FlexJet SPAC Presentation Deck
Risk Factors (Cont'd)
Risks Relating to the Company's Business and Industry (Cont'd)
The issuance of operating restrictions applicable to any fleet types that the Company operates could have an adverse effect on the Company.
The Company may become involved in litigation, investigations and other proceedings that could adversely affect the Company.
Risks Relating to Conflicts of Interest
Horizon's stockholders and other related parties have actual or potential conflicts of interest as a result of certain relationships and transactions with the Company and Horizon. Such conflicts may adversely affect the Company and include those
described below.
With respect to Eldridge and its affiliates, including Horizon II Sponsor, LLC (Horizon's sponsor) and officers and directors of Horizon (collectively, "Eldridge Persons"):
Eldridge Persons own approximately 29.5% of Horizon's Class A ordinary shares and 100.0% of Horizon's Class B ordinary shares, representing, in combined classes, approximately 43.6% of Horizon's total ordinary shares. Accordingly, a
significant amount of voting power to approve the De-SPAC Transaction is held by Eldridge Persons. The foregoing percentages do not take into account warrants to purchase 11,433,334 of Class A ordinary shares of Horizon or $1.5 million in
notes held by Eldridge Persons that may be converted into warrants to purchase 1,000,000 Class A ordinary shares of Horizon. Todd L. Boehly, who is the Chairman and Chief Executive Officer of Eldridge, is also the Chief Executive Officer, the
Chief Financial Officer and a director of Horizon. As a result of the foregoing and the sponsor structure of Horizon, Eldridge Persons may be deemed to control Horizon. Eldridge Persons own all the shares of Series D-1 preferred stock of the
Company (pre-De-SPAC Transaction), which are convertible into an approximately 38.1% equity ownership stake in the Company (approximately 35.1% on a fully diluted basis after accounting for employee options). Eldridge Persons have the
right to appoint three of the six directors of the Company (pre-De-SPAC Transaction). The three persons so appointed are Mr. Boehly, Tony Minella, who is the President of Eldridge, and Nick Sandler, who is the President of Stonebriar Finance
Holdings, LLC ("Stonebriar"), which is an Eldridge Person. As a result of the foregoing and the governance structure of the Company, Eldridge Persons may be deemed to have significant influence over the Company.
After giving effect to the closing of the De-SPAC Transaction, Eldridge Persons are expected to own approximately 34% of New Pub Co's shares of common stock (without giving effect to any dilution from warrants or out of the money employee
options) and assuming, purely for purposes of illustration, no Horizon shareholder redemptions and no PIPE investment. Eldridge Persons' ownership and voting power would be reduced by any third-party PIPE investment and increased by
any Horizon shareholder redemptions and any funding of the Horizon's sponsor backstop. Such ownership would increase to up to 42%, assuming maximum redemptions, no third-party PIPE investment and full funding of the Horizon's
sponsor backstop. See the risk factor below relating to control of the Company following the De-SPAC Transaction. The foregoing percentage does not take into account any warrants to be owned by Eldridge Persons after giving effect to the De-
SPAC Transaction. Such warrants, assuming full conversion of the convertible notes referred to above, would be exercisable for approximately 32 million shares of the Company's common stock.
With respect to management of the Company:
Members of management of the Company and their affiliated entities, not including Eldridge Persons (collectively, "Management Persons"), own common equity, employee options and the majority of the Series D-2 preferred units, which
represent an approximately 30% equity ownership stake in the Company (pre-De-SPAC Transaction) (approximately 31% on a fully diluted basis after accounting for employee options). Of such percentages, approximately 24% on a fully
diluted basis after accounting for employee options is held by an entity controlled by Kenneth Ricci, the Chief Executive Officer of the Company. Management Persons have the right to appoint three of the six directors of the Company (pre-De-
SPAC Transaction). The three persons so appointed are Kenneth Ricci, Michael Rossi and Steven Rosen. As a result of the foregoing and the governance structure of the Company, Management Persons may be deemed to control the Company
(pre-De-SPAC Transaction).
European aviation regulations include citizenship requirements for an operator that holds an air operator's certificate or the equivalent (an "AOC"). If the Company is unable to comply with such requirements, it will be adversely affected,
including in its planned expansion of European operations. The Company's subsidiaries that hold AOCs in Europe are owned through an Irish company, Volare Acquisitions, Limited (Volare"). To comply with such citizenship requirements, 51%
of the share capital of Volare is owned indirectly by Kenneth Ricci (who holds dual European and U.S. citizenship), and 49% is owned indirectly by the Company. The Company could be adversely affected if Mr. Ricci or a suitable replacement
who is a European citizen no longer owns a majority of Volare's share capital, or if satisfactory other arrangements to comply with European regulations are not implemented.
After giving effect to the closing of the De-SPAC Transaction, Management Persons are expected to own approximately 25% of New PubCo's shares of common stock (without giving effect to any dilution from warrants or out of the money
employee options) and assuming, purely for purposes of illustration, no Horizon shareholder redemptions and no PIPE investment. Such ownership would increase to up to 27% assuming maximum redemptions, no third-party PIPE
investment and full funding of the Horizon's sponsor backstop. Management Persons' ownership and voting power would be reduced by a third-party PIPE investment.
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