美國
證券交易委員會 及交易所
華盛頓特區，20549
表單
1934年證券交易所法案
截至年度季度結束
或者
1934年證券交易所法案
在 從________到________的過渡期間
委員會
檔案編號：
（依憑其章程所指定之註冊申請人姓名）
| （州或其他管轄區 | （美國國稅局雇主識別號碼） | |
| 註冊或組織） | 識別號碼） |
| （總執行辦公室地址） | (郵遞區號代碼) |
（申報人的電話號碼，包括區號）
| N/A |
| （前名稱，前地址和前財政年度，如自上次報告以來有更改） |
根據該法案第12(b)條條款應註冊的證券：
| 每種類別的名稱 | 交易標的（s） | 每個註冊交易所的名稱 | ||
| 該 |
請用勾號標示登記人是否（1）在過去12個月內（或登記人被要求提交此類報告的較短期間內）根據1934年證券交易法第13條或第15(d)條提交了所需的報告，以及（2）在過去90天內是否受到這些提交要求的約束。
請勾選，指出在過去12個月內（或更短時間並應提供此類文件的情況下），申報人是否已依據Regulation S-t（本章節之§232.405號）提交每一個所需提交的互動式數據文件。
勾選是否公司屬於大型迅速提交者、迅速提交者、非迅速提交者、更小型報告公司、或新興成長公司。參見《交易所法》第120億2條規定中「大型迅速提交者」、「迅速提交者」、「更小型報告公司」和「新興成長公司」的定義。
| 大型加速文件申報者 ☐ | 加速申報者 ☐ |
| 較小的報告公司 | |
| 新興成長型企業 |
如果是新興成長公司，請勾選表示公司已選擇不使用交易所法第13(a)條所提供的任何新或修訂財務會計準則的延長過渡期遵守。
請以勾號表示登記者是否為外殼公司（根據交易法第120億2條的定義）。是 ☐ 否
截至2024年11月12日，共有 股份為分享公司的普通股, 已發行及流通。
目錄
| Page | ||
| 部分 1 | 財務信息 | 1 |
| 事項 1 | 基本報表 | 1 |
| 2024年9月30日（未經審核）和2023年12月31日的合併資產負債表 | 1 | |
| 截至2024年9月30日和2023年（未經審核）的合併經營損益表 | 2 | |
| 2024年9月30日和2023年（未經審核）三個月和九個月股東權益綜合報表 | 3 | |
| 2024年9月30日及2023年控制項現金流量合併報表（未經審核） | 4 | |
| 基本報表註 | 5 | |
| 項目 2 | 財務狀況和營運結果之管理討論和分析 | 24 |
| 事項 3 | 市場風險的定量和定性披露。 | 39 |
| 事項 4 | 內部控制及程序 | 39 |
| 第二部分 | 其他資訊 | 40 |
| 項目 1 | 法律訴訟 | 40 |
| 項目 1A | 風險因素 | 40 |
| 項目 2 | 股票權益的未註冊銷售和資金用途 | 41 |
| 項目 5 | 其他資訊 | 41 |
| 項目 6 | 展品 | 42 |
| 簽名 | 43 |
在此Form 10-Q中，除非另有說明，術語“Jet.AI”、“我們”、“我們的”或“公司”指的是Jet.AI Inc.及其綜合子公司。
本季度報告以10-Q表格形式可能包含前瞻性陳述與信息，涉及公司、其業務計劃和策略及其行業板塊等其他事項。這些前瞻性陳述基於公司的管理層的信念、所作的假設和當前可用的信息。在本季度報告中使用的“估計”、“預計”、“相信”、“預期”、“意圖”、“期待”及類似的表達，用於標識前瞻性陳述。這些陳述反映了管理層對未來事件的當前看法，並且受到可能導致公司實際結果與前瞻性陳述中所包含的結果大相徑庭的風險和不確定性的影響。投資者被提醒不要過度依賴這些前瞻性陳述，這些陳述僅在作出日期時有效。公司不承擔任何義務去修改或更新這些前瞻性陳述，以反映此日期之後的事件或情況，或反映意外事件的發生。
| ii |
部分 財務資訊
項目 1. 基本報表
JEt.人工智能 INC.
綜合資產負債表
| 九月三十日， | 12月31日, | |||||||
| 2024 | 2023 | |||||||
| (未經審計) | （已經接受審計） | |||||||
| 資產 | ||||||||
| 流動資產: | ||||||||
| 現金及現金等價物 | $ | $ | ||||||
| 應收賬款 | ||||||||
| 其他流動資產 | ||||||||
| 預付發行成本 | ||||||||
| 全部流動資產 | ||||||||
| 物業及設備，扣除折舊後淨值 | ||||||||
| 無形資產，扣除累計攤銷 | ||||||||
| 租賃權資產 | ||||||||
| 對合資公司的投資 | ||||||||
| 存款及其他資產 | ||||||||
| 總資產 | $ | $ | ||||||
| 負債及股東權益不足 | ||||||||
| 流動負債： | ||||||||
| 應付帳款 | $ | $ | ||||||
| 應計負債 | ||||||||
| 透過收益 | ||||||||
| 營業租賃負債 | ||||||||
| 應付票據，淨額 | ||||||||
| 應付票據 - 關聯方，淨額 | ||||||||
| 流動負債合計 | ||||||||
| 租賃負債，當期部分淨額 | ||||||||
| 可赎回优先股 | ||||||||
| 總負債 | ||||||||
| 承諾與或有事項（附註2及5） | ||||||||
| 股東赤字 | ||||||||
| 優先股， 授權股票，面值$, 已發行股數： | ||||||||
| B轉換優先股， 授權股票，面值$, 和 已發行及 流通中 | ||||||||
| 普通股, 授權股份，面值$, 和 已發行及流通的股份 | ||||||||
| 認股權收款 | ( | ) | ( | ) | ||||
| 資本公積額額外增資 | ||||||||
| 累積虧損 | ( | ) | ( | ) | ||||
| 股東權益的赤字為 | ( | ) | ( | ) | ||||
| 總負債及股東權益赤字 | $ | $ | ||||||
參閱合併 基本報表 附註
| 1 |
JEt.人工智能 INC.
綜合營運狀況表
(未經審核)
| 截至三個月 | 截至九個月的時間 | |||||||||||||||
| 九月三十日， | 九月三十日， | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 營收 | $ | $ | $ | $ | ||||||||||||
| 營收成本 | ||||||||||||||||
| 毛利潤（虧損） | ( | ) | ( | ) | ( | ) | ||||||||||
| 營業費用： | ||||||||||||||||
| 一般及行政費用（包括送轉的$, $, $，和 $，分別為) | ||||||||||||||||
| 銷售與行銷 | ||||||||||||||||
| 研究與開發 | ||||||||||||||||
| 營業費用總額 | ||||||||||||||||
| 營運虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 其他費用（收益）： | ||||||||||||||||
| 利息支出 | ||||||||||||||||
| 其他收入 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 總其他費用（收入） | ( | ) | ||||||||||||||
| 收入稅前虧損 | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| 所得稅準備 | ||||||||||||||||
| 淨損失 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 認定股息來自於權證交易所要約 | ( | ) | ( | ) | ||||||||||||
| 累積優先股送轉 | ( | ) | ( | ) | ||||||||||||
| 對普通股股東的淨損失 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 加權平均股本-基本及稀釋 | ||||||||||||||||
| 基本和稀釋每股淨虧損 | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
請參見 附帶的合併基本報表附註
| 2 |
JEt.人工智能 INC.
股東權益綜合表（赤字）
三個及九個月完結 九月 30, 2024 和 2023
(未經審核)
| 其他 | 總計 | |||||||||||||||||||||||||||||||
| B系列優先股 | 普通股 | 訂閱 | 已付資本 | 累積 | 股東 | |||||||||||||||||||||||||||
| 股份 | 金額 | 股份 | 金額 | 應收帳款 | 資本 | 資本總額 | （赤字）股本 | |||||||||||||||||||||||||
| 2022年12月31日結餘 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| 基於股份的補償 | - | | ||||||||||||||||||||||||||||||
| 以現金出售普通股 | - | ( | ) | |||||||||||||||||||||||||||||
| 收到的認購應收款 | - | - | ||||||||||||||||||||||||||||||
| 發行成本 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 淨損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 截至2023年3月31日的餘額（未經審核） | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| 基於股票的補償 | - | - | ||||||||||||||||||||||||||||||
| 淨損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 截至2023年6月30日的餘額（未經審計） | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| 基於股票的薪酬 | - | |||||||||||||||||||||||||||||||
| 應收訂閱款項的收款 | - | - | ||||||||||||||||||||||||||||||
| 資本重組 | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| 發行成本 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 淨損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 截至2023年9月30日的餘額（未經審計） | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| 其他 | 總計 | |||||||||||||||||||||||||||||||
| B系列優先股 | 普通股 | 訂閱 | 已付資本 | 累積 | 股東 | |||||||||||||||||||||||||||
| 股份 | 金額 | 股份 | 金額 | 應收帳款 | 資本 | 資本總額 | (赤字)權益 | |||||||||||||||||||||||||
| 截至2023年12月31日的餘額 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| 基於股份的補償 | - | - | ||||||||||||||||||||||||||||||
| 出售乙系可換股特優單位 | ||||||||||||||||||||||||||||||||
| 發行成本 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 行使認股權後發行普通股份 | - | |||||||||||||||||||||||||||||||
| 以現金出售普通股 | - | |||||||||||||||||||||||||||||||
| 淨損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 2024年3月31日結餘（未經審核） | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| 基於股份的補償 | - | - | ||||||||||||||||||||||||||||||
| 以現金出售普通股 | - | |||||||||||||||||||||||||||||||
| 淨損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 2024年6月30日結餘（未經審計) | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
| 基於股份的補償 | ||||||||||||||||||||||||||||||||
| 發行普通股以償還應付款項和應計負債 | - | |||||||||||||||||||||||||||||||
| 從換股權交易所發行普通股 | - | ( | ) | |||||||||||||||||||||||||||||
| A輪優先股轉換 | - | |||||||||||||||||||||||||||||||
| 發行成本 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 淨損失 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| 2024年9月30日結餘（未經審核） | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||
請參見 附帶的合併基本報表附註
| 3 |
JEt.人工智能 INC.
綜合現金流量表
(未經審核)
| 截至九個月的時間 | ||||||||
| 九月三十日， | ||||||||
| 2024 | 2023 | |||||||
| 營業活動之現金流量： | ||||||||
| 淨損失 | $ | ( | ) | $ | ( | ) | ||
| 調整為使淨虧損轉化為經營活動所使用現金： | ||||||||
| 攤銷和折舊 | ||||||||
| 債務折價攤銷 | ||||||||
| 基於股份的補償 | ||||||||
| 非現金營業租賃成本 | ||||||||
| 營運資產和負債的變化： | ||||||||
| 應收賬款 | ( | ) | ||||||
| 其他流動資產 | ( | ) | ||||||
| 應付帳款 | ||||||||
| 應計負債 | ( | ) | ||||||
| 透過收益 | ( | ) | ||||||
| 營業租賃負債 | ( | ) | ( | ) | ||||
| 經營活動所用的淨現金 | ( | ) | ( | ) | ||||
| 投資活動產生的現金流量: | ||||||||
| 購買不動產和設備 | ( | ) | ||||||
| 購置無形資產 | ( | ) | ( | ) | ||||
| 對合資公司的投資 | ( | ) | ||||||
| 存款及其他資產 | ( | ) | ||||||
| 投資活動中使用的淨現金 | ( | ) | ( | ) | ||||
| 融資活動產生的現金流量: | ||||||||
| 收益 - 應付票據，扣除折扣後的淨額 | ||||||||
| 收益 - 關聯方應付票據，扣除折扣後的淨額 | ||||||||
| 還款 - 應付票據 | ( | ) | ||||||
| 還款 - 關聯方應付票據 | ( | ) | ||||||
| 發行成本 | ( | ) | ( | ) | ||||
| 認購權證的行使 | ||||||||
| 出售B系列優先股的收益 | ||||||||
| 出售普通股的收益 | ||||||||
| 來自業務合併的收益 | ||||||||
| 籌資活動提供的淨現金 | ||||||||
| 現金及現金等價物減少 | ( | ) | ( | ) | ||||
| 期初現金及現金等價物 | ||||||||
| 現金及現金等價物期末餘額 | $ | $ | ||||||
| 現金流資訊的補充揭示： | ||||||||
| 支付利息的現金 | $ | $ | ||||||
| 支付所得稅現金 | $ | $ | ||||||
| 非現金融資活動： | ||||||||
| 應收訂閱款項來自普通股的銷售 | $ | $ | ||||||
| 發行普通股以結算應付賬款 | $ | $ | ||||||
| 通過warrants交換發行普通股 | $ | $ | ||||||
| A系列優先股轉換 | $ | $ | ||||||
| 由於業務合併而增加的應付賬款 | $ | $ | ||||||
| 由於業務合併而增加的可贖回優先股 | $ | $ | ||||||
| 預付發行成本和應付賬款的增加 | $ | $ | ||||||
| 預付發售成本和因發行普通股而產生的應計負債減少 | $ | $ | ||||||
請參見 附帶的合併基本報表附註
| 4 |
JEt.AI公司
合併財務報表附註
備註 1 – 組織和營運性質
Oxbridge 收購corp.（「Oxbridge」）於2021年4月12日在開曼群島註冊成立為豁免公司。Oxbridge成立的目的是為了與一個或多個業務進行合併、資本股票或分享交換、資產收購、股票購買、重組或類似的業務合併。Jet Token Inc.於2018年6月4日在特拉華州成立（「創立」），並總部設於內華達州拉斯維加斯。
於 2023年8月10日（“交割日”），Oxbridge完成了業務結合交易（“業務結合”） 根據 業務結合協議及重組計劃（“業務結合協議”）與OXAC Merger Sub I, Inc.，這是一家特拉華州的公司，為Oxbridge的直接全資子公司（“首次合併子公司”）、Summerlin Aviation LLC（前稱OXAC Merger Sub II, LLC），這是一家特拉華州的有限責任公司，為Oxbridge的直接全資子公司（“第二合併子公司”）和Jet Token, Inc.，這是一家特拉華州的公司（“Jet Token”）。 根據業務結合協議的條款，Oxbridge與Jet Token之間透過首次合併子公司和Jet Token的合併實現業務結合，Jet Token作為存續公司，隨後Jet Token與第二合併子公司的合併，第二合併子公司作為Oxbridge的全資子公司。與2023年8月10日業務結合的最終確定有關，該公司已在特拉華州註冊並繼續作為一家公司（“國內化”） 並立即更名為Jet.AI, Inc. （“Jet.AI”或“公司”）。完成業務結合後，公司擁有一類普通股，每股面值$ ，在納斯達克全球市場（“納斯達克”）下以逐筆明細符號“JTAI”上市。公司還擁有兩種公開交易的warrants，包括在公司首次公開募股時發行的五年可贖回warrants（“可贖回warrants”）以及與業務結合有關的十年合併對價warrants（“合併對價warrants”）。在交割日，可贖回warrants和合併對價warrants分別在納斯達克以逐筆明細符號“JTAIW”和“JTAIZ”上市。
在業務合併結束後，公司直接或間接擁有Second Merger Sub及其子公司的所有已發行及流通的股權，並且在第一次合併的生效時間前的瞬間，Jet Token的股東（“Jet Token 股東”）持有公司的部分普通股，每股面值$ （“Jet.AI普通股”）。
根據並在國內化生效的時間，(a) 每一個已發行及在外的Oxbridge A類普通股自動按一對一的比例轉換為一股Jet.AI普通股；(b) 每一個已發行及在外的Oxbridge B類普通股自動按一對一的比例轉換為一股Jet.AI普通股；(c) 每一份已發行及在外的Oxbridge權證自動轉換為根據權證協議("Jet.AI權證")購買一股Jet.AI普通股的權證；(d) 每一個已發行及在外的Oxbridge單位自動轉換為一個Jet.AI單位，每個單位由一股Jet.AI普通股及一份Jet.AI權證組成。
在業務合併生效時間（“生效時間”）時，（i）每股Jet Token普通股，包括在生效前立即轉換為Jet Token普通股的每股Jet Token優先股，均被取消並自動轉換為有權收取（x）Jet.AI普通股數量，等同於交換比率的股份，及（y）相當於期權交換比率的“合併考慮認股權證”數量；
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該 公司直接和間接透過其子公司，主要從事以下業務：(i) 交易部分及整體飛機的權益，(ii) 銷售噴射卡，該卡使持有者能夠以約定的價格使用公司及其他公司的特定飛機，(iii) 營運專有的預訂平台（“應用程式”），該平台作為一個尋求和報價的平台，以安排與第三方運輸商的私人飛機旅行，以及透過公司的租賃及管理飛機進行安排，(iv) Cirrus直接包租其HondaJet飛機，(v) 飛機券商，以及 (vi) 來自客戶飛機每月管理及每小時操作的服務收入。
注意 2 - 重要會計政策摘要
企業持續經營和管理計劃
本公司具有較短的營運歷史，自成立以來屢次虧損。這些事項引發了對公司持續作為公司命運的疑慮。
在接下來的十二個月內，公司打算利用其業務產生的資金來支持運營，從與創業板Yield LLC SCS及創業板Yield Bahamas Limited的股份購買協議中提款，從與Ionic Ventures, LLC的證券購買協議中行使warrants的收益，以及其他債務或股權證券的銷售。此外，公司可能會探索其他潛在的外部資本來源。如果有必要，公司可以減少現金消耗以保護資本。然而，管理層能否在接受公司條件的情況下籌集資本並無任何保證。如果公司無法獲得足夠數額的額外資本，則可能需要縮減近期計劃的發展和運營範圍，這可能會延遲公司業務計劃的實施，並損害其業務、財務狀況和經營結果。合併資產負債表並未包括可能源自於這些不確定性的任何調整。
報表說明基礎
本公司的合併基本報表是根據美國公認的會計原則（“GAAP”）編製的。這些附注中對適用指南的任何提及均意味著指的是會計準則編碼（“ASC”）和財務會計準則委員會（“FASB”）的會計準則更新（“ASU”）中的權威GAAP。合併基本報表包括本公司及其全資子公司的賬目。這裡的合併基本報表中已消除所有母公司間賬戶和交易。
業務組合按照GAAP的規定作為一種逆向資本重組來計算，其中Oxbridge被視為被收購公司，Jet Token則被視為收購方（“逆向資本重組”）。因此，從會計角度來看，逆向資本重組被視為Jet Token為Oxbridge的淨資產發行股票的等價行為，並伴隨著一項資本重組。 Oxbridge的淨資產以歷史成本列示，沒有商認資產或其他無形資產記錄。
根據以下主要因素，Jet Token被確定為業務組合中的會計取得方：
| ● | Jet Token現有股東在合併實體中擁有最大的表決權； | |
| ● | Jet Token現有股東有能力提名合併實體董事會的大多數初始成員； | |
| ● | Jet Token的高級管理層是合併實體的高級管理層； | |
| ● | Jet Token根據歷史運營活動來看是較大的實體，並擁有較多的員工基數；並 | |
| ● | 合併後的公司假定了一個以Jet Token品牌命名的名稱：“Jet.人工智能公司”。 |
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反向 股票合併
在
2024年11月8日，公司宣佈進行反向普通股拆分，按照比例對公司已發行及流通的普通股份進行拆分，比例為
未經審核的 中期基本報表
根據通常按照GAAP準備的年度合併基本報表，某些資訊和披露被縮短或省略。在管理層的意見中，已納入了這些未經審計的合併中期基本報表所需的所有調整和披露，以公平呈現。這些調整包括正常的週期性調整。截至2024年9月30日的九個月營運結果並不一定能反映出整個年度可能預期的結果。
合併財務報表的準則
隨同的合併基本報表包括Jet.AI及其全資附屬公司Summerlin Aviation LLC、Jet Token Software Inc.、Jet Token Management Inc.、Galilee LLC和Galilee 1 SPV LLC。所有公司間帳戶和交易在合併中已被消除。
在反向資本重組之前，合併的資產、負債和經營結果均為Jet Token的數據。在反向資本重組之前，股份及相應的資本金額和每股損失已根據在業務合併中確定的交易所比例進行了追溯重述。
使用估計值
編制符合GAAP的合併基本報表要求管理層作出影響資產和負債報告數額及在基本報表日期披露或有資產和負債的估計和假設，並影響報告期間的支出報告數額。進行估計需要管理層運用重大判斷。至少在合理的範圍內，合併基本報表日期的條件、情況或一組存在的環境對估計的影響可能會因一個或多個未來的確認事件而在短期內發生變化。因此，實際結果可能與這些估計有顯著差異。
金融工具公允價值
公平價值定義為在主要或最有利的市場上，在計量日期時，接收資產的交易價格或支付轉讓負債的價格（退出價格）的交易。適用的會計指引提供了用於衡量公平價值的輸入的建立層次結構，最大化使用可觀察輸入，通過要求在可用時使用最可觀察的輸入，最大程度地減少使用不可觀察的輸入。可觀察輸入是市場參與者在評估資產或負債時將使用的輸入，是基於從與公司無關的來源獲得的市場數據開發的。不可觀察的輸入是反映公司對市場參與者在評估資產或負債時將使用的因素的假設的輸入。可能用於衡量公平價值的三個輸入級別：
層次 1 - 在活躍市場中反映相同資產或負債的報價價格（未調整）的可觀察輸入。
等級 2 - 包括在市場上直接或間接可觀察的其他輸入。
層級 3 - 由市場活動支持甚少或不支持的不可觀察輸入。
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公允價值層級還要求實體在衡量公允價值時，最大限度地使用可觀察輸入，並最小化使用不可觀察輸入。
風險 和不確定性
本公司擁有有限的經營歷史，截至目前為止，僅從預期業務中產生有限的營業收入。本公司的業務和運營對美國（“美國”）及全球的一般業務和經濟控制項，以及地方、州和聯邦政府的政策決策非常敏感。許多超出本公司控制範圍的因素可能會導致這些控制項的波動。不利的控制項可能包括但不限於：航空行業的變化、燃料和營運成本、不利的宏觀經濟控制項、對高管飛行的企業治理最佳實踐變化、私人飛機旅行的一般需求、航空業的碳排放規範，以及市場對本公司商業模式的接受程度。這些不利的控制項可能會影響本公司的財務狀況和綜合業務結果。
現金及現金等價物
為了綜合現金流量表的目的，公司認為所有具有原始期限不超過三個月的高度流動債務工具均為現金等價物。現金及現金等價物包括受限制現金$
提供 成本
本公司遵守ASC 340，其他資產及遞延成本的要求，涉及發行成本。在發行完成之前，發行成本將作為遞延發行成本資本化於合併資產負債表上。遞延發行成本將在發行完成時計入股東虧損，或如果發行未完成則計入費用。
其他 流動資產
其他 流動資產包括安防存款，主要涉及向第三方提前支付未來服務的合同預付款、預付費用以及客戶應收款，用於支付租賃旅行中發生的額外費用。
資產 和設備
不動產 和設備以成本入帳，減去累計折舊。對於主要的增添和改進支出會資本化， 而輕微的替換、維護和修理支出則在發生時計入費用。當不動產和設備退役或以其他方式 處置時，成本和累計折舊會從帳面移除，任何產生的盈餘或虧損也會計入相應期間的 業務結果中。折舊根據相關資產的估計使用壽命，使用直線法來計算財務報表的目的。截止2024年9月30日和2023年12月31日，不動產和設備完全由 正在折舊的設備組成， -年期限。
內部 使用軟體
公司負擔軟件開發成本，開發軟件程序僅用於滿足其內部需求和基於雲的應用程式，用於提供其服務。根據ASC 350-40《無形資產-商譽和其他-內部使用軟體》，一旦初步項目階段完成，資金已承諾，並且可能項目將完成，並將軟體用於履行預期功能，公司對這些軟件應用的開發成本進行資本化。截至2024年9月30日和2023年12月31日，公司資本化了約$
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投資 合資企業
在 2023年1月，該公司與Great Western Air LLC（以Cirrus Aviation Services名義經營）成立了一個50/50的創業公司子公司，名字為380 軟體 LLC，這是一家內華達州的有限責任公司。成本和利潤將平等分享。該公司使用權益法來會計處理這些投資，其中初始投資按成本記錄，並隨後根據該公司在該創業公司的收益或損失的份額進行調整。目前，除了這一初始投資外，該創業公司沒有財務活動或重大資產可供報告。
租賃
公司會根據合同基礎確定安排是否為租賃。營運租賃包括在資產租賃權利、營運租賃負債、流動及營運租賃負債、非流動資產負債負債在綜合賬冊中。資產租賃權利代表使用租賃期間內的基礎資產權利。資產租賃權利是根據租賃開始日期確認的，基於租賃期間內未來最低租賃支付的現值。每個租賃內含的利率都易於確定，以折現租賃支付。
經營租賃使用權資產包括任何租賃付款，包括基於指數或利率的任何變量金額， 並排除租賃獎勵。租賃條款可能包括延長或終止租賃的期權。續租選擇期包含在 租賃期間內，當這些付款在公司裁量範圍內並被認為有合理的確定性將被行使時，相關付款會在經營使用權資產的衡量中予以確認。租賃支出則在租賃期間內以直線法確認。
公司已選擇實用豁免條款，不在公司合併資產負債表上承認初始期限為12個月或更短的租賃，並將租賃費用按照短期租賃的期限線性認列。
長壽資產的減值
本公司遵循ASC 360-10，即長期資產的減值及處置。ASC 360-10要求，如果事件或情況的變化顯示長期資產或資產組的帳面價值可能減值，則應進行回收性評估，通過將與資產相關的預估未來未折現現金流與資產的帳面價值進行比較，以判斷是否需要減記至市場價值。符合ASC 360-10標準的持有出售的長期資產或資產組將以其帳面金額或公允市場價值中較低者減去銷售成本的金額列示。
營業收入 確認
在應用ASC 606《與客戶簽訂的合同中的營業收入》的指導時，公司通過以下步驟確定營業收入確認：
| ● | 識別與客戶的合同或合同。 | |
| ● | 識別合同中的履行義務； | |
| ● | 確定交易價格； | |
| ● | 將交易價格分配給合同中的履行義務； | |
| ● | 在履行義務得到滿足時，或隨着履行義務的滿足而確認營業收入。 |
營業收入來源包括但不限於（i）部分/整架飛機銷售，（ii）部分所有權和飛機包卡項目、（iii）公司及（iv）飛機管理提供的包機業務。
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在部分所有權計劃下，客戶購買了飛機的所有權份額，保證客戶每年可預設小時數使用飛機。 部分所有權計劃包括首付款、一個或多個進度付款、交付款、月度管理費（貨幣）和小時佔用費（OHF）。 來自出售飛機部分或全部權益的收入，在飛機的所有權轉移給購買者時確認，這通常發生在交付或所有權轉移時。
噴氣卡計劃在協議期限內（通常爲一年）爲客戶提供預設的保證私人噴氣機使用小時數，而無需購買所有權份額所需的大額小時費用或資本承諾。噴氣卡計劃通常要求飛行小時的固定小時費率100%預付。
營業收入 是指一旦公司承諾的服務轉移控制權，通常發生在飛行小時被使用時即被確認。對於部分飛機和噴氣卡計劃未使用的小時，將在合同期結束時被放棄，因此立即被確認爲營業收入。
遞延
營業收入是公司已收到對客戶提供服務的對價的義務。當公司收到客戶預付款作爲交易價格的全部或部分時，最初確認合同負債。合同負債在公司在未來的某個時間滿足對客戶的履約義務時得以結清，並確認營業收入。截至2024年9月30日和2023年12月31日，公司遞延了$
該
公司還通過公司的應用程序生成個人臨時包機預訂的營業收入，公司根據提前選擇的期權和公司通過應用程序提供的定價爲客戶提供包機基礎的旅行服務，並進行採購、談判和安排。此外，Cirrus航空公司爲公司的利益在公司的飛機上營銷包機。與應用程序相關的遞延營業收入爲$
公司在執行部分航班時會利用持證獨立第三方航空公司。公司通過控制模型評估是否存在向客戶轉讓服務的承諾，作爲委託人，或者安排另一方提供服務，作爲代理人。不論涉及哪家第三方航空公司，公司向會員提供的飛行服務的性質都是相似的。公司指導第三方航空公司向會員或客戶提供飛機。根據對控制模型的評估，確定公司在所有營業收入安排中均作爲委託人而非代理人。所有者包機收入在管理飛機的所有者設定航班價格時確認。公司按淨額記錄所有者包機收入，以反映我們收取的運營飛機的差額。如果公司具有履行義務的主要責任，則營業收入和相關成本將以總體方式在綜合損益表中報告。關於飛機管理的遞延營業收入分別爲$
以下是2024年和2023年9月30日止三個月和九個月的子類別營業收入構成的分解。
| 截至三個月 | 截至九個月的時間 | |||||||||||||||
| 九月三十日， | 九月三十日， | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| 軟件應用和Cirrus包機 | $ | $ | $ | $ | ||||||||||||
| 噴氣卡和分時項目 | ||||||||||||||||
| 管理和其他服務 | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
航班
航班及相關於航班的服務，以及航班相關的成本，在提供服務的時候將被賺取和確認爲營業收入。對於往返航班，每個航段到達目的地時都會確認收入。
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分時和私人飛機卡會員根據合同規定的上限小時費率支付固定報價的航班費用。臨時包機客戶主要爲航班支付固定費用。此外，會員通過購買以美元計價的預付航班小時塊（「預付航班塊」）支付航班費用，其他附加費用，如餐飲和地面運輸等，每月按照產生的費用進行賬單結算。預付航班塊被延遲確認，並在會員完成航班段時確認營業收入。
航空器 管理
公司爲所有者管理飛機，並收取合同費用。與飛機管理相關的營業收入還包括所有者發生的費用回收，包括維護協調、機組人員和飛行員，以及重新收取某些發生的飛機運營成本和費用，如維護、燃料、着陸費、停車費和其他相關運營成本。公司將回收和重新收取的費用按照成本或預定利潤率返還給所有者。
飛機管理相關的營業收入包括兩種履約義務。一種履約義務是在合同期內提供管理服務。來自管理服務的營業收入將按月份在合同期間內確認。第二種履約義務是運營和維護飛機的成本，這種 成本將在完成服務的時間點確認爲收入。
飛機 銷售
公司從供應商和各種其他第三方賣家那裏收購飛機，主要是在私人航空行業。公司將購買的飛機歸類爲合併餘額表上的飛機庫存。飛機庫存的價值以成本或可變現淨值較低者爲準。銷售在合併運營報表中以總額方式記錄在營業收入和營業成本內。公司記錄的飛機銷售額爲$ 截至2024年和2023年9月30日的三個月和九個月。
傳遞成本
根據ASC 606的指引，公司在顧客獲得約定的貨物或服務的控制權時確認營業收入，金額應反映公司預計因交換這些貨物或服務而將收到的對價。爲了判斷適用ASC 606範圍內的安排的營業收入確認，公司執行以下五個步驟： (i) 識別與顧客的合同；(ii) 識別合同中的履約義務；(iii) 判斷交易價格；(iv) 根據合同中的履約義務分配交易價格；和(v) 實體履行一個履約義務時，確認營業收入。當公司認爲有可能會收取應得的因交換提供給顧客的貨物或服務的對價時，公司僅在合同上應用這五步模型。在合同初次確認時，一旦確定合同屬於ASC 606的範圍，公司評估每份合同中承諾的貨物或服務，並確定明確的履約義務。然後公司評估自己是作爲代理還是主體履行每個確定的履約義務，在判斷公司是作爲主體時，公司將第三方成本包含在交易價格中。
銷售成本
銷售費用的成本包括在提供空運服務過程中產生的費用，如租用第三方飛機、飛機租賃費用、飛行員培訓和工資、飛機燃料、飛機維護以及其他飛機營業費用，下面將逐一討論這些費用。
| 1. | 包機 第三方飛機：租用第三方飛機的費用作爲銷售成本的一部分進行記錄。這些費用 包括支付給第三方運營商的費用，以代表公司提供飛機服務。費用在服務提供的期間確認 並以應計制的方式報告在收益表中。 |
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| 2. | 飛機 租賃費用：飛機租賃費用包括公司運營中租賃飛機的成本。租賃費用 按直線法在損益表中作爲營業費用按租賃期間確認。 | |
| 3. | 飛行員 培訓和工資：飛行員培訓費用在發生時支出，幷包括在銷售費用中。這包括 與初始飛行員培訓、定期培訓以及任何額外培訓項目相關的費用。飛行員工資，包括 薪水、獎金和福利，也作爲銷售費用的一部分根據權責發生制認定。 | |
| 4. | 飛機 燃油：飛機燃油成本根據飛行操作實際消耗計入銷售成本中作爲費用。燃油成本在 燃油消耗時期間記錄在損益表上，並根據權責發生制報告。 | |
| 5. | 飛機 維護：飛機維護費用包括日常和非日常維護。日常維護費用在發生時支出 並作爲銷售費用的一部分記錄。如主要修理和 大修等非例行維護費用資本化，並在預期使用壽命內攤銷。攤銷費用包括在銷售費用 且按資產預期壽命直線攤銷在損益表中確認。 | |
| 6. | 其他 飛機營業費用：其他飛機營業費用包括保險、降落費、航行費用、 以及餐飲服務等成本。這些費用在發生時按權責發生制確認爲損益表的銷售費用的一部分。 |
廣告成本
公司將廣告和推廣公司服務的費用在發生時支出。這些金額被包含在合併財務報表的銷售和市場費用中，總計$
研究和開發費用會在發生時計入運營成本。研發費用的主要組成部分包括工資、顧問、外部服務和用品。
公司在研究和開發其技術及未來產品的過程中產生研發費用。 公司的研發費用主要由非資本化的第三方軟件開發付款組成。 公司在相關產品完成、測試並準備好商業使用之前，按發生時將這些費用計入支出。
公司根據ASC 718《薪酬-股票薪酬》覈算股票獎勵。根據ASC 718，基於授予日估計的獎勵公允價值衡量股票-based補償成本，並在僱員應獲得的限制國分期內或非員工提供商品或服務的期間內作爲費用確認。每個股票期權或認股權授予獎勵的公允價值是利用授予日使用Black-Scholes期權定價模型估計的。
所得稅
公司適用ASC 740所得稅。遞延所得稅是根據已頒佈的稅法和適用於差異預計會影響應稅收入的期間的法定稅率，確認未來年份因資產和負債的稅基與其財務報表報告金額之間的差異所產生的稅務後果。在必要時，設立估值準備，將遞延稅資產減少到預計能夠實現的金額。所得稅的準備代表當期的稅費（如有）以及期間內遞延稅資產和負債的變化。
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ASC 740還提供了有關承認、計量、呈現和披露不確定稅務立場的準則。僅當根據技術性而言，對某個不確定立場「更可能而不是可能不」的情形在相關稅務機構的審查中是持續的，稅收益才予以承認。
該 公司在美國受稅務管轄，並在美國聯邦管轄區和內華達州管轄區提交稅務申報。 該公司可能受到包括聯邦、州和地方稅務機關的所有時期的審查。 目前該公司沒有受到任何稅務機關的審查。
公司在合併損益表的面上呈現基本每股收益（「每股收益」）和攤薄後每股收益。基本每股收益是將淨虧損除以期內加權平均流通普通股股份數得出的。在公司發生淨虧損的期間，潛在攤薄證券的影響將是反攤薄的，因此會被排除在攤薄後每股收益的計算之外。截止到2024年和2023年9月30日的九個月的期間內， 和 期權， 和 買入普通股的warrants，以及 和 可轉換的系列b優先股的普通股股份，分別被排除。
信貸風險集中
公司將現金存放在其認爲信用良好的數家美國主要金融機構。餘額由聯邦存款保險公司保險，最高可達$
板塊報告
公司將運營板塊識別爲公司元件，這些元件的離散財務信息可用，並且定期由首席運營決策者（「CODM」）或決策小組審核，以便在資源分配和績效評估方面做出決策。CODM是公司的首席執行官。公司確定其運營於單一的運營和報告板塊——私人航空服務，因爲CODM以合併基礎上呈現的財務信息進行審查，並提供營業收入的分解信息，以便做出運營決策、分配資源和評估績效。公司的所有長期資產位於美國，來自私人航空服務的營業收入主要來自美國境內的航班。
注意 3 – 其他資產
其他資產包括以下內容：
| 2024年9月30日 | 2023年12月31日 | |||||||
| 存款 | $ | $ | ||||||
| 租賃維護儲備 | ||||||||
| 其他資產總額 | $ | $ | ||||||
註釋 4 – 應付票據
橋 協議
在
2023年9月11日，公司與八位投資者簽訂了一份具有約束力的條款清單（「橋樑協議」），投資者從公司購買了總額爲
$的高級擔保票據（「橋樑票據」）。
公司通過出售橋樑票據獲得的淨收益爲$
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這些 橋樑票據及應付的累計利息已在截至2024年9月30日的九個月內全部償還。
注意 5 – 承諾和 contingencies
在與租賃有關的安排費用中，公司同意向單獨的第三方支付$
在 2021年11月，公司與第三方達成了一項租賃協議，將一架飛機用於公司的運營。 租賃期限爲60個月，至2026年11月到期，並要求每月支付租金。在租賃期限內的任何時候， 公司都有權以當時飛機的公允市場價值從出租方購買該飛機。
租賃協議還要求公司持有一筆流動性儲備，金額爲$
2024年9月30日止九個月的總租賃費用分別爲2024年和2023年爲$
使用權 租賃資產和運營租賃的租賃負債在合併資產負債表中記錄如下：
| 2024 年 9 月 30 日 | 2023 年 12 月 31 日 | |||||||
| 經營租賃使用權資產 | $ | $ | ||||||
| 累計攤銷 | ( | ) | ( | ) | ||||
| 淨餘額 | $ | $ | ||||||
| 租賃負債，流動部分 | $ | $ | ||||||
| 長期租賃負債 | ||||||||
| 經營租賃負債總額 | $ | $ | ||||||
截至2024年9月30日，加權平均剩餘租賃期限爲
截至2024年9月30日，非可撤銷經營租賃下的未來最低租賃支付要求如下：
| 2024（三個月） | $ | |||
| 2025 | ||||
| 2026 | ||||
| 未來最低租賃付款總額 | ||||
| 減去隱含利息 | ( | ) | ||
| 租賃負債的到期 | $ |
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創業板 股份購買協議
Jet Token簽署了一個股權購買協議，該協議日期爲2022年8月4日，與創業板Yield LLC SCS和創業板Yield Bahamas Limited（連同創業板Yield LLC SCS，統稱爲「創業板」），在業務合併完成時公司自動承接了該協議。 公司有權定期向創業板發行和賣出股票，創業板同意購買，最多達$ 公司的普通股在納斯達克上市後36個月內的總價值爲 股票。
在截至2024年9月30日的九個月期間，公司發行了 根據協議，普通股股份的總對價爲 $ 百萬美元。
公司同意支付創業板一筆承諾手續費，金額爲$ 可用現金或公司普通股自由交易的股份支付，支付日期爲首次上市之日或首個紀念日之前，並於2024年10月通過發行普通股履行該費用。在截至2024年9月30日的九個月內，公司發行了 股普通股，通過這些股份的公平價值減少了應支付的承諾手續費$.
根據 股份購買協議，公司向創業板發行了一個認股權證（「創業板認股權證」），授予其購買 最多 公司的普通股股份，按全面攤薄後的基礎計算。創業板認股權證的行使價格爲$並且期限爲 。創業板認股權證包括一個調整機制，行使價格將不時進行調整。根據該認股權證，在認股權證中定義的公開上市日期之後的第一個週年紀念日（「調整日期」），如果所有或部分創業板認股權證仍未被行使，並且調整日期之後的 個交易日公司普通股的平均收盤價低於當時認股權證行使價格的90%（「基線價格」），則未行使的認股權證股份的行使價格將調整爲基線價格的110%。因此，認股權證的行使價格在2024年9月30日降至$ 每股。
在2022年8月4日，公司與創業板簽署了註冊權協議，要求公司就根據股份購買協議和行使創業板認股權證發行給創業板的普通股股票的轉售提交註冊聲明。由於該註冊聲明在2023年10月23日（「有效截止日期」）之前未被宣佈生效，公司可能有義務支付創業板相當於$的金額。
在2023年10月23日，公司簽署了一份追溯生效於2023年8月10日的權證修訂協議（「創業板權證修訂」）。創業板權證修訂規定，創業板可以選擇限制「創業板權證」的可行使性，以購買公司的普通股，以至於在行使後，創業板及其附屬機構在公司的實際知識範圍內，將不超過
前向 採購協議
2023年8月6日，牛津大學與（i）Meteora Capital Partners，LP（「MCP」）、（ii）Meteora Select Trading Opportunities Master，LP（「MSTO」）和（iii）Meteora Strategic Capital，LLC（「msc」及其與MCP和MSTO合稱爲「平台」）簽訂了一項協議（「遠期購買協議」），涉及場外交易預付權益遠期交易。在遠期購買協議中，牛津大學在業務組合完成前被稱爲「交易對手」，而Jet.人工智能在業務組合完成後被稱爲「交易對手」。本介紹中使用的大寫術語但未另行定義的術語，其含義應按遠期購買協議規定。
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根據前期購買協議的條款，賣方打算但並非有義務購買高達 （「已購買金額」）價格爲每股$ 的Oxbridge（「Oxbridge股票」）A類普通股，並行進行交易，根據賣方FPA融資金額PIPE認購協議（如下定義）的交易收盤價，減去賣方通過經紀人在開放市場上分別從第三方手中購買的Oxbridge股票（「回收股票」）。在終止前期購買協議後，受前期購買協議約束的股票數量根據「前期終止選擇權」下所述而減少。 與該股票相關的回購協議
前置購買協議規定，預付款短缺金額爲相當於美元的$
轉讓購買協議規定，賣方將直接獲得一筆總現金金額（「預付款金額」），等於（x）根據定價日期通知中列明的股份數量與（ii）每股贖回價格的乘積，該贖回價格在2021年8月11日生效的牛津橋修訂和重述的備忘錄及章程的第49.5條中定義，且可能不時修訂（「初始價格」），減去（y）預付款短缺。
賣方同意放棄與業務合併有關的任何回購權利，以及根據Oxbridge修訂和重述的公司章程所需的回購權利。這樣的放棄減少了在業務合併中被回購的Oxbridge股份數量，這可能改變了對業務合併潛在實力的看法。
賣方最初持有的股份包括 通過經紀人在開放市場交易中從第三方購買的股份，或通過撤銷先前提交的贖回請求，並放棄了對這些股份的贖回權。此外,賣方 購買的 按每股價格$直接從公司購買的「額外股份」 根據於2023年8月6日簽訂的（「FPA資金金額PIPE認購協議」）進行的認購協議購買的股份中， 股份代表賣方的股份考慮 賣方 根據遠期購買協議條款，這些股份不受遠期購買協議條款的約束，這意味着 賣家 可以自由出售這些股票並保留所有收益。在考慮股份交易後，最初受遠期購買協議條款約束的「股份數量」爲 ，包括 「再循環股票」和 附加股份。在業務合併結束後，根據遠期購買協議，信託帳戶中剩餘約
2023年8月31日和2023年10月2日，公司分別簽署了一項修正協議和第二項修正協議（統稱爲「修正協議」），以修改買斷購買協議。
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修正案的綜合效果是：
| ● | 增加 賣方根據FPA資金金額PIPE認購協議從公司購買的額外股份總數至 公司的普通股股份； | |
| ● | 向公司支付「未來短缺」金額，總計$ | |
| ● | 增加 向賣方的總股份對價至 公司的普通股票， | |
| ● | 減少 剩餘的回購股份數量至 ; | |
| ● | 增加 根據前期購買協議的股份數量至 ; 和 | |
| ● | 將「估值日期」延長至業務合併成交兩週年，或在賣方自行判斷下提前，且需通知公司。 |
經修訂的遠期購買協議規定，在評估日期後進行現金結算，屆時賣方有義務向公司支付與遠期購買協議的「股份數量」相等的金額（前提是這些股票已登記備案或根據豁免登記的規定可自由轉讓），乘以反映公司成交量加權平均交易價格的每股價格，並在評估日期後的若干天內進行交易，根據某些情況進行替代計算。在結算時，公司有義務向賣方支付每股「$」的結算調整金額，用於支付全部股份數量的股份數量，結算調整金額可以以現金形式支付，或以公司普通股形式支付，前提是結算調整金額大於賣方應支付的結算金額，並且保證賣方持股不超過公司已發行普通股的「%」。此外，如果結算金額減去結算金額調整金額爲負數，且公司已選擇以現金形式支付結算金額調整金額，則 Meteor 或公司均不應對遠期購買協議下的任何支付向對方承擔責任。根據ASC 480，遠期購買協議被確定爲獨立的權益聯繫金融工具。FPA不包括髮行認股權證的義務。因此，FPA股份被分類爲股本，並向公司支付的淨款項被記錄爲資本金的一部分進行重新規劃。 每股「$」的結算調整金額將支付總股份數量，該金額可用現金支付，或者如果結算調整金額高於賣方應支付的結算金額，則可以用公司普通股支付，前提是賣方的持股不超過公司已發行的普通股的「%」。此外，如果結算金額減去結算金額調整金額爲負數，並且公司已選擇以現金形式支付結算金額調整金額，則 Meteor 或公司均不應對遠期購買協議下的任何支付向對方承擔責任。根據ASC 480，遠期購買協議被確定爲獨立的權益聯繫金融工具。FPA不包括髮行認股權證的義務。因此，FPA股份被分類爲股本，並向公司支付的淨款項被記錄爲資本金的一部分進行重新規劃。
FPA 融資金額PIPE訂閱協議
2023年8月6日，牛橋公司簽訂了一份認購協議（「FPA融資金額PIPE認購協議」) 與賣方。
根據FPA資金PIPE認購協議，賣方同意認購和購買，並且Oxbridge同意在收盤日向賣方發行和出售高達 Oxbridge股票，減去與遠期購買協議相關的回收股份。
Maxim 和解協議
2023年8月10日，公司與Maxim Group LLC達成了和解協議（「Maxim和解協議」），該公司是公司首次公開發行（「Maxim」）的承銷商。根據Maxim和解協議，公司發行了 股Jet.AI普通股，用於解決公司根據2021年8月11日前後公司與Maxim簽訂的承銷協議的付款義務，Jet.AI普通股將受到註冊權協議的約束。公司還發行了 8% A系列累積可轉換優先股，價值等同於$
2024年7月，公司與Maxim簽署了一份關於Maxim和解協議的修正案，並同意在其他事項中修改「系列A換股價格」的定義，用於A類優先股和與Maxim可能根據其A類優先股換股而獲取公司普通股的若干限制。截至2024年9月30日九個月結束時，公司發行了 普通股以換股 A類優先股。
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贊助商 和解協議
在2023年8月10日，Jet Token、牛津大學和OAC贊助有限公司（以下簡稱「贊助商」）簽署了一份和解協議（以下簡稱「贊助商和解協議」）。根據贊助商和解協議，公司發行了 公司的5% A-1系列可轉換優先股（以下簡稱「A-1優先股」）以結清公司在一份本金金額爲$的承兌票據下的支付義務。
2024年8月，贊助方同意放棄某些通知和回購權益，以贊助方持有的與公司進行的股本融資相關的A-1優先可轉換股的條款作爲考慮，金額爲$
日峯 和解協議
2024年8月21日，公司與Sunpeak Holdings Corporation（「SHC」）達成了一項和解協議和規定，於2024年8月28日生效（「Sunpeak結算協議」），用於解決公司欠SHC的未決索賠。根據Sunpeak結算協議，SHC同意購買公司和公司指定供應商之間的某些未清支付款，總額約爲$
在截至2024年9月30日的九個月期間，公司發行了 普通股股票的股份，結算金額約爲$
注意 6-隨後事件股東權益
普通股和優先股
根據公司修訂後的章程，公司有權發行高達
業務合併完成後， Jet.AI普通股股份和 Merger Consideration Warrants 發行給「歷史滾存股東」，作爲交換所有未分配的Jet Token普通股股份（包括轉換後的Jet Token優先股股份）。公司還預留髮行最多 Jet.AI普通股股份，用於以Jet.AI期權換取先前未合併的Jet Token期權，以及 Jet.AI普通股股份和 Merger Consideration Warrants，用於以Jet.AI RSU獎勵換取先前未合併的Jet Token RSU獎勵。 每個Merger Consideration Warrant授權持有人以每股$的價格購買公司的一股普通股，並在發行後十年到期。
此外，爲了促成業務合併，Jet.AI董事會通過了綜合激勵計劃，以便授予股權獎勵，吸引、留住並激勵Jet.AI Inc.及其附屬公司的員工（包括指定的高管）、獨立承包商和董事，這是Jet.AI Inc.長期成功的關鍵。綜合激勵計劃是2018計劃和2021計劃的延續，這兩項計劃是從Jet Token承接並修改、重述並更名爲綜合激勵計劃，自業務合併完成之日起生效。
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權證交換
在2024年7月30日，公司完成了一項關於之前發行的可贖回warrants、合併對價warrants和定向增發warrants（「定向增發warrants」）的交易所要約，其中可贖回warrants和定向增發warrants的持有者被提供了
作爲這些交易的結果，公司確認了一項視同股息$
系列 b可轉換優先股證券購買協議
在2024年3月28日，公司與Ionic Ventures, LLC（「Ionic」）簽訂了一份證券購買協議（「證券購買協議」），進行了一次定向增發，交易於2024年3月29日完成。根據證券購買協議，公司售出 的B系列優先股，以及一個購買最多
根據前文中規定的限制條件，並在涵蓋Ionic的Jet.AI普通股的有效註冊聲明下，Series b優先股的股份將在發行日期或之前的第十個交易日自動轉換成Jet.AI普通股。每股Series b優先股轉換爲普通股的數量是通過將每股Series b優先股的轉換金額除以當時的轉換價格計算得出的。轉換金額等於Series b優先股的股份規定價值，即$
如果在指定的《設計聲明》中定義的某些「觸發事件」發生，例如違反《離子註冊權協議》、暫停交易或公司在行使轉換權時未能將B系列優先股轉換爲普通股，則公司可能被要求以現金贖回B系列優先股，
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與證券購買協議項下的交易有關，公司與Maxim簽署了一份安置代理協議（「安置代理協議」）。根據安置代理協議的條款，公司同意支付Maxim一筆現金費用，等於
在2024年9月24日，公司與Ionic簽署了一份協議函（「協議函」），其中闡明瞭公司與Ionic之間與證券購買協議相關的某些理解和協議。根據協議函，Ionic同意不採取行動以保護其在證券購買協議下的合法權利。作爲放棄的對價，公司同意釋放Ionic及其附屬公司，並向Ionic發行 附加的b系列優先股。股權發行被記錄爲一般和行政費用，作爲基於發行日相應普通股票的公允價值的股票補償。.
Regulation A offerings
In
June 2021, the Company undertook another Regulation A, Tier 2 offering for which it was selling up to non-voting common stock at
$ per share for a maximum of $
Stock Options
In connection with the Business Combination, the Company adopted the 2023 Omnibus Incentive Plan (the “2023 Plan”). The 2023 Plan provides for the grant of equity awards to employees, outside directors, and consultants, including the direct award or sale of shares, stock options, and restricted stock units to purchase shares. The 2023 Plan is a continuation of the 2018 Plan and 2021 Plan, which were assumed from Jet Token and amended, restated and re-named into the form of the 2023 Omnibus Incentive Plan effective as of the consummation of the Business Combination. In September 2024, the 2023 Plan was amended to increase the number of shares of common stock authorized under the 2023 Plan to and to eliminate the automatic share replenishment provision. As of September 30, 2024, the total number of shares reserved for issuance under the Omnibus Incentive Plan was shares. The Omnibus Incentive Plan is administered by the Company’s Board of Directors, and expires ten years after adoption, unless terminated by the Board.
On June 4, 2018, the Company’s Board of Directors adopted the Jet.AI, Inc. 2018 Stock Option and Grant Plan (the “2018 Plan”). The 2018 Plan provides for the grant of equity awards to employees, non-employee directors and consultants, to purchase shares of Jet.AI Common Stock. As of September 30, 2024, the total number of shares reserved for issuance under the 2018 Plan was . The 2018 Plan is administered by the Board.
In August 2021, the Board adopted the Jet Token Inc. 2021 Stock Plan (the “2021 Plan”). The 2021 plan provides for the grant of equity awards to employees, outside directors, and consultants, including the direct award or sale of shares, stock options, and restricted stock units to purchase shares. Up to shares of common stock may be issued pursuant to awards granted under the 2021 Plan. During the year ended December 31, 2022, the 2021 Plan was amended to increase the number of shares of common stock authorized under the 2021 Plan to . In the event that shares of common stock subject to outstanding options or other securities under the Company’s 2018 Stock Option and Grant Plan expire or become exercisable in accordance with their terms, such shares shall be automatically transferred to the 2021 Plan and added to the number of shares then available for issuance under the 2021 Plan. The 2021 Plan is administered by the Board, and expires ten years after adoption, unless terminated by the Board.
During the nine months ended September 30, 2023, the Company granted a total of stock options to purchase common stock to various employees, advisors and consultants. The options have a -year life and an exercise price of $. Approximately of the options vest over a period of two months, while the remaining options vest in monthly tranches over a three-year period.
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During the nine months ended September 30, 2024, the Company granted a total of stock options to purchase common stock and restricted stock units to various employees, advisors and consultants. The options have a ten-year life and an exercise price of $. Approximately of the options were immediately vested on the grant date, while the remaining options vest in monthly tranches over a three-year period. The options had a grant date fair value of approximately $, which will be recognized over the vesting period. The restricted stock units were immediately vested on the grant date.
During the nine months ended September 30, 2024 and 2023, stock-based compensation expense of $ and $, respectively, was recognized for the vesting of these options and restricted stock units. As of September 30, 2024, there was approximately $ in unrecognized stock-based compensation, which will be recognized through September 2026.
| Number of Shares | Weighted Average Exercise Price | Weighted average Remaining Contractual Term | ||||||||||
| Outstanding at December 31, 2022 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | - | |||||||||||
| Forfeitures | ( | ) | - | |||||||||
| Outstanding at September 30, 2023 | $ | |||||||||||
| Number of Shares | Weighted Average Exercise Price | Weighted average Remaining Contractual Term | ||||||||||
| Outstanding at December 31, 2023 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | - | |||||||||||
| Forfeitures | - | |||||||||||
| Outstanding at September 30, 2024 | $ | |||||||||||
| Exercisable at September 30, 2024 | $ | |||||||||||
Warrants
The number of outstanding warrants issued by the Company as of September 30, 2024 is as follows:
| Warrant | Expiration Date Date | Exercise Price | Number Outstanding | |||||||
| GEM Warrants | $ | |||||||||
| Total | ||||||||||
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NOTE 7 – RELATED PARTY TRANSACTIONS
See Note 4 for a discussion of the Bridge Agreement entered into with related parties.
See Note 5 for a discussion of the related party Settlement Agreement entered into with Maxim.
See Note 6 for a discussion of related party Placement Agent Agreement with Maxim.
See
Note 5 for a discussion of the related party Settlement Agreement entered into with Sponsor. In addition, included in the Company’s
accrued liabilities as of September 30, 2024 are $
NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of the Company’s financial instruments, which consist of cash and cash equivalents, accounts receivable, accounts payable, and notes payable approximate fair value due to their short-term nature.
NOTE 9 – DEFERRED REVENUE
Changes in deferred revenue for the nine months ended September 30, 2024 were as follows:
| Deferred revenue as of December 31, 2023 | $ | |||
| Amounts deferred during the period | ||||
| Revenue recognized from amounts included in the deferred revenue beginning balance | ( | ) | ||
| Revenue from current period sales | ( | ) | ||
| Deferred revenue as of Sept 30, 2024 | $ |
NOTE 10 – SUBSEQUENT EVENTS
In
October 2024, the Company issued shares of common stock for settlement of approximately $
In October 2024, the Company issued shares of common stock under the Share Purchase Agreement with GEM for total consideration of $.
In
October 2024, the Company also issued
In October 2024, the Company redeemed in full all of the previously issued and outstanding Series A-1 Preferred Shares by paying the holder the requisite per share redemption price together with all accrued but unpaid dividends on such shares. As a result of this redemption there are no Series A-1 Preferred Shares issued and outstanding.
On October 10, 2024, the Company and Ionic entered into a second letter agreement (the “Second Letter Agreement”) that set forth certain understandings and agreements among the Company and Ionic related to the Securities Purchase Agreement described in Note 5. Under the Second Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the Securities Purchase Agreement, and the related documents and agreements among the parties, related to certain actions and transactions identified in the Second Letter Agreement. In consideration of Ionic’s consent, the Company has agreed to, among other things, change the Conversion Measurement Period (as defined in the Certificate of Designations) for the shares of Series B Convertible Preferred Stock that Ionic held as of the date of the Second Letter Agreement to begin on March 28, 2024 and to end in accordance with the Certificate of Designations.
In October 2024, the Company
issued shares of Series B Preferred Stock upon the exercise of Series B Preferred warrants for total consideration of $
During October 2024, the Company issued shares of common stock for the conversion of shares of Series B Convertible Preferred Stock and in November a further shares towards the conversion of an additional shares of Series B Convertible Preferred Stock.
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On
October 10, 2024, the Company entered into Securities Purchase Agreements (the “First Purchase Agreement”) with institutional
investors for the sale of shares of common stock at a per share price of $. The closing of the offering occurred on October
11, 2024. In connection with offering, the Company entered into a placement agency agreement with
Maxim, pursuant to which the Company agreed to pay Maxim (as the placement agent) an aggregate fee equal to
On October 18, 2024, the Company and Ionic entered into a third letter agreement (the “Third Letter Agreement”) that set forth certain understandings and agreements among the Company and Ionic related to the Securities Purchase Agreement described in Note 5. Under the Third Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the Securities Purchase Agreement, and the related documents and agreements among the parties, related to a transaction that may be effected utilizing the registration statement on Form S-3 (File No. 333-281578) as generally identified in the Third Letter Agreement. In consideration for Ionic’s consent, the Company agreed to, among other things, change the Conversion Measurement Period (as defined in the Certificate of Designations) for the first shares of Series B Convertible Preferred Stock that Ionic would hold upon exercise of the Ionic Warrant, to begin on March 28, 2024 and to end in accordance with the Certificate of Designations for the Series B Preferred Stock.
On
October 21, 2024, the Company entered into Securities Purchase Agreements (the “Second Purchase Agreement”) with institutional
investors for the sale of shares of common stock at a per share price of $. The closing of the offering occurred on October
21, 2024. In connection with offering, the Company entered into a placement agency agreement with
Maxim, pursuant to which the Company agreed to pay Maxim (as the placement agent), an aggregate fee equal to
On
October 25, 2024, the Company entered into an Equity Distribution Agreement (“ATM Sales Agreement”) with Maxim, which provides
for the sale, in our sole discretion, of shares of our common stock through Maxim, as our sales agent. In accordance with the terms
of the ATM Sales Agreement, the Company may offer and sell shares of our common stock, par value $ per share, having an aggregate
offering price of up to $
On
October 31, 2024, the Company entered into and aircraft purchase agreement with Textron Aviation Inc. (“Textron”), for the
purchase of 3 Cessna Citation CJ4 aircraft (the “CJ4 Aircraft”). Under the aircraft purchase agreement, the Company
may purchase from Textron specifically configured CJ4 Aircraft at prevailing market rates whereby the aggregate purchase price could
be approximately $
The Company has evaluated subsequent events that occurred after September 30, 2024 through November 14, 2024, the date that these consolidated financial statements were available to be issued, and noted no additional events requiring recognition for disclosure.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information which Jet.AI’s management believes is relevant to an assessment and understanding of its consolidated results of operations and financial condition. You should read the following discussion and analysis of Jet.AI’s financial condition and results of operations together with the historical unaudited consolidated financial statements as of September 30, 2024 and December 31, 2023, and the three and nine months ended September 30, 2024 and 2023, and the related notes that are included elsewhere in this report.
Certain of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to plans and strategy for Jet.AI’s business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in “Item 1A – Risk Factors” in Jet.AI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, and factors identified in other subsequent reports filed with the SEC Jet.AI’s actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this report. We assume no obligation to update any of these forward-looking statements.
Percentage amounts included in this report have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. Certain other amounts that appear in this report may not sum due to rounding.
Unless otherwise indicated, all information in this Quarterly Report on Form 10-Q gives effect to a 1-for-225 reverse stock split of our common stock that became effective on November 12, 2024, and all references to shares of common stock outstanding and per share amounts give effect to the reverse stock split.
Overview
Jet.AI, a Delaware corporation (“Jet.AI”, “Company”, “we” or “us”), was founded in 2018 by Michael Winston, its Executive Chairman. The Company, directly and indirectly through its subsidiaries, has been principally involved in (i) the sale of fractional and whole interests in aircraft, (ii) the sale of jet cards, which enable holders to use certain of the Company’s and other’s aircraft at agreed-upon rates, (iii) the operation of a proprietary booking platform, which functions as a prospecting and quoting platform to arrange private jet travel with third party carriers as well as via the Company’s leased and managed aircraft, (iv) direct chartering of its HondaJet aircraft by Cirrus Aviation, (v) aircraft brokerage and (vi) service revenue from the monthly management and hourly operation of customer aircraft.
Currently we offer the following SaaS software to aircraft owners and operators generally:
| ● | Reroute AI: recycles aircraft waiting to embark to their next revenue flight into prospective new charter bookings to destinations within specific operational parameters. | |
| ● | DynoFlight: enables aircraft operators to estimate aircraft emissions then purchase carbon removal credits via our DynoFlight application programming interface API. |
Business Combination
On August 10, 2023, Oxbridge Acquisition Corp. (“Oxbridge”) consummated a business combination pursuant to a Business Combination Agreement and Plan of Reorganization, as amended by Amendment No. 1 to the Business Combination Agreement, dated as of May 11, 2023 (the “Business Combination Agreement”) among Oxbridge, OXAC Merger Sub I, Inc., a direct, wholly owned subsidiary of Oxbridge (“First Merger Sub”), Summerlin Aviation LLC, a direct, wholly owned subsidiary of Oxbridge (“Second Merger Sub”), and Jet Token Inc., a Delaware corporation (“Jet Token”). Pursuant to the Business Combination Agreement, Oxbridge redomiciled as a Delaware corporation and was immediately renamed Jet.AI Inc., and promptly thereafter, (i) First Merger Sub merged with and into Jet Token, with Jet Token surviving the merger as a wholly owned subsidiary of Jet.AI Inc., and (b) Jet Token merged with and into Second Merger Sub (each merger and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”).
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As a result of the Business Combination:
| ● | the then issued and outstanding Class A ordinary shares of Oxbridge were converted, on a one-for-one basis, into shares of common stock of Jet.AI Inc., | |
| ● | the then issued and outstanding Class B ordinary shares of Oxbridge were converted, on a one-for-one basis, into shares of common stock of Jet.AI Inc., | |
| ● | the then issued and outstanding Oxbridge warrants were converted into an equal number of warrants, each exercisable for one share of common stock (“Jet.AI Warrants”), | |
| ● | the then issued and outstanding Oxbridge Units were converted into an equal number of Jet.AI Units, each consisting of one share of common stock and one Jet.AI Warrant, | |
| ● | the outstanding shares of Jet Token common stock, including all shares of Jet Token preferred stock that converted into shares of Jet Token common stock, were cancelled and converted into the right to receive the number of shares of Common Stock and the number of warrants (“Merger Consideration Warrants”) based on the respective exchange rations set forth in the Business Combination Agreement, | |
| ● | all outstanding Jet Token options for its common stock , whether or not exercisable and whether or not vested, were converted into options to purchase Common Stock based on the applicable exchange ratio determined in accordance with the Business Combination Agreement, | |
| ● | all outstanding Jet Token warrants were converted into warrants to acquire the number of shares of common stock and Merger Consideration Warrants based on the applicable exchange ratio set forth in the Business Combination Agreement, and | |
| ● | the outstanding Jet Token restricted stock unit awards were converted into Jet.AI restricted stock unit awards based on the applicable exchange ratio determined in accordance with the Business Combination Agreement. |
As a result of the Business Combination, Jet.AI has one class of common stock, listed on The Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “JTAI,” and had two classes of warrants, the Redeemable Warrants and the Merger Consideration Warrants, that at the time of closing of the Business Combination were listed on Nasdaq under the ticker symbols “JTAIW” and “JTAIZ,” respectively.
The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP, whereby Oxbridge is treated as the acquired company and Jet Token is treated as the acquirer (the “Reverse Recapitalization”). Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Jet Token issuing stock for the net assets of Oxbridge, accompanied by a recapitalization. The net assets of Oxbridge were stated at historical cost, with no goodwill or other intangible assets recorded.
The consolidated assets, liabilities, and results of operations prior to the Reverse Recapitalization are those of Jet Token. The shares and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based on shares reflecting the exchange ratio established in the Business Combination.
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Results of Operations
The following table sets forth our results of operations for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | 3,917,393 | $ | 3,367,189 | $ | 10,849,875 | $ | 8,035,505 | ||||||||
| Cost of revenues | 3,931,279 | 3,196,748 | 11,405,113 | 8,140,905 | ||||||||||||
| Gross (loss) profit | (13,886 | ) | 170,441 | (555,238 | ) | (105,400 | ) | |||||||||
| Operating Expenses: | ||||||||||||||||
| General and administrative (including stock-based compensation of $1,313,358, $2,669,071, $3,714,404 and $5,424,158, respectively) | 2,746,783 | 4,231,142 | 7,956,830 | 8,834,864 | ||||||||||||
| Sales and marketing | 83,310 | 156,991 | 632,380 | 380,699 | ||||||||||||
| Research and development | 37,959 | 48,823 | 107,907 | 113,778 | ||||||||||||
| Total operating expenses | 2,868,052 | 4,436,956 | 8,697,111 | 9,329,341 | ||||||||||||
| Operating loss | (2,881,938 | ) | (4,266,515 | ) | (9,252,349 | ) | (9,434,741 | ) | ||||||||
| Other (income) expense: | ||||||||||||||||
| Interest expense | - | 24,095 | 79,314 | 24,095 | ||||||||||||
| Other income | (56 | ) | (51 | ) | (176 | ) | (51 | ) | ||||||||
| Total other (income) expense | (56 | ) | 24,044 | 79,138 | 24,044 | |||||||||||
| Loss before provision for income taxes | (2,881,882 | ) | (4,290,559 | ) | (9,331,487 | ) | (9,458,785 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net Loss | $ | (2,881,882 | ) | $ | (4,290,559 | ) | $ | (9,331,487 | ) | $ | (9,458,785 | ) | ||||
| Deemed dividend from warrant exchange offer | (540,255 | ) | - | (540,255 | ) | - | ||||||||||
| Cumulative preferred stock dividends | (18,708 | ) | - | (78,163 | ) | - | ||||||||||
| Net Loss to common stockholders | $ | (3,440,845 | ) | $ | (4,290,559 | ) | $ | (9,949,905 | ) | $ | (9,458,785 | ) | ||||
| Weighted average shares outstanding - basic and diluted | 78,523 | 31,192 | 71,791 | 23,800 | ||||||||||||
| Net loss per share - basic and diluted | $ | (43.82 | ) | $ | (137.55 | ) | $ | (138.60 | ) | $ | (397.43 | ) | ||||
Three Months Ended September 30, 2024 and 2023
Revenues
Revenues for the third quarter of 2024 totaled $3.9 million, a $0.5 million increase from 2023’s third quarter revenues of $3.4 million, and were comprised of $977,000 in services revenue from the management of customers’ aircraft, $2.4 of revenues related to our software App Cirrus Charter program (being $1.1 million in software-related revenue and $1.3 million in revenue from the chartering of our HondaJets by our operating partner Cirrus), $547,000 in Jet Card revenue for hours flown and other charges based on hours flown, and $1.3 million in revenue from the chartering of our HondaJets by our operating partner Cirrus.
The primary reason for this increase in revenue was due to additional service revenue of $977,000 in the 2024 period arising from the Company entering into an agreement to manage a second customer aircraft in the second quarter of 2024 and the resulting revenue thereafter.
The following table sets forth a breakout of revenue components by subcategory for the three months ended September 30, 2024 and 2023.
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| Software App and Cirrus Charter | $ | 2,409,742 | $ | 1,860,795 | ||||
| Jet Card and Fractional Programs | 547,186 | 731,716 | ||||||
| Management and Other Services | 960,465 | 774,678 | ||||||
| $ | 3,917,393 | $ | 3,367,189 | |||||
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The Company recognized $1.1 million in revenue related to App-generated Services and software revenues related to charter bookings made through its App in the third quarter of 2024, an increase of $300,000 and reflected additional brokerage staff, increased marketing and greater awareness of the Company. This compares to revenues totaling $798,000 in the 2023 period.
The Company recognized $960,000 in service revenue in the third quarter of 2024, an increase of $186,000, relating to an agreement entered into during the fourth quarter of 2023 to manage a customer’s aircraft, as well as a second managed aircraft beginning in April 2024. There was $775,000 in service revenues in the third quarter of 2023.
During the third quarter of 2024, the Company sold 110 prepaid flight hours under its jet card and fractional programs, amounting to $615,000, and recognized $547,000 of revenue for 85 flight hours flown or forfeited, as well as additional charges. These additional charges represent primarily charges for cost reimbursements such as a fuel component adjustment to adjust for changes in fuel prices relative to the jet card and fractional contracts’ base fuel price and reimbursement of federal excise taxes. Prepaid flight hours are recognized as revenue as the flight hours are used or forfeited. At September 30, 2024, the Company had recorded deferred revenue of $1.2 million on its consolidated balance sheet representing prepaid flight hours for which the related travel had not yet occurred.
In the third quarter of 2023, the Company sold 122 prepaid flight hours, amounting to $713,000, and recognized $709,000 of revenue for 113 flight hours flown or forfeited, as well as additional charges. At September 30, 2023, the Company had recorded deferred revenue of approximately $1.2 million.
The increase in flight hours flown period over period is a direct result of the increased number of the Company’s aircraft during the 2024 period when compared to the 2023 period.
The following table details the flight hours sold and flown or forfeited, as well as the associated deferred revenues and recognized revenues, respectively, and additional charges for the third quarter of 2024 and 2023:
| For the three months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Deferred revenue at the beginning of the period (1) | $ | 1,099,466 | $ | 1,099,545 | ||||
| Prepaid flight hours sold | ||||||||
| Amount | $ | 615,130 | $ | 712,769 | ||||
| Total Flight Hours | 110 | 122 | ||||||
| Prepaid flight hours flown | ||||||||
| Amount | $ | 480,929 | $ | 649,077 | ||||
| Total flight hours | 85 | 113 | ||||||
| Additional charges | $ | 66,257 | $ | 59,760 | ||||
| Total flight hour revenue | $ | 547,186 | $ | 708,837 | ||||
| Deferred revenue at the end of the period (2) | $ | 1,206,869 | $ | 1,163,237 | ||||
| (1) | Deferred revenue at June 30, 2024 and 2023 also includes $56,067 and $10,301, respectively, with respect to customer prepayments associated with software app transactions and $16,233 and $0 with respect to customer prepayments associated with management and other services revenue. |
| (2) | Deferred revenue at September 30, 2024 and 2023 also includes $29,269 and $268,889, respectively, with respect to customer prepayments associated with software app transactions and $16,233 and $0 with respect to customer prepayments associated with management and other services revenue. |
In addition to its software App and jet card revenues, the Company also generates revenue through the direct chartering of its HondaJet aircraft by Cirrus. During the third quarter of 2024 this revenue amounted to approximately $1.1 million, an increase of $249,000, or 23.4% from the prior year period. The increased revenue was a direct result of the increased chartering of the Company’s HondaJet and CJ4 fleet, as well as increased software app bookings in the third quarter of 2024 as compared to the third quarter of 2023.
Cost of revenues
Our cost of revenue is comprised of payments to Cirrus for the maintenance and management of our fleet aircraft, commissions to Cirrus for their arranging for charters on our aircraft, aircraft lease expense, federal excise tax relating to jet card and third-party charters, and payments to third-party aircraft operators for both charter flights booked through our App, as well as the cost of subcharters for covering jet card flights when our HondaJets were unavailable. The management of our aircraft by Cirrus covers all our aircraft regardless of whether the aircraft are used for program flight hours or charter flights and includes expenses such as fuel, pilot wages and training costs, aircraft insurance, maintenance and other flight operational expenses.
In the third quarter of 2024, the Company operated three HondaJets, one King Air 390 and one CJ4 as compared to the three HondaJets and one CJ4 that it operated in the comparable 2023 period.
As a result of the increase in Cirrus charter flight activity, costs related to the operation of these aircraft and payments to Cirrus for their management increased $1.2 million from $1.4 million in the third quarter of 2023 to $2.6 million in 2024, and aircraft lease payments increased remained the same at $317,000 in the third quarter of 2023 and 2024. The Company also incurred third-party charter costs of approximately $0.9 million in the third quarter of 2024, a $0.5 million decrease over 2023, in order to fulfill a greater number of App-generated charter bookings, offset by a reduction in subcharters used for covering jet card flights when our HondaJets were unavailable. Merchant fees and federal excise tax relating to charter flights of $130,000 in the third quarter of 2024 were a $89,000 increase as compared to $41,000 in the third quarter of 2023.
In total, it cost $3.9 million to operate these five aircraft in the third quarter of 2024, compared to $3.2 million to operate four aircraft in the third quarter of 2023.
Gross (loss) profit
The resulting gross loss totaled approximately $14,000 for the third quarter of 2024, compared to a gross profit of $170,000 for the third quarter of 2023. The gross loss in the third quarter of 2024 was largely driven by reduced flights performed for our jet card customers without a corresponding reduction in fixed costs.
Total Operating Expenses
In the third quarter of 2024, the Company’s operating expenses decreased by approximately $1.6 million over the prior year comparable period due to an approximate $1.5 million decrease in general and administrative expenses, a $74,000 reduction in sales and marketing expenses and an $11,000 reduction in research and development costs. Excluding non-cash stock-based compensation of $1.3 million and $2.7 million in the third quarter of 2024 and 2023, respectively, general and administrative expenses declined by approximately $129,000 primarily due to a decrease in professional service expenses of $297,000 with a substantial portion of these expenses during the 2023 period related to the closing of the Business Combination in the third quarter of 2023, offset by an increase in Directors and Officers Insurance costs of $40,000 and increased wages of $170,000, primarily due to increased commissions compensation payable on software app revenue.
The Company’s sales and marketing expenses decreased by $74,000 to $83,000 in the third quarter of 2024 from $157,000 in the third quarter of 2023. These expenses are mainly linked to promoting the Company and its programs.
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Research and development expenses declined $11,000 to $38,000 in the third quarter of 2024 from $49,000 in the third quarter of 2023, due to the reduced need to refine the App, offset by continued development work on additional software offerings.
Operating Loss
As a result of all of the above, in the third quarter of 2024 the Company recognized an operating loss of approximately $2.9 million, which was a decrease in loss of approximately $1.4 million when compared to the prior year period. The decrease in operating loss was primarily due to the decrease in general and administrative expenses resulting from the decrease in non-cash stock-based compensation expense that resulted from the non-cash vesting of employee stock options as well as the decrease in professional costs incurred from the Business Combination.
Other (Income) Expense
During the third quarter of 2024, the Company recognized approximately $56 in other income as compared to $24,000 in other expense due primarily to interest expense related to the Bridge Agreement as defined and discussed below.
Nine Months Ended September 30, 2024 and 2023
Revenues
Revenues for the first nine months of 2024 totaled $10.9 million, a $2.9 million increase from revenues of $8.0 during the comparable period in 2023. Revenues in the 2024 period were comprised of approximately $6.4 of revenues related to our software App and Cirrus charter services (comprised of approximately $3.4 million in software-related revenue and $2.9 million in revenue from the chartering of our HondaJets by our operating partner Cirrus), $2.7 million in services revenue from the management of customers’ aircraft, and $1.8 million in Jet Card revenue for hours flown and other charges based on hours flown.
The following table sets forth a breakout of revenue components by subcategory for the nine months ended September 30, 2024 and 2023.
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2024 | 2023 | |||||||
| Software App and Cirrus Charter | $ | 6,391,732 | $ | 4,413,745 | ||||
| Jet Card and Fractional Programs | 1,783,066 | 2,090,401 | ||||||
| Management and Other Services | 2,675,077 | 1,531,359 | ||||||
| $ | 10,849,875 | $ | 8,035,505 | |||||
The Company began recording revenue in September 2020 reflecting services and software revenues related to charter bookings made through its App and in the first nine months of 2023, the Company recognized $2.2 million in revenue related to App-generated charter bookings. During 2024 these revenues totaled $3.4 million, a $1.2 million or 59.2% increase from 2023 reflecting additional brokerage staff, increased marketing and greater awareness of the Company.
The Company recognized $2.7 million in service revenue in the first nine months of 2024, an increase of $1.2 million, relating to an agreement entered into during the fourth quarter of 2023 to manage a customer’s aircraft, as well as a second managed aircraft beginning in April 2024. There was $1.5 million in service revenues in the first nine months of 2023.
During the first nine months of 2024, the Company sold 220 prepaid flight hours under its jet card and fractional programs, amounting to $1.3 million, and recognized $1.8 of revenue for 267 flight hours flown or forfeited, as well as additional charges. These additional charges represent primarily charges for cost reimbursements such as a fuel component adjustment to adjust for changes in fuel prices relative to the jet card and fractional contracts’ base fuel price and reimbursement of federal excise taxes. Prepaid flight hours are recognized as revenue as the flight hours are used or forfeited. At September 30, 2024, the Company recorded deferred revenue of $1.2 million on its consolidated balance sheet, which represents prepaid flight hours for which the related travel had not yet occurred.
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In the first nine months of 2023, we sold 383 prepaid flight hours amounting to approximately $2.1 million and recognized approximately $2.1 million of revenue for 323 flight hours flown or forfeited, as well as additional charges. At September 30, 2023, the Company recorded deferred revenue of $1.2 million on its consolidated balance sheet.
The increase in flight hours flown is a direct result of the increased number of aircraft during the 2024 period versus the 2023 period.
The following table details the flight hours sold and flown or forfeited, as well as the associated deferred revenues and recognized revenues, respectively, and additional charges for the first nine months of 2024 and 2023:
| For the nine months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Deferred revenue at the beginning of the period (1) | $ | 1,779,794 | $ | 933,361 | ||||
| Prepaid flight hours sold | ||||||||
| Amount | $ | 1,270,130 | $ | 2,133,019 | ||||
| Total Flight Hours | 220 | 383 | ||||||
| Prepaid flight hours flown | ||||||||
| Amount | $ | 1,619,739 | $ | 1,903,143 | ||||
| Total flight hours | 267 | 323 | ||||||
| Additional charges | $ | 163,327 | $ | 164,379 | ||||
| Total flight hour revenue | $ | 1,783,066 | $ | 2,067,522 | ||||
| Deferred revenue at the end of the period (2) | $ | 1,206,869 | $ | 1,163,237 | ||||
| (1) | Deferred revenue at December 31, 2023 and 2022 also includes $268,818 and $11,800, respectively, with respect to customer prepayments associated with software app transactions. |
| (2) | Deferred revenue at September 30, 2024 and 2023 also includes $29,269 and $268,889, respectively, with respect to customer prepayments associated with software app transactions and $16,233 and $0 with respect to customer prepayments associated with management and other services revenue. |
During the first nine months of 2024 revenue generated through the direct chartering of the Company’s HondaJet aircraft by Cirrus amounted to approximately $2.9 million, an increase of $0.7 million, or 31.0% from the prior year. The increased revenue was a direct result of increased charter activity, both ad hoc and by Cirrus, as well as the addition of the managed Citation CJ4 and King Air 350i.
Cost of revenues
Our cost of revenue is comprised of payments to Cirrus for the maintenance and management of our fleet aircraft, commissions to Cirrus for their arranging for charters on our aircraft, aircraft lease expense, federal excise tax relating to jet card and third-party charters, and payments to third-party aircraft operators for both charter flights booked through our App, as well as the cost of subcharters for covering jet card flights when our HondaJets were unavailable. The management of our aircraft by Cirrus covers all our aircraft regardless of whether the aircraft are used for program flight hours or charters and includes expenses such as fuel, pilot wages and training costs, aircraft insurance, maintenance and other flight operational expenses.
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As a result of the increased fleet and the increase in jet card and Cirrus charter flight activity, as well as the startup expenses relating to the introduction of the King Air 350i managed aircraft to its fleet, operating expenses related to the operation of the Company’s aircraft and payments to Cirrus for their management increased $3.6 million from $3.3 million in the first nine months of 2023 to $6.9 million in the 2024 year period and aircraft lease payments increased $43,000 from $967,000 in 2023 to $1.0 million in the first nine months of 2024. The Company also incurred third-party charter costs of approximately $3.0 million in the first nine months of 2024, a $559,000 decrease over 2023, as a result of a reduced need for subcharters used for covering jet card flights when our HondaJets were unavailable. Federal excise tax and merchant fees relating to charter flights increased $242,000 in the first nine months of 2024 to $541,000 from $299,000 in 2023.
In total, excluding aircraft sales costs and as disclosed above, it cost $11.4 million to operate the Company’s 5 aircraft in the first nine months of 2024, compared to $8.1 million in 2023 for 4 aircraft.
Gross (loss) profit
The resulting gross loss totaled $555,000 for the first nine months of 2024, compared to $105,000 for the 2023 year period. The increased gross loss in these operations was a result of increased maintenance costs, together with lower utilization on our HondaJets.
Total Operating Expenses
In the first nine months of 2024, the Company’s operating expenses decreased $632,000 due to a $878,000 decrease in general and administrative expenses and $6,000 in lower research and development costs, offset by $252,000 in higher sales and marketing expenses. Excluding non-cash stock-based compensation of $3.7 million and $5.4 million in the first nine months of 2024 and 2023, respectively, general and administrative expenses rose by approximately $0.8 million primarily due to due to increased wages of $632,000, primarily due to increased commissions compensation payable on charter sales, as well as a greater number of software developers in 2024.
The Company’s sales and marketing expenses increased by about $252,000 to $632,000 in the first nine months of 2024 from $380,000 in 2023, as it reaccelerated its sales and marketing spending upon aircraft delivery and the associated increase in marketable jet card inventory. These expenses are mainly linked to promoting the Company and its programs.
Research and development expenses declined $6,000 to $108,000 in the first nine months of 2024 from $114,000 in 2023, due to the reduced need to refine the App, offset by continued development work on additional software offerings.
Operating Loss
As a result of all of the above, in the first nine months of 2024 the Company recognized an operating loss of approximately $9.3 million, which was a decrease in loss of $182,000 compared to the 2023 year period. The decrease was primarily due to reduced general and administrative expenses of $878,000, offset by an increase in the Company’s gross loss of $549,000.
Other (Income) Expense
During the first nine months of 2024, the Company recognized approximately $79,000 in other expense due primarily to interest expense related to the Bridge Agreement, compared to $24,000 recorded for the first nine months of 2023.
Liquidity and Capital Resources
Overview
As of September 30, 2024, the Company’s cash and equivalents were $311,883. As of September 30, 2024, current liabilities exceeded current assets by approximately $4.8 million, of which $1.2 million in liabilities represents deferred revenue that would be recorded as revenue once the flight hours are flown or forfeited.
During the nine month period ended September 30, 2024, the Company raised (1) approximately $1,727,000 in funds from the issuance of 14,222 shares of common stock under the Share Purchase Agreement discussed below, as well as $1,500,000 related to the sale of 150 shares of Series B Preferred Stock, and (2) approximately $742,000 from Jet.AI Warrant exercises.
| 30 |
The Company also incurred negative cash flows from operating activities and significant losses from operations in the past as reflected in its accumulated deficit of approximately $49.1 million as of September 30, 2024. While we expect to drive revenue and operating profit growth from aircraft acquisitions, higher average hourly pricing of jet cards, increased charter activity through CharterGPT and Reroute AI and SaaS revenues from DynoFlight, we expect to continue to incur operating losses to a greater or lesser extent for at least the next 12 months, depending on the timing and success of these initiatives. To bridge the gap, we intend to rely on funds available from share issuances under the Share Purchase Agreement, amounts received upon an exercise of the Ionic Warrant (as defined below), if any, and other potential sales of our equity and debt securities to meet our funding obligations. Additional funding under the Share Purchase Agreement may be limited contractually and the Ionic Warrant may not be exercised by the holder in full or substantial part. Furthermore, issuances of additional shares of common stock under the Share Purchase Agreement, upon conversion of the Series B Preferred Stock outstanding and underlying the Ionic Warrant and other sales of equity securities we have made after September 30, 2024 may negatively impact the Company’s stock price and ability to raise additional funds. We will likely require additional capital resources to grow our business. In the absence of external financing the Company is prepared to cut its cash utilization by ceasing marketing and customer acquisition, suspending software development, streamlining operations, and servicing only existing customers. Such a reduction would allow the Company to continue to operate for a year or more by management’s estimate. During that time the Company would plan to arrange new financing and to then resume expansion.
Ionic Transaction
General
On March 28, 2024, Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) and a number of other transaction documents described below for a private placement with Ionic Ventures, LLC (“Ionic”), which closed on March 29, 2024 (the “Closing Date”), which we collectively refer to as the “Ionic Transaction.” Under the Securities Purchase Agreement, the Company issued to Ionic (a) 150 shares of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), which are convertible into shares of the Company’s common stock, (b) a warrant to purchase up to 1,500 shares of Series B Preferred Stock (the “Ionic Warrant”), at an exercise price of $10,000 per share, and (c) 1,111 shares of the Company’s common stock.
The Company received gross proceeds of approximately $1.5 million, not including customary placement fees and reimbursement of certain payables to Maxim as placement agent and other expenses payable by the Company in connection with the Ionic Transaction. This amount excludes the proceeds, if any, from the exercise of the Ionic Warrant.
Series B Preferred Stock
On March 28, 2024, we filed a Certificate of Designation of the Series B Convertible Preferred Stock with the Secretary of State of the State of Delaware, which provides for the issuance of up to 5,000 shares of the Company’s Series B Preferred Stock. The Series B Preferred Stock ranks pari passu with the shares of Series A Preferred Stock and Series A-1 Preferred Stock and senior to all other capital stock of the Company.
Each share of Series B Preferred Stock converts into a number of shares of our Common Stock, subject to certain limitations, including a beneficial ownership limitation of 4.99% (calculated in accordance with the rules promulgated under Section 13(d) of the Securities Exchange Act), which can be adjusted to a beneficial ownership limitation of 9.99% upon 61 days prior written notice by Ionic. From time to time Ionic may convert Series B Preferred Stock into Common Stock which it may liquidate and thereafter receive additional shares of Common Stock pursuant to subsequent conversions of its Series B Preferred Stock.
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Subject to the limitations set forth in the preceding paragraph and provided there is an effective registration statement covering Ionic’s potential resale of common stock underlying the Series B Preferred Stock, shares of Series B Preferred Stock will automatically convert into shares of common stock on or prior to the tenth trading day after the issuance date of such shares of Series B Preferred Stock. The number of shares of common stock issuable upon conversion of a share of Series B Preferred Stock is calculated by dividing the conversion amount per share of Series B Preferred Stock by the then conversion price. The conversion amount is equal to the stated value of the shares of Series B Preferred Stock, which is $10,000, plus any additional amounts and late charges calculated in accordance with the Certificate of Designations. The conversion price is equal to 90% (or, in the case of a delisting, 80%) of the lowest daily volume weighted average price of our common stock over a period beginning on the trading day after we deliver shares of common stock upon such conversion to Ionic and ending on the trading day on which the aggregate dollar trading volume of our common stock exceeds seven times the applicable conversion amount, subject to a five trading day minimum period for such calculation, and subject to certain adjustments.
If certain defined “triggering events” defined in the Certificate of Designations occur, such as a breach of the Ionic Registration Rights Agreement, suspension of trading, or our failure to convert the Series B Preferred Stock into common stock when a conversion right is exercised, then we may be required to redeem the Series B Preferred Stock for cash at 110% of the stated value.
Other Transaction Documents
The Ionic Warrant exercise price was initially set at $10,000 per share of Series B Preferred Stock, subject to adjustment for certain events, such as a stock split, issuance of additional shares as a dividend or otherwise. If the entirety of the Ionic Warrant was exercised for cash, the Company would receive additional gross proceeds of approximately $15.0 million. The Company cannot predict when or if there will be additional exercises of the Ionic Warrant. It is possible that the Ionic Warrant may never be exercised in full, or in substantial part. At any time when the Ionic Warrant is exercisable for less than 1,000 shares of Series B Preferred Stock, the Company has the right to redeem all or a portion of the Ionic Warrant by paying to Ionic in cash $100 per share of Series B Preferred Stock that would otherwise be issuable pursuant to the Ionic Warrant.
Pursuant to the Securities Purchase Agreement, the Company agreed to submit to its stockholders a proposal to approve the issuance of shares of common stock issuable upon exercise of the shares of Series B Preferred Stock in accordance with Nasdaq Stock Market Rules at a special meeting of stockholders at the earliest practicable date after the date of the Securities Purchase Agreement, but in no event later than ninety (90) days after the Closing Date. At its annual meeting of stockholders, which took place on September 24, 2024, the Company sought stockholder approval for the potential issuance of shares of Common Stock pursuant to Ionic Transaction in an amount that, upon issuance, could result in the issuance of shares of Common Stock in an amount in excess of 19.99% of the Company’s outstanding shares of Common Stock at a price less than the “minimum price” as defined by and in accordance with Nasdaq Listing Rule 5635(d). The Company’s stockholders approved such potential issuance at the annual meeting. The Securities Purchase Agreement obligates the Company to reserve no less than 200% of the maximum number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock outstanding, using an alternate conversion method (the “Required Reserve Amount”). The Company and Ionic initially agreed that the Required Reserve Amount is 200,000 shares of Common Stock. In order to meet that obligation, the Company sought stockholder approval to amend its certificate of incorporation to increase the number of authorized shares of Common Stock to 200,000,000 at its annual meeting of stockholders. The Company received such approval on September 24, 2024.
Additionally, on March 29, 2024, the Company entered into the Registration Rights Agreement Ionic, which, among other things, provides that the Company would register the resale of the 1,111 shares of Common Stock and the shares of Common Stock issuable upon conversion of the Series B Preferred Stock, including the Series B Preferred Stock issuable upon exercise of the Warrant. The Company was required to prepare and file a registration statement with the SEC no later than 30 days following the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), but in no event later than May 15, 2024 (the “Filing Deadline”), and to use its commercially reasonable efforts to have the registration statement and any amendment declared effective no later than the earlier of the (a) 60th calendar day following the filing of the Form 10-K (or, if such registration statement is subject to a full review by the SEC, the 100th calendar day after such filing) and (b) 2nd business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such registration statement will not be reviewed or will not be subject to further review (the “Effectiveness Deadline”). The Company timely filed a registration statement on Form S-1 by the Filing Deadline, however, because this registration statement was not declared effective by the SEC by the Effectiveness Deadline, the Company was obligated pay to Ionic a $100,000 Effectiveness Fee. On September 3, 2024 the Company issued to Ionic 444 Effectiveness Shares in lieu of paying the Effectiveness Fee in cash. The registration statement was declared effective by the SEC on October 23, 2024.
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On September 24, 2024, the Company and Ionic entered into a letter agreement (the “Letter Agreement”) that set forth certain understandings and agreements among the Company and Ionic. Pursuant to the Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the transaction documents, related to certain actions and transactions identified in the Letter Agreement that the Company has undertaken or effected prior to the date of the Letter Agreement. As consideration for the waiver, the Company agreed to a release of Ionic and its affiliates and issued an additional 50 shares of Series B Preferred Stock to Ionic.
On October 10, 2024, the Company and Ionic entered into a second letter agreement (the “Second Letter Agreement”) that set forth certain understandings and agreements among the Company and Ionic. Pursuant to the Second Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the transaction documents, related to certain actions and transactions identified in the Second Letter Agreement. Such actions include the Company’s filing of an amendment to a registration statement on Form S-1 (File No. 333-281911) with the SEC and a registered direct offering. As consideration for the waiver, the Company agreed to change the Conversion Measurement Period (as defined in the Certificate of Designations) for the previously issued 200 shares of Series B Preferred Stock to begin on March 28, 2024 and to end in accordance with the Certificate of Designations.
Share Purchase Agreement
The Company has access to an aggregate of up to $40 million from the Share Purchase Agreement, dated as of August 4, 2022, with GEM Yield LLC SCS and GEM Yield Bahamas Limited (together with GEM Yield LLC SCS, “GEM”), less drawdowns of $2,550,024 to date. In consideration for GEM’s services under the Share Purchase Agreement, the Company has agreed to pay GEM a commitment fee equal to $800,000 payable in cash or freely tradable shares of common stock, at the option of the Company. Upon the Company’s issuance of shares in connection with any drawdown purchase made by GEM, the Company is required to pay GEM a portion of such commitment fee in an amount equal to 2% of the amount purchased in such drawdown; provided that the full $800,000 commitment fee was due on or before the first anniversary of the closing of the Business Combination. In October 2024, the Company issued 36,886 shares of common stock to satisfy in full the outstanding commitment fee payable discussed in Note 5 and 44,225 shares of common stock under the Share Purchase Agreement with GEM for total consideration of $822,745.
GEM is not obligated to purchase shares under the Share Purchase Agreement if any purchase of shares would result in GEM and its affiliates beneficially owning, directly or indirectly, at the time of the proposed issuance, more than 9.99% of the number of issued and outstanding shares of common stock as of the date of such proposed issuance. GEM may waive the restriction under the Share Purchase Agreement by providing the Company with sixty-one (61) days’ notice that the Purchaser would like to waive the restriction with regard to any or all shares issuable pursuant to the Share Purchase Agreement.
On August 10, 2023, the Company issued GEM a warrant (as subsequently amended, the “GEM Warrant”) granting it the right to purchase up to 6% of the outstanding common stock of the Company on a fully diluted basis as of the date of listing. The GEM Warrant has a term of three years. The exercise price of the GEM Warrant was reduced to $.24 per share as of September 30, 2024. The warrant may be exercised by payment of the per share amount in cash or through a cashless exercise.
The GEM Warrant provides that GEM can elect to limit the exercisability of the GEM Warrant such that it is not exercisable to the extent that, after giving effect to the exercise, GEM and its affiliates, to the Company’s actual knowledge, would beneficially own in excess of 4.99% of Jet.AI’s common stock outstanding immediately after giving effect to such exercise. GEM has made this election, which makes funds available under the Share Purchase Agreement in excess of this 4.99% ownership limit up to the 9.99% ownership restriction in the Share Purchase Agreement. GEM may revoke this election by providing written notice, which revocation will not be effective until the sixty-first (61st) day thereafter.
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Bridge Agreement
On September 11, 2023, the Company entered into a binding term sheet (“Bridge Agreement”) with eight investors to provide the Company $500,000 of short-term bridge financing pending its receipt of funds from its other existing financing arrangements.
As of December 31, 2023, the Bridge Agreement provided for the issuance of Notes, in an aggregate principal amount of $625,000, reflecting a 20% original issue discount. The Notes bore interest at 5% per annum and matured on March 11, 2024. The Company was required to redeem the Notes with 100% of the proceeds of any equity or debt financing at a redemption premium of 110% of the principal amount of the Notes. In March 2024, the Company fully repaid the Bridge Agreement in the amount of approximately $683,000, representing principal, redemption premium and interest.
Other Equity Issuances and Settlement Arrangements
Maxim Payment and Settlement Agreement
On August 10, 2023, the Company entered into a settlement agreement (“Maxim Settlement Agreement”) with Maxim Group LLC, the underwriter for the Company’s initial public offering (“Maxim”). Pursuant to the Maxim Settlement Agreement, the Company issued to Maxim Partners (a) 1,200 shares of common stock to settle the payment obligations of the Company under the underwriting agreement dated on or about August 11, 2021, by and between the Company and Maxim and (b) 1,127 Series A Preferred Shares in an amount equal in value to $1,127,000. The Series A Preferred Shares accrue a dividend at the rate of 8% per annum (which increases to 18% if the Company fails to meet certain obligations under the terms thereof), payable quarterly and, at the Company’s option, in shares of common stock. The Series A Preferred Shares are convertible into 501 shares of common stock. The Company also issued 511 shares of common stock to Maxim Partners on August 16, 2021 to meet a payment obligation under the underwriting agreement in connection with Oxbridge’s IPO, representing a value of $2,025.00 per share reflecting an allocation of the $2,250.00 per Unit IPO price. The above issued and issuable shares of common stock are subject to a registration rights agreement.
The Company may, subject to certain conditions, redeem the outstanding Series A Preferred Shares in cash at the $1,000 original issue price, subject to adjustment, plus accrued and unpaid dividends. The Company was required to redeem all the outstanding Series A Preferred Shares on August 10, 2024, which was automatically extended by an additional three (3) month period because the Company has not closed upon one or more equity financings that, in total, result in gross proceeds to the Company of $10.0 million or greater. If the Company raises equity capital, 15% of the net proceeds will be used to redeem the Series A Preferred Shares if requested by the holder.
In July 2024, the Company and Maxim entered into an amendment to the Maxim Settlement Agreement and agreed to, among other things, amend the definition of the “Series A Conversion Price” for the Series A Preferred Shares and certain restrictions with respect to shares of Company common stock Maxim may acquire upon the conversion of its shares of Series A Preferred Shares.
Sponsor Settlement Agreement
On August 10, 2023, the Company entered into settlement agreement (“Sponsor Settlement Agreement”) with the Sponsor. Pursuant to the Sponsor Settlement Agreement, the Company issued 575 Series A-1 Preferred Shares to settle the payment obligations of the Company under a promissory note in the principal amount of $575,000 dated November 14, 2022 in favor of the Sponsor. The Series A-1 Preferred Shares accrue interest at the rate of 5% per annum (which increases to 18% if the Company fails to meet certain obligations under the terms thereof), payable quarterly in cash. The Series A-1 Preferred Shares are convertible into 256 shares of common stock.
The Company may, subject to certain conditions, redeem the outstanding Series A-1 Preferred Shares in cash at the $1,000 original issue price, subject to adjustment, plus accrued and unpaid dividends. The Company was required to redeem all the outstanding Series A-1 Preferred Shares on August 10, 2024, which was automatically extended by an additional three (3) month period because the Company has not closed upon one or more equity financings that, in total, result in gross proceeds to the Company of $10.0 million or greater. If the Company raises equity capital, 15% of the net proceeds will be used to redeem the Series A-1 Preferred Shares if requested by the holder.
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Warrants
On various dates at the end of December 2023 and through early 2024, we entered a number of separate warrant exchange agreements with various unaffiliated second-party warrant holders with respect to warrants to purchase an aggregate of 6,605 shares of our common stock (the “Exchanged Warrants”). Pursuant to these warrant exchange agreements, the Company issued an aggregate of 6,605 shares of common stock to those warrant holders in exchange for the surrender and cancellation of the Exchanged Warrants.
In December 2023 and January 2024, holders of an aggregate of 687 JTAIW warrants were exercised for an equal number of shares of our common stock, generating net proceeds to us of $1,777,475.
Cash Flows for the Nine Months Ended September 30, 2024 and 2023
As of September 30, 2024, the Company’s cash and equivalents were approximately $312,000.
The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:
| For the nine months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Net cash (used in) provided by operating activities | $ | (4,840,533 | ) | $ | (2,744,630 | ) | ||
| Net cash (used in) provided by investing activities | (12,922 | ) | (169,530 | ) | ||||
| Net cash provided by financing activities | 3,064,795 | 2,290,678 | ||||||
| Increase (decrease) in cash and cash equivalents | $ | (1,788,660 | ) | $ | (623,482 | ) | ||
Cash Flow from Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2024 was $4.8 million compared to $2.7 million for the nine months ended September 30, 2023. The cash outflow from operating activities in the 2024 period primarily consisted of our net loss, net of non-cash charges of $4.2 million, a $0.4 million reduction in lease liability, which were offset by a $1.2 million increase in operating liabilities and a $41,000 reduction in accounts receivables and other current assets. The increase in operating liabilities was primarily driven by a $1.2 million increase in the Company’s accounts payable and accrued liabilities relating to the operation of the Company’s aircraft and a $0.6 million decrease in deferred jet card revenue relating to the sale of jet card hours not yet flown. The increase in net cash used in operating activities for the 2024 period was primarily driven by a $1.6 million increase in our net loss, net of non-cash charges resulting from the Company’s higher level of operations during the first nine months of 2024 as a result of operating a greater number of operational aircraft and startup expenses incurred during 2024 as well as the $0.5 million changes in operating assets and liabilities.
Cash Flow from Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2024 was $13,000 as compared to $170,000 in the 2023 year period, primarily relating to the Company’s 2023 investment in 380 Software LLC, a 50/50 joint venture subsidiary with Great Western Air LLC dba Cirrus Aviation Services.
Cash Flow from Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2024 was $3.1 million. Cash provided by financing activities was primarily driven by warrant exercises and proceeds from the sale of common stock under the Share Purchase Agreement, sale of preferred stock, partially offset repayments of notes payable.
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Aircraft Financing Arrangements
In November 2021 and April 2022, the Company entered into two separate five-year leasing arrangements for the acquisition of two of its HondaJet Elite aircraft. At any time during their term, the Company has the option to purchase either aircraft from the lessor at the aircraft’s fair market value at that time. The leasing arrangements also require the Company to hold a combined liquidity reserve of $500,000 in a separate bank account pledged as security to the lessor, which the Company records as restricted cash on its balance sheet, as well as a maintenance reserve of approximately $690,000 for each leased aircraft, which is held by the lessor in the event the lessor determines that the relevant aircraft is not being maintained in accordance with the lease requirements or to prevent deterioration of the aircraft. Events of default under the leasing arrangements include, among other things, failure to make the monthly payments (with a 10-day cure period), default on other indebtedness, breaches of covenants related to insurance and maintenance requirements, change of control or merger, insolvency and a material adverse change in the Company’s business, operations or financial condition. Please see Note 5 to the Company’s consolidated financial statements for a further description of these leasing arrangements.
Subsequent to September 30, 2024 on October 31, 2024, the Company entered into and aircraft purchase agreement for the purchase of 3 Cessna Citation CJ4 aircraft (the “CJ4 Aircraft”). Under the aircraft purchase agreement, the Company may purchase from Textron specifically configured CJ4 Aircraft. Upon execution of the purchase agreement an initial deposit was paid for each aircraft, and three additional deposits are due on each aircraft and payable on defined intervals starting in November 2024 through August 2025. Upon delivery of the aircraft the remainder of the purchase price will become due and payable.
Critical Accounting Estimates
Going Concern and Management Plans
The Company has limited operating history and has incurred losses from operations since its inception. These matters raise concern about the Company’s ability to continue as a going concern.
The Company began ramping up its revenue-generating activities during the second half of the year ended December 31, 2022 and those activities have continued into 2024. During the next twelve months, the Company intends to fund its operations with funds from its operations, and drawdowns under the Share Purchase Agreement, as well as proceeds from other financing arrangements. The Company also has the ability to reduce cash burn to preserve capital. There are no assurances, however, that management will be able to raise capital on terms acceptable to the Company. If the Company is unable to obtain sufficient amounts of additional capital, the Company may be required to reduce the near-term scope of its planned development and operations, which could delay implementation of the Company’s business plan and harm its business, financial condition and operating results. The consolidated balance sheets do not include any adjustments that might result from these uncertainties.
Basis of Presentation for the Business Combination
The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP, whereby Oxbridge is treated as the acquired company and Jet Token is treated as the acquirer (the “Reverse Recapitalization”). Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Jet Token issuing stock for the net assets of Oxbridge, accompanied by a recapitalization. The net assets of Oxbridge were stated at historical cost, with no goodwill or other intangible assets recorded.
Jet Token has been determined to be the accounting acquirer in the Business Combination based on the following predominate factors:
| ● | Jet Token’s existing stockholders have the greatest voting interest in the combined entity; | |
| ● | Jet Token existing stockholders have the ability to nominate a majority of the initial members of the combined entity board; | |
| ● | Jet Token’s senior management is the senior management of the combined entity; | |
| ● | Jet Token is the larger entity based on historical operating activity and has the larger employee base; and | |
| ● | The post-combination company has assumed a Jet Token branded name: “Jet.AI Inc.” |
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Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Material estimates that are particularly susceptible to significant change in the near-term relate to the fair value of options granted. Although considerable variability is likely to be inherent in these estimates, management believes that the amounts provided are reasonable. These estimates are
Revenue Recognition
In applying the guidance of ASC 606, the Company determines revenue recognition through the following steps:
| ● | Identification of the contract, or contracts, with a customer; | |
| ● | Identification of the performance obligations in the contract; | |
| ● | Determination of the transaction price; | |
| ● | Allocation of the transaction price to the performance obligations in the contract; and | |
| ● | Recognition of revenue when, or as, a performance obligation is satisfied. |
Revenue is derived from a variety of sources including, but not limited to, (i) fractional/whole aircraft sales, (ii) fractional ownership and jet card programs, (iii) ad hoc charter through the Jet Token App (replaced by CharterGPT) and (iv) aircraft management.
Under the fractional ownership program, a customer purchases an ownership share in a jet which guarantees the customer access to the jet for a preset number of hours per year. The fractional ownership program consists of a down payment, one or more progress payments, a payment on delivery, a monthly management fee and an occupied hourly fee based on usage. Revenues from the sale of fractional or whole interests in an aircraft are recognized at the time title to the aircraft is transferred to the purchasers, which generally occurs upon delivery or ownership transfer.
The jet card program provides the customer with a preset number of hours of guaranteed private jet access over the agreement term (generally a year) without the larger hourly or capital commitment of purchasing an ownership share. The jet card program consists of a fixed hourly rate for flight hours typically paid 100% up front.
Revenue is recognized upon transfer of control of the Company’s promised services, which generally occurs upon the flight hours being used. Any unused hours for the fractional jet and jet card programs are forfeited at the end of the contract term and are thus immediately recognized as revenue at that time.
Deferred revenue is an obligation to transfer services to a customer for which the Company has already received consideration. Upon receipt of a prepayment from a customer for all or a portion of the transaction price, the Company initially recognizes a contract liability. The contract liability is settled, and revenue is recognized when the Company satisfies its performance obligation to the customer at a future date.
The Company also generates revenues from individual ad hoc charter bookings processed through the Company’s booking app, whereby the Company will source, negotiate, and arrange travel on a charter basis for a customer based on pre-selected options and pricing provided by the Company to the customer through the app. In addition, Cirrus markets charter on the Company’s aircraft for the Company’s benefit. Deferred revenue with respect to bookings through the app was $56,000 as of September 30, 2024.
The Company utilizes certificated independent third-party air carriers in the performance of a portion of flights. The Company evaluates whether there is a promise to transfer services to the customer, as the principal, or to arrange for services to be provided by another party, as the agent, using a control model. The nature of the flight services the Company provides to members is similar regardless of which third-party air carrier is involved. The Company directs third-party air carriers to provide an aircraft to a member or customer. Based on evaluation of the control model, it was determined that the Company acts as the principal rather than the agent within all revenue arrangements. Owner charter revenue is recognized for flights where the owner of a managed aircraft sets the price for the trip. The Company records owner charter revenue at the time of flight on a net basis for the margin we receive to operate the aircraft. If the Company has primary responsibility to fulfill the obligation, then the revenue and the associated costs are reported on a gross basis in the consolidated statements of operations.
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Flights
Flights and flight-related services, along with the related costs of the flights, are earned and recognized as revenue at the point in time in which the service is provided. For round-trip flights, revenue is recognized upon arrival at the destination for each flight segment.
Fractional and jet card members pay a fixed quoted amount for flights based on a contractual capped hourly rate. Ad hoc charter customers primarily pay a fixed rate for flights. In addition, flight costs are paid by members through the purchase of dollar-denominated prepaid blocks of flight hours (“Prepaid Blocks”), and other incidental costs such as catering and ground transportation are billed monthly as incurred. Prepaid Blocks are deferred and recognized as revenue when the member completes a flight segment.
Aircraft Management
The Company manages aircraft for owners in exchange for a contractual fee. Revenue associated with the management of aircraft also includes the recovery of owner-incurred expenses including maintenance coordination, cabin crew and pilots, as well as recharging of certain incurred aircraft operating costs and expenses such as maintenance, fuel, landing fees, parking and other related operating costs. The Company passes the recovery and recharge costs back to owners at either cost or a predetermined margin.
Aircraft management-related revenue contains two types of performance obligations. One performance obligation is to provide management services over the contract period. Revenue earned from management services is recognized over the contractual term, on a monthly basis. The second performance obligation is the cost to operate and maintain the aircraft, which is recognized as revenue at the point in time such services are completed.
Aircraft Sales
The Company acquires aircraft from vendors and various other second-party sellers in the private aviation industry. The Company’s classifies the purchase as aircraft inventory on the consolidated balance sheets. Aircraft inventory is valued at the lower of cost or net realizable value. Sales are recorded on a gross basis within revenues and cost of revenue in the consolidated statements of operations.
Pass-Through Costs
In applying the guidance of ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are distinct performance obligations. The Company then assesses whether it is acting as an agent or a principal for each identified performance obligation and includes revenue within the transaction price for second-party costs when the Company determines that it is acting as the principal
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Cost of Sales
The cost of sales expenses includes costs incurred in providing air transportation services, such as chartering second-party aircraft, aircraft lease expenses, pilot training and wages, aircraft fuel, aircraft maintenance, and other aircraft operating expenses.
| 1. | Chartering Third-Party Aircraft: The cost of chartering second-party aircraft is recorded as a part of the cost of sales expense. These expenses include the fees paid to second-party operators for providing aircraft services on behalf of the company. Expenses are recognized in the income statement in the period when the service is rendered and are reported on an accrual basis. | |
| 2. | Aircraft Lease Expenses: Aircraft lease expenses include the cost of leasing aircraft for the company’s operations. The lease expenses are recognized as an operating expense in the income statement over the lease term on a straight-line basis. | |
| 3. | Pilot Training and Wages: Pilot training costs are expensed as incurred and are included in the cost of sales expenses. This encompasses expenses related to initial pilot training, recurrent training, and any additional required training programs. Pilot wages, including salaries, bonuses, and benefits, are also recognized as a part of the cost of sales expenses and are reported on an accrual basis. | |
| 4. | Aircraft Fuel: The cost of aircraft fuel is recognized as an expense in the cost of sales category based on the actual consumption during flight operations. Fuel costs are recorded in the income statement in the period when the fuel is consumed and are reported on an accrual basis. | |
| 5. | Aircraft Maintenance: Aircraft maintenance expenses include both routine and non-routine maintenance. Routine maintenance costs are expensed as incurred and are recorded as a part of the cost of sales expense. Non-routine maintenance expenses, such as major repairs and overhauls, are capitalized and amortized over their expected useful life. The amortization expense is included in the cost of sales expense and is recognized in the income statement on a straight-line basis over the asset’s useful life. | |
| 6. | Other Aircraft Operating Expenses: Other aircraft operating expenses include costs such as insurance, landing fees, navigation charges, and catering services. These expenses are recognized in the income statement as a part of the cost of sales expenses in the period when they are incurred and are reported on an accrual basis. |
Stock-Based Compensation
The Company accounts for stock awards under ASC 718, Compensation–Stock Compensation. Under ASC 718, stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee’s requisite vesting period or over the nonemployee’s period of providing goods or services. The fair value of each stock option or warrant award is estimated on the date of grant using the Black-Scholes option valuation model.
Trend Information
The Company’s business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with local, state, federal and foreign governmental policy decisions. A host of factors beyond Jet.AI’s control could cause fluctuations in these conditions. Adverse conditions may include but are not limited to: changes in the airline industry, fuel and operating costs, changes to corporate governance best practices for executive flying, general demand for private jet travel, regulations on carbon emissions from aviation and market acceptance of the Company’s business model. These adverse conditions could affect the Company’s financial condition and the results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Interim Chief Executive Officer and Interim Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Interim Chief Executive Officer and Interim Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2024. Based on that evaluation, our Interim Chief Executive Officer and our Interim Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the periods covered by this report.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the quarter ended on September 30, 2024 covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
Except with respect to the following risk factors, and the Company’s on-going liquidity needs, there were no material changes in the risk factors we previously disclosed in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024.
If we fail to comply with the continued listing requirements of Nasdaq, we would face possible delisting, which would result in a limited public market for our shares, limit our ability to access existing liquidity facilities and make obtaining future financing more difficult for us.
Our Common Stock is currently listed on Nasdaq under the symbol “JTAI”. On December 1, 2023, the Company received a notification letter (the “Initial Notice Letter”) from the Nasdaq Listing Qualifications Staff of Nasdaq notifying the Company that its amount of stockholders’ equity has fallen below the $10 million required minimum for continued listing on The Nasdaq Global Market set forth in Nasdaq Listing Rule 5450(b)(1)(A) (the “Minimum Stockholders’ Equity Requirement”). The Company’s stockholders’ deficit as of December 31, 2023 was $(3,963,039). The Initial Notice Letter also noted that as of September 30, 2023, the Company did not meet The Nasdaq Global Market alternative listing criteria for the “Market Value” standard or the “Total Assets / Total Revenues” standard. On August 14, 2024, the Nasdaq Hearings Panel granted the Company’s request to transfer the Company’s securities from The Nasdaq Global Market to The Nasdaq Capital Market effective as of August 16, 2024.
On April 14, 2024, the Company received an additional notification letter from Nasdaq (the “Second Notice Letter”) stating that the Company is not in compliance with Nasdaq Listing Rule 5450(a)(1), as the minimum bid price of the Company’s Class A Common Stock had been below $1.00 for 30 consecutive business days (the “Minimum Bid Price Requirement”). The notification of noncompliance has no immediate effect on the listing or trading of the Company’s Common Stock on Nasdaq. The Company had 180 calendar days, or until October 14, 2024, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the minimum bid price of the Company’s Common Stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-calendar day grace period. The Company did not regain compliance with the Minimum Bid Price Requirement by October 14, 2024, however, the Company, may be eligible for an additional 180-calendar day compliance period because it elected to transfer to The Nasdaq Capital Market. The Company’s failure to regain compliance during this period could result in delisting. The Company effected a reverse stock split on November 12, 2024 to, in part, cause the Company to regain compliance with the Minimum Bid Price Requirement.
On May 30, 2024, the Company received an additional notification letter from Nasdaq (the “Third Notice Letter”) stating that the Company has not regained compliance with the Minimum Stockholders’ Equity Requirement for continued listing discussed in the Initial Notice Letter, which it was required to meet by May 29, 2024 pursuant to its compliance plan. The Third Notice Letter notified the Company that, unless the Company requested an appeal hearing before the Nasdaq Hearings Panel (the “Panel”) by June 6, 2024, trading of the Company’s Common Stock would be suspended at the opening of business on June 10, 2024, and a Form 25-NSE would be filed with the SEC, which would remove the Company’s securities from listing and registration on Nasdaq (such notification, the “Delisting Notice”).
As directed in the Third Notice Letter, the Company timely requested a hearing before the Panel and paid the applicable fee to appeal the Delisting Notice. The Delisting Notice has no immediate effect on the listing or trading of the Company’s Common Stock. The Company’s hearing request stayed the suspension of trading on the Company’s securities, and the Company’s securities continue to trade on Nasdaq. On August 14, 2024, in connection the implementation of the Company’s compliance plan, the Nasdaq Hearings Panel granted the Company’s request to transfer the Company’s securities from The Nasdaq Global Market to The Nasdaq Capital Market effective as August 16, 2024. Further the Nasdaq Hearings Panel granted the Company’s request to have until November 26, 2024 to demonstrate compliance with its previously submitted plan, a deadline that the Company believes to be attainable. The Company is working diligently to cure the deficiencies set forth in the Delisting Notice and believes it can regain compliance with the continued listing requirements on or before November 26, 2024.
Although the Company believes it will be able to achieve compliance with Nasdaq’s continued listing requirements, there can be no assurance that the Company will be able to regain compliance with all applicable requirements or maintain compliance with any other listing requirements within the time frame required by Nasdaq or at all, particularly if the Company’s stock price trades below $1.00 for a sustained period. Nasdaq’s determination that we fail to meet the continued listing standards of Nasdaq may result in our securities being delisted from Nasdaq as set forth in the Delisting Notice.
A delisting of our Common Stock and our inability to list on another national securities market could negatively impact us by: (i) reducing the liquidity and market price of our Common Stock; (ii) reducing the number of investors willing to hold or acquire our Common Stock, which could negatively impact our ability to raise equity financing; (iii) limiting our ability to use certain registration statements to offer and sell freely tradable securities, thereby limiting our ability to access the public capital markets; and (iv) impairing our ability to provide equity incentives to our employees. In addition, a delisting of our Common Stock would prevent us from being able to access financing under the Share Purchase Agreement. Furthermore, the Company may have to pay all or a portion of the $800,000 commitment fee due under the Share Purchase Agreement in cash if its shares are no longer listed. The Company may not have sufficient funds to be able to pay such fee. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.”
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Certain Risks Associated with the Reverse Split
We cannot assure you that the Reverse Stock Split will increase our stock price over the long term. We expect that the 1-for-225 reverse split of our outstanding common stock effected on November 12, 2024 (the “Reverse Split”) will increase the market price of our common stock to a level that would attract more investors. However, the continuing effect of the Reverse Split on the market price of our common stock cannot be predicted with any certainty, and the history of reverse stock splits for other companies is varied, particularly since some investors may view a reverse stock split negatively. It is possible that ultimately the per share price of our common stock after the Reverse Split will not increase in the same proportion as the reduction in the number of our outstanding shares of common stock following the Reverse Split, or if the price does increase, that the price can be maintained for any particular period of time. In either of those cases, such decline in price would cause a reduction in the value of our company as measured by our market capitalization, and the Reverse Split may not result in a per share price that would attract brokers and investors who do not trade in lower-priced stocks. In addition, although we believe the Reverse Split may enhance the desirability of our common stock to certain potential investors, we cannot assure you that our common stock will be more attractive to institutional or other long-term investors. After the Reverse Split, the market price of our common stock may ultimately decrease due to factors unrelated to the Reverse Split. In any case, the market price of our common stock may also be based on other factors which may be unrelated to the number of shares outstanding, including our future performance. After the consummation of the Reverse Split if the trading price of the common stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would have occurred in the absence of the Reverse Split.
Even if the Reverse Split achieves the requisite increase in the market price of our common stock, we cannot assure you that we will be able to continue to comply with the minimum price requirement of Nasdaq. Even if the Reverse Split achieves the requisite increase in the market price of our common stock to be in compliance with the minimum bid price of the Nasdaq listing rules, there can be no assurance that the market price of our common stock following the Reverse Split will continue to remain at the level required for continuing compliance with that requirement. It is not uncommon for the market price of a company’s common stock to decline in the period following a reverse stock split. If the market price of our common stock declines following the effectuation of the Reverse Split, the percentage decline may be greater than would occur in the absence of a reverse stock split. In any event, other factors unrelated to the number of shares of our common stock outstanding, such as negative financial or operational results, could adversely affect the market price of our common stock and jeopardize our ability to meet or maintain Nasdaq’s minimum price requirement.
The Reverse Split may decrease the liquidity of our common stock. The liquidity of the shares of our common stock may be affected adversely by the Reverse Split given the reduced number of shares that are outstanding following the Reverse Split, especially if the market price of our common stock does not increase proportionality as a result of the Reverse Split.
Because the number of authorized shares of our common stock will not be reduced proportionately, the Reverse Stock Split increased the Board’s ability to issue authorized and unissued shares without further stockholder action. The Reverse Split did not serve to decrease the authorized number of shares of common stock under our charter. Because the number of authorized shares of our common stock was not reduced proportionately, the Reverse Split increased the Board’s ability to issue authorized and unissued shares without further stockholder action. Having a substantial number of authorized but unissued shares of stock, the issuance of which would be dilutive to our existing stockholders and may cause a decline in the trading price of our common stock. With respect to authorized but unissued and unreserved shares, we could also use such shares to oppose a hostile takeover attempt or delay or prevent changes in control or changes in or removal of management. Other than the foregoing, there are no existing plans, arrangements or understandings relating to the issuance of any of the authorized, but unissued and unreserved shares, whether available as a result of the Reverse Stock Split or otherwise.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Unregistered Sales of Equity Securities
On various dates in the third quarter of 2024, the Company sold an aggregate of 6,222 shares of common stock to GEM under the Share Purchase Agreement. The issuance of the securities was made in reliance upon the exemption from the registration requirements under Section 4(a)(2) of the Securities Act of 1933. In October 2024, the Company issued 36,886 shares of common stock to satisfy in full the outstanding commitment fee payable discussed in Note 5 and 44,225 shares of common stock under the Share Purchase Agreement with GEM for total consideration of $822,745.
On various dates in the third quarter of 2024, the Company issued an aggregate of 14,778 shares of common stock to SHC under the Sunpeak Settlement Agreement. The issuance of the securities was made in reliance upon the exemption from the registration requirements under Section 3(a)(10) of the Securities Act of 1933. During the nine months ended September 30, 2024, the Company issued 14,333 shares of common stock for settlement of approximately $265,000 in SHC Claims under the Sunpeak Settlement Agreement.
Otherwise, all unregistered sales of equity securities effected during the quarter ended September 30, 2024 [and through the filing of this report] were previously reported in reports the Company has filed with the Securities and Exchange Commission.
Use of Proceeds
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
During
the quarter ended September 30, 2024, none of the Company’s directors or officers
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ITEM 6. EXHIBITS.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| * | Filed herewith |
| ** | Furnished herewith |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| JET.AI INC. | ||
| By: | /s/ George Murnane | |
| Name: | George Murnane | |
| Title: | Interim Chief Financial Officer | |
| (Principal Financial Officer and Accounting Officer) | ||
| Date: November 14, 2024 | ||
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