listing requirements as of the Closing Date. For more information about conditions to the consummation of the Business Combination, see “Proposal No. 1  — The Transaction Proposal — Conditions to the Closing of the Business Combination.”

Sources and Uses of Funds for the Business Combination

The following table summarizes the sources and uses for funding the Business Combination. Where actual amounts are not known or knowable, the figures below represent EGA’s good faith estimate of such amounts. In addition to illustrating the assumptions of no redemptions, 25% redemption and maximum redemptions, the tables also illustrate the impact of the maximum Closing Date Cash Repurchase Amount which, as described under the section entitled “Summary of the Proxy Statement — Summary of the Equity Purchase Agreement,” represents the maximum amount of shares that the Existing Equityholders may request to be repurchased at the Closing (which depends on the size of the Closing Date Cash Contribution Amount). The tables below titled, “Assuming No Redemptions” assumes that there are no additional redemptions of EGA Class A Common Stock subject to possible redemption. The tables below titled, “Assuming 25% Redemptions,” assumes that 25% of the outstanding shares of EGA Class A Common Stock held by the EGA Public Stockholders are redeemed. The tables below titled, “Assuming Maximum Redemptions,” assumes the redemption of the maximum number of shares of EGA Class A Common Stock subject to possible redemption that can be redeemed while allowing the Business Combination to close. Refer to the section entitled, “Unaudited Pro Forma Condensed Combined Financial Information” for additional information regarding the assumptions of no redemptions, interim redemptions and maximum redemptions.

Sources of Proceeds

 

(in millions)

   Assuming No Redemptions  
   Assuming
No Repurchases
     Assuming
Maximum Repurchases
 

Sources

     

Cash Held in Trust Account(1)

   $ 45      $ 45  

Existing Equityholders

     600        585  
  

 

 

    

 

 

 

Total Sources

   $ 645      $ 630  
  

 

 

    

 

 

 

 

(in millions)

   Assuming 25% Redemptions  
   Assuming
No Repurchases
     Assuming
Maximum Repurchases
 

Sources

     

Cash Held in Trust Account(1)

   $ 45      $ 45  

Existing Equityholders

     600        585  
  

 

 

    

 

 

 

Total Sources

   $ 645      $ 630  
  

 

 

    

 

 

 

 

(in millions)

   Assuming Maximum Redemptions  
   Assuming
No Repurchases
     Assuming
Maximum Repurchases
 

Sources

     

Cash Held in Trust Account(1)

   $ 45      $ 45  

Existing Equityholders

     600        585  
  

 

 

    

 

 

 

Total Sources

   $ 645      $ 630  
  

 

 

    

 

 

 

 

(1)

Represents the amount of the cash held in the Trust Account as of October 31, 2023.

 

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Uses of Proceeds

 

(in millions)

   Assuming No Redemptions  
   Assuming
No Repurchases
     Assuming
Maximum Repurchases
 

Uses

     

Existing Equityholders

   $ 600      $ 585  

Cash to balance sheet

     13        13  

Transaction Expenses (1)

     32        32  
  

 

 

    

 

 

 

Total Uses

   $ 645      $ 630  
  

 

 

    

 

 

 

 

     Assuming 25% Redemptions  

(in millions)

   Assuming
No Repurchases
     Assuming
Maximum Repurchases
 

Uses

     

Existing Equityholders

   $ 600      $ 585  

Cash to balance sheet

     2        2  

Assuming interim redemptions

     11        11  

Transaction Expenses(1)

     32        32  
  

 

 

    

 

 

 

Total Uses

   $ 645      $ 630  
  

 

 

    

 

 

 

 

     Assuming Maximum Redemptions  

(in millions)

   Assuming
No Repurchases
    Assuming
Maximum Repurchases
 

Uses

    

Existing Equityholders

   $ 600     $ 585  

Cash to balance sheet

     (8     (8

Assuming maximum redemptions

     21       21  

Transaction Expenses(1)

     32       32  
  

 

 

   

 

 

 

Total Uses

   $ 645     $ 630  
  

 

 

   

 

 

 

 

(1)

Represents the total estimated Transaction Expenses incurred by the parties to the Equity Purchase Agreement.

Certain U.S. Federal Income Tax Considerations

For a discussion summarizing the material U.S. federal income tax consequences of an exercise of Redemption Rights, please see “Proposal No. 1 — The Transaction Proposal — Certain U.S. Federal Income Tax Considerations to Holders of EGA Class A Common Stock Exercising Redemption Rights.

Board of Directors Following the Business Combination

Upon the consummation of the Business Combination, the PubCo Board will be chaired by Segrave, who will also serve as Chief Executive Officer, and will include six additional directors, of which four are independent. For more information on the PubCo Board members following the Business Combination, please see “PubCo Management After the Business Combination—Executive Officers and Directors After the Business Combination.”

Anticipated Accounting Treatment

For a discussion summarizing the anticipated accounting treatment of the Business Combination, please see “Proposal No. 1 — The Transaction Proposal — Anticipated Accounting Treatment.

 

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Regulatory Matters

The Business Combination is not subject to any federal, state or other regulatory requirements or approvals, except for filings with the State of Delaware necessary to effectuate the transactions contemplated by the Equity Purchase Agreement.

Risk Factors

In evaluating the Proposals to be presented at the Special Meeting, a stockholder should carefully read this proxy statement and especially consider the factors discussed in the section entitled “Risk Factors.”

Sources of Industry and Market Data

Where information has been sourced from a third party, the source of such information has been identified. Unless otherwise indicated, the information contained in this proxy statement on the market environment, market developments, growth rates, market trends and competition in the markets in which EGA and LGM operate is taken from publicly available sources, including third-party sources, or reflects EGA’s or LGM’s estimates that are principally based on information from publicly available sources.

Emerging Growth Company, Smaller Reporting Company and Controlled Company

EGA is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“SOX”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. EGA intends to take advantage of the benefits of this extended transition period. This may make comparison of EGA’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

EGA will remain an emerging growth company until the earlier of (i) the last day of the fiscal year following the fifth anniversary of the completion of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the date on which we are deemed to be a large accelerated filer, which means the market value of shares of PubCo Class A Common Stock that are held by non-affiliates exceeds $700 million as of the prior June 30th and (b) the date on which we issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that fiscal year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the end of that fiscal year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

 

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By virtue of the combined voting power of the Existing Equityholders of more than 50% of the total voting power of the shares of capital stock of PubCo outstanding as of the Closing, PubCo will, as of the Closing, qualify as a “controlled company” within the meaning of the corporate governance standards of the NYSE. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of the PubCo Board consist of independent directors, (ii) we have a compensation committee that is composed entirely of independent directors and (iii) we have a nominating/corporate governance committee that is composed entirely of independent directors.

We expect to rely on certain of these exemptions after the Closing. As a result, we will not be required to have a compensation committee consisting entirely of independent directors and we will not be required to have a nominating/corporate governance committee that is composed entirely of independent directors. We may also rely on the other exemptions so long as we qualify as a “controlled company.” To the extent we rely on any of these exemptions, holders of PubCo Class A Common Stock will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

Summary of Risk Factors

You should consider all the information contained in this proxy statement in deciding how to vote for the proposals presented herein. The occurrence of one or more of the events or circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may materially adversely affect our business, financial condition and operating results. Such risks include, but are not limited to:

Risks Relating to EGA

 

   

Our Sponsor has agreed to vote in favor of the Business Combination, regardless of how our Public Stockholders vote.

 

   

Directors of EGA have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination and approval of the other Proposals described in this proxy statement.

 

   

The “net cash” per share of EGA Class A Common Stock not being redeemed will be significantly less than the redemption price.

Risks Relating to the Business Combination

 

   

The unaudited pro forma condensed combined financial information included in this proxy statement might not be indicative of what our actual financial position or results of operations would have been.

 

   

The historical financial results of LGM and unaudited pro forma financial information included elsewhere in this proxy statement might not be indicative of what LGM’s actual financial position or results of operations would have been if it were a public company.

 

   

Financial projections with respect to LGM might not prove to be reflective of actual financial results.

 

   

EGA’s existing stockholders may experience dilution as a consequence of the Business Combination. Having a minority share position may reduce the influence that our current stockholders have on the management of PubCo.

 

   

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of our securities may decline.

 

   

The Business Combination is subject to conditions, including certain conditions that might not be satisfied on a timely basis, if at all.

 

   

While EGA and LGM work to complete the Business Combination, the focus and resources of LGM’s management may be diverted from operational matters and other strategic opportunities.

 

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Following the consummation of the Business Combination, PubCo will incur significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.

Risks Relating to Our Organization and Structure

 

   

The multi-class structure of PubCo Common Stock will have the effect of concentrating voting power with Segrave, who will serve as Chief Executive Officer of PubCo. This concentration of voting power will limit other stockholders’ ability to influence the outcomes of important transactions, including a change of control.

Risks Relating to Tax

 

   

The only principal asset of PubCo following the Business Combination will be its interest in LGM, and accordingly it will depend on distributions from LGM to pay dividends, taxes, other expenses, and make any payments required to be made under the Tax Receivable Agreement.

 

   

In certain cases, payments under the Tax Receivable Agreement may (i) exceed any actual tax benefits the Tax Group realizes or (ii) be accelerated.

 

   

A new 1% U.S. federal excise tax may be imposed upon PubCo in connection with the redemptions by PubCo of PubCo Class A common stock.

Risks Relating to LGM

 

   

We may not be able to successfully implement our growth strategies.

 

   

We are exposed to the risk of a decrease in demand for private aviation services.

 

   

The 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.

 

   

The 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.

 

   

Pilot attrition may negatively affect our operations and financial condition.

 

   

Significant reliance on certain third-party aircraft engine manufacturers and engine management companies poses risks to our owned and leased aircraft and operations.

 

   

We are exposed to operational disruptions due to maintenance.

 

   

Our transition to in-house maintenance, repair and overhaul activities could prove unsuccessful or impact key relationships.

 

   

Significant increases in fuel costs could have a material adverse effect on our business, financial condition and results of operations.

 

   

We identified material weaknesses in our internal control over financial reporting, and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

 

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COMPARATIVE SHARE INFORMATION

The following tables set forth selected historical comparative per share information for EGA and LGM and unaudited pro forma condensed combined per share information of PubCo after giving effect to the Business Combination, assuming three redemption scenarios as follows:

Redemption and Repurchase Scenarios

The comparative share information presents three redemption scenarios as follows:

 

   

Assuming No Redemptions: This scenario, which we refer to as “Assuming No Redemptions,” assumes that no additional EGA Public Stockholders exercise their right to have their shares of EGA Class A Common Stock subject to possible redemption converted into their pro rata share of the Trust Account. The Assuming No Redemptions scenario reflects the actual redemption of 18,268,171 shares redeemed prior to the Closing Date for an aggregate cash payment of approximately $187.1 million out of the Trust Account based on a redemption price of $10.24 per share, which was the redemption price paid per share for the redemption that occurred on June 1, 2023. The comparative share information also includes two sets of assumptions regarding repurchases of LGM Common Units under the Assuming No Redemptions scenario, which are described below:

 

   

Assuming No Closing Date Repurchase – In this situation, which is referred to as “Assuming No Closing Date Repurchase,” it is assumed that Existing Equityholders do not elect to have PubCo repurchase any LGM Common Units in connection with the Closing of the Business Combination (pursuant to the rights of the Existing Equityholders to have repurchased up to the Closing Date Cash Repurchase Amount described elsewhere in this proxy statement).

 

   

Assuming Maximum Closing Date Repurchase – In this situation, which is referred to as “Assuming Maximum Closing Date Repurchase,” it is assumed that Existing Equityholders have elected for the maximum number of LGM Common Units, as specified in the Equity Purchase Agreement, to be repurchased by PubCo, in connection with the Closing of the Business Combination. Under the Maximum Closing Date Repurchase in the Assuming No Redemptions scenario, it is assumed that 1,500,000 LGM Common Units will be repurchased at a price of $10.00 per LGM Common Unit.

 

   

Assuming Interim Redemptions: This scenario, which we refer to as “Assuming Interim Redemptions,” assumes that 25% of the shares of EGA Class A Common Stock held by the EGA Public Stockholders are redeemed, resulting in an aggregate cash payment of approximately $11.3 million out of the Trust Account based on an assumed redemption price of $10.66 per share, which was calculated based on the balance of the trust account at October 31, 2023 and the total redeemable shares. The Assuming Interim Redemptions scenario includes all adjustments contained in the Assuming No Redemptions scenario and presents an additional adjustment to reflect the effect of Assuming Interim Redemptions. The Assuming Interim Redemptions scenario reflects the actual redemption of 18,268,171 shares redeemed prior to the Closing Date for an aggregate cash payment of approximately $187.1 million out of the Trust Account based on a redemption price of $10.24 per share and the redemption of an additional 1,057,957 shares of EGA Class A Common Stock (which represents 25% of the outstanding shares of EGA Class A Common Stock subject to possible redemption). The comparative share information also includes two sets of assumptions regarding repurchases of LGM Common Units under the Assuming Interim Redemptions scenario, which are described below:

 

   

Assuming No Repurchases – In this situation, which is referred to as “Assuming No Closing Date Repurchase,” it is assumed that Existing Equityholders do not elect to have PubCo repurchase any LGM Common Units in connection with the Closing of the Business Combination.

 

   

Assuming Maximum Repurchases – In this situation, it is assumed that Existing Equityholders have elected for the maximum number of LGM Common Units, as specified in the Equity

 

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Purchase Agreement, to be repurchased by PubCo, in connection with the Closing of the Business Combination. Under this scenario, it is assumed that 1,500,000 LGM Common Units will be repurchased at a price of $10.00 per LGM Common Unit.

 

   

Assuming Maximum Redemption: This scenario, which we refer to as “Assuming Maximum Redemptions” assumes that 1,935,209 shares of EGA Class A Common Stock subject to possible redemption are redeemed, resulting in an aggregate cash payment of approximately $20.6 million out of the Trust Account based on an assumed redemption price of $10.66 per share, which was calculated based on the balance of the trust account at October 31, 2023 and the total redeemable shares. The Equity Purchase Agreement includes as a condition to the Closing that, at the Closing, EGA must have a minimum of $5,000,001 in tangible net assets. The Assuming Maximum Redemptions scenario reflects the actual redemption of 18,268,171 shares redeemed prior to the Closing Date for an aggregate cash payment of approximately $187.1 million out of the Trust Account based on a redemption price of $10.24 per share and the redemption of the additional maximum number of shares 1,935,209 of EGA Class A Common Stock subject to possible redemption that can be redeemed while allowing the minimum tangible net assets requirement of $5,000,001 to be met. The Assuming Maximum Redemptions scenario includes all adjustments contained in the Assuming No Redemptions scenario and presents an additional adjustment to reflect the effect of Assuming Maximum Redemptions. The comparative share information also includes two sets of assumptions regarding repurchases of LGM Common Units under the Assuming Maximum Redemptions scenario, which are described below:

 

   

Assuming No Repurchases – In this situation, which is referred to as “Assuming No Closing Date Repurchase,” it is assumed that Existing Equityholders do not elect to have PubCo repurchase any LGM Common Units in connection with the Closing of the Business Combination.

 

   

Assuming Maximum Repurchases – In this situation, it is assumed that Existing Equityholders have elected for the maximum number of LGM Common Units, as specified in the Equity Purchase Agreement, to be repurchased by PubCo, in connection with the Closing of the Business Combination. Under the Maximum Closing Date Repurchase in the Assuming Maximum Redemptions scenario, it is assumed that 1,500,000 LGM Common Units will be repurchased at a price of $10.00 per LGM Common Unit.

The unaudited pro forma book value (deficit) per share information reflects the Business Combination as if it had occurred on June 30, 2023. The unaudited pro forma net loss per share and weighted average shares outstanding information reflect the Business Combination as if it had occurred on January 1, 2022. The historical book value (deficit) per share information is as of June 30, 2023 and the historical earnings per share information is for the six months ended June 30, 2023.

This information is only a summary and should be read together with the selected historical financial information included elsewhere in this proxy statement, and the historical financial statements of EGA and LGM and related notes. The unaudited pro forma condensed combined per share information of EGA and LGM is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information included elsewhere in this proxy statement.

The unaudited pro forma condensed combined net loss per share information below does not purport to represent the net loss per share which would have occurred had the companies been combined during the periods presented, nor net loss per share for any future date or period. The unaudited pro forma condensed combined

 

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book value per share information below does not purport to represent what the value of EGA and LGM would have been had the companies been combined as of the date presented.

 

                  Assuming No
Redemptions
 
     EGA
(Historical)
    LGM
(Historical)(2)
     Assuming No
Repurchases
    Assuming
Maximum
Repurchases
 

Per share amounts:

         

Basic and diluted book value (deficit) per share of common stock(1)

   $ (1.83     N/A      $ 0.19     $ 0.22  

Basic and diluted net loss per share, PubCo Class A common stock

   $ —         N/A      $ (0.03   $ (0.03

EGA basic and diluted earnings per share, redeemable Class A common stock

   $ 0.02       N/A      $ —       $ —    

EGA basic and diluted earnings per share, non-redeemable Class B common stock

   $ 0.02       N/A      $ —       $ —    

LGM basic and diluted earnings per share

   $ —         N/A      $ —       $ —    

Shares outstanding and weighted average shares outstanding—basic and diluted:

         

PubCo shares outstanding, Class A common stock—basic and diluted(3)

     —         N/A        19,270       19,270  

EGA shares outstanding, redeemable Class A common stock—basic and diluted

     4,232       N/A        —         —    

EGA shares outstanding, non-redeemable Class A common stock—basic and diluted

     5,624       N/A        —         —    

EGA shares outstanding, non-redeemable Class B common stock—basic and diluted

     1       N/A        —         —    

EGA weighted average shares outstanding, Class A common stock—basic and diluted

     19,496       N/A        —         —    

EGA weighted average shares outstanding, Class B common stock—basic and diluted

     4,289       N/A        —         —    

LGM weighted average common shares outstanding—basic and diluted

     —       N/A        —         —    

 

                  Assuming
Interim Redemptions
 
     EGA
(Historical)
    LGM
(Historical)(2)
     Assuming
No
Repurchases
    Assuming
Maximum
Repurchases
 

Per share amounts:

         

Basic and diluted book value (deficit) per share of common stock(1)

   $ (1.83     N/A      $ 0.20     $ 0.24  

Basic and diluted net loss per share, PubCo Class A common stock

   $ —         N/A      $ (0.03   $
(0.03

EGA basic and diluted earnings per share, redeemable Class A common stock

   $ 0.02       N/A      $ —       $ —    

EGA basic and diluted earnings per share, non-redeemable Class B common stock

   $ 0.02       N/A      $ —       $ —    

LGM basic and diluted earnings per share

   $ —         N/A      $ —       $ —    

Shares outstanding and weighted average shares outstanding—basic and diluted:

         

PubCo shares outstanding, Class A common stock—basic and diluted(3)

     —         N/A        18,212       18,212  

EGA shares outstanding, redeemable Class A common stock—basic and diluted

     4,232       N/A        —         —    

EGA shares outstanding, non-redeemable Class A common stock—basic and diluted

     5,624       N/A        —         —    

EGA shares outstanding, non-redeemable Class B common stock—basic and diluted

     1       N/A        —         —    

 

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                   Assuming
Interim Redemptions
 
     EGA
(Historical)
     LGM
(Historical)(2)
     Assuming
No
Repurchases
     Assuming
Maximum
Repurchases
 

EGA weighted average shares outstanding, Class A common stock—basic and diluted

     19,496        N/A        —          —    

EGA weighted average shares outstanding, Class B common stock—basic and diluted

     4,289        N/A        —          —    

LGM weighted average common shares outstanding—basic and diluted

     —        N/A        —          —    

 

                  Assuming
Maximum Redemptions
 
     EGA
(Historical)
    LGM
(Historical)(2)
     Assuming
No
Repurchases
    Assuming
Maximum
Repurchases
 

Per share amounts:

         

Basic and diluted book value (deficit) per share of common stock(1)

   $ (1.83     N/A      $ 0.21     $ 0.26  

Basic and diluted net loss per share, PubCo Class A common stock

   $ —       N/A      $
(0.03

  $
(0.03

EGA basic and diluted earnings per share, redeemable Class A common stock

   $ 0.02       N/A      $ —     $ —  

EGA basic and diluted earnings per share, non-redeemable Class B common stock

   $ 0.02       N/A      $ —     $ —  

LGM basic and diluted earnings per share

   $ —       N/A      $ —     $ —  

Shares outstanding and weighted average shares outstanding—basic and diluted:

         

PubCo shares outstanding, Class A common stock—basic and diluted(3)

     —       N/A        17,335       17,335  

EGA shares outstanding, redeemable Class A common stock—basic and diluted

     4,232       N/A        —       —  

EGA shares outstanding, non-redeemable Class A common stock—basic and diluted

     5,624       N/A        —       —  

EGA shares outstanding, non-redeemable Class B common stock—basic and diluted

     1       N/A        —       —  

EGA weighted average shares outstanding, Class A common stock—basic and diluted

     19,496       N/A        —         —    

EGA weighted average shares outstanding, Class B common stock—basic and diluted

     4,289       N/A        —         —    

LGM weighted average common shares outstanding—basic and diluted

     —       N/A        —       —  

 

(1)

Book value per share equals total equity attributable to stockholders divided by total common shares outstanding.

(2)

This column is not applicable (“N/A”) as LGM has membership interests rather than shares. Therefore, per share amounts are N/A for LGM.

(3)

In the scenario assuming no redemptions, the 19,270 shares of PubCo Class A common stock are comprised of 4,232 shares held by EGA Public Stockholders, 5,625 shares held by the EGA Sponsor, and 9,413 shares held by an affiliate of the EGA Sponsor in connection with the conversion of the Bridge Notes upon Closing. In the scenario assuming interim redemptions, the 18,212 shares of PubCo Class A common stock are comprised of 3,174 shares held by EGA Public Stockholders, 5,625 shares held by the EGA Sponsor, and 9,413 shares held by an affiliate of the EGA Sponsor in connection with the conversion of the Bridge Notes upon Closing. In the scenario assuming maximum redemptions, the 17,335 shares of PubCo Class A common stock are comprised of 2,297 shares held by EGA Public Stockholders, 5,625 shares held by the EGA Sponsor, and 9,413 shares held by an affiliate of the EGA Sponsor in connection with the conversion of the Bridge Notes upon Closing.

 

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RISK FACTORS

Risks Relating to LGM

In addition to the other information contained in this proxy statement, including the matters addressed under the heading “Cautionary Note Regarding Forward-Looking Statements,” you should carefully consider the following risk factors in deciding how to vote on the proposals presented in this proxy statement. The risk factors described below disclose both material and other risks and are not intended to be exhaustive and are not the only risks facing us. Additional risks not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, results of operations and cash flows in future periods or are not identified because they are generally common to businesses.

Unless the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to the business of LGM and its consolidated subsidiaries prior to the consummation of the Business Combination, which will be the business of PubCo and its consolidated subsidiaries following the consummation of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of the PubCo, in which event the market price of PubCo’s common stock could decline, and you could lose part or all of your investment.

Risks Relating to Our Business and Industry

We may not be able to successfully implement our growth strategies.

Our growth strategies include, among other things, expanding our addressable market by opening up private aviation to non-members through our marketplace, expanding into new domestic and international markets and developing adjacent businesses. We face numerous challenges in implementing our growth strategies, including our ability to execute on market, business, product/service and geographic expansions. Our strategies for growth are dependent on, among other things, our ability to expand existing products and service offerings and launch new products and service offerings. Although we devote significant financial and other resources to the expansion of our products and service offerings, including increasing our access to available aircraft supply, these efforts may not be commercially successful or achieve the desired results. Our financial results and our ability to maintain or improve our competitive position will depend on our ability to effectively gauge the direction of our key marketplaces and successfully identify, develop, market and sell new or improved products and services in these changing marketplaces. Our inability to successfully implement our growth strategies could have a material adverse effect on our business, financial condition and results of operations and any assumptions underlying estimates of expected cost savings or expected revenues may be inaccurate.

Our operating results are expected to be difficult to predict based on a number of factors that also will affect our long-term performance.

We expect our operating results to fluctuate significantly in the future based on a variety of factors, many of which are outside our control and difficult to predict. As a result, period-to-period comparisons of our operating results may not be a good indicator of our future or long-term performance. The following factors may affect us from period-to-period and may affect our long-term performance:

 

   

we may fail to successfully execute our business, marketing and other strategies;

 

   

we may experience the detrimental effects of the ongoing COVID-19 pandemic such as outbreaks of disease that affect travel behaviors;

 

   

we may be unable to attract new customers and/or retain existing customers;

 

   

we may be unable to obtain the foreign authorizations and permits necessary to operate in some international markets, and we are limited by international cabotage laws from operating point-to-point within most countries, including the European Union and the United Kingdom;

 

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we may be impacted by changes in consumer preferences, perceptions, spending patterns and demographic trends;

 

   

we may require additional capital to finance strategic investments and operations, pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and we cannot be sure that additional financing will be available or at reasonable prices and terms;

 

   

our historical growth rates may not be reflective of our future growth;

 

   

our business and operating results may be significantly impacted by actual or potential changes to the international, national, regional and local economic, business and financial conditions, the health of the global private aviation industry and risks associated with our aviation assets including recession, inflation and higher interest rates;

 

   

litigation or investigations involving us could result in material settlements, fines or penalties and may adversely affect our business, financial condition and results of operations;

 

   

existing or new adverse regulations or interpretations thereof applicable to our industry may restrict our ability to expand or to operate our business as we wish and may expose us to fines and other penalties;

 

   

the occurrence of geopolitical events such as war, terrorism, civil unrest, political instability, environmental or climatic factors, natural disaster, pandemic or epidemic outbreak, public health crisis and general economic conditions may have an adverse effect on our business;

 

   

some of our potential losses may not be covered by insurance, and we may be unable to obtain or maintain adequate insurance coverage; and

 

   

we are potentially subject to taxation-related risks in multiple jurisdictions, and changes in tax laws could have a material adverse effect on our business, cash flow, results of operations or financial condition.

In 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 all.

To grow at the rate of our projections, we will need to acquire and pay for the additional aircraft we have on order, of which up to approximately 20% will become due for payment before the end of the first half of 2024. Our growth strategy assumes that we will raise sufficient capital to support our projections and provide the necessary working capital needed to grow per our projections. However, we currently do not have the available cash to provide us with adequate liquidity for the purchase of the additional aircraft. There is no assurance that we will be able to raise this additional capital or generate sufficient future cash flow to fund the purchases of these additional aircraft. If the amount of capital we are able to raise, together with any income from future operations, is not sufficient to add the number of planes needed under our projections, we might not achieve our projected growth rate.

Our ability to obtain necessary financing, whether in the form of equity, debt (asset-backed or otherwise) and/or hybrid financings, may be impaired by factors such as the health of and access to capital markets and our limited track record as a public company, and may be on terms that are unfavorable to us, if available at all. Any additional capital raised through the sale of additional shares of our capital stock, convertible debt or other equity may dilute the ownership percentage of our stockholders.

We may 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 us.

From time to time, we may consider opportunities to acquire other companies, products or technologies that may enhance our products and service offerings or technology, expand the breadth of our markets or customer base, or advance our business strategies. Any such transaction could be material to our business and could take any number of forms, including mergers, joint ventures and the purchase of equity interests. The consideration

 

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for such transactions may include, among other things, cash, common stock or our equity interests, and in conjunction with a transaction we might incur indebtedness. If we elect to pursue an acquisition, our ability to successfully implement such transaction would depend on a variety of factors. If we need to obtain any third parties’ consent prior to an acquisition, they may refuse to provide such consent or condition their consent on our compliance with additional restrictive covenants that limit our operating flexibility.

Acquisition transactions involve risks, including, but not limited to:

 

   

insufficient revenue to offset liabilities assumed;

 

   

inadequate return of capital;

 

   

regulatory or compliance issues, including securing and maintaining regulatory approvals;

 

   

unidentified issues not discovered in due diligence;

 

   

those associated with integrating the operations or (as applicable) separately maintaining the operations;

 

   

financial reporting;

 

   

managing geographically dispersed operations resulting from an acquisition;

 

   

the diversion of management’s attention from current operations;

 

   

potential unknown risks associated with an acquisition;

 

   

unanticipated expenses related to acquired businesses or technologies and their integration into our existing business or technology;

 

   

the potential loss of key employees, customers or partners of an acquired business; or

 

   

the tax effects of any such acquisitions.

We may not successfully integrate any future acquisitions and may not achieve anticipated revenue and cost benefits relating to any such transactions. Realizing the benefits of acquisitions depends in part on the integration of operations and personnel. If we do not complete an announced acquisition transaction or integrate an acquired business successfully and in a timely manner, we may not realize the benefits of the acquisition to the extent anticipated, and in certain circumstances an acquisition could harm our financial position. In addition, strategic transactions may be expensive, time consuming and may strain our resources. Such transactions may not be accretive to our earnings and may negatively impact our results of operations as a result of, among other things, the incurrence or assumption of indebtedness, or the impairment or write-off of goodwill and intangible assets. Furthermore, strategic transactions that we may pursue could result in dilutive issuances of equity securities. As a result of the risks inherent in such transactions, we cannot guarantee that any future transaction will be completed successfully or that it will ultimately result in the realization of our anticipated benefits or that it will not have a material adverse impact on our business, financial condition and results of operations. If we were to complete such an acquisition, investment or other strategic transaction, we may require debt financing that could result in significant indebtedness and debt service obligations.

We are exposed to the risk of a decrease in demand for private aviation services.

If demand for private aviation services were to decrease, this could result in slower jet club growth, members declining to renew their memberships and reduced interest in the fractional and partnership programs, all of which could have a material adverse effect on our business, financial condition and results of operations. In addition, our customers may consider private air travel through our products and services to be a luxury item, especially when compared to commercial air travel. As a result, any general downturn in economic, business and financial conditions which has an adverse effect on our customers’ spending habits could cause them to travel less frequently and, to the extent they travel, to travel using commercial air carriers or other means considered to be more economical than our products and services. In addition, in cases where significant hours of private flight

 

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are needed, many of the companies and high-net-worth individuals to whom we provide products and services have the financial ability to purchase their own aircraft or operate their own corporate flight department should they elect to do so.

The private aviation industry is subject to competition.

Many of the markets in which we operate are competitive as a result of the expansion of existing private aircraft operators, expanding private aircraft ownership and alternatives such as luxury commercial airline service. We compete against a number of private aviation operators with different business models, and local and regional private operators. Factors that affect competition in our industry include price, reliability, safety, regulations, professional reputation, aircraft availability, equipment and quality, consistency and ease of service, willingness and ability to serve specific airports or regions and investment requirements. There can be no assurance that our competitors will not be successful in capturing a share of our present or potential customer base. The materialization of any of these risks could adversely affect our business, financial condition and results of operations.

The outbreak and global spread of COVID-19 has adversely impacted certain aspects of our business. The duration, severity and persistence of the COVID-19 pandemic, and similar public health threats that we may face in the future, could result in additional adverse effects on our business, operating results, including financial condition and liquidity.

The COVID-19 outbreak, along with the measures governments and private organizations worldwide implemented in an attempt to contain the spread of this pandemic, resulted in an overall decline in demand for air travel, which decline was severe in late spring and early summer of 2020. In response to the pandemic, we implemented certain initiatives and safety measures to limit the spread of COVID-19. Such initiatives and measures resulted in increased costs to our business and while the recent abatement of the COVID-19 pandemic has allowed us to return to substantially pre-pandemic operations, outbreaks of variants of COVID-19 in the future could require us to re-implement such initiatives and safety measures.

Outbreaks of variants of COVID-19 have also disrupted our operations and accentuated other risks to our business, such as the availability of qualified flight personnel seeThe 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” and reliance on our third-party service providers see Significant reliance on certain third-party aircraft engine manufacturers and engine management companies poses risks to our owned and leased aircraft and operations.” Such an outbreak of COVID-19 or similar disease could result in significant downtime of our aircraft and result in material and adverse effects on our business, operating results, financial condition and liquidity.

In response to the sharp decline in private air travel during late spring and early summer 2020, we availed ourselves of governmental assistance under the CARES Act, see We are subject to certain restrictions on our business as a result of our participation in governmental programs under the CARES Act” and implemented certain cost saving initiatives, including offering voluntary furloughs to our employees, implementing a mandatory reduction in all work schedules and delaying certain previously planned initiatives and internal investments. While the severity, magnitude and duration of the COVID-19 pandemic remain uncertain, there can be no assurance that these actions will be sufficient and that other similar measures may not be required during the pendency of the COVID-19 pandemic or future outbreaks of variants of COVID-19.

In response to the COVID-19 pandemic, federal, state and local government authorities implemented directives, orders and regulations intended to mitigate the spread of COVID-19, and in response, we have modified our practices, policies and procedures, as appropriate. For example, for a period of time, we used a sanitizer specifically developed for the aviation industry to clean our aircraft. We instituted a vaccination policy for our employees, including a frequently asked questions guide to proactively respond to employees regarding the policy. In addition, COVID-19 and related restrictions may have a material and adverse impact on other

 

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aspects of our business, including enhanced risk of delays or defaults in payments by customers, delays and difficulties in completing maintenance work on certain aircraft and delays or shortages in our supply chain.

The full extent of the ongoing impact of COVID-19 on our future operational and financial performance will depend on future developments, many of which are outside our control, including the severity, magnitude, duration and spread of COVID-19, including any recurrence of the pandemic, and related travel advisories, restrictions and future government action, all of which are highly uncertain and cannot be predicted. At this time, we are also not able to predict whether the COVID-19 pandemic will result in long-term changes to business practices and consumer behavior, with such changes including but not limited to a long-term reduction in travel as a result of increased usage of “virtual” and “teleconferencing” products or a general reluctance to travel by consumers.

In addition, an outbreak of another disease or similar public health threat, or fear of such an event, that affects travel demand, travel behavior or travel restrictions could adversely impact our business, financial condition and operating results. Outbreaks of other diseases could also result in increased government restrictions and regulation, such as those actions described above or otherwise, which could adversely affect our operations.

We are subject to certain restrictions on our business as a result of our participation in governmental programs under the CARES Act.

flyExclusive applied for government assistance under the Payroll Support Program (“PSP”) maintained and administered by the U.S. Department of Treasury (“Treasury”) as directed by the CARES Act and was awarded a total of $16.34 million to support ongoing operations, all of which has been received and subsequently deployed. In addition, Sky Night, LLC (“Sky Night”) had separately applied for assistance under the PSP, and was awarded an aggregate of $0.74 million, all of which has been received and subsequently deployed. The PSP awards are governed by the terms and conditions of the CARES Act and three consecutive Payroll Support Program Agreements (“PSAs”) with the Treasury. Neither we, nor Sky Night, were required to issue equity or other form of security to the Treasury in connection with such awards.

While we believe that we are fully compliant with all requirements of the CARES Act and the PSAs, including the requirement to use the awards only for payment of certain employment costs (i.e. wages, salaries and benefits), if we were found to be not in compliance with such requirements, the Treasury has sole discretion to impose any remedy it deems appropriate, including requiring full repayment of the awards with appropriate interest. The imposition of any such remedy could have a material and adverse effect on our financial condition.

Between April 2020 and May 2021, each of LGM, flyExclusive and Sky Night also received loans (the “PPP Loans”) from two lenders under the Paycheck Protection Program (“PPP”). The PPP Loans are subject to the terms and conditions applicable to loans administered by the U.S. Small Business Administration (“SBA”) under the CARES Act, which is subject to revisions and changes by the SBA and Congress. The PPP Loans have all been forgiven by the SBA. We believe that we satisfied all eligibility criteria for the PPP Loan, and that each of LGM’s, flyExclusive’s and Sky Night’s receipt of the PPP Loan was consistent with the broad objectives of the PPP of the CARES Act. The SBA has up to six years after the date of forgiveness of a certain PPP Loan to pursue an audit of such loan. Given that flyExclusive received more than $2.0 million under its PPP Loans, it is likely that it will be subject to an SBA audit. If, despite our good-faith belief that each of LGM, flyExclusive and Sky Night satisfied all eligibility requirements for the PPP Loans, any of the PPP Loans are later determined to have violated any of the applicable laws or governmental regulations related to the PPP Loans or it is otherwise determined that LGM, flyExclusive and/or Sky Night was ineligible to receive the PPP Loans, we could be subject to civil, criminal and administrative penalties or adverse publicity. Any such events could consume significant financial and management resources and could have a material adverse effect on our business, results of operations and financial condition.

 

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The 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.

We believe that our future success will depend in large part on our ability to retain or attract highly qualified management, technical and other personnel, particularly our founder and Chief Executive Officer, Segrave, and our Interim Chief Financial Officer, Billy Barnard. We compete against commercial and private aviation operators, including the major U.S. airlines for pilots, mechanics and other skilled labor and some of the airlines may offer wage and benefit packages which exceed ours. As we grow our fleet and/or more pilots approach retirement age, we may be affected by a pilot shortage. See “— Pilot attrition may negatively affect our operations and financial condition.” We may not be successful in retaining key personnel or in attracting other highly qualified personnel. Any inability to retain or attract significant numbers of qualified management and other personnel would have a material adverse effect on our business, results of operations and financial condition.

The 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.

Our pilots are subject to stringent pilot qualification and crew member flight training standards (“FAA Qualification Standards”), which among other things require minimum flight time for pilots and mandate strict rules to minimize pilot fatigue. The existence of such requirements effectively limits the supply of qualified pilot candidates and increases pilot salaries and related labor costs. A shortage of pilots would require us to further increase our labor costs, which would result in a material reduction in our earnings. Such requirements also impact pilot scheduling, work hours and the number of pilots required to be employed for our operations.

In addition, we are in the process of transitioning the majority of our pilot-training in-house and our operations and financial condition may be negatively impacted if we are unable to train pilots in a timely manner. Due to an industry-wide shortage of qualified pilots, driven by the flight hours requirements under the FAA Qualification Standards and attrition resulting from the hiring needs of other industry participants, pilot training timelines have significantly increased and stressed the availability of flight simulators, instructors and related training equipment. Future changes to FAA regulations and requirements could also prohibit or materially restrict our ability to train pilots in-house. As a result of the foregoing, the training of our pilots may not be accomplished in a cost-efficient manner or in a manner timely enough to support our operational needs.

Due to the flexibility on the types of aircraft and routes we offer, we may not have access to a qualified pilot at the departure location for a particular flight. We rely on commercial airlines to fly our pilots to the departure location when our pilots come onto a work rotation or when there is a grounded aircraft or other maintenance event where there is a need for a pilot to switch planes. Any disruption to such commercial airline activity may cause us to delay or cancel a flight and could adversely affect our reputation, business, results of operation and financial condition. Aviation businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions; air traffic control inefficiencies; increased and changing security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; any of which could have a material adverse effect on our business, results of operations and financial condition.

Pilot attrition may negatively affect our operations and financial condition.

In recent years, we have experienced significant volatility in our attrition, including volatility resulting from training delays, pilot wage and bonus increases at other industry participants and the growth of cargo, low-cost and ultra-low-cost airlines. In prior periods, these factors, at times, caused our pilot attrition rates to be higher than our ability to hire and retain replacement pilots. If our attrition rates are higher than our ability to hire and retain replacement pilots, our operations and financial results could be materially and adversely affected.

 

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We 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.

Our business is labor intensive and while our employees, particularly our pilots and our maintenance workers, are not currently represented by labor unions, we may, in the future, experience union organizing activities of our pilots, maintenance workers or other crewmembers. Such union organization activities could lead to work slowdowns or stoppages, which could result in loss of business. In addition, union activity could result in demands that may increase our operating expenses and adversely affect our business, financial condition, results of operations and competitive position. Any of the different groups or classes of our crewmembers could unionize at any time, which would require us to negotiate in good faith with the crew member group’s certified representative concerning a collective bargaining agreement. In addition, we may be subject to disruptions by unions protesting the non-union status of our other crewmembers. Any of these events would be disruptive to our operations and could harm our business.

We 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.

In accordance with applicable accounting standards, we are required to test our indefinite-lived intangible assets for impairment on an annual basis, or more frequently where there is an indication of impairment. In addition, we are required to test certain of our other assets for impairment where there is any indication that an asset may be impaired, such as our market capitalization being less than the book value of our equity.

We may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, such as aircraft, unfavorable trends in historical or forecasted results of operations and cash flows and an uncertain economic environment, as well as other uncertainties.

We can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period. The value of our aircraft could also be impacted in future periods by changes in supply and demand for these aircraft. Such changes in supply and demand for certain aircraft types could result from the grounding of aircraft. See also “— The residual value of our aircraft may be less than estimated in our depreciation policies.”

An impairment loss could have a material adverse effect on our financial condition and operating results.

The residual value of our aircraft may be less than estimated in our depreciation policies.

As of June 30, 2023, we had $258.1 million of property and equipment and related assets, net of accumulated depreciation, of which $225.8 million relates to aircraft. In accounting for these long-lived assets, we make estimates about the expected useful lives of the assets, the expected residual values of certain of these assets, and the potential for impairment based on the fair value of the assets and the cash flows they generate. Factors indicating potential impairment include, but are not limited to, significant decreases in the market value of the long-lived assets, a significant change in the condition of the long-lived assets and operating cash flow losses associated with the use of the long-lived assets. In the event the estimated residual value of any of our aircraft types is determined to be lower than the residual value assumptions used in our depreciation policies, the applicable aircraft type in our fleet may be impaired and may result in a material reduction in the book value of applicable aircraft types we operate or we may need to prospectively modify our depreciation policies. An impairment on any of the aircraft types we operate or an increased level of depreciation expense resulting from a change to our depreciation policies could result in a material negative impact to our financial results.

Significant reliance on Textron aircraft and spare parts poses risks to our business and prospects.

As part of our business strategy, we have historically flown primarily Textron Aviation (“Textron”) and Gulfstream Aerospace (“Gulfstream”) aircraft. A majority of the aircraft we currently operate are the product of

 

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those two manufacturers. We have negotiated preferred rates with Textron for line maintenance services, certain component repair services and to purchase and exchange parts. Parts and services from Gulfstream and Textron are subject to their product and workmanship warranties. If either Gulfstream or Textron fails to adequately fulfill its obligations towards us or experiences interruptions or disruptions in production or provision of services due to, for example, bankruptcy, natural disasters, labor strikes or disruption of its supply chain, we may experience a significant delay in the delivery of or fail to receive previously ordered aircraft and parts, which would adversely affect our revenue and results of operations and could jeopardize our ability to meet the demands of our program participants. Although we could choose to operate aircraft of other manufacturers or increase our reliance on third-party operators, such a change would involve substantial expense to us and could disrupt our business activities.

Significant reliance on certain third-party aircraft engine manufacturers and engine management companies poses risks to our owned and leased aircraft and operations.

As part of our business strategy, we have historically relied on Pratt & Whitney Canada, Corp. (“Pratt & Whitney”), Williams International (“Williams”) and Rolls-Royce plc (“Rolls-Royce”) aircraft engines to power substantially all of our owned and leased aircraft. If any of Pratt &Whitney, Williams or Rolls-Royce fail to adequately fulfill their obligations towards us or experience interruptions or disruptions in production or provision of services due to, for example, bankruptcy, natural disasters, labor strikes or disruption of its supply chain, we may experience a significant delay in the delivery of or fail to receive previously ordered aircraft engines and parts, which would adversely affect our revenue and profitability and could jeopardize our ability to meet the demands of our program participants.

We have entered into engine program agreements with various third-party providers, including Jet Support Services, Inc., Pratt & Whitney, Rolls-Royce, Textron and Williams, whom we rely on to provide engine related maintenance and services. If such third-party providers terminate their contracts with us, do not provide timely or consistently high-quality service or increase pricing to terms we do not believe to be reasonable, we may not be able to replace them in a cost-efficient manner or in a manner timely enough to support our operational needs, which could have a material adverse effect on our business, financial condition and results of operations.

We may incur substantial maintenance costs as part of our leased aircraft return obligations.

Our aircraft lease agreements may contain provisions that require us to return aircraft airframes and engines to the lessor in a specified condition or pay an amount to the lessor based on the actual return condition of the equipment. These lease return costs are recorded in the period in which they are incurred. Any unexpected increase in maintenance return costs may negatively impact our financial position and results of operations.

We are exposed to operational disruptions due to maintenance.

Our fleet requires regular maintenance work, which may cause operational disruption. Our inability to perform timely maintenance and repairs can result in our aircraft being underutilized which could have an adverse impact on our business, financial condition and results of operations. On occasion, airframe manufacturers and/or regulatory authorities require mandatory or recommended modifications to be made across a particular fleet which may mean having to ground a particular type of aircraft. This may cause operational disruption to and impose significant costs on us. Furthermore, our operations in remote locations, where delivery of components and parts could take a significant period of time, could result in delays in our ability to maintain and repair our aircraft. We often rely on commercial airlines to deliver such components and parts. Any such delays may pose a risk to our business, financial condition and results of operations. See “— Aviation businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions; air traffic control inefficiencies; increased and changing security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; any of which could have a material

 

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adverse effect on our business, results of operations and financial condition.” Moreover, as our aircraft base increases and our fleet ages, our maintenance costs could potentially increase. Additionally, certain parts may no longer be produced and adversely affect our ability to perform necessary repairs.

Our transition to in-house maintenance, repair and overhaul activities could prove unsuccessful or impact key relationships.

We entered the Maintenance, Repair, and Overhaul (“MRO”) business in the second quarter of 2021 with the opening of our electrostatic painting and coating facility. Subsequently, in the third quarter of 2021, we officially launched the MRO operation, offering a complete line of interior and exterior refurbishment services to third-party aircraft in addition to maintaining our own fleet. We began installing avionics in our mid-size fleet in the second quarter 2022. In October of 2022, we opened a new 48,000 square foot hangar dedicated to our growing MRO division. We plan to add additional facilities at our headquarters location in Kinston, North Carolina, and potentially other geographical locations in the future, to complement our growing MRO operations.

We may be unsuccessful in such MRO efforts, which could have an adverse effect on our future business and results of operations. Additionally, the successful execution of our MRO strategy could adversely affect our relationships with vendors historically providing MRO services to us, from whom we expect to continue to require maintenance and other services. In addition, performing such services in-house would internalize the risks and potential liability for the performance of such MRO services. If maintenance is not performed properly this may lead to significant damage to aircraft, loss of life, negative publicity and legal claims against us.

Significant increases in fuel costs could have a material adverse effect on our business, financial condition and results of operations.

Fuel is essential to the operation of our aircraft and to our ability to carry out our transport services. Fuel costs are a significant component of our operating expenses. A significant increase in fuel costs may negatively impact our revenue, operating expenses and results of operations. The majority of our contractual service obligations allow for rate adjustments to account for changes in fuel prices. Our jet club and guaranteed revenue (“GRP”) programs generally adjust incrementally on a sliding scale based on changes in jet fuel prices. Wholesale rates are non-contractual, so rates are adjusted on an ad-hoc basis. Given our contractual ability to pass on increased fuel costs, in whole or in part, to certain of our customers and mitigate the risk with others, we do not maintain hedging arrangements for the price of fuel. However, increased fuel surcharges may affect our revenue and retention if a prolonged period of high fuel costs occurs. Additionally, participants in the most recent version of our jet club agreement introduced on June 20, 2023 are subject to fixed rates for the first 12 months of the program. A significant increase in fuel costs could have a material adverse effect on our business, financial condition and results of operations in the interim until we are able to make such jet fuel rate adjustments.

In addition, potential increased environmental regulations that might require new fuel sources (e.g., sustainable aircraft fuel) could lead to increased costs. To the extent there is a significant increase in fuel costs that affects the amount our customers choose to fly with us, it may have a material adverse effect on our business, financial condition and results of operations.

Our 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.

Hazards are inherent in the aviation industry and may result in loss of life and property, potentially exposing us to substantial liability claims arising from the operation of aircraft. We carry insurance for aviation hull, aviation liability, premises, hangar keepers, product, war risk, general liability, workers compensation, and other insurance customary in the industry in which we operate. Insurance underwriters are required by various federal and state regulations to maintain minimum levels of reserves for known and expected claims. However, there can be no assurance that underwriters have established adequate reserves to fund existing and future claims. The

 

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number of accidents, as well as the number of insured losses within the aviation and aerospace industries, and the impact of general economic conditions on underwriters may result in increases in premiums above the rate of inflation. To the extent that our existing insurance carriers are unable or unwilling to provide us with sufficient insurance coverage, and if insurance coverage is not available from another source (for example, a government entity), our insurance costs may increase and may result in our being in breach of regulatory requirements or contractual arrangements requiring that specific insurance be maintained, which may have a material adverse effect on our business, financial condition and results of operations.

Our self-insurance programs may expose us to significant and unexpected costs and losses.

Since April 1, 2022, we have maintained employee health insurance coverage on a self-insured basis. We do maintain stop loss coverage which sets a limit on our liability for both individual and aggregate claim costs. Prior to April 1, 2022, we maintained such coverage on a fully insured basis. We record a liability for our estimated cost of claims incurred and unpaid as of each balance sheet date. Our estimated liability is recorded on an undiscounted basis and includes a number of significant assumptions and factors, including historical trends, expected costs per claim, actuarial assumptions and current economic conditions. Our history of claims activity for all lines of coverage has been and will be closely monitored, and liabilities will be adjusted as warranted based on changing circumstances. It is possible, however, that our actual liabilities may exceed our estimates of loss. We may also experience an unexpectedly large number of claims that result in costs or liabilities in excess of our projections, and therefore we may be required to record additional expenses. For these and other reasons, our self-insurance reserves could prove to be inadequate, resulting in liabilities in excess of our available insurance and self-insurance. If a successful claim is made against us and is not covered by our insurance or exceeds our policy limits, our business may be negatively and materially impacted.

If our efforts to continue to build our strong brand identity and improve member satisfaction and loyalty are not successful, we may not be able to attract or retain customers, and our operating results may be adversely affected.

We 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 customers. If our efforts to promote and maintain our brand are not successful, our operating results and our ability to attract members and other customers may be adversely affected. From time to time, our members and other customers may express dissatisfaction with our products and service offerings, in part due to factors that could be outside of our control, such as the timing and availability of aircraft and service interruptions driven by prevailing political, regulatory or natural conditions. To the extent dissatisfaction with our products and services is widespread or not adequately addressed, our brand may be adversely impacted and our ability to attract and retain customers may be adversely affected. In connection with any expansion into additional markets, we will also need to establish our brand and to the extent we are not successful, our business in such new markets would be adversely impacted.

Any 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.

Through our marketing, advertising, and communications with our customers, we set the tone for our brand as one based on a high-quality of customer service and we strive to create high levels of customer satisfaction through the experience provided by our team and representatives. The ease and reliability of our offerings, including our ability to provide high-quality customer support, helps us attract and retain customers. Customers depend on our services team to resolve any issues relating to our products and services, such as scheduling changes and other updates to trip details and assistance with certain billing matters. Our ability to provide effective and timely support is largely dependent on our ability to attract and retain skilled employees who can support our customers and are sufficiently knowledgeable about our product and services. As we continue to grow our business and improve our platform, we will face challenges related to providing quality support at an

 

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increased scale. Any failure to provide efficient customer support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation, brand, business, financial condition and results of operations.

A 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 operations.

In order to operate our business, achieve our goals, and remain competitive, we continuously seek to identify and devise, invest in, implement and pursue technology, business and other important initiatives, such as those relating to aircraft fleet structuring, MRO operations, business processes, information technology, initiatives seeking to ensure high quality service experience and others.

Our business and the aircraft we maintain and operate are characterized by changing technology, introductions and enhancements of models of aircraft and services and shifting customer demands, including technology preferences. Our future growth and financial performance will depend in part upon our ability to develop, market and integrate new services and to accommodate the latest technological advances and customer preferences. In addition, the introduction of new technologies or services that compete with our product and services could result in our revenues decreasing over time. If we are unable to upgrade our 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 impacted.

We rely on third-party internet, mobile, and other products and services to deliver our mobile and web applications and flight management system offerings, and any disruption of, or interference with, our use of those services could adversely affect our business, financial condition, results of operations and customers.

Our customer-facing technology platform’s continuing and uninterrupted performance is critical to our success. That platform is dependent on the performance and reliability of internet, mobile and other infrastructure services that are not under our control. For example, we currently host our platform, including our mobile and web-based applications, and support our operations using a third-party provider of cloud infrastructure services. While we have engaged reputable vendors to provide these products or services, we do not have control over the operations of the facilities or systems used by our third-party providers. These facilities and systems may be vulnerable to damage or interruption from natural disasters, cybersecurity attacks, human error, terrorist attacks, power outages, pandemics and similar events or acts of misconduct. In addition, any changes in one of our third-party service provider’s service levels may adversely affect our ability to meet the requirements of our customers or needs of our employees.

We have experienced, and expect that in the future our systems will experience, interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions, capacity constraints or external factors beyond our control. While we are in the process of developing reasonable backup and disaster recovery plans, until such plans are finalized, we may be particularly vulnerable to such disruptions. Sustained or repeated system failures would reduce the attractiveness of our offerings and could disrupt our customers’, suppliers’, third-party vendors and aircraft providers’ businesses. It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as we expand our products and service offerings. Any negative publicity or user dissatisfaction arising from these disruptions could harm our reputation and brand, may adversely affect the usage of our offerings, and could harm our business, financial condition and results of operation.

 

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We rely on third parties maintaining open marketplaces to distribute our mobile and web applications and to provide the software we use in certain of our products and offerings. If such third parties interfere with the distribution of our products or offerings, with our use of such software, or with the interoperability of our platform with such software, our business would be adversely affected.

Our platform’s mobile applications rely on third parties maintaining open marketplaces, including the Apple App Store and Google Play, which make applications available for download. There can be no assurance that the marketplaces through which we distribute our applications will maintain their current structures or that such marketplaces will not charge us fees to list our applications for download.

We rely upon certain third-party software and integrations with certain third-party applications, including Salesforce.com, Amazon and Microsoft and others, to provide our platform and products and service offerings. As our offerings expand and evolve, we may use additional third-party software or have an increasing number of integrations with other third-party applications, software, products and services. Third-party applications, software, products and services are constantly evolving, and we may not be able to maintain or modify our platform, including our mobile and web-based applications, to ensure its compatibility with third-party offerings following development changes. Moreover, some of our competitors or technology partners may take actions which disrupt the interoperability of our offerings with their own products or services, or exert strong business influence on our ability to operate our platform and provide our products and service offerings to customers.

In addition, if any of our third-party providers cease to provide access to the third-party software that we use, do not provide access to such software on terms that we believe to be attractive or reasonable, do not provide us with the most current version of such software, modify their products, standards or terms of use in a manner that degrades the functionality or performance of our platform or is otherwise unsatisfactory to us or gives preferential treatment to competitive products or services, we may be required to seek comparable software from other sources, which may be more expensive and/or inferior, or may not be available at all. Any of these events could adversely affect our business, financial condition and results of operations.

We 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.

As part of our day-to-day business operations and the services we provide, including through our website and mobile application, we receive, collect, store, process, transmit, share, and use various kinds of personal information pertaining to our employees, members and other travelers, aircraft owners and buyers, and business partners. A variety of federal, state, local, and foreign laws, regulations, and industry standards apply, or could in the future apply as our business grows and expands, to our processing of that information. The California Consumer Privacy Act of 2018, for example, requires covered companies that process personal information about California residents to make specific disclosures about their data collection, use, and sharing practices, and to allow consumers to opt out of certain types of data sharing with third parties, among other obligations. We are required to comply with the Payment Card Industry Data Security Standard (“PCI DSS”), a set of technical and operating requirements issued by payment card brands designed to protect cardholder data because we accept debit and credit cards for payment.

These laws, regulations, and industry standards are continually evolving and are subject to potentially differing interpretations, including as to their scope and applicability to our business. The interpretation of these laws, regulations, and standards can be uncertain, and they may be applied inconsistently from one jurisdiction to another or may conflict with other rules or our practices. As a result, our practices may not have complied or may not comply in the future with all such laws, regulations, and industry standards.

Compliance with current and future privacy and data protection laws, regulations, and industry standards can be costly and time-consuming, and may necessitate changes to our business practices with respect to the

 

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collection, use, and disclosure of personal information, which may adversely affect our business and financial condition. Any failure, or perceived failure, by us to comply with these laws, regulations, and industry standards could have a materially adverse impact to our reputation and brand, and may result in government investigations and enforcement actions, as well as claims for damages and other forms of relief by affected individuals, business partners, and other third parties. Any such investigations, enforcement actions, or claims could require us to change our operations, incur substantial costs and expenses in an effort to comply, force us to incur significant expenses in defense of such proceedings, distract our management, increase our costs of doing business, result in a loss of customers and vendors, result in the imposition of monetary penalties, and otherwise adversely affect our business, financial condition, and results of operations.

Any failure to maintain the security of personal or other confidential information that is stored in our information technology systems or by third parties on our behalf, whether as the result of cybersecurity breaches or otherwise, could damage our reputation, result in litigation or other legal actions against us, cause us to incur substantial additional costs, and materially adversely affect our business and operating results.

Our information technology systems, and those of our third-party service providers and business partners, contain personal financial and other sensitive information relating to our customers, employees, and other parties, as well as proprietary and other confidential information related to our business. Attacks against these systems, including but not limited to ransomware, malware, and phishing attacks, create a risk of data breaches and other cybersecurity incidents. Some of our systems and third-party service providers’ systems have experienced security incidents or breaches, and although those incidents did not have a material adverse effect on our operating results, there can be no assurance of a similar result in the future.

Any compromise of our information systems or of those of businesses with which we interact that results in personal information or other confidential information being accessed, obtained, damaged, disclosed, destroyed, modified, lost, or used by unauthorized persons could harm our reputation and expose us to regulatory actions, customer attrition, remediation expenses, and claims from customers, employees, and other persons. Moreover, a security compromise could require us to devote significant management resources to address the problems created by the issue and to expend significant additional resources to upgrade our security measures, and could result in a disruption of our operations. To the extent a cybersecurity breach or other data security incident affects payment card information that we maintain, or we otherwise fail to comply with PCI DSS, we could also be subject to costly fines or additional fees from the payment card brands whose cards we accept or could lose the ability to accept those payment cards, which could have a material adverse effect on our business, financial condition, and results of operations.

Privacy and data protection laws can also impose liability for security and privacy breaches that affect personal information we maintain. Among other obligations, breaches affecting personal information may trigger obligations under federal and state laws to notify affected individuals, government agencies, and the media. Such breaches could also subject us to fines, sanctions, and other legal liability and harm our reputation.

Our obligations in connection with our indebtedness and other contractual obligations could impair our liquidity and thereby harm our business, results of operations and financial condition.

We have significant long-term lease obligations primarily relating to our aircraft fleet. On June 30, 2023, we had 36 aircraft under operating leases, with an average remaining lease term of approximately 2.95 years. As of June 30, 2023, future minimum lease payments due under all long-term operating leases were approximately $53.0 million. Additionally, in connection with 34 aircraft leases, third parties have been granted a put option, which, if exercised, requires us to purchase the leased aircraft at the end of the lease term based on a pre-determined exercise price. As of June 30, 2023, we were subject to up to $98.0 million in future aggregate contractual put obligations. Our ability to pay our contractual obligations will depend on our operating performance, cash flow and our ability to secure adequate financing, which will in turn depend on, among other

 

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things, the success of our current business strategy, U.S. and global economic conditions, the availability and cost of financing, as well as general economic and political conditions and other factors that are generally beyond our control.

Additionally, as of June 30, 2023, we had approximately $205.9 million in total long-term debt outstanding. The majority of our long-term debt was incurred in connection with the acquisition of aircraft. During the six months ended June 30, 2023, our principal payments of long-term debt totaled $21.8 million.

Although our cash flows from operations and our available capital, including the proceeds from financing transactions, have been sufficient to meet our obligations and commitments to date, our liquidity has been, and may in the future be, negatively affected by the risk factors discussed herein. If our liquidity is materially diminished, our cash flow available to fund working capital requirements, capital expenditures and business development efforts may be materially and adversely affected.

Our existing indebtedness, potential for a non-investment grade credit ratings and the availability of our assets as collateral for future loans or other indebtedness, which available collateral would be reduced under other future liquidity-raising transactions, may make it difficult for us to raise additional capital if we are required to meet our liquidity needs on acceptable terms, or at all.

We cannot be assured that our operations will generate sufficient cash flow to make any required payments, or that we will be able to obtain financing to make capital expenditures that we believe are necessary to fulfill our strategic directives. The amount of our fixed obligations could have a material adverse effect on our business, results of operations and financial condition.

Our ability to obtain financing or access capital markets may be limited.

There are a number of factors that may limit our ability to raise financing or access capital markets in the future, including future debt and future contractual obligations, our liquidity and credit status, our operating cash flows, the market conditions in the aviation industry, U.S. and global economic conditions, the general state of the capital markets and the financial position of the major providers of aircraft and other aviation industry financing. We cannot assure you that we will be able to source external financing for our capital needs, and if we are unable to source financing on acceptable terms, or unable to source financing at all, our business could be materially adversely affected. To the extent we finance our activities with debt, we may become subject to financial and other covenants that may restrict our ability to pursue our business strategy or otherwise constrain our growth and operations.

We face a concentration of credit risk.

We maintain our cash and cash equivalent balances at financial or other intermediary institutions. The combined account balances at each institution typically exceeds Federal Deposit Insurance Corporation (“FDIC”) insurance coverage of $250,000 per depositor, and, as a result, we face a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. As of June 30, 2023, substantially all of our cash and cash equivalent balances held at financial institutions exceeded FDIC insured limits. Any event that would cause a material portion of our cash and cash equivalents at financial institutions to be uninsured by the FDIC could have a material adverse effect on our financial condition and results of operations.

Additionally, as of June 27, 2023, one customer, Wheels Up Partners, LLC (“WUP”) accounted for $15.7 million in receivables, which was a significant majority of total receivables at that time. When the agreement with WUP was terminated on June 30, 2023 the receivable balances were eliminated, as allowable under relevant accounting standards, by being applied against existing deposits held under the agreement.

 

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Aviation businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions; air traffic control inefficiencies; increased and changing security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; any of which could have a material adverse effect on our business, results of operations and financial condition.

Like other aviation companies, our business is affected by factors beyond our control, including air traffic congestion at airports, airport slot restrictions, air traffic control inefficiencies, increased and changing security measures, changing regulatory and governmental requirements, and/or new or changing travel-related taxes. Factors that cause flight delays frustrate passengers, increase operating costs and decrease revenues, which in turn could adversely affect profitability. Any general reduction in flight volumes could have a material adverse effect on our business, results of operations and financial condition. In the United States, the federal government singularly controls all U.S. airspace, and aviation operators are completely dependent on the FAA to operate that airspace in a safe, efficient and affordable manner. The expansion of our business into international markets will result in a greater degree of interaction with the regulatory authorities of the foreign countries in which we may operate. The air traffic control system, which is operated by the FAA, faces challenges in managing the growing demand for U.S. air travel. U.S. and foreign air-traffic controllers often rely on outdated technologies that routinely overwhelm the system and compel aviation operators to fly inefficient, indirect routes resulting in delays and increased operational cost. In addition, there are currently proposals before Congress that could potentially lead to the privatization of the U.S. air traffic control system, which could adversely affect our business. Further, implementation of the Next Generation Air Transport System by the FAA would result in changes to aircraft routings and flight paths that could lead to increased noise complaints and lawsuits, resulting in increased costs.

Extreme weather, natural disasters and other adverse events could have a material adverse effect on our business, results of operations and financial condition.

Adverse weather conditions and natural disasters, such as hurricanes, winter snowstorms or earthquakes, can cause flight cancellations or significant delays. Cancellations or delays due to adverse weather conditions or natural disasters, air traffic control problems or inefficiencies, breaches in security or other factors may affect us to a greater degree than our competitors who may be able to recover more quickly from these events, and therefore could have a material adverse effect on our business, results of operations and financial condition to a greater degree than other air carriers. Any general reduction in passenger traffic could have a material adverse effect on our business, results of operations and financial condition.

We are subject to risks associated with climate change, including the potential increased impacts of severe weather events on our operations and infrastructure.

Climate change-related regulatory activity and developments may adversely affect our business and financial results by requiring us to reduce our emissions, make capital investments to modernize certain aspects of our operations, purchase carbon offsets, or otherwise pay for our emissions. Such activity may also impact us indirectly by increasing our operating costs.

The potential physical effects of climate change, such as increased frequency and severity of storms, floods, fires, fog, mist, freezing conditions, sea-level rise and other climate-related events, could affect our operations, infrastructure, and financial results. Operational impacts, such as the delay or cancellation of flights, could result in loss of revenue. In addition, certain of our fixed base operators are in locations susceptible to the impacts of storm-related flooding and sea-level rise, which could result in costs and loss of revenue. We could incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate such physical effects of climate change. We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change.

 

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Our business is primarily focused on certain targeted geographic regions making us vulnerable to risks associated with having geographically concentrated operations.

While our customer base is located throughout the continental United States, approximately 70% of our flight demand is within two flight hours of our headquarters in Kinston, North Carolina. As a result, our business, financial condition and results of operations are susceptible to certain regional factors, including state regulations and severe weather conditions, catastrophic events or other disruptions.

The 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.

The operation of aircraft is subject to various risks, including catastrophic disasters, crashes, mechanical failures and collisions, which may result in loss of life, personal injury and/or damage to property and equipment. We may experience accidents in the future. These risks could endanger the safety of our customers, our personnel, third parties, equipment, cargo and other property (both ours and that of third parties), as well as the environment. If any of these events were to occur, we could experience loss of revenue, termination of customer contracts, higher insurance rates, litigation, regulatory investigations and enforcement actions (including potential grounding of our fleet and suspension or revocation of our operating authorities) and damage to our reputation and customer relationships. In addition, to the extent an accident occurs with an aircraft we operate or charter, we could be held liable for resulting damages, which may involve claims from injured passengers and survivors of deceased passengers. There can be no assurance that the amount of our insurance coverage available in the event of such losses would be adequate to cover such losses, or that we would not be forced to bear substantial losses from such events, regardless of our insurance coverage. Moreover, any aircraft accident or incident, even if fully insured, and whether involving us or other private aircraft operators, could create a public perception that we are less safe or reliable than other private aircraft operators, which could cause our customers to lose confidence in us and switch to other private aircraft operators or other means of transportation. In addition, any aircraft accident or incident, whether involving us or other private aircraft operators, could also affect the public’s view of industry safety, which may reduce the amount of trust by our customers.

We incur considerable costs to maintain the quality of (i) our safety program, (ii) our training programs and (iii) our fleet of aircraft. We cannot guarantee that these costs will not increase. Likewise, we cannot guarantee that our efforts will provide an adequate level of safety or an acceptable safety record. If we are unable to maintain an acceptable safety record, we may not be able to retain existing customers or attract new customers, which could have a material adverse effect on our business, financial condition and results of operations. Failure to comply with regulatory requirements related to the maintenance of our aircraft and associated operations may result in enforcement actions, including revocation or suspension of our operating authorities in the United States and potentially other countries.

Any damage to our reputation or brand image could adversely affect our business or financial results.

Maintaining a good reputation is critical to our business. Our reputation or brand image could be adversely impacted by, among other things, any failure to maintain high ethical, social and environmental sustainability practices for all of our operations and activities, our impact on the environment, any failure to provide consistent and high-quality customer service, public pressure from investors or policy groups to change our policies, customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, customer perceptions of our use of social media, or customer perceptions of statements made by us, our employees and executives, agents or other third parties. In addition, we operate in a highly visible industry that has significant exposure on social media. Negative publicity, including as a result of misconduct by our customers, vendors or employees, can spread rapidly through social media. Should we not respond in a timely and appropriate manner to address negative publicity, our brand and reputation may be significantly harmed. Damage to our reputation or brand image or loss of customer confidence in our services could adversely affect our business and financial results as well as require additional resources to rebuild or repair our reputation.

 

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We could suffer losses and adverse publicity stemming from any accident involving our aircraft models operated by third parties.

Certain aircraft models that we operate have experienced accidents while operated by third parties. If other operators experience accidents with aircraft models that we operate, obligating us to take such aircraft out of service until the cause of the accident is determined and rectified, we might lose revenues and might lose customers. It is also possible that the FAA or other regulatory bodies in another country could ground the aircraft and restrict it from flying. In addition, safety issues experienced by a particular model of aircraft could result in customers refusing to use that particular aircraft model or a regulatory body grounding that particular aircraft model. The value of the aircraft model might also be permanently reduced in the secondary market if the model were to be considered less desirable for future service. Such accidents or safety issues related to aircraft models that we operate could have a material adverse effect on our business, financial condition and results of operations.

Terrorist activities or warnings have dramatically impacted the aviation industry and will likely continue to do so.

The terrorist attacks of September 11, 2001, and their aftermath have negatively impacted the aviation business in general. If additional terrorist attacks are launched against the aviation industry, there will be lasting consequences of the attacks, which may include loss of life, property damage, increased security and insurance costs, increased concerns about future terrorist attacks, increased government regulation and airport delays due to heightened security. We cannot provide any assurance that these events will not harm the aviation industry generally or our operations or financial condition in particular.

We identified material weaknesses in our internal control over financial reporting, and we may identify additional material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our financial statements. If we fail to remediate any material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

Our management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Under auditing standards established by the U.S. Public Company Accounting Oversight Board, a material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

In connection with the audit of our financial statements for the years ended December 31, 2022, 2021 and 2020, we identified material weaknesses in our internal control over financial reporting. As of December 31, 2022, 2021, and 2020, we did not effectively apply the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO framework, due primarily to an insufficient complement of personnel possessing the appropriate accounting and financial reporting knowledge and experience. Additionally, we did not maintain effective controls relating to accounting for variable interest entities, related party transactions, and property and equipment.

Although management is working to remediate the material weaknesses by hiring additional qualified accounting and financial reporting personnel, and further evolving our accounting processes and systems, we cannot provide assurance that these measures will be sufficient to remediate the material weaknesses that have been identified or prevent future material weaknesses or significant deficiencies from occurring.

We may identify future material weaknesses in our internal controls over financial reporting or fail to meet the demands that will be placed upon us as a public company, including the requirements of SOX, and we may

 

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be unable to accurately report our financial results, or report them within the timeframes required by law or stock exchange regulations. We cannot provide assurance that our existing material weaknesses will be remediated or that additional material weaknesses will not exist or otherwise be discovered, any of which could adversely affect our reputation, financial condition and results of operations.

We lease our corporate headquarters and operations facilities from third-party affiliates and a failure to renew such leases could adversely affect our business.

Certain subsidiaries of LGM Ventures, LLC (“LGMV”), which is owned by Segrave, lease to us a substantial portion of our headquarters and maintenance and operations facilities. During the six months ended June 30, 2023, rental payments under the leases related to LGMV were $987 thousand. While the majority of these leases have terms greater than 10 years we have no assurance that these related parties will renew the lease agreements after expiration or that any renewal offered to us will be on terms that we find acceptable. If we cannot renew the leases, we will be required to move a substantial portion of our headquarters and operations, which may adversely affect our reputation, financial condition and results of operation.

On June 30, 2023, we terminated our agreement with Wheels Up that accounted for a significant portion of our total revenues the past two years. Such termination could have an adverse effect on our business, results of operations and financial condition if we fail to materially replace the revenue derived from Wheels Up moving forward as expected.

For the years ended December 31, 2022 and 2021, WUP has accounted for 39% and 23% of total revenue, respectively, and for the six months ended June 30, 2023 and 2022, WUP has accounted for 38% and 38% of total revenue, respectively. On June 30, 2023, we terminated our agreement with WUP. Subsequently, on July 5, 2023, WUP initiated a lawsuit against us, see the section entitled “Other Information About LGM Legal Proceedings” for more information about such lawsuit.

Although the termination of the agreement with WUP will be material to our total revenues for the year ending December 31, 2023, we had already expected the percentage of total revenue concentrated in WUP to continue to decrease over the next few years and had already planned to scale down business with WUP relative to our other revenue streams prior to terminating our agreement with WUP (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of LGM — Key Factors Affecting Results of OperationsWheel’s Up (“WUP”) Termination”). However, a failure to materially replace the revenue derived from WUP in the future may adversely affect our financial condition and results of operations.

Additionally, as of June 27, 2023, WUP accounted for $15.7 million in receivables, which was a significant majority of total receivables at that time. When the agreement with WUP was terminated on June 30, 2023 the receivable balances were eliminated, as allowable under relevant accounting standards, by being applied against existing deposits held under the agreement.

It 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.

As of June 30, 2023, LGM had applied for $9.5 million and received the Employee Retention Credit (“ERC”) in the total amount of $8.9 million. Our legal counsel has issued a legal opinion that we, more likely than not, qualified for the ERC. However, it remains uncertain whether we meet the qualifications required to receive the ERC. If we are ultimately required to repay the ERC it may materially adversely affect our financial condition and results of operations.

 

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Legal and Regulatory Risks Relating to Our Business

We 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 disruptions.

All FAA certified air carriers, including us, are subject to regulation by the DOT, the FAA and other governmental agencies, including the DHS, the TSA, the CBP and others. The laws and regulations enforced by these and other agencies impose substantial costs on us, may reduce air travel demand, and also may restrict the manner in which we conduct our business now or in the future, resulting in a material adverse effect on our operations. The FAA recently issued a proposed rulemaking that, when finalized, would expand the requirement for a safety management system to all certificate holders operating under FAA Part 135, which will likely increase our regulatory compliance costs. We also incur substantial costs in maintaining our current certifications and otherwise complying with the laws to which we are subject. An adverse decision by a federal agency may have a material adverse effect on our operations, such as an FAA decision to ground, or require time consuming inspections of or maintenance on, all or any of our aircraft. Our business may also be affected if government agencies shut down for any reason or if there is significant automation or another operational disruption, such as those attributed to Air Traffic Control or weather.

In addition, as described under the caption entitled “—Foreign Ownership,” we are also subject to restrictions imposed by federal law on the maximum amount of foreign ownership of U.S. airlines and oversight by the DOT in maintaining our status as a “citizen of the United States” (as defined at 49 U.S.C. Section 40102(a)(15) and administrative interpretations thereof issued by the DOT or its predecessor or successors, or as the same may be from time to time amended). A failure to comply with or changes to these restrictions may materially adversely affect our business and force a divesture of any foreign investment in excess of the applicable thresholds.

Foreign Ownership

Under DOT regulations and federal law, we must be owned and controlled by U.S. citizens. The restrictions imposed by federal law and regulations currently require that at least 75% of our voting stock must be owned and controlled, directly and indirectly, by persons or entities who are U.S. citizens, as defined in the Federal Aviation Act, that our president and at least two-thirds of the members of our Board of Directors and other managing officers be U.S. citizens, and that we be under the actual control of U.S. citizens. In addition, at least 51% of our total outstanding stock must be owned and controlled by U.S. citizens and no more than 49% of our stock may be held, directly or indirectly, by persons or entities who are not U.S. citizens and are from countries that have entered into “open skies” air transport agreements with the U.S. which allow unrestricted access between the United States and the applicable foreign country and to points beyond the foreign country on flights serving the foreign country. We are currently in compliance with these ownership provisions. As of June 30, 2023, we are 100% U.S. citizen owned.

Revocation of permits, approvals, authorizations and licenses.

Our business also requires a variety of federal, state and local permits, approvals, authorizations and licenses. Our business depends on the maintenance of such permits, approvals, authorizations and licenses. Our business is subject to regulations and requirements and may be adversely affected if we are unable to comply with existing regulations or requirements or if changes in applicable regulations or requirements occur.

We 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 condition.

We are subject to increasingly stringent federal, state, local and foreign laws, regulations and ordinances relating to the protection of the environment and noise, including those relating to emissions to the air, discharges

 

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(including storm water and de-icing fluid discharges) to surface and subsurface waters, safe drinking water and the use, management, disposal and release of, and exposure to, hazardous substances, oils and waste materials. We are or may be subject to new or proposed laws and regulations that may have a direct effect (or indirect effect through our third-party relationships or airport facilities at which we operate) on our operations. Any such existing, future, new or potential laws and regulations could have an adverse impact on our business, results of operations and financial condition.

Similarly, we are subject to environmental laws and regulations that require us to investigate and remediate soil or groundwater to meet certain remediation standards. Under certain laws, generators of waste materials, and current and former owners or operators of facilities, can be subject to liability for investigation and remediation costs at locations that have been identified as requiring response actions. Liability under these laws may be strict, joint and several, meaning that we could be liable for the costs of cleaning up environmental contamination regardless of fault or the amount of wastes directly attributable to us.

Environmental 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.

In recent years, governments, customers, suppliers, employees and other of our stakeholders have increasingly focused on climate change, carbon emissions, and energy use. Laws and regulations that curb the use of conventional energy or require the use of renewable fuels or renewable sources of energy, such as wind or solar power, could result in a reduction in demand for hydrocarbon-based fuels such as oil and natural gas. In addition, governments could pass laws, regulations or taxes that increase the cost of such fuels, thereby decreasing demand for our services and also increasing the costs of our operations. Other laws or pressure from our stakeholders may adversely affect our business and financial results by requiring, or otherwise causing, us to reduce our emissions, make capital investments to modernize certain aspects of our operations, purchase carbon offsets or otherwise pay for our emissions. Such activity may also impact us indirectly by increasing our operating costs. More stringent environmental laws, regulations or enforcement policies, as well as motivation to maintain our reputation with our key stakeholders, could have a material adverse effect on our business, financial condition and results of operations.

The 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 condition.

Our owned and leased fleet is comprised of a limited number of aircraft types, including the Citation CJ3 / CJ3+, Citation Excel / XLS / XLS+, Citation Encore / Encore+, Citation Sovereign, Citation X, Gulfstream GIV-SP aircraft. The issuance of FAA or manufacturer directives restricting or prohibiting the use of any one or more of the aircraft types we operate could have a material adverse effect on our business, results of operations and financial condition.

We may become involved in litigation that may materially adversely affect us.

From time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including employment, commercial, product liability, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and enforcement proceedings. Such matters can be time-consuming, divert management attention and resources, cause us to incur significant expenses or liability and/or require us to change our business practices. Because of the potential risks, expenses and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses. Because litigation is inherently unpredictable, the results of any of these actions may have a material adverse effect on our business, results of operations and financial condition.

 

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Risks Relating to Our Organization and Structure

Following the Closing, we will be a “controlled company” within the meaning of the NYSE listing standards and, as a result, will 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.

Following the Closing, regardless of the percentage of redemptions, the Existing Equityholders will hold a majority of the PubCo Class B Common Stock and as a result, will control a majority of the voting power of PubCo. As a result of the Existing Equityholders’ holdings after Closing, we will qualify as a “controlled company” within the meaning of the corporate governance standards of the NYSE. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of the PubCo Board consist of independent directors, (ii) we have a compensation committee that is composed entirely of independent directors and (iii) we have a nominating/corporate governance committee that is composed entirely of independent directors.

We expect to rely on certain of these exemptions after the Closing. As a result, we will not be required to have a compensation committee consisting entirely of independent directors and we will not be required to have a nominating/corporate governance committee that is composed entirely of independent directors. We may also rely on the other exemptions so long as we qualify as a “controlled company.” To the extent we rely on any of these exemptions, holders of PubCo Class A Common Stock will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE.

The multi-class structure of PubCo Common Stock will have the effect of concentrating voting power with Segrave, who will serve as Chief Executive Officer of PubCo. This concentration of voting power will limit other stockholders’ ability to influence the outcomes of important transactions, including a change of control.

Upon the completion of the Business Combination, Segrave will hold a percentage of the PubCo Class A Common Stock and PubCo Class B Common Stock outstanding that will be approximately (i) 75.3%, assuming no shares of EGA Class A Common Stock are redeemed and the maximum number of LGM Common Units are repurchased and (ii) 78.1%, assuming the maximum shares of EGA Class A Common Stock are redeemed and no LGM Common Units are repurchased. The percentages above assume that none of the warrants to purchase 11,833,333 shares of EGA Class A Common Stock (consisting of 7,500,000 EGA Public Warrants and 4,333,333 Private Placement Warrants issued to the Sponsor) are exercised. See “Summary of the Proxy Statement—Equity Ownership and Voting Power Upon Closing.” Accordingly, upon the consummation of the Business Combination, Segrave will be able to control or exert substantial influence over all matters submitted to our stockholders for approval, including the election of directors and amendments of our organization documents. Segrave may have interests that differ from those of the other stockholders and may vote in a way with which the other stockholders disagree and which may be adverse to their interests. This concentrated control may have the effect of delaying, preventing or deterring a change of control of PubCo, could deprive PubCo stockholders of an opportunity to receive a premium for their capital stock as part of a sale of PubCo, and might ultimately affect the market price of shares of PubCo Class A Common Stock. For information about PubCo’s securities, see the section entitled “Description of PubCo Securities.”

We cannot predict the impact PubCo’s multi-class structure may have on the stock price of PubCo Class A Common Stock.

We cannot predict whether PubCo’s multi-class structure will result in a lower or more volatile market price of PubCo Class A Common Stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices. In July 2017, FTSE Russell and S&P Dow Jones announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices.

 

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Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Under the announced policies, our multi-class capital structure would make us ineligible for inclusion in certain indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track those indices will not be investing in our stock. It is possible that these policies may depress valuations compared to those of other similar companies that are included in such indices. Because of our multi-class structure, we will likely be excluded from certain of these indices and we cannot assure you that other stock indices will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from stock indices would likely preclude investment by many of these funds and could make shares of PubCo Class A Common Stock less attractive to other investors. As a result, the market price of shares of PubCo Class A Common Stock could be adversely affected.

PubCo will qualify as an “emerging growth company” within the meaning of the Securities Act, and if it takes advantage of certain exemptions from disclosure requirements available to emerging growth companies, it could make PubCo’s securities less attractive to investors and may make it more difficult to compare PubCo’s performance to the performance of other public companies.

PubCo will qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, PubCo will be eligible for and intends to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including, but not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the SOX, (ii) reduced disclosure obligations regarding executive compensation in PubCo’s periodic reports and proxy statements and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, PubCo’s stockholders may not have access to certain information they may deem important. PubCo will remain an emerging growth company until the earliest of (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which PubCo has total annual gross revenue of at least $1.07 billion, or (c) in which PubCo is deemed to be a large accelerated filer, which means the market value of its common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (ii) the date on which PubCo has issued more than $1.0 billion in non-convertible debt securities during the prior three year period. We cannot predict whether investors will find PubCo’s securities less attractive because it will rely on these exemptions. If some investors find PubCo’s securities less attractive as a result of its reliance on these exemptions, the trading prices of PubCo’s securities may be lower than they otherwise would be, there may be a less active trading market for PubCo’s securities and the trading prices of PubCo’s securities may be more volatile.

The requirements of being a public company may strain our resources and divert management’s attention.

As a public company, we are subject to the reporting requirements of the Exchange Act, the SOX, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the NYSE and other applicable securities rules and regulations. Compliance with these rules and regulations increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The SOX requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. We may need to hire more employees in the future or engage outside consultants to comply with these requirements, which will increase our costs and expenses.

 

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Risks Relating to EGA

Our Sponsor has agreed to vote in favor of the Business Combination, regardless of how our Public Stockholders vote.

Pursuant to the Letter Agreement, our Sponsor, officers and directors have agreed to vote any shares of capital stock of EGA owned by them in favor of the Business Combination. As of the date of this proxy statement, the Sponsor currently holds 57% of the issued and outstanding shares of EGA Common Stock and accordingly, the Sponsor will have the ability, voting on its own, to approve each of the Proposals. Pursuant to the Letter Agreement, the Sponsor has agreed to vote any shares of EGA Common Stock held by it in favor of the Proposals, including the Transaction Proposal, to be presented at the Special Meeting and as a result, no shares of EGA Common Stock held by EGA Public Stockholders will need to be voted to approve any of the Proposals.

Directors of EGA have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination and approval of the other Proposals described in this proxy statement.

In considering the recommendation of our Board to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, our Sponsor and our directors and officers have interests in the Business Combination that are different from, or in addition to, those of our other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to our stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

 

   

the anticipated election of Gregg S. Hymowitz, our existing Chief Executive Officer and director, and Gary Fegel, our existing Chairman, as directors of PubCo after the consummation of the Business Combination. As such, in the future they will receive any cash fees, stock options or stock awards that the PubCo Board determines to pay to directors;

 

   

the fact that, pursuant to the Stockholders’ Agreement, our Sponsor, and its permitted transferees, by a majority of shares held by them, will have the right to nominate, and the PubCo Board and the Existing Equityholders, and their permitted transferees, will appoint and vote for, two members of the PubCo Board, initially designated pursuant to the Stockholders’ Agreement as Gregg S. Hymowitz and Gary Fegel, and thereafter as designated by the Sponsor, and its permitted transferees, by a majority of shares held by them;

 

   

the fact that (i) each of Gregg Hymowitz (through his affiliation with EnTrust Global Management GP LLC) and Gary Fegel (through his affiliation with GMF Venture LP) beneficially owns and has a substantial economic interest in Sponsor and (ii) each of Louise Curbishley, Linda Hall Daschle, Jonathan Silver and Noorsurainah (Su) Tengah individually owns and has a small (less than 1%) economic interest in Sponsor (in each case, which is immaterial to their respective net worth and which the Board believes is not material to the Business Combination), and, as such, given Sponsor’s ownership of the outstanding EGA Class B Common Stock and warrants as well as certain governance rights that Sponsor will receive under the Stockholders Agreement, each of the foregoing directors of EGA may have an interest in the Business Combination that is different from the Public Stockholders generally;

 

   

the fact that (i) Noorsurainah (Su) Tengah serves as the Executive Manager and Head of Alternative Assets, for the Brunei Investment Agency, which is an investor in EnTrust Global and certain investment vehicles affiliated with EnTrust Global, including EnTrust Emerald (Cayman) LP, which is purchasing $50 million of the Bridge Notes, and (ii) Gregg Hymowitz serves as the Founder and Chief Executive Officer of EnTrust Global, an affiliate of which serves as the general partner of EnTrust Emerald (Cayman) LP and other investment vehicles, which are purchasing $85 million in the aggregate of the Bridge Notes, and in respect of which certain affiliates of EnTrust Global may receive

 

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certain management and other fees, and, as such, Ms. Tengah and Mr. Hymowitz may have an interest in the Business Combination that is different from the Public Stockholders generally;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that our Sponsor has waived its right to redeem any of the shares of capital stock of EGA owned by it in connection with a stockholder vote to approve a proposed initial business combination;

 

   

the fact that our Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to any Founder Shares or Converted Shares held by it if we fail to complete our initial business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board);

 

   

the fact that if we do not complete our initial business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board), the proceeds of the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of our EGA Class A Common Stock, and the Private Placement Warrants will expire worthless;

 

   

the fact that, with certain limited exceptions, the Founder Shares and Converted Shares will not be transferable or assignable by our Sponsor until the earlier of: (A) three years after the completion of our initial business combination (or with respect to any Founder Shares or Converted Shares transferred or distributed by the Sponsor to one of our independent directors, one year) and (B) subsequent to our initial business combination, the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of EGA Class A Common Stock for cash, securities or other property. With certain limited exceptions, the Private Placement Warrants and the EGA Class A Common Stock underlying such warrants, will not be transferable, assignable or saleable by our Sponsor or its permitted transferees until three years after the completion of our initial business combination. This lock-up is longer than what is common practice generally for special purpose acquisition companies. The rationale for this longer lock-up period is the belief that it would better align the interests of the Sponsor with those of our investors, and that it would also provide a competitive advantage when approaching potential target companies, compared to special purpose acquisition companies where the founder shares and private placement warrants are subject to a shorter lock-up period. Since our Sponsor and officers and directors may directly or indirectly own common stock and warrants, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination;

 

   

the fact that our Sponsor, officers or directors may have a conflict of interest with respect to evaluating the Business Combination and financing arrangements as we have obtained or may obtain loans from our Sponsor or an affiliate of our Sponsor or any of our officers or directors to finance transaction costs in connection with the Business Combination, of which up to $1,500,000 of such loans could be made convertible into warrants (although no such loans made to date are convertible) identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period, at a price of $1.50 per warrant at the option of the lender;

 

   

the fact that our Existing Certificate of Incorporation provides that, except in limited circumstances, the doctrine of corporate opportunity does not apply with respect to any of EGA’s officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have and that, in the course of their other business activities, EGA’s officers and directors may have, or may become, aware of other investment and business opportunities which may be appropriate for presentation to EGA as well as the other entities with which they are affiliated and owe fiduciary duties to and that, given the corporate opportunity waiver described above, such EGA directors and officers may not have, or may not, present such opportunity to EGA; however, EGA does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target;

 

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the fact that our Sponsor purchased an aggregate of 5,750,000 Founder Shares, for an aggregate offering price of $25,000 at an average purchase price of approximately $0.004 per share. In March 2021, EGA effected a stock dividend resulting in an increase in the total number of shares of EGA Class B Common Stock outstanding from 5,750,000 to 7,187,500. On May 25, 2021, the Sponsor surrendered and EGA cancelled an aggregate of 718,750 shares of EGA Class B Common Stock for no consideration, resulting in an aggregate of 6,468,750 shares of EGA Class B Common Stock outstanding and held by the Sponsor. In July 2021, 843,750 of the Founder Shares were forfeited because the underwriters’ over-allotment granted in the IPO was not exercised, resulting in a decrease in the total number of shares of EGA Class B Common Stock outstanding to 5,625,000, such that the total number of Founder Shares represented 20% of the total number of shares of EGA Common Stock outstanding. On May 19, 2023, EGA’s stockholders approved a proposal to amend EGA’s organizational documents to extend the deadline by which EGA’s initial business combination must be completed up to five times, initially from May 28, 2023 to August 28, 2023, and thereafter for additional one month periods commencing on August 28, 2023 through and until December 28, 2023 (or such earlier date after May 28, 2023 as determined by the Board). In connection with the vote to amend EGA’s organizational documents, the holders of 18,268,171 shares of EGA Class A Common Stock properly exercised their right to redeem their shares for cash. Following the approval of the amendment to EGA’s organizational documents, Sponsor elected to convert 5,624,000 of the 5,625,000 Founder Shares into the Converted Shares. After giving effect to the redemptions described above and the conversion of the Founder Shares, there is an aggregate of 9,856,829 shares of EGA Common Stock outstanding, consisting of 9,855,829 shares of EGA Class A Common Stock, including 4,231,829 shares of EGA Class A Common Stock held by Public Shareholders and 5,624,000 Converted Shares, and 1,000 Founder Shares, such that the total number of Founder Shares and Converted Shares held by Sponsor represents 57% of the total number of shares of EGA Common Stock outstanding, and such securities will have a significantly higher value at the time of the Business Combination, estimated at approximately $60.0 million based on the closing price of $10.66 per share of EGA Class A Common Stock on the NYSE on November 1, 2023 and, in light of the relatively small average price per share originally paid by Sponsor for the Founder Shares, Sponsor and its affiliates can earn a positive rate of return on their investment even if EGA Public Stockholders experience a negative return following the consummation of the Business Combination;

 

   

the fact that our Sponsor paid $6,500,000 for an aggregate of 4,333,333 Private Placement Warrants at a price of $1.50 per warrant in a private placement simultaneously with the completion of the IPO, with each Private Placement Warrant being exercisable commencing 30 days following the Closing, subject to certain lock-up restrictions, for one share of PubCo Class A Common Stock at $11.50 per share; the warrants held by our Sponsor had an aggregate market value of approximately $406 thousand based upon the closing price of $0.0937 per warrant on the NYSE on November 1, 2023;

 

   

The fact that if the Trust Account is liquidated, including in the event that we are unable to complete an initial business combination within the required time period, our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act.

Our Sponsor or its affiliates may purchase shares of EGA Class A Common Stock or EGA Public Warrants in privately negotiated transactions or in the open market. There is no limit on the number of shares of EGA

 

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Class A Common Stock or EGA Public Warrants our Sponsor or its affiliates may purchase in such transactions, subject to compliance with applicable law and the NYSE rules. If our Sponsor or its affiliates engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. Any such purchases will satisfy the following conditions:

 

   

the purpose of any such purchases of shares of EGA Class A Common Stock could be to increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of EGA Public Warrants could be to reduce the number of EGA Public Warrants outstanding. Any such purchases of EGA Class A Common Stock or EGA Public Warrants may result in the completion of our initial business combination that may not otherwise have been possible.

 

   

our Sponsor and its affiliates will purchase the shares of EGA Class A Common Stock or EGA Public Warrants at a price no higher than the price offered through the redemption process described herein;

 

   

the shares of EGA Class A Common Stock or EGA Public Warrants purchased by our Sponsor or its affiliates will not be voted in favor of approving the Business Combination;

 

   

our Sponsor and its affiliates will waive any Redemption Rights it would otherwise have with respect to the shares of EGA Class A Common Stock or EGA Public Warrants purchased; and

 

   

we will disclose in a Form 8-K, prior to the Special Meeting, the following:

 

   

the amount of shares of EGA Class A Common Stock or EGA Public Warrants outside of the redemption offer purchased by our Sponsor or its affiliates, along with the purchase price;

 

   

the purpose of the purchases by our Sponsor or its affiliates;

 

   

the impact, if any, of the purchases by our Sponsor or its affiliates on the likelihood that the Business Combination will be approved;

 

   

the identities of holders of EGA Class A Common Stock or EGA Public Warrants who sold to our Sponsor or its affiliates (if not purchased on the open market) or the nature of the holders of EGA Class A Common Stock or EGA Public Warrants (e.g., 5% security holders) who sold to our Sponsor or its affiliates; and

 

   

the number of shares of EGA Class A Common Stock or EGA Public Warrants for which we received redemption requests pursuant to our redemption offer.

These financial interests of our Sponsor, officers and directors and entities affiliated with them may have influenced their decision to approve the Business Combination. You should consider these interests when evaluating the Business Combination and the recommendation of the Board to vote in favor of the Transaction Proposal and the other Proposals to be presented at the Special Meeting.

 

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If the Business Combination is not completed, potential target businesses may have leverage over EGA in negotiating a business combination, EGA’s ability to conduct due diligence on a business combination as it approaches its dissolution deadline may decrease, and EGA may have insufficient working capital to continue to pursue potential target businesses, each of which could undermine EGA’s ability to complete a business combination on terms that would produce value for EGA’s stockholders.

Any potential target business with which we enter into negotiations concerning an initial business combination will be aware that, unless we amend the Existing Certificate of Incorporation to extend EGA’s life, and amend certain other agreements we have entered into, we must complete our initial business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board). Consequently, if we are unable to complete this Business Combination, a potential target business may obtain leverage over us in negotiating an initial business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation. Additionally, we may have insufficient working capital to continue efforts to pursue a business combination.

If we are unable to complete our initial business combination within the prescribed time frame, we would cease all operations except for the purpose of winding up and we would redeem shares of EGA Class A Common Stock and liquidate, in which case our Public Stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.

The Existing Certificate of Incorporation provides that we will have only 31 months from the closing of our IPO (assuming exercise of all five extension periods, or such earlier time period after 24 months as determined by the Board) to complete our initial business combination, which is December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board). If we are unable to complete our initial business combination within such 31-month period (assuming exercise of all five extension periods, or such earlier time period after 24 months as determined by the Board), or extend such term, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, subject to lawfully available funds therefor, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our Public Stockholders may only receive $10.00 per share. There will be no Redemption Rights or liquidating distributions with respect to EGA Warrants, which will expire worthless if we fail to complete our initial business combination within the 31-month time period (assuming exercise of all five extension periods, or such earlier time period after 24 months as determined by the Board) or any extended term. In certain circumstances, our Public Stockholders may receive less than $10.00 per share on the redemption of their shares.

The financial statements of EGA included in this proxy statement do not take into account the consequences of EGA’s failure to complete a business combination by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board) or any extended term.

EGA is a blank check company, and as it has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement, there is a risk that EGA will be unable to consummate an initial business combination. Unless EGA amends the Existing Certificate of Incorporation to extend its life and certain other

 

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agreements it has entered into, if, as a result of the termination of the Equity Purchase Agreement or otherwise, EGA is unable to complete the Business Combination or another initial business combination transaction by December 28, 2023 (assuming exercise of all five extension periods, or such earlier date after May 28, 2023 as determined by the Board), unless extended, the Existing Certificate of Incorporation provides that it will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, subject to lawfully available funds therefor, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our Public Stockholders may only receive $10.00 per share. There will be no Redemption Rights or liquidating distributions with respect