# EDGAR Filing Document

**Accession Number:** 0001861622
**File Stem:** 0001641172-25-020326
**Filing Date:** 2025-7
**Character Count:** 704859
**Document Hash:** ec01b7da4e3ed891644a4865281ffe89
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-020326.hdr.sgml**: 20251201

**ACCESSION NUMBER**: 0001641172-25-020326

**CONFORMED SUBMISSION TYPE**: DRS

**PUBLIC DOCUMENT COUNT**: 6

**FILED AS OF DATE**: 20250721

**DATE AS OF CHANGE**: 20250718

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Jet.AI Inc.
- **CENTRAL INDEX KEY:** 0001861622
- **STANDARD INDUSTRIAL CLASSIFICATION:** AIR TRANSPORTATION, NONSCHEDULED [4522]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** DRS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 377-08232
- **FILM NUMBER:** 251135576

**BUSINESS ADDRESS:**
- **STREET 1:** 10845 GRIFFITH PEAK DR.,
- **STREET 2:** SUITE 200
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89135
- **BUSINESS PHONE:** 702-747-4000

**MAIL ADDRESS:**
- **STREET 1:** 10845 GRIFFITH PEAK DR.,
- **STREET 2:** SUITE 200
- **CITY:** LAS VEGAS
- **STATE:** NV
- **ZIP:** 89135

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Oxbridge Acquisition Corp.
- **DATE OF NAME CHANGE:** 20210511

**As confidentially submitted to the Securities and Exchange Commission on July 18, 2025. This draft registration statement has not been publicly filed with the Securities and Exchange Commission, and all information contained herein remains strictly confidential.**

**Registration No. 333-**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM S-1**

**REGISTRATION STATEMENT**

**UNDER THE SECURITIES ACT OF 1933**

**Jet.AI Inc.**

(Exact name of registrant as specified in its charter.)

<u>Delaware</u> <u>4522</u> <u>93-2971741</u> <br> (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Number) (IRS Employer Identification No.)

10845 Griffith Peak Dr.

Suite 200

Las Vegas, Nevada 89135

<u>702-747-4000</u>

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Michael Winston

10845 Griffith Peak Dr.

Suite 200

Las Vegas, Nevada 89135

<u>702-747-4000</u>

(Name, address, including zip code and telephone number, including area code, of agent for service)

Copies to:

---

| | |
|:---|:---|
| Kate L. Bechen | M. Ali Panjwani |
| Peter F. Waltz | Pryor Cashman LLP |
| Hallie D. Heath | 7 Times Square |
| Dykema Gossett PLLC | New York, NY 10036 |
| 111 E. Kilbourn Ave., Suite 1050 | (212) 421-4100 |
| Milwaukee, WI 53202 |  |
| (414) 488-7300 |  |

---

As soon as practicable after the effective date of this Registration Statement.

(Approximate date of commencement of proposed sale to the public)

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission acting pursuant to said section 8(a), may determine.**

**The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.**

**Subject to Completion, Dated July** 18**, 2025**

**PRELIMINARY PROSPECTUS**

**Jet.AI Inc.**

![](formdrs_001.jpg)

**[●] Shares of Common Stock**

**[●] Pre-Funded Warrants**

**[●] Shares of Common Stock Underlying the Pre-Funded Warrants**

Jet.AI Inc. (the "***Company***," "***we***," "***our***," and "***us***") is offering, on a firm commitment basis, up to [●] shares of our Common Stock, par value $0.0001 per share (the "***Common Stock***"), at an assumed public offering price of $[●] per share of Common Stock.

We are also offering to those purchasers, if any, whose purchase of Common Stock in this offering would otherwise result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of Common Stock immediately following the consummation of this offering, the opportunity to purchase, if any such purchaser so chooses, pre-funded warrants (the "***Pre-Funded Warrants***") in lieu of shares of Common Stock that would otherwise result in such purchaser's beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of Common Stock. The purchase price of each Pre-Funded Warrant will be equal to the combined public offering price per share of Common Stock sold in this offering minus $[●], the exercise price per share of Common Stock of each Pre-Funded Warrant. The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. For each Pre-Funded Warrant we sell, the number of shares of Common Stock we are offering will be decreased on a one-for-one basis. We are also registering the shares of Common Stock issuable from time to time upon exercise of the Pre-Funded Warrants.

The public offering price per share of Common Stock of $[●] is based upon the closing price of our Common Stock on The Nasdaq Stock Market LLC ("***Nasdaq***") on [●], 2025.The actual public offering price per share of Common Stock (or Pre-Funded Warrant) will be determined between us, the underwriters (as defined below), and the investors in the offering at the time of pricing, and may be at a discount to the current market price of our Common Stock. Therefore, the assumed combined public offering price used throughout this prospectus may not be indicative of the final offering price.

Our Common Stock is traded on Nasdaq under the symbol "JTAI." The last reported sale price of our Common Stock on Nasdaq on [●], 2025 was $[●] per share. There is currently no established trading market for the Pre-Funded Warrants. We do not intend to list the Pre-Funded Warrants on Nasdaq or any other national securities exchange or nationally recognized trading system. Without an active trading market, the liquidity of the Pre-Funded Warrants will be limited.

We have engaged Maxim Group LLC, ("***Maxim***" or the "***lead underwriter***") to act as our exclusive managing underwriter and sole book running manager in connection with this offering. The lead underwriter has agreed to arrange for the sale of the securities offered by this prospectus on a firm commitment basis. As such, the lead underwriter is obligated to take and pay for all of the securities in this offering if any such securities are taken. We will bear all costs associated with this offering and have agreed to pay the lead underwriter the fees set forth in the table below. In addition, Ladenburg Thalmann & Co. Inc. (together with Maxim, the "***underwriters***") will be acting as the co-manager in connection with this offering. See the section of this prospectus titled "*Underwriting*" for more information regarding our arrangements with the underwriters.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.

We are an "emerging growth company" and a "smaller reporting company," each as defined under the federal securities laws and, as such, have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings. See the section of this prospectus entitled "*[●]*."

**Investing in our securities involves a high degree of risks. See "*Risk Factors*" beginning on page 9 of the prospectus. You should carefully consider these risk factors, as well as the information contained in this prospectus and in the documents incorporated by reference into this prospectus, before you invest.**

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.** 

The following table sets forth the expected proceeds from this Offering, assuming an offering price at the minimum of the proposed price range of the shares of our Common Stock:

---

| | | | |
|:---|:---|:---|:---|
|  | **Proposed Maximum Offering Price Per Share** | **Proposed Maximum Offering Price Per Pre-Funded Warrant** | **Total<sup>(1)</sup>** |
| Public Offering Price | $| $| $|
| Underwriting fees<sup>(2)</sup> | $| $| $|
| Proceeds, Before Expenses, to us<sup>(3)</sup> | $| $| $|

---

(1) Assumes no exercise of the over-allotment option by the underwriters.

(2) Represents cash transaction fee payable to the underwriters of 7.0% of the total gross proceeds to us from this offering. We have also agreed to reimburse certain expenses of the underwriters in connection with this offering. See "*Underwriting*" beginning on page 96 of this prospectus for additional information regarding the compensation to be received by the underwriters.

(3) Does not include proceeds from the exercise of the Pre-Funded Warrants, if any.

The underwriters may also exercise their option to purchase up to [●] additional shares of Common Stock (or Pre-Funded Warrants in lieu thereof), which equals 15% of the total number of shares of Common Stock (or Pre-Funded Warrants in lieu thereof) to be offered by us in this offering, for forty-five (45) days after the date of this prospectus solely to cover over-allotments, if any. If the underwriters exercise this option in full, the total underwriting discounts and commissions will be $[●] and the additional proceeds to us, before expenses, from the over-allotment option exercise will be $[●].

---

| | |
|:---|:---|
| **Maxim Group LLC** | **Ladenburg Thalmann** |

---

The date of this prospectus is [●], 2025

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | Page |
| [ABOUT THIS PROSPECTUS](#ska_001) | 1 |
| [PROSPECTUS SUMMARY](#ska_002) | 2 |
| [THE OFFERING](#ska_003) | 7 |
| [SUMMARY FINANCIAL DATA](#ska_004) | 8 |
| [RISK FACTORS](#ska_005) | 9 |
| [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS](#ska_006) | 28 |
| [USE OF PROCEEDS](#ska_007) | 30 |
| [DIVIDEND POLICY](#ska_008) | 30 |
| [CAPITALIZATION](#ska_009) | 30 |
| [DILUTION](#ska_010) | 31 |
| [INDUSTRY AND MARKET DATA](#ska_011) | 33 |
| [UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION](#ska_012) | <br> 33 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#ska_013) | 38 |
| [CURRENT BUSINESS](#m_001) | 55 |
| [DATA CENTER BUSINESS](#m_002) | 67 |
| [DIRECTORS AND EXECUTIVE OFFICERS](#m_003) | 70 |
| [EXECUTIVE COMPENSATION](#m_004) | 76 |
| [CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS](#m_005) | 90 |
| [MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS](#m_006) | 94 |
| [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#m_007) | 95 |
| [UNDERWRITING](#D_012) | 96 |
| [DESCRIPTION OF SECURITIES](#D_013) | 101 |
| [MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS](#D_014) | 104 |
| [LEGAL MATTERS](#D_015) | 110 |
| [EXPERTS](#D_016) | 110 |
| [WHERE YOU CAN FIND MORE INFORMATION](#D_017) | 110 |
| [INDEX TO CONSOLIDATED FINANCIAL STATEMENTS](#D_019) | F-1 |

---

i

**ABOUT THIS PROSPECTUS**

This prospectus is part of a registration statement on Form S-1 (the "***Registration Statement***") that we filed with the Securities and Exchange Commission (the "***SEC***"). It omits some of the information contained in the Registration Statement, and reference is made to the Registration Statement for further information with regard to us and the securities being offered in this Offering. You should review the information and exhibits in the Registration Statement for further information about us and the securities being offered hereby. Statements in this prospectus concerning any document we filed as an exhibit to the Registration Statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to the filings. You should review the complete document to evaluate these statements.

We own or have rights to trademarks or trade names that we use in connection with the operation of our business, including our corporate names, logos and website names. In addition, we own or have the rights to copyrights, trade secrets and other proprietary rights that protect the content of our products. This prospectus may also contain trademarks, service marks and trade names of other companies, which are the property of their respective owners. Our use or display of third parties' trademarks, service marks, trade names or products in this prospectus is not intended to, and should not be read to, imply a relationship with or endorsement or sponsorship of us. Solely for convenience, some of the copyrights, trade names and trademarks referred to in this prospectus are listed without their©,® and™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks. All other trademarks are the property of their respective owners.

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market share, is based on information from our own management's estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Management's estimates are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. Our management's estimates have not been verified by any independent source, and we have not independently verified any third-party information. In addition, assumptions and estimates of our and our industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section of this prospectus entitled "*Risk Factors*." These and other factors could cause our future performance to differ materially from our assumptions and estimates. See the sections of this prospectus entitled "*Risk Factors*" and "*Cautionary Statement on Forward-Looking Statements*."

We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to the registration statement of which this prospectus is a part were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.

We have not, and the underwriters have not, authorized anyone to provide you with any information or to make any representation not contained or incorporated by reference in this prospectus or any related free writing prospectus. We do not, and the underwriters and their affiliates do not, take any responsibility for, and can provide no assurance as to the reliability of, any information that others may provide to you. This prospectus is not an offer to sell or an offer to buy securities in any jurisdiction where offers and sales are not permitted. The information in this prospectus is accurate only as of its date, regardless of the time of delivery of this prospectus or any sale of securities. You should also read and consider the information in the documents to which we have referred you under the caption "*Where You Can Find More Information*" in the prospectus.

**PROSPECTUS SUMMARY**

*This summary highlights information contained elsewhere in this prospectus or incorporated by reference herein. This summary does not contain all of the information you should consider before investing in our securities. Before investing in our securities, you should carefully read this entire prospectus, including our financial statements and the related notes included in this prospectus and the information set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." As used in this prospectus, unless the context requires otherwise, the terms "Company," "Jet.AI," "we," "our," and "us" refer to Jet.AI Inc., and its consolidated subsidiaries. Unless otherwise indicated, all share and per share amounts in this prospectus have been presented on a retrospective and pro forma basis to reflect the reverse stock split of our outstanding shares of common stock at a ratio of 225-for-1 which we effected on November 12, 2024.*

**Company Overview** 

Our business strategy combines concepts from fractional jet and charter jet programs with innovations in artificial intelligence, also referred to herein is "***AI***." Our purposeful enhancement of price discovery has the potential to produce fairer and more inclusive results for aircraft owners and travelers alike.

We formed the Company on June 4, 2018. We developed and, in September 2019, launched our booking platform represented by our iOS app Jet Token, which originally functioned as a prospecting and quoting platform to arrange private jet travel with third party carriers. Following our acquisition of HondaJets, we began selling jet cards and fractional ownership interests in our aircraft. In 2023, we launched an AI-enhanced booking app called CharterGPT (the "App"). Beginning in 2023, we launched our Jet.AI Operator Platform to provide a business-to-business ("B2B") software platform for software-as-a-service ("SaaS") products. Currently we offer the following SaaS software to aircraft owners and operators generally:

● <u>Reroute AI:</u> recycles aircraft waiting to return to base into prospective new charter bookings to destinations within specific distances; and

● <u>DynoFlight:</u> enables aircraft operators to estimate aircraft emissions then purchase carbon removal credits via our DynoFlight API.

We have also established a specific version of a private jet by-the-seat booking tool for the Las Vegas Golden Knights professional ice hockey team and Great Western Air, LLC (DBA Cirrus Aviation Services, LLC) ("***Cirrus***") via 380 Software LLC. 380 Software LLC is a by-the-seat charter joint venture between us and Cirrus.

Our strategy historically has involved expanding our fleet of aircraft with larger aircraft capable of traveling longer distances, developing a national jet card program based on third party aircraft, further enhancing the AI functionality of CharterGPT, and expanding upon our B2B software offerings. Our strategy currently involves further enhancing the AI functionality of Ava and CharterGPT, and expanding upon Reroute AI and DynoFlight.

 **

***Recent Events***

 **

*Merger Agreement*

On February 13, 2025, the Company, entered into an Agreement and Plan of Merger and Reorganization (the "***Original Merger Agreement***") with flyExclusive, Inc. ("***flyExclusive***"), FlyX Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of flyExclusive ("***Merger Sub***"), and Jet.AI SpinCo, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("***SpinCo***"). Pursuant to the Merger Agreement, (i) as a condition to closing on the Merger Agreement, the Company will distribute all of the shares of SpinCo, on a pro rata basis, to the Company's stockholders (the "***Distribution***"), (ii) Merger Sub will merge with and into SpinCo (the "***Merger***" and, together with the Distribution and all other transactions contemplated under the Merger Agreement, the "***Transactions***") with SpinCo surviving the Merger as a wholly owned subsidiary of flyExclusive, and (iii) as consideration for the Merger, the Company's existing stockholders will have the right to receive shares of Class A common stock of flyExclusive. Additionally, the Company's stockholders will continue to own and hold their existing shares of the Company's common stock as of closing of the Merger.

On May 6, 2025, the parties entered into an Amended and Restated Agreement and Plan of Merger and Reorganization (the "***Merger Agreement***"). Except as follows, the material terms of the Transactions remain unchanged in the Merger Agreement. The Merger Agreement amends, restates, replaces and supersedes the Original Merger Agreement in its entirety. The Merger Agreement amended the Original Merger Agreement to provide for the concept that 20% of the merger consideration will not be issued upon closing, but will instead be issued post-closing, if any, upon final determination of the purchase price. Previously, the Original Merger Agreement contemplated all of the merger consideration shares being issued upon closing, with 20% of such merger consideration shares being "Restricted Shares" subject to potential post-closing claw back upon determination of the final purchase price. Additionally, the Original Merger Agreement contained a condition to closing which would have required the Company to amend its existing securities purchase agreement with Ionic Ventures, LLC. The Merger Agreement amended the closing condition to instead require the Company to execute a new securities purchase agreement with a third-party investor, pursuant to which the Company will issue the investor a warrant to purchase up to $50 million worth of shares of a newly-designated series of preferred stock.

In connection with executing the Original Merger Agreement, the Company, SpinCo, and flyExclusive entered into a Separation and Distribution Agreement (the "***Separation and Distribution Agreement***") pursuant to which the Company will transfer the business, operations, services and activities of the Company's jet charter business to SpinCo (the "***Separation***"). Upon the terms and subject to the conditions set forth in the Separation and Distribution Agreement, the Company will consummate the Distribution. As such, the Company will no longer operate a jet charter business as of consummation of the Distribution. There will be no change to the Company's board of directors or executive officers as a result of the Merger, Separation, Distribution, or other Transactions.

The Merger Agreement contains customary conditions to closing, including the following mutual conditions: (i) the Separation and Distribution and the other transactions contemplated by the Separation and Distribution Agreement shall have been consummated in accordance with the Separation and Distribution Agreement; (ii) a registration statement on Form S-4 covering the merger consideration shares shall be effective; (iii) the approval of the Transactions by holders of the Company's common stock shall have been obtained; and (iv) the shares of flyExclusive Class A common stock issuable pursuant to the Transactions shall have been approved for listing on the NYSE American LLC.

After the Transactions, the Company will continue to operate and retain its software and intellectual property assets, but will cease to hold its aircraft fractional, jet card and management assets and expects to pursue additional business opportunities in the artificial intelligence (AI) sector utilizing its remaining assets to enhance those business operations and model. The Transactions are subject to stockholder approval and are expected to close during the third quarter of 2025.

The Company does not believe that the proposed Transactions will have an impact on this offering. For more information regarding flyExclusive and the proposed Transactions, please refer to the Registration Statement on Form S-4 (File No. 333-284960) filed by flyExclusive with the SEC.

*Joint Venture Agreement* 

On June 26, 2025, the Company and Consensus Core Technologies Inc. ("***Consensus Core***") entered into a Joint Venture Agreement (the "***JV Agreement***"), pursuant to which the parties agreed to enter into a joint venture to collaborate in developing data centers. The JV Agreement provided certain terms of the joint venture, including: (i) the parties would enter into a Contribution Agreement (the "***Contribution Agreement***") with a joint venture limited liability company outlining the full terms of the joint venture; (ii) the joint venture limited liability company would be organized under the laws of the State of Delaware prior to any initial closing under the Contribution Agreement, which would initially be wholly owned by Consensus Core; and (iii) the joint venture limited liability company would establish separate subsidiaries for each data center project to be contributed to the joint venture.

On July 2, 2025, the Company entered into the Contribution Agreement with Consensus Core and Convergence Compute LLC, a Delaware limited liability company ("***Convergence Compute***"), pursuant to which Jet.AI contributed $300,000 to Convergence Compute in the first closing of the transactions contemplated by the JV Agreement. As consideration for its contribution, Jet.AI acquired a 0.5% equity interest in Convergence Compute. Upon the completion of certain data center project milestones, each of the Company and Consensus Core will make additional contributions to Convergence Compute and will receive additional equity interests in Convergence Compute and its subsidiaries.

The Company will contribute up to an aggregate $20 million to Convergence Compute in five tranches, which are each tied to specific project development milestones. Consensus Core will contribute 100% of the equity interests of its Midwest data center project to Convergence Compute at the second closing under the Contribution Agreement and will contribute 100% of the equity interests of its Maritime data center project to Convergence Compute at the third closing under the Contribution Agreement. In consideration for such contributions, the Company and Consensus Core will each receive a 17.5% equity interest in the Midwest project upon the second closing and a 17.5% equity interest in the Maritime project upon the third closing. The Company will also receive an additional 0.5% equity interest in Convergence Compute upon each additional closing, for an aggregate equity interest of up to 2.5% if all five tranches are consummated.

**Nasdaq Compliance**

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).

On April 14, 2024, the Company received an additional notification letter from Nasdaq (the "***Second Notice Letter***") stating that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1), as the minimum bid price of the Company's Common Stock had been below $1.00 per share for 30 consecutive business days (the "***Minimum Bid Price Requirement***"). The Company had 180 calendar days, or until October 14, 2024, to regain compliance with the Minimum Bid Price Requirement. Although the Company did not regain compliance with the Minimum Bid Price Requirement by October 14, 2024, it was eligible for an additional 180-calendar day compliance period because it elected to transfer to The Nasdaq Capital Market.

On May 30, 2024, the Company received an additional notification letter from Nasdaq (the "***Third Notice Letter***") stating that the Company had 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 to appeal the Delisting Notice. The Company's hearing request stayed the suspension of trading on the Company's securities, and the Company's securities continued 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 of 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. The Company effected a reverse stock split of its issued and outstanding shares of Common Stock at a ratio of 225-for-1 on November 12, 2024 to, in part, to regain compliance with the Minimum Bid Price Requirement.

On November 26, 2024, the Company received a letter from Nasdaq stating that the Company regained compliance with both the Minimum Stockholders' Equity Requirement and the Minimum Bid Price Requirement. Pursuant to Nasdaq Listing Rule 5815(d)(4)(B), the Company is subject to a Mandatory Panel Monitor for a period of one year from November 26, 2024. If, within that one-year monitoring period, Nasdaq finds the Company again out of compliance with the Minimum Stockholders' Equity Requirement, which was the subject of the exception, notwithstanding Nasdaq Listing Rule 5810(c)(2), the Company would not be permitted to provide Nasdaq with a plan of compliance with respect to that deficiency and Nasdaq would not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor would the Company be afforded an applicable cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, Nasdaq should issue a Delist Determination Letter, the Company would have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel were unavailable. The Company would have the opportunity to respond/present to the Hearings Panel as provided by Nasdaq Listing Rule 5815(d)(4)(C). The Company's securities could at that time delisted from Nasdaq.

Although the Company believes it will be able to maintain compliance with Nasdaq's continued listing requirements, there can be no assurance that the Company will be able to maintain compliance with all such requirements.

**Company Information**

The address of our executive corporate offices is 10845 Griffith Peak Drive, Suite 200, Las Vegas, NV 89135, and our telephone number is (702) 747-4000. Our website is *www.jet.ai*. Information contained on or accessible through this website is not incorporated by reference in, or otherwise a part of, this prospectus, and any references to this website are intended to be inactive textual references only.

**Risk Factors**

Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the "*Risk Factors*" section of this prospectus immediately following this prospectus summary. These risks include the following:

● The Company is an early-stage company with a limited operating history.

● The Company may not be able to successfully implement its growth strategies.

● The Company's operating results are expected to be difficult to predict based on a number of factors that also will affect its long-term performance.

● The Company may not have enough capital as needed and may be required to raise more capital and the terms of subsequent financings may adversely impact your investment.

● The Company's business and reputation rely on, and will continue to rely on, third parties.

● The Company may be unable to adequately protect its intellectual property interests or may be found infringing on the intellectual property interests of others.

● A delay or failure to identify and devise, invest in and implement certain important technology, business, and other initiatives could have a material impact on the Company's business, financial condition and results of operations.

● The Company is dependent on its information systems which may be vulnerable to cyber-attacks or other events.

● Because the Company's software could be used to collect and store personal information, privacy concerns in the territories in which the Company operates could result in additional costs and liabilities to the Company or inhibit sales of its software.

● The Company may not have enough funds to sustain the business until it becomes profitable and may not be able to obtain additional capital when desired, on favorable terms or at all.

● Jet.AI is subject to risks related to taxation in the United States.

● Jet.AI's sole material asset is its direct and indirect interests in its subsidiaries and, accordingly, Jet.AI is dependent upon distributions from its subsidiaries to pay taxes and cover its corporate and other overhead expenses and pay dividends, if any, on the Jet.AI common stock.

● Demand for the Company's services may decline due to factors beyond its control.

● The Company faces a high level of competition with numerous market participants with greater financial resources and operating experience.

● Aviation businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions; air traffic control inefficiencies; natural disasters; adverse weather conditions, such as hurricanes or blizzards; increased and changing security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; or the outbreak of disease; any of which could have a material adverse effect on the Company's business, results of operations and financial condition.

● The operation of aircraft is subject to various risks, and failure to maintain an acceptable safety record may have an adverse impact on our ability to obtain and retain customers.

● The supply of pilots to the airline industry is limited and may negatively affect the Company's operations and financial condition. Increases in labor costs may adversely affect the Company's business, results of operations and financial condition.

● The Company is exposed to operational disruptions due to maintenance.

● Significant increases in fuel costs could have a material adverse effect on the Company's business, financial condition and results of operations.

● If efforts to continue to build a strong brand identity and improve member satisfaction and loyalty are not successful, the Company may not be able to attract or retain members, and its operating results may be adversely affected.

● Any failure to offer high-quality customer support may harm the Company's relationships with its customers and could adversely affect the Company's reputation, brand, business, financial condition and results of operations.

● Changes in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results of operations.

● The Company's failure to attract and retain highly qualified personnel in the future could harm its business.

● The proposed Transactions with flyExclusive may not be completed on the terms or timeline currently contemplated, or at all.

● In the proposed Transactions with flyExclusive Jet.AI will divest substantially all of its fractional and jet card business and related assets, together with associated working capital and thereafter adopt a business strategy that focuses on expanding its AI operations. Any or all of these decisions if incorrect may have a material adverse effect on the results of Jet.AI's operations, financial position and cash flows, and pose further risks to the successful operation of Jet.AI's business over the short and long-term.

● The AI sector in which Jet.AI expects to primarily focus after the Transactions is subject to significant risks, including rapid growth and volatility, capital requirements, dependence on rapidly changing underling technologies, market and political risks and uncertainties and extreme competition. Jet.AI cannot guarantee that it will be able to anticipate or overcome any or all of these risks and uncertainties, especially as a small company operating in an environment that includes many large, well-capitalized competitors with substantially more resources.

● Particularly after the Transactions Jet.AI's success will be dependent on its ability to successfully develop new services, platforms and solutions that utilize AI and enhance or complement its existing services, platforms and solutions, and market acceptance of these offerings.

● The Company's stock price may be volatile, and you may not be able to sell shares at or above the price at which you purchase shares.

● 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.

● Stockholders may experience dilution of their ownership interest due to the issuance of additional shares of common stock upon the conversion of the Series B Preferred Stock, especially since the Series B Preferred Stock has fluctuating conversion rates that are set at a discount to market prices of our shares of common stock during the period immediately following conversion.

● The issuances of additional shares of Jet.AI common stock under the Share Purchase Agreement and the GEM Warrant may result in dilution of future Jet.AI stockholders and have a negative impact on the market price of Jet.AI common stock.

● Certain existing stockholders purchased our securities at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price.

● Sales of Jet.AI common stock, or the perception of such sales, by us or our significant stockholders in the public market or otherwise could cause the market price for Jet.AI common stock to decline.

● The JOBS Act permits "emerging growth companies" like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

**THE OFFERING**

---

| | |
|:---|:---|
| Common Stock Offered | Up to [●] shares of Common Stock. |
| Pre-Funded Warrants Offered | We are also offering to those purchasers, if any, whose purchase of shares of Common Stock in this offering would result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding Common Stock following the consummation of this offering, the opportunity to purchase, in lieu of the shares of our Common Stock that would otherwise result in the purchaser's beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%), Pre-Funded Warrants each to purchase one share of Common Stock at an exercise price of $[●] per share. The assumed combined public offering price for each Pre-Funded Warrant will be equal to the public offering price per share of Common Stock in this offering, minus $[●]. Each Pre-Funded Warrant will be exercisable upon issuance and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. For each Pre-Funded Warrant we sell, the number of shares of Common Stock we sell will be decreased on a one-for-one basis. This prospectus also relates to the offering of the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants. See "*Description of Securities – Pre-Funded Warrants*" for additional information. |

---

---

| | |
|:---|:---|
| Offering Price | $[●] per share |
| Common Stock Outstanding Prior to This Offering | [●] shares of Common Stock (as of July [●], 2025). |
| Common Stock To Be Outstanding After This Offering | [●] shares of Common Stock, (or [●] shares if the underwriters exercise their option to purchase additional shares in full) based on an assumed public offering price of $[●] per share (which is the last reported sale price of our Common Stock on Nasdaq on July [●], 2025) and assuming no sale of Pre-Funded Warrants, which, if sold, would reduce the number of shares of Common Stock that we are offering on a one-for-one basis. |
| Use of Proceeds | We intend to use the net proceeds from the sales of the securities offered by this prospectus primarily for [●]. See "*Use of Proceeds*" on page 30 for additional information. |
| Risk Factors | You should read the "*Risk Factors*" section of this prospectus for a discussion of factors to consider carefully before deciding to invest in shares of our Common Stock. |
| Underwriters' Over-allotment Option | We have granted the underwriters a 45-day option from the date of this prospectus to purchase up to [●] additional shares of Common Stock (or Pre-Funded Warrants in lieu thereof) representing 15% of the total number of securities offered by us in the offering. |
| Lock-up agreements | In connection with this offering, we, our directors and officers, and our affiliates have agreed not to offer, issue, sell, or otherwise dispose of any of our securities without the underwriters' prior consent, except for any ordinary course equity grants under our equity compensation plans or sales of our Common Stock that may be effected in accordance with the terms of various pre-existing arrangements. See "*Underwriting*" on page 96 of this prospectus for more information. |
| Market for the Common Stock | Our Common Stock is traded on Nasdaq under the symbol "JTAI." There is no established trading market for the Pre-Funded Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the Pre-Funded Warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the Pre-Funded Warrants will be limited. |

---

The number of shares of our Common Stock outstanding is based on an aggregate of [●] shares of our Common Stock outstanding as of July [●], 2025, and excludes:

● 9,686 shares of Common Stock issuable upon exercise of the GEM Warrant as of July [●], 2025;

● [●] shares of Common Stock issuable upon conversion of [989] shares of Series B Preferred Stock as of July [●], 2025;

● 22,668 shares of Common Stock issuable upon exercise of outstanding options with an average exercise price of $998.26 as of July [●], 2025; and

● [●] shares of Common Stock available for future issuance under the Amended and Restated 2023 Jet.AI Inc. Omnibus Incentive Plan as of July [●], 2025.

**SUMMARY FINANCIAL DATA**

The following tables summarize our consolidated financial data. We have derived the summary consolidated statement of operations data for the years ended December 31, 2024 and 2023 as well as our balance sheet data as of December 31, 2024 and 2023 from our audited consolidated financial statements included elsewhere in this prospectus. The summary data for the three months ended March 31, 2025 and 2024 as well as our balance sheet data as of March 31, 2025 is derived from our unaudited consolidated financial statements appearing elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future. The following summary financial data should be read in conjunction with the section titled "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and our audited consolidated financial statements and related notes included elsewhere in this prospectus.

***Consolidated Statement of Operations Data (in thousands, except per share data)***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Years Ended** | **Years Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31,** | **December 31,** | **March 31,** | **March 31,** |
|  | **2024** | **2023** | **2025** | **2024** |
| Revenues | $14023 | $12215 | $3475 | $3849 |
| Gross loss | $(965) | $(179) | $(116) | $(124) |
| Operating loss | $(12567) | $(12510) | $(3171) | $(3150) |
| Net loss | $(12733) | $(12616) | $(3170) | $(3229) |
| Deemed dividend from warrant exchange offer | $(540) | $– | $– | $– |
| Cumulative preferred stock dividends | $(109) | $(47) | $– | $(30) |
| Net loss to common stockholders | $(13383) | $(12663) | $(3170) | $(3259) |
| Net loss per share – basic and diluted | $(47.93) | $(450.34) | $(1.85) | $(64.08) |

---

***Consolidated Balance Sheet Data***

---

| | | |
|:---|:---|:---|
|  | **As of** | **As of** |
|  | **March 31, 2025** | **March 31, 2025** |
|  | **Actual** | **As adjusted** |
| Total assets | $18459 | $396 |
| Total liabilities | $4835 | $4421 |
| Total stockholders' equity | $13624 | $(4025) |

---

**RISK FACTORS**

*Investing in our Common Stock involves a high degree of risk. In addition to the information, documents or reports included or incorporated by reference in this prospectus and, if applicable, any prospectus supplement or other offering materials, you should carefully consider the risks described below in addition to the other information contained in this prospectus, before making an investment decision. Our business, financial condition or results of operations could be harmed by any of these risks. As a result, you could lose some or all of your investment in our Common Stock. The risks and uncertainties described below are not the only ones we face. Additional risks not currently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.*

**Risks Related to the Company's Business**

***The Company may not be able to continue to operate its business if it is not successful in securing additional sources of capital and, as a result, may not be able to continue as a going concern.***

The Company is dependent on funds from its operations, proceeds from its financing arrangements and additional fundraising in order to sustain its ongoing operations. The Company has suffered recurring losses from operations and has a significant accumulated deficit. As a result of these recurring losses from operations and the need for additional capital, there is substantial doubt about the Company's ability to continue as a going concern. Therefore, our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern in its report on the Company's audited financial statements for the year ended December 31, 2024. And, Note 2 to the consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 included a similar qualification regarding the Company's ability to continue as a going concern. The financial statements have been prepared in accordance with GAAP, which contemplates that the Company will continue to operate as a going concern. The Company's financial statements do not contain any adjustments that might result if it is unable to continue as a going concern. There are no assurances 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. In such circumstances, the Company may have to significantly reduce its operations or delay, scale back or discontinue the development of one or more of its products or services, seek alternative financing arrangements, declare bankruptcy or terminate its operations entirely.

***The Company may not have enough capital as needed and may be required to raise more capital and the terms of subsequent financings may adversely impact your investment.***

Although the Company anticipates that the funds from this offering will be sufficient to support its expected operations, it may need access to credit in order to support its working capital requirements as it grows. Interest rates are rising, and it is a difficult environment for obtaining credit on favorable terms. If the Company cannot obtain credit when needed, the Company may issue debt or equity securities to raise funds, modify its growth plans, or take some other action. Interest on debt securities could increase costs and negatively impact operating results and convertible debt securities could result in diluting your interest in the Company. If the Company is unable to find additional capital on favorable terms, then it is possible that it will choose to cease its sales activity. In that case, the only asset remaining to generate a return on your investment could be the Company's intellectual property. Even if the Company is not forced to cease its sales activity, the unavailability of capital could result in the Company performing below expectations, which could adversely impact the value of your investment.

***The Company may not have enough funds to sustain the business until it becomes profitable and may not be able to obtain additional capital when desired, on favorable terms or at all.***

The Company may not accurately anticipate how quickly it may use its funds and whether these funds are sufficient to bring the business to profitability.

The industry, products and markets in which Jet.AI focuses are markets that make Jet.AI's prospects difficult to evaluate and enter these industry sectors and thereafter remain competitive, Jet.AI expects to be required to make continued investments in equipment, facilities and technology. Jet.AI expects that substantial capital will be required to pursue certain business opportunities in sectors that are complementary to AI focused business operations, and to also continue technology and product development, and to fund working capital for anticipated growth. If Jet.AI does not generate sufficient cash flow from operations or otherwise have the capital resources to meet its future capital needs, we may need additional financing to implement our business strategy.

Jet.AI expects that it will need to raise additional capital in the future to fund more rapid expansion, respond to competitive pressures, potentially acquire complementary assets, businesses or technologies or take advantage of unanticipated opportunities, and it may seek to do so through public or private financing, strategic relationships or other arrangements. The ability of Jet.AI to secure any required financing will depend in part upon prevailing capital market conditions and business success. There can be no assurance that Jet.AI will be successful in its efforts to secure any additional financing on terms satisfactory to management or at all. Even if such funding is available, Jet.AI cannot predict the size of future issues of common shares or securities convertible into common shares or the effect, if any, that future issues and sales of common shares will have on the price of Jet.AI's common shares.

If Jet.AI raises additional capital through the issuance of equity securities, the percentage ownership of Jet.AI's existing shareholders may be reduced, and such existing shareholders may experience additional dilution in net book value per share. Any such newly-issued equity securities may also have rights, preferences or privileges senior to those of the holders of the common shares. If additional funds are raised through the incurrence of indebtedness, such indebtedness may involve restrictive covenants that impair the ability of Jet.AI to pursue its growth strategy and other aspects of its business plan, expose Jet.AI to greater interest rate risk and volatility, require Jet.AI to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, thereby reducing the availability of its cash flow to fund working capital and capital expenditures, increase Jet.AI's vulnerability to general adverse economic and industry conditions, place Jet.AI at a competitive disadvantage compared to its competitors that have less debt, and limit Jet.AI's ability to borrow additional funds. In connection with any such future capital raising transactions, whether involving the issuance of equity securities or the incurrence of indebtedness, Jet.AI may be required to accept terms that restrict its ability to raise additional capital for a period of time, which may limit or prevent Jet.AI from raising capital at times when it would otherwise be opportunistic to do so.

***The Company is an early-stage company with a limited operating history.***

The Company's predecessor operating company Jet Token, Inc. was formed on June 4, 2018. Accordingly, the Company has a limited history upon which an investor can evaluate its performance and future prospects. The Company has a short history and a limited number of aircraft and related customers. The Company's current and proposed operations are subject to all business risks associated with newer enterprises. These include likely fluctuations in operating results as the Company reacts to developments in its markets, difficulty in managing its growth and the entry of competitors into the market. The Company has incurred net losses to date and anticipates continuing net losses for the foreseeable future. The Company cannot assure you that it will be profitable in the foreseeable future or generate sufficient profits to pay dividends. If the Company does achieve profitability, the Company cannot be certain that it will be able to sustain or increase such profitability. The Company has not consistently generated positive cash flow from operations, and it cannot be certain that it will be able to generate positive cash flow from operations in the future. To achieve and sustain profitability, the Company must accomplish numerous objectives, including broadening and stabilizing its sources of revenue and increasing the number of paying members to its service. Accomplishing these objectives may require significant capital investments. The Company cannot be assured that it will be able to achieve these objectives.

***The Company may not be able to successfully implement its growth strategies.***

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

***The Company's operating results are expected to be difficult to predict based on a number of factors that also will affect its long-term performance.***

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

● the Company may fail to successfully execute its business, marketing and other strategies;

● the Company's ability to grow complementary products and service offerings may be limited, which could negatively impact its growth rate and financial performance;

● the Company may be unable to attract new customers and/or retain existing customers;

● the Company will require additional capital to finance strategic investments and operations, pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and the Company cannot be sure that additional financing will be available;

● the Company's historical growth rates may not be reflective of its future growth;

● the Company's business and operating results may be significantly impacted by general economic conditions, the health of the U.S. aviation industry and risks associated with its aviation assets;

● litigation or investigations involving the Company could result in material settlements, fines or penalties and may adversely affect the Company's business, financial condition and results of operations;

● existing or new adverse regulations or interpretations thereof applicable to the Company's industry may restrict its ability to expand or to operate its business as intended and may expose the Company to fines and other penalties;

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

● some of the Company's potential losses may not be covered by insurance, and the Company may be unable to obtain or maintain adequate insurance coverage; and

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

***The Company's business is primarily focused on certain targeted geographic regions, making it vulnerable to risks associated with having geographically concentrated operations.***

Jet.AI's customer base is primarily concentrated in the southwestern region of the United States. As a result, Jet.AI's business, financial condition and results of operations are susceptible to regional economic downturns and other regional factors, including state regulations and budget constraints and severe weather conditions, catastrophic events or other disruptions. As Jet.AI seeks to expand in its existing markets, opportunities for growth within these regions will become more limited and the geographic concentration of the Company's business may increase.

***The Company's business and reputation rely on, and will continue to rely on, third parties.***

The Company has relied on a third-party app developer to develop the initial versions of its App and the Company may continue to rely on third parties for future development of portions of any new or revised App. In place of a third-party app developer, the Company relies both on internal development and freelance contractors supervised by the Company's Chief Technology Officer. The Company intends to continue to build its internal development team and to gradually decrease its reliance on external contractors for app development. If there were delays or complications in the further development of the App, this might result in difficulties that include but are not limited to the following:

● Increased Development Costs: Extended development timelines can result in higher costs associated with personnel, software licenses, hardware, and other development resources. Delays may require additional investments to address technical issues, hire more personnel, or acquire additional technology or expertise to expedite the development process. These increased costs may negatively impact our financial performance and profitability.

● Missed Time-to-Market Opportunities: Delays in app development may cause us to miss strategic market windows, limiting our ability to capture early adopters and gain a competitive advantage. Competitors may seize the opportunity to launch similar apps, potentially eroding our market share and diminishing our growth prospects. Our ability to generate revenue and establish a strong market presence may be compromised as a result.

● Customer Dissatisfaction and Loss of Trust: If delays or complications prolong the release of new versions of our App, it may lead to customer frustration and disappointment. Use of the App may diminish, and users may turn to alternative solutions or competitors. Customer dissatisfaction can harm our reputation and brand image, resulting in a loss of trust and reducing customer loyalty and engagement with our products and services.

● Negative Impact on Revenue and Financial Performance: A delay in launching revisions of our App or other software products may impact our revenue projections, financial forecasts, and investment plans. The inability to generate expected revenue streams can adversely affect our cash flow, profitability, and ability to meet financial obligations or raise additional capital. Our valuation and attractiveness to investors may also be negatively impacted.

● Opportunity Costs and Competitive Disadvantage: Time spent on addressing delays and complications diverts management's attention and resources away from other strategic initiatives or product developments. We may miss out on potential partnership opportunities, market expansions, or product enhancements, resulting in missed revenue and growth opportunities. Competitors may gain a competitive advantage over us.

● Loss of Investor Confidence: Extended delays or ongoing complications may erode investor confidence in our ability to execute our business plan successfully. Investors may question our management's capability, resulting in reduced investor interest, difficulty in raising funds, and a potential decline in our stock price. The loss of investor confidence can have broader implications for our overall financial stability and long-term viability.

The Company also relies heavily on its existing operating partner, Cirrus, to maintain and operate the Company's leased aircraft for charter services and the Company will rely on third party operators when its clients book flights through its platform with those operators. Both the Company and Cirrus actively book charter onto the Company aircraft. Cirrus books charter via its 24-hour charter department and the Company books charter via its App. The failure of these third parties to perform these roles properly may result in damage to the Company's reputation, loss of clients, potential litigation and other costs. The Company may also experience delays, defects, errors, or other problems with their work that could have an adverse effect on its results and its ability to achieve profitability.

***The Company relies on third-party Internet, mobile, and other products and services to deliver its mobile and web applications and flight management system offerings to customers, and any disruption of, or interference with, the Company's use of those services could adversely affect its business, financial condition, results of operations, and customers.***

The Company's platform's continuing and uninterrupted performance is critical to its success. That platform is dependent on the performance and reliability of Internet, mobile, and other infrastructure services that are not under the Company's control. While the Company has engaged reputable vendors to provide these products or services, the Company does not have control over the operations of the facilities or systems used by its third-party providers. These facilities and systems may be vulnerable to damage or interruption from natural disasters, cybersecurity attacks, human error, terrorist attacks, power outages, pandemics, and similar events or acts of misconduct. In addition, any changes in one of the Company's third-party service provider's service levels may adversely affect the Company's ability to meet the requirements of its customers. While the Company believes it has implemented reasonable backup and disaster recovery plans, the Company has experienced, and expects that in the future it will experience, interruptions, delays and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions, capacity constraints, or external factors beyond the Company's control. Sustained or repeated system failures would reduce the attractiveness of the Company's offerings and could disrupt the Company's customers' businesses. It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as the Company expands its products and service offerings. Any negative publicity or user dissatisfaction arising from these disruptions could harm the Company's reputation and brand, may adversely affect the usage of the Company's offerings, and could harm the Company's business, financial condition and results of operation.

***The Company relies on third parties maintaining open marketplaces to distribute its mobile and web applications.***

The success of the Company's App relies in part on third parties maintaining open marketplaces, including the Apple App Store and Google Play, which make our App available for download. The Company cannot be assured that the marketplaces through which it distributes its App will maintain their current structures or that such marketplaces will not charge the Company fees to list its App for download.

***The Company may be unable to adequately protect its intellectual property interests or may be found infringing on the intellectual property interests of others.***

The Company's intellectual property may include trademarks, domain names, website, mobile and web applications, software (including our proprietary algorithms and data analytics engines), copyrights, trade secrets, and inventions (whether or not patentable). The Company believes that its intellectual property plays an important role in protecting its brand and the competitiveness of its business. If the Company does not adequately protect its intellectual property, its brand and reputation may be adversely affected and its ability to compete effectively may be impaired.

The Company protects its intellectual property through a combination of trademarks, domain names and other measures. The Company has registered its trademarks and domain names that it currently uses in the United States. The Company's efforts may not be sufficient or effective. Further, the Company may be unable to prevent competitors from acquiring trademarks or domain names that are similar to or diminish the value of its intellectual property. In addition, it may be possible for other parties to copy or reverse engineer the Company's applications or other technology offerings. Moreover, the Company's proprietary algorithms, data analytics engines, or other software or trade secrets may be compromised by third parties or the Company's employees, which could cause the Company to lose any competitive advantage it may have from them.

In addition, the Company's business is subject to the risk of third parties infringing its intellectual property. The Company may not always be successful in securing protection for, or identifying or stopping infringements of, its intellectual property and it may need to resort to litigation in the future to enforce its rights in this regard. Any such litigation could result in significant costs and a diversion of resources. Further, such enforcement efforts may result in a ruling that the Company's intellectual property rights are unenforceable.

Moreover, companies in the aviation and technology industries are frequently subject to litigation based on allegations of intellectual property infringement, misappropriation, or other violations. As the Company expands and raises its profile, the likelihood of intellectual property claims being asserted against it grows. Further, the Company may acquire or introduce new technology offerings, which may increase the Company's exposure to patent and other intellectual property claims. Any intellectual property claims asserted against the Company, whether or not having any merit, could be time-consuming and expensive to settle or litigate. If the Company is unsuccessful in defending such a claim, it may be required to pay substantial damages or could be subject to an injunction or agree to a settlement that may prevent it from using its intellectual property or making its offerings available to customers. Some intellectual property claims may require the Company to seek a license to continue its operations, and those licenses may not be available on commercially reasonable terms or may significantly increase the Company's operating expenses. If the Company is unable to procure a license, it may be required to develop non-infringing technological alternatives, which could require significant time and expense. Any of these events could adversely affect the Company's business, financial condition, or operations.

***A delay or failure to identify and devise, invest in and implement certain important technology, business, and other initiatives could have a material impact on the Company's business, financial condition and results of operations.***

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

The Company's business and the aircraft the Company operates are characterized by changing technology, introductions and enhancements of models of aircraft and services and shifting customer demands, including technology preferences. The Company's future growth and financial performance will depend in part upon its ability to develop, market and integrate new services and to accommodate the latest technological advances and customer preferences. In addition, the introduction of new technologies or services that compete with the Company's product and services could result in its revenues decreasing over time. If the Company is unable to upgrade its operations or fleet with the latest technological advances in a timely manner, or at all, its business, financial condition and results of operations could suffer.

***The Company is dependent on its information systems which may be vulnerable to cyber-attacks or other events.***

The Company's operations are dependent on its information systems and the information collected, processed, stored, and handled by these systems. The Company relies heavily on its computer systems to manage its client account balances, booking, pricing, processing and other processes. The Company receives, retains and transmits certain confidential information, including personally identifiable information that its clients provide. In addition, for these operations, the Company depends in part on the secure transmission of confidential information over public networks to charter operators. The Company's information systems are subject to damage or interruption from power outages, facility damage, computer and telecommunications failures, computer viruses, security breaches, including credit card or personally identifiable information breaches, coordinated cyber-attacks, vandalism, catastrophic events and human error. If the Company's platform is hacked, these funds could be at risk of being stolen which would damage the Company's reputation and likely its business. Any significant disruption or cyber-attacks on the Company's information systems, particularly those involving confidential information being accessed, obtained, damaged, or used by unauthorized or improper persons, could harm the Company's reputation and expose it to regulatory or legal actions and adversely affect its business and its financial results.

***Because the Company's software could be used to collect and store personal information, privacy concerns in the territories in which the Company operates could result in additional costs and liabilities to the Company or inhibit sales of its software.***

The regulatory framework for privacy issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Many government bodies and agencies have adopted or are considering adopting laws and regulations regarding the collection, use, storage and disclosure of personal information and breach notification procedures. The Company is also required to comply with laws, rules and regulations relating to data security. Interpretation of these laws, rules and regulations and their application to the Company's software and services in applicable jurisdictions is ongoing and cannot be fully determined at this time.

In the United States, these include rules and regulations promulgated under the authority of the Federal Trade Commission, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the California Consumer Privacy Act of 2018 (the "CCPA") and other state and federal laws relating to privacy and data security. By way of example, the CCPA requires covered businesses to provide new disclosures to California residents, provide them new ways to opt-out of certain disclosures of personal information, and allows for a new cause of action for data breaches. It includes a framework that includes potential statutory damages and private rights of action. There is some uncertainty as to how the CCPA, and similar privacy laws emerging in other states, could impact the Company's business as it depends on how such laws will be interpreted. As the Company expands its operations, compliance with privacy laws may increase its operating costs.

***Jet.AI is subject to risks related to taxation in the United States.***

Significant judgments based on interpretations of existing tax laws or regulations are required in determining Jet.AI's provision for income taxes. Jet.AI's effective income tax rate could be adversely affected by various factors, including, but not limited to, changes in the mix of earnings in tax jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in existing tax policies, laws, regulations or rates, changes in the level of non-deductible expenses (including share-based compensation), changes in the location of Jet.AI's operations, changes in Jet.AI's future levels of research and development spending, mergers and acquisitions or the results of examinations by various tax authorities. Although Jet.AI believes its tax estimates are reasonable, if the IRS or any other taxing authority disagrees with the positions taken on its tax returns, Jet.AI could have additional tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes could have a material impact on our results of operations and financial position.

***Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect Jet.AI's business and future profitability.***

Jet.AI is a U.S. corporation and thus subject to U.S. corporate income tax on its worldwide income. Further, since Jet.AI's operations and customers are located throughout the United States, Jet.AI is subject to various U.S. state and local taxes. U.S. federal, state, local and non-U.S. tax laws, policies, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to Jet.AI and may have an adverse effect on its business and future profitability.

For example, several tax proposals have been set forth that would, if enacted, make significant changes to U.S. tax laws. Such proposals include an increase in the U.S. income tax rate applicable to corporations (such as Jet.AI) from 21% to 28%. Congress may consider, and could include, some or all of these proposals in connection with tax reform that may be undertaken. It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect. The passage of any legislation as a result of these proposals and other similar changes in U.S. federal income tax laws could adversely affect Jet.AI's business and future profitability.

***In the event that Jet.AI's business expands domestically or internationally, including to jurisdictions in which tax laws may not be favorable, its obligations may change or fluctuate, become significantly more complex or become subject to greater risk of examination by taxing authorities, any of which could adversely affect Jet.AI's after-tax profitability and financial results.***

In the event that Jet.AI's business expands domestically or internationally, its effective tax rates may fluctuate widely in the future. Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under U.S. GAAP, changes in deferred tax assets and liabilities, or changes in tax laws. Factors that could materially affect Jet.AI's future effective tax rates include, but are not limited to: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards or practices, (c) changes in the composition of operating income by tax jurisdiction and (d) pre-tax operating results of Jet.AI's business.

Additionally, Jet.AI may be subject to significant income, withholding, and other tax obligations in the United States and may become subject to taxation in numerous additional U.S. state and local and non-U.S. jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions. Jet.AI's after-tax profitability and financial results could be subject to volatility or be affected by numerous factors, including (a) the availability of tax deductions, credits, exemptions, refunds and other benefits to reduce tax liabilities, (b) changes in the valuation of deferred tax assets and liabilities, if any, (c) the expected timing and amount of the release of any tax valuation allowances, (d) the tax treatment of stock-based compensation, (e) changes in the relative amount of earnings subject to tax in the various jurisdictions, (f) the potential business expansion into, or otherwise becoming subject to tax in, additional jurisdictions, (g) changes to existing intercompany structure (and any costs related thereto) and business operations, (h) the extent of intercompany transactions and the extent to which taxing authorities in relevant jurisdictions respect those intercompany transactions, and (i) the ability to structure business operations in an efficient and competitive manner. Outcomes from audits or examinations by taxing authorities could have an adverse effect on Jet.AI's after-tax profitability and financial condition. Additionally, the IRS and several foreign tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles. Tax authorities could disagree with Jet.AI's intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If Jet.AI does not prevail in any such disagreements, Jet.AI's profitability may be affected.

Jet.AI's after-tax profitability and financial results may also be adversely affected by changes in relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect.

***Jet.AI's ability to utilize its net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations.***

In general, under Section 382 of the Code, a corporation that undergoes an "ownership change" is subject to limitations on its ability to use its pre-change net operating loss carryforwards ("NOLs") to offset future taxable income. The limitations apply if a corporation undergoes an "ownership change," which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three year period. If the Company has experienced an ownership change at any time since its incorporation, Jet.AI may be subject to limitations on its ability to utilize its existing NOLs and other tax attributes to offset taxable income or tax liability. In addition, future changes in Jet.AI's stock ownership, which may be outside of Jet.AI's control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit Jet.AI's use of accumulated state tax attributes. As a result, even if Jet.AI earns net taxable income in the future, its ability to use its pre-change NOL carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to Jet.AI.

***Jet.AI's sole material asset is its direct and indirect interests in its subsidiaries and, accordingly, Jet.AI is dependent upon distributions from its subsidiaries to pay taxes and cover its corporate and other overhead expenses and pay dividends, if any, on the Jet.AI common stock.***

Jet.AI is a holding company and it has no material assets other than its direct and indirect equity interests in its subsidiaries. Jet.AI has no independent means of generating revenue. To the extent Jet.AI's subsidiaries have available cash, Jet.AI will cause its subsidiaries to make distributions of cash to pay taxes, cover Jet.AI's corporate and other overhead expenses and pay dividends, if any, on the common stock. To the extent that Jet.AI needs funds and its subsidiaries fail to generate sufficient cash flow to distribute funds to Jet.AI or are restricted from making such distributions or payments under applicable law or regulation or under the terms of their financing arrangements, or are otherwise unable to provide such funds, Jet.AI's liquidity and financial condition could be materially adversely affected.

**Risks Related to the Company's Charter Business Operating Environment**

***Demand for the Company's services may decline due to factors beyond its control.***

Demand for private jet charters may be negatively impacted by factors affecting air travel generally, such as adverse weather conditions, an outbreak of a contagious disease and other natural events, terrorism and increased security screening requirements.

In particular, the recurrence of a pandemic, whether COVID-19 or otherwise, may result in a decline in air travel. Additionally, the reimposition of travel restrictions and other measures intended to contain the spread of any such virus may contribute to a decline in demand for air travel. If travel remains in a general decline for a significant period of time, the Company may be unable to compete with more established operators and may not be able to achieve profitability in the medium term or at all.

More broadly, business jet travel is highly correlated to the performance of the economy, and an economic downturn, such as the current economic environment, which has been adversely affected by high rates of inflation, increasing interest rates, and low consumer sentiment, is likely to have a direct impact on the use of business jets. The Company's customers may consider private air travel through its products and services to be a luxury item, especially when compared to commercial air travel. As a result, any economic downturn which has an adverse effect on the Company's customers' spending habits could cause them to travel less frequently and, to the extent they travel, to travel using commercial air carriers or other means considered to be more economical than the Company's products and services. For example, beginning in 2008 and in connection with weakened macroeconomic conditions, the corporate and executive jet aviation industry, and companies that utilize corporate jets, experienced intensified political and media scrutiny.

Any of these factors that cause the demand for private jet travel to decline may also result in delays that could reduce the attractiveness of private air charter travel versus other means of transportation, particularly for shorter distance travel, which represents our primary market currently. Delays also frustrate passengers, affecting the Company's reputation and potentially reducing fleet utilization and charter bookings as a result of flight cancellations and increase costs. The Company may experience decreased demand, as well as a loss of reputation, in the event of an accident involving one of its aircraft or an aircraft booked through our platform or any actual or alleged misuse of its platform or aircraft by customers in violation of law. Demand for the Company's product and services may also decline due to actions that increase the cost of private air charter travel versus other forms of transportation, particularly efforts aimed at addressing climate change such as carbon tax initiatives or other actions. Any of the foregoing circumstances or events which reduced the demand for private jet charters could negatively impact the Company's ability to establish its business and achieve profitability.

***The Company faces a high level of competition with numerous market participants with greater financial resources and operating experience.***

The private air travel industry is extraordinarily competitive. Factors that affect competition in this industry include price, reliability, safety, regulations, professional reputation, aircraft availability, equipment and quality, consistency and ease of service, willingness and ability to serve specific airports or regions, and investment requirements. The Company competes against private jet charter and fractional jet companies as well as business jet charter companies. Both the private jet charter companies and the business jet charter companies have numerous competitive advantages that enable them to attract customers. Jet.AI's access to a smaller aircraft fleet and regional focus puts it at a competitive disadvantage, particularly with respect to its appeal to business travelers who want to travel overseas.

The fractional private jet companies and many of the business jet charter companies have access to larger fleets of aircraft and have greater financial resources, which would permit them to more effectively service customers. Due to the Company's relatively small size, it is more susceptible to their competitive activities, which could prevent the Company from attaining the level of sales required to sustain profitable operations.

Recent consolidation in the industry, such as VistaJet's acquisitions of XOJET and JetSmarter and Wheels Up's acquisition of Delta Private Jets as well as Gama Aviation, a business jet services company, and increased consolidation in the future could further intensify the competitive environment the Company faces.

There can be no assurance that the Company's competitors will not be successful in capturing a share of our present or potential customer base. The materialization of any of these risks could adversely affect the Company's business, financial condition and results of operations.

***Aviation businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions; air traffic control inefficiencies; natural disasters; adverse weather conditions, such as hurricanes or blizzards; increased and changing security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; or the outbreak of disease; any of which could have a material adverse effect on the Company's business, results of operations and financial condition.***

Like other aviation companies, the Company's business is affected by factors beyond its control, including air traffic congestion at airports, airport slot restrictions, air traffic control inefficiencies, natural disasters, adverse weather conditions, increased and changing security measures, changing regulatory and governmental requirements, new or changing travel-related taxes, or the outbreak of disease. Factors that cause flight delays frustrate passengers and increase operating costs and decrease revenues, which in turn could adversely affect profitability. In the United States, the federal government singularly controls all U.S. airspace, and aviation operators are completely dependent on the FAA to operate that airspace in a safe, efficient and affordable manner. The air traffic control system, which is operated by the FAA, faces challenges in managing the growing demand for U.S. air travel. U.S. air-traffic controllers often rely on outdated technologies that routinely overwhelm the system and compel aviation operators to fly inefficient, indirect routes resulting in delays and increased operational cost. In addition, there are currently proposals before Congress that could potentially lead to the privatization of the United States' air traffic control system, which could adversely affect the Company's business.

Adverse weather conditions and natural disasters, such as hurricanes, winter snowstorms or earthquakes, can cause flight cancellations or significant delays. Cancellations or delays due to adverse weather conditions or natural disasters, air traffic control problems or inefficiencies, breaches in security or other factors may affect the Company to a greater degree than its competitors who may be able to recover more quickly from these events, and therefore could have a material adverse effect on the Company's business, results of operations and financial condition to a greater degree than other air carriers. Any general reduction in passenger traffic could have a material adverse effect on the Company's business, results of operations and financial condition.

***The operation of aircraft is subject to various risks, and failure to maintain an acceptable safety record may have an adverse impact on our ability to obtain and retain customers.***

The operation of aircraft is subject to various risks, including catastrophic disasters, crashes, mechanical failures and collisions, which may result in loss of life, personal injury and/or damage to property and equipment. The Company may experience accidents in the future. These risks could endanger the safety of its customers, personnel, third parties, equipment, cargo and other property (both the Company's and that of third parties), as well as the environment. If any of these events were to occur, the Company could experience loss of revenue, termination of customer contracts, higher insurance rates, litigation, regulatory investigations and enforcement actions (including potential grounding of the Company's fleet and suspension or revocation of its operating authorities) and damage to its reputation and customer relationships. In addition, to the extent an accident occurs with an aircraft the Company operates or charters, the Company could be held liable for resulting damages, which may involve claims from injured passengers and survivors of deceased passengers. There can be no assurance that the amount of the Company's insurance coverage available in the event of such losses would be adequate to cover such losses, or that the Company would not be forced to bear substantial losses from such events, regardless of its insurance coverage.

Moreover, any aircraft accident or incident, even if fully insured, and whether involving the Company or other private aircraft operators, could create a public perception that the Company is less safe or reliable than other private aircraft operators, which could cause customers to lose confidence and switch to other private aircraft operators or other means of transportation. In addition, any aircraft accident or incident, whether involving the Company or other private aircraft operators, could also affect the public's view of industry safety, which may reduce the amount of trust by customers.

The Company incurs considerable costs through the monthly management fee paid to Cirrus to maintain the quality of its (i) safety program, (ii) training programs and (iii) fleet of aircraft. The Company cannot guarantee that these costs will not increase. Likewise, the Company cannot guarantee that its efforts will provide an adequate level of safety or an acceptable safety record. If the Company is unable to maintain an acceptable safety record, the Company may not be able to retain existing customers or attract new customers, which could have a material adverse effect on its business, financial condition and results of operations.

***The supply of pilots to the airline industry is limited and may negatively affect the Company's operations and financial condition. Increases in labor costs may adversely affect the Company's business, results of operations and financial condition.***

The pilots that fly aircraft on behalf of the Company are subject to stringent pilot qualification and crew member flight training standards, which among other things require minimum flight time for pilots and mandate strict rules to minimize pilot fatigue. The existence of such requirements effectively limits the supply of qualified pilot candidates and increases pilot salaries and related labor costs. A shortage of pilots would require the Company to further increase its labor costs, which would result in a material reduction in its earnings. Such requirements also impact pilot scheduling, work hours and the number of pilots required for the Company's operations.

In addition, the Company's operations and financial condition may be negatively impacted if pilots are not able to be trained in a timely manner. Due to an industry-wide shortage of qualified pilots, driven by the flight hours requirements under the FAA qualification standards and attrition resulting from the hiring needs of other industry participants, pilot training timelines have significantly increased and stressed the availability of flight simulators, instructors and related training equipment. As a result, the training of pilots may not be accomplished in a cost-efficient manner or in a manner timely enough to support the Company's operational needs.

***Pilot attrition may negatively affect the Company's operations and financial condition.***

In recent years, the Company has observed significant volatility in pilot attrition as a result of pilot wage and bonus increases at other industry participants and the growth of cargo, low-cost and ultra-low-cost airlines. If attrition rates are higher than the availability of replacement pilots, the Company's operations and financial results could be materially and adversely affected.

***The Company is exposed to operational disruptions due to maintenance.***

The Company's fleet requires regular maintenance work, which may cause operational disruption. The inability to perform timely maintenance and repairs can result in the Company's aircraft being underutilized which could have an adverse impact on its business, financial condition and results of operations. On occasion, airframe manufacturers and/or regulatory authorities require mandatory or recommended modifications to be made across a particular fleet which may mean having to ground a particular type of aircraft. This may cause operational disruption to and impose significant costs on the Company. Moreover, as the Company's aircraft base increases, maintenance costs could potentially increase.

***Significant increases in fuel costs could have a material adverse effect on the Company's business, financial condition and results of operations.***

Fuel is essential to the operation of the Company's aircraft and to the Company's ability to carry out its transport services. Fuel costs are a key component of the Company's operating expenses. A significant increase in fuel costs may negatively impact the Company's revenue, margins, operating expenses and results of operations. While the Company may be able to pass increases in fuel costs on to its customers, increased fuel surcharges may affect the Company's revenue and retention if a prolonged period of high fuel costs occurs. To the extent there is a significant increase in fuel costs that affects the amount the Company's customers choose to fly, it may have a material adverse effect on the Company's business, financial condition and results of operations.

***If efforts to continue to build a strong brand identity and improve member satisfaction and loyalty are not successful, the Company may not be able to attract or retain members, and its operating results may be adversely affected.***

The Company must continue to build and maintain strong brand identity for its products and services, which have expanded over time. The Company believes that strong brand identity will continue to be important in attracting members. If the Company's efforts to promote and maintain its brand are not successful, the Company's operating results and our ability to attract members and other customers may be adversely affected. From time to time, the Company's members and other customers may express dissatisfaction with its products and service offerings, in part due to factors that could be outside of the Company's control, such as the timing and availability of aircraft and service interruptions driven by prevailing political, regulatory, or natural conditions. To the extent dissatisfaction with the Company's products and services is widespread or not adequately addressed, the Company's brand may be adversely impacted and its ability to attract and retain members may be adversely affected. With respect to the Company's planned expansion into additional markets, the Company will also need to establish its brand and to the extent it is not successful, the Company's business in new markets would be adversely impacted.

***Any failure to offer high-quality customer support may harm the Company's relationships with its customers and could adversely affect the Company's reputation, brand, business, financial condition and results of operations.***

Through the Company's marketing, advertising, and communications with its customers, the Company sets the tone for its brand as aspirational but also within reach. The Company's strives to create high levels of customer satisfaction through the experience provided by its team and representatives. The ease and reliability of its offerings, including its ability to provide high-quality customer support, helps the Company attract and retain customers. The Company's ability to provide effective and timely support is largely dependent on its ability to attract and retain skilled employees who can support the Company's customers and are sufficiently knowledgeable about the Company's product and services. As the Company continues to grow its business and improve its platform, it will face challenges related to providing quality support at an increased scale. Any failure to provide efficient customer support, or a market perception that the Company does not maintain high-quality support, could adversely affect the Company's reputation, brand, business, financial condition and results of operations.

***The demand for the Company's services is subject to seasonal fluctuations.***

Demand for the Company's services will fluctuate over the course of the year and is higher in the summer season and during holiday periods. During periods of higher demand, the Company's ability to provide agreed upon levels of service to its customers may deteriorate, which could have a negative impact on the Company's reputation and its ability to succeed.

***Changes in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results of operations.***

We are subject to laws and regulations enacted by national, regional and local governments. The Company's business is subject to significant regulation by the FAA, the TSA as well as "know your customer" obligations and other laws and regulations. The laws and regulations concerning the selling of the Company's product or services may change and if they do then the selling of the Company's product or service may no longer be possible or profitable. In addition, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and our results of operations.

***The Company's failure to attract and retain highly qualified personnel in the future could harm its business.***

The Company believes that its future success will depend in large part on its ability to retain or attract highly qualified management, technical and other personnel. The Company may not be successful in retaining key personnel or in attracting other highly qualified personnel. If the Company is unable to retain or attract significant numbers of qualified management and other personnel, the Company may not be able to grow and expand its business.

**Risks Relating to the flyExclusive Transactions and Jet.AI after the Closing of the Transactions**

***The proposed Transactions with flyExclusive may not be completed on the terms or timeline currently contemplated, or at all.***

The consummation of the proposed Transactions is subject to numerous conditions, including (1) the effectiveness of the registration statement on Form S-4 filed by flyExclusive with the SEC in connection with the Transactions, (2) the approval by Jet.AI's stockholders of the Transactions, and (3) other customary closing conditions and there can be no assurance that the Transactions will be consummated. If the Transactions are not completed for any reason, the price of Jet.AI's common stock may decline to the extent that the market price of Jet.AI's common stock reflects or previously reflected positive market assumptions that the Transactions would be completed, and the related benefits would be realized. In addition, Jet.AI has expended and will continue to expend significant management time and resources and have incurred and will continue to incur significant expenses due to legal, advisory, printing and financial services fees related to the Transactions. These expenses must be paid regardless of whether the Transactions are consummated.

***In the proposed Transactions with flyExclusive Jet.AI will divest substantially all of its fractional and jet card business and related assets, together with associated working capital and thereafter adopt a business strategy that focuses on expanding its AI operations. Any or all of these decisions if incorrect may have a material adverse effect on the results of Jet.AI's operations, financial position and cash flows, and pose further risks to the successful operation of Jet.AI's business over the short and long-term.***

There are substantial risks associated with divesting a portion of our legacy assets and operations in the proposed Transactions with flyExclusive and thereafter focusing primarily upon on opportunities in the AI sector, including the loss of working capital and the loss of revenue associated with divesting our aviation centric assets. After the proposed Transactions are consummated, Jet.AI management expects the company to focus on opportunities in the AI sector, or that are complementary to that sector, and leverage Jet.AI's remaining assets in that process. While Jet.AI management has experience in the software development and artificial intelligence sectors (including from its existing booking platform and iOS Apps (such as CharterGPT)) there is no guarantee that Jet.AI's chosen strategy will be successful. Further, Jet.AI's business operations after the Transactions will be significantly dependent on its ability to further penetrate the AI sector and identify and execute upon business opportunities that are complementary to that sector, and the future market acceptance and sale of its existing or new AI focused applications, and implementing its business model, which, in some cases are neither fully developed nor in qualification stages. There can be no assurance that Jet.AI will be successful in addressing these or any other significant risks it may encounter after the divestment of certain assets to flyExclusive or the expansion of its AI focused strategy.

***The AI sector in which Jet.AI expects to primarily focus after the Transactions is subject to significant risks, including rapid growth and volatility, capital requirements, dependence on rapidly changing underling technologies, market and political risks and uncertainties and extreme competition. Jet.AI cannot guarantee that it will be able to anticipate or overcome any or all of these risks and uncertainties, especially as a small company operating in an environment that includes many large, well-capitalized competitors with substantially more resources.***

Developing and then commercializing AI focused technologies, services and products is subject to significant barriers to entry and operational fluctuations. In order to become and then remain competitive, Jet.AI will incur substantial costs associated with research and development, qualification, prototype production capacity and sales and marketing activities in connection with its products and services. Jet.AI may also need to acquire new assets, or enter new agreements, to facilitate its entry into certain opportunities in the greater AI sector. In addition, the rapidly changing industry, the length of time between developing and introducing a product to market, frequent changing customer (or market driven) specifications for apps and products, customer cancellations of products and general down cycles in the industry, among other things, make our future prospects difficult to evaluate. As a result of these factors, it is possible that we may not (i) generate sufficient positive cash flow from operations; (ii) raise funds through the issuance of equity, equity-linked or convertible debt securities; or (iii) otherwise have sufficient capital resources to meet our future capital or liquidity needs. There are no guarantees Jet.AI will be able to generate additional financial resources beyond its existing balances.

***Jet.AI may not achieve some or all of the expected benefits of the Transactions, and the Transactions may adversely impact Jet.AI's business.***

Jet.AI may not realize the strategic, financial, operational or other benefits from the Transactions it hopes to achieve. Jet.AI is seeking to divest certain assets and operations that have historically operated at a net loss, and thereafter primarily focus on the AI sector while leveraging its remaining intellectual property and software assets and expertise. Jet.AI cannot predict with certainty if or when anticipated benefits from the Transactions will occur or the extent to which they will be achieved. Following the completion of the Transactions Jet.AI's operational and financial profile will change, and it will face new risks. Following the completion of the Transactions, Jet.AI will initially be a smaller and less-diversified company compared to Jet.AI prior to the Transactions, and, may be more vulnerable to changing market conditions. The business opportunities that Jet.AI expects to pursue will likely require it to identify and execute on additional sources of liquidity and are in industries or business sectors where Jet.AI faces barriers to entry and competition. While Jet.AI believes that the Transactions will allow Jet.AI to focus on business opportunities that it can more readily scale and capitalize on, and, will help position Jet.AI to capitalize on its remaining assets and pursue other business opportunities in high growth industries, Jet.AI cannot assure you that following the Transactions it will be able to successfully identify any such opportunities or effect and capitalize on those business opportunities.

***Particularly after the Transactions Jet.AI's success will be dependent on its ability to successfully develop new services, platforms and solutions that utilize AI and enhance or complement its existing services, platforms and solutions, and market acceptance of these offerings.***

Although Jet.AI will retain various of its software and intellectual property assets after the Transactions and continue to offer its existing apps that utilize AI, the software and AI industries are characterized by rapid technological change, evolving industry standards, changing customer preferences, new product and service introductions and the emergence of new developers and vendors with lean cost and flexible cost models. Jet.AI's future success will depend on its ability to successfully develop services, platforms and solutions that utilize AI that build upon or differ from its legacy aircraft fractional, jet card and management operations and keep pace with changes in Jet.AI's addressable markets, and the acceptance of these services, platforms and solutions by existing and target customers. Jet.AI cannot guarantee that it will be successful in developing new applications, services, platforms and solutions, addressing evolving technologies on a timely or cost-effective basis or, if these services, platforms and solutions are developed, that Jet.AI will be successful in the marketplace. Jet.AI also cannot guarantee that it will be able to compete effectively with new developers or vendors offering lean cost and flexible cost models, or that products, services or technologies developed by others will not render our services, platforms and solutions non-competitive or obsolete. Jet.AI's failure to address these developments could have a material adverse effect on our business, results of operations and financial condition.

***The Transactions could give rise to disputes or other unfavorable effects, which could materially and adversely affect Jet.AI's business, financial position or results of operations.***

After the Transactions Jet.AI will have decreased working capital and will have divested certain of its revenue producing assets and operations. However, Jet.AI will continue to own and operate certain other of its legacy assets and continue to have operational expenses and overhead (including the costs and expenses associated with being a publicly reporting company with a class of securities listed on Nasdaq), of both a nonrecurring and a recurring nature, and certain of these expenses and costs are related to arrangements made between Jet.AI and certain of its existing vendors and strategic partners. Disputes with third parties could also arise out of these transactions, and Jet.AI could experience unfavorable reactions to any separation from employees, financing partners or other interested parties. These increased expenses, changes to operations, disputes with third parties or other effects could materially and adversely affect Jet.AI's business, financial position or results of operations.

**Risks Relating to Ownership of Jet.AI Securities**

***The Company has never paid cash dividends on its capital stock, and Jet.AI does not anticipate paying dividends in the foreseeable future.***

The Company has never paid cash dividends on its capital stock and currently intends to retain any future earnings to fund the growth of its business, other than mandatory dividend payments on its preferred stock, subject to Delaware law. Any determination to pay dividends in the future will be at the discretion of the board of directors and will depend on Jet.AI's financial condition, operating results, capital requirements, general business conditions and other factors that the board of directors may deem relevant. As a result, capital appreciation, if any, of Jet.AI's common stock will be the sole source of gain for the foreseeable future.

***The Company's stock price may be volatile, and you may not be able to sell shares at or above the price at which you purchase shares.***

Fluctuations in the price of the common stock could contribute to the loss of all or part of your investment. If an active market for our securities develops and continues, the trading price of common stock could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.

Factors affecting the trading price of our common stock may include:

● the realization of any of the risk factors presented in this prospectus;

● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to Jet.AI;

● failure to meet or exceed financial estimates and projections of the investment community or that Jet.AI provides to the public;

● issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general;

● announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations, financings, or capital commitments;

● the volume of shares of common stock available for public sale;

● operating and stock price performance of other companies that investors deem comparable to Jet.AI;

● Jet.AI's ability to market new and enhanced products and technologies on a timely basis;

● changes in laws and regulations affecting Jet.AI's business;

● Jet.AI's ability to meet compliance requirements;

● commencement of, or involvement in, litigation involving Jet.AI;

● changes in financial estimates and recommendations by securities analysts concerning Jet.AI or the market in general;

● the timing and magnitude of investments in the growth of the business;

● actual or anticipated changes in laws and regulations;

● additions or departures of key management or other personnel;

● increased labor costs;

● disputes or other developments related to intellectual property or other proprietary rights, including litigation;

● the ability to market new and enhanced solutions on a timely basis;

● sales of substantial amounts of the Jet.AI common stock by Jet.AI's directors, executive officers, significant stockholders or the perception that such sales could occur, including as a result of transactions under the Share Purchase Agreement and the Forward Purchase Agreement;

● trading volume of our common stock, including as a result of transactions under the Share Purchase Agreement and the Forward Purchase Agreement;

● changes in capital structure, including future issuances of securities or the incurrence of debt and the terms thereof; and

● general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and Nasdaq have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to Jet.AI could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of Jet.AI's securities also could adversely affect its ability to issue additional securities and its ability to obtain additional financing in the future.

***Anti-takeover provisions contained in the Company's Certificate of Incorporation and applicable laws could impair a takeover attempt.***

The Company's Certificate of Incorporation afford certain rights and powers to the board of directors that could contribute to the delay or prevention of an acquisition that it deems undesirable. Any of the foregoing provisions and terms that have the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of our securities, and could also affect the price that some investors are willing to pay for our securities.

***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 The Nasdaq Capital Market under the symbol "JTAI". On December 1, 2023, the Company received a notification letter (the "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 Company's stockholders' equity as of December 31, 2024 was $6,512,460. The Letter also noted that as of September 30, 2023, the Company does not meet The Nasdaq Global Market alternative listing criteria for the Market Value standard or the Total Assets / Total Revenues standard. The Letter further noted that the Company may consider applying to transfer the Company's securities to The Nasdaq Capital Market (the "Capital Market"), which would require the Company to, among other things, meet the Capital Market's continued listing requirements, and later in 2024 the Company received various notices from Nasdaq that the Company was not in compliance with certain listing standards, including Nasdaq's minimum stockholders' equity requirement and its minimum bid price requirement. As a result of a reverse-stock split effected in November 2024 and other financing transactions that occurred during fiscal 2024, on November 26, 2024, the Company received a letter from Nasdaq stating that the Company regained compliance with both the Minimum Stockholders' Equity Requirement and the Minimum Bid Price Requirement. However, pursuant to Nasdaq Listing Rule 5815(d)(4)(B), the Company is subject to a Mandatory Panel Monitor until November 26, 2025. If, within that time period Nasdaq finds the Company again out of compliance with the Nasdaq listing rules related to stockholders' equity the Company would not be permitted to provide Nasdaq with a plan of compliance with respect to that deficiency and Nasdaq would not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor would the Company be afforded an applicable cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, Nasdaq would issue a Delist Determination Letter and the Company would have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel were unavailable. The Company would have the opportunity to respond/present to the Hearings Panel as provided by Nasdaq listing rules. The Company's securities could at that time be delisted from Nasdaq.

In order to continue listing its securities on Nasdaq, the Company is required to maintain certain financial, distribution and stock price levels. We cannot assure you that the Company will be able to continue to meet those listing requirements. If Nasdaq were to delist the Company's Common Stock from trading on its exchange and the Company is not able to list its securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

● a limited availability of market quotations for our securities;

● reduced liquidity for our securities;

● a determination that the Common Stock is a "penny stock" which will require brokers trading in Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

● a limited amount of news and analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as "covered securities." Since the Company's Common Stock is listed on Nasdaq, it is a covered security. Although the states are preempted from regulating the sale of its securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if the Company was no longer listed on a securities exchange, its securities would not be covered securities and it would be subject to regulation in each state in which it offers its securities.

***Stockholders may experience dilution of their ownership interest due to the issuance of additional shares of common stock upon the conversion of the Series B Preferred Stock, especially since the Series B Preferred Stock has fluctuating conversion rates that are set at a discount to market prices of our shares of common stock during the period immediately following conversion***.

Starting in October 2024, and through the date of this prospectus, 711 shares of Series B preferred Stock have been converted in full. Those conversions, in total, resulted in the issuance of 2,079,261 shares of common stock (as adjusted to give effect to the reverse stock split). Additional conversions of Series B Preferred Stock could result in material dilution to existing stockholders of the Company. Because the conversion price is based upon the trading prices of our shares at the time of conversion, the number of shares into which the Series B Preferred Stock may be converted may increase without an upper bound. If the trading prices of our shares are low when the conversion price of the convertible debt is determined, we would be required to issue a greater number of shares to the converting holder, which could cause substantial dilution to our stockholders. In addition, if any or all of the holders Series B Preferred Stock convert and then sell our common stock, this could result in an imbalance of supply and demand for our common stock and reduce our stock price significantly. The further our stock price declines, the further the adjustment of the conversion price will fall and the greater the number of shares we will have to issue upon conversion, resulting in further dilution to our stockholders. Because a market price-based conversion formula can lead to dramatic stock price reductions and corresponding negative effects on both a company and its stockholders, convertible security financings with market price-based conversion ratios have colloquially been called "floorless," "toxic," and "death spiral," convertibles.

***The issuances of additional shares of Jet.AI common stock under the Share Purchase Agreement and the GEM Warrant may result in dilution of future Jet.AI stockholders and have a negative impact on the market price of Jet.AI common stock.***

The proceeds from the Business Combination, Forward Purchase Agreement and our existing cash and cash equivalents may not be sufficient to meet our working capital needs and we may draw on the Share Purchase Agreement to meet our cash needs. Further, our estimates may prove to be inaccurate, and we could spend our capital resources faster than we currently expect. Changing circumstances, some of which may be beyond our control, could also cause us to spend capital significantly faster than we currently anticipate, and we may need to seek additional funding sooner than planned. To the extent this occurs, it could impose significant dilution on the Company's stockholders.

In addition to shares to be sold to GEM upon a drawdown, the Share Purchase Agreement entitled GEM to receive (i) payment of a commitment fee of $800,000, which the Company elected to pay in shares of common stock and (ii) the GEM Warrant. The shares issuable pursuant to the GEM Warrant were calculated on a fully diluted basis as of the closing of the Business Combination. The GEM Warrant grants it the right to purchase up to 9,686 shares of common stock of the Company on a fully diluted basis.

Because the average closing price of Jet.AI's common stock for the 10 trading days following the first anniversary of the date of listing was less than 90% of the then current exercise price of the GEM Warrant, the exercise price of the GEM Warrant was adjusted to 110% of our then current trading price. Accordingly, the warrant exercise price was reduced to $14.12 per share as of December 31, 2024.

The issuances of common stock pursuant to the GEM Warrant and the Share Purchase Agreement would result in dilution of future Jet.AI stockholders and could have a negative impact on the market price of common stock and Jet.AI's ability to obtain additional financing. See "*Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Overview – Share Purchase Agreement*" for a description of the GEM Warrant.

***Certain existing stockholders purchased our securities at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price.***

Given the relatively lower purchase prices that some of our stockholders paid to acquire some of their securities compared to the current trading price of our shares of common stock, these stockholders in some instances may earn a positive rate of return on their investment, which may be a significant positive rate of return, depending on the market price of our shares of common stock at the time that such stockholders choose to sell their shares of common stock.

Such stockholders may be incentivized to sell their securities at prices below the prevailing trading price because the prices at which they acquired their shares may be lower than prevailing market prices and/or the prices at which public investors purchased our securities in the open market, and therefore such stockholders may generate positive rates of return on their investment that would not be available to public stockholders that acquired their securities at higher prices.

Public stockholders may not be able to experience the same positive rates of return on securities they purchase due to the low price at which some of our stockholders acquired shares of our common stock or the prices at which GEM may receive shares at the time of a drawdown under the Share Purchase Agreement.

***Sales of Jet.AI common stock, or the perception of such sales, by us or our significant stockholders in the public market or otherwise could cause the market price for Jet.AI common stock to decline.***

The sale of shares of common stock in the public market or otherwise, particularly sales by our officers or directors, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that is deemed appropriate. Resales of common stock may cause the market price of our securities to drop significantly, even if our business is doing well.

We have an effective registration statement covering the resale of up to 1,270,000 shares of common stock held by, or available upon exercise of warrants or other convertible securities by, certain of our stockholders, as well as the issuance by us of shares of common stock upon exercise of our outstanding warrants. Given the substantial number of shares of common stock registered for potential resale by these stockholders, the sale of shares by them, or the perception in the market that they intend to sell shares, could increase the volatility of the market price of our common stock or result in a significant decline in the public trading price of our common stock. Many of these stockholders have or may acquire their shares at a significant discount to the market price of our common stock. This will create an incentive for such stockholders to sell shares of our common stock because they purchased the shares at prices lower than the then-current trading price.

***The JOBS Act permits "emerging growth companies" like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.***

We qualify as an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including (a) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our shareholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year (i) following August 16, 2026, the fifth anniversary of the date of the first sale of common equity securities of the Company in a registered offering under the Securities Act, (ii) in which we have total annual gross revenue of at least $1.235 billion (as adjusted for inflation pursuant to SEC rules from time to time) or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our the shares of common stock that are held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

**Risks Related to This Offering**

***Resales of our shares of our common stock in the public market by investors in this offering may cause the market price of our shares of our common stock to fall.***

We are registering shares of Common Stock and shares of Common Stock (or Pre-Funded Warrants in lieu thereof) offered under this prospectus. Sales of a substantial number of shares of our Common Stock in the public market, or the perception that such sales might occur, could adversely affect the market price of our shares of Common Stock. The issuance of new shares of Common Stock in this offering or in the future could result in sales of shares of our Common Stock by our current stockholders concerned about the potential ownership dilution of their holdings. Furthermore, in the future, we may issue additional shares of Common Stock or other equity or debt securities exercisable or convertible into shares of Common Stock. Any such issuance could result in substantial dilution to our existing stockholders and could cause our stock price to decline.

 **

***This offering may cause the trading price of shares of our common stock to decrease.***

 **

The price per share, together with the number of shares of Common Stock being offered hereby, may result in an immediate decrease in the market price of our shares. This decrease may continue after the completion of this offering.

 **

***You may experience future dilution as a result of future equity offerings.***

 **

In order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our shares of our Common Stock that could result in further dilution to investors purchasing our securities in this offering or result in downward pressure on the price of our shares of Common Stock. We may sell shares of Common Stock or other securities in any other offering at prices that are higher or lower than the prices paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.

 **

***There is no public market for the Pre-Funded Warrants being offered in this offering.***

 **

There is no established public trading market for the Pre-Funded Warrants being offered in this offering, and we do not expect a market to develop. In addition, we do not intend to apply to list the Pre-Funded Warrants on any securities exchange or nationally recognized trading system, including Nasdaq. Without an active market, the liquidity of the Pre-Funded Warrants will be limited.

 ****

 **

***Except as set forth in the Pre-Funded Warrants, holders of the Pre-Funded Warrants will have no rights as holders of Common Stock until such warrants are exercised.***

 **

Except as set forth in the Pre-Funded Warrants, until you acquire shares of Common Stock upon exercise of your Pre-Funded Warrants, you will have no rights with respect to the shares of Common Stock issuable upon exercise of your Pre-Funded Warrants. Upon exercise of your Pre-Funded Warrants, you will be entitled to exercise the rights of a holder of shares only as to matters for which the record date occurs after the exercise date.

 **

***The Pre-Funded Warrants are speculative in nature.***

 **

The Pre-Funded Warrants offered hereby do not confer any rights of ownership of our shares of Common Stock, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a fixed price. Specifically, commencing on the date of issuance, holders of the Pre-Funded Warrants may acquire shares of Common Stock issuable upon exercise of such warrants at an exercise price of $[●] per share of Common Stock may acquire shares of Common Stock issuable upon exercise of such warrants at an exercise price of $[●] per share of Common Stock. Moreover, following this offering, the market value of the Pre-Funded Warrants is uncertain, and there can be no assurance that the market value of the Pre-Funded Warrants will equal or exceed the combined public offering price.

 **

***We will not receive any meaningful amount of additional funds upon the exercise of the Pre-Funded Warrants.***

 **

Each Pre-Funded Warrant will be exercisable until it is fully exercised and by means of payment of the nominal cash purchase price upon exercise. Accordingly, we will not receive any meaningful additional funds upon the exercise of the Pre-Funded Warrants.

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this prospectus, regarding the proposed the Company's future financial performance and the Company's strategy, expansion plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "intend," "believe," "estimate," "continue," "project," "strive," "might," "possible," "potential," "predict," or the negative of such terms or other similar expressions, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about the Company that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this prospectus. The Company cautions you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond the control of the Company.

In addition, the Company cautions you that the forward-looking statements regarding the Company, which are included in this prospectus, are subject to the following factors:

● the Company's ability to realize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably;

● the ability to maintain the listing of the Company's securities on Nasdaq;

● our public securities' potential liquidity and trading;

● our ability to raise financing in the future;

● the Company's success in retaining or recruiting, or changes in, its officers, key employees or directors;

● the impact of the regulatory environment and complexities with compliance related to such environment, including compliance with restrictions imposed by federal law on ownership of U.S. airlines;

● actors relating to the business, operations and financial performance of the Company (or any of its subsidiaries), including:

● the ability to anticipate the impact of the COVID-19 pandemic and its effect on business and financial conditions;

● changes in applicable laws or regulations;

● the risk that the Company may fail to effectively build scalable and robust processes to manage the growth of its business;

● the risk that demand for the Company's products and services may decline;

● high levels of competition faced by the Company with numerous market participants having greater financial resources and operating experience than the Company;

● the possibility that the Company's business may be adversely affected by changes in government regulations;

● the possibility that the Company may not be able to grow its client base;

● the failure to attract and retain highly qualified personnel;

● the inability to finance aircraft or generate sufficient funds;

● the possibility that the Company may not have enough capital and may be required to raise additional capital;

● data security breaches, cyber-attacks or other network outages;

● the volatility of the prices of blockchain currencies that the Company accepts as payment;

● our reliance on third parties;

● our inability to adequately protect our intellectual property interests or infringement on intellectual property interests of others;

● the possibility that the Company may be adversely affected by other economic, business or competitive factors; and

● other factors detailed in the section entitled "*Risk Factors*."

Should one or more of the risks or uncertainties described in this prospectus and in any document incorporated by reference in this prospectus materialize, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements.

You should read this prospectus with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

**USE OF PROCEEDS**

We estimate that the net proceeds to us from this offering will be approximately $[●] million, after deducting the underwriting fees and estimated offering expenses payable by us. If the underwriters exercise their over-allotment option in full, the additional net proceeds to us, after deducting the underwriting fees and estimated offering expenses payable by us, will be $[●].

We estimate that the net proceeds of this offering will be used for general working capital needs, the further development of announced and pending data center projects, and the company's ongoing operations in the data center space. For more information regarding the Company's announced data center projects, please see the section titled "*Data Center Business – Anticipated Projects*."

As of the date of this prospectus and except as explicitly set forth herein, we cannot specify with certainty all of the particular uses of the net proceeds from this offering. The expected use of net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors, including the factors described under the heading "*Risk Factors*" in this prospectus. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering and investors will be relying on our judgment in such allocation.

The above description of the anticipated use of proceeds is not binding on us and is merely a description of our current intentions. We reserve the right to change the above use of proceeds if management believes it is in the best interests of our company.

Pending use of the net proceeds from this offering, we may invest in short- and intermediate-term interest-bearing obligations, investment-grade instruments, certificates of deposit, or direct or guaranteed obligations of the U.S. government.

**DIVIDEND POLICY**

The Company has not paid dividends on the Common Stock to date and does not intend to pay cash dividends. The payment of cash dividends in the future will be dependent upon revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the Company's board of directors (the "***Board***"). It is the present intention of the Board to retain all earnings, if any, for use in the Company's business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future.

**CAPITALIZATION**

The following table sets forth our cash and cash equivalents and our capitalization as of March 31, 2025:

● on an actual basis;

● on a pro forma basis to reflect the issuance of [363,810] shares of Common Stock upon conversion of shares of Series B Convertible Preferred Stock subsequent to March 31, 2025; and

● on a pro forma as-adjusted basis, giving effect to this offering of [●] at an assumed public offering price of $[●] per share of Common Stock, after deducting underwriting commissions and estimated offering expenses payable by us.

The pro forma as-adjusted information below is illustrative only, and our capitalization following the closing of this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. You should read this information in conjunction with "*Use of Proceeds*," "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" our audited financial statements and the related notes appearing elsewhere in this prospectus.

---

| | | |
|:---|:---|:---|
| **March 31, 2025** | **March 31, 2025** | **March 31, 2025** |
| **Actual<br> (unaudited)** | **Pro Forma (unaudited)** | **Pro Forma as Adjusted (unaudited)** |

---

The number of shares of our Common Stock outstanding is based on an aggregate of 2,187,446 shares of our Common Stock outstanding as of March 31, 2025, and excludes:

● 9,686 shares of Common Stock issuable upon exercise of the GEM Warrant as of March 31, 2025;

● 2,688,432 shares of Common Stock issuable upon conversion of 1,300 shares of Series B Preferred Stock as of March 31, 2025;

● 22,668 shares of Common Stock issuable upon exercise of outstanding options with an average exercise price of $998.26 as of March 31, 2025; and

● 10,933 shares of Common Stock available for future issuance under the Amended and Restated 2023 Jet.AI Inc. Omnibus Incentive Plan as of March 31, 2025.

**DILUTION**

If you purchase securities in this offering, your ownership interest will be diluted to the extent of the difference between the public offering price per share of our Common Stock and the as adjusted net tangible book value per share of our Common Stock immediately after giving effect to this Offering.

Our net tangible book value as of March 31, 2024, was $13,536,847, or $6.19 per share of our Common Stock. Our net tangible book value is the amount of our total tangible assets minus total liabilities. Net tangible book value per share as of March 31, 2024, is our net tangible book value divided by the number of shares of Common Stock outstanding as of March 31, 2024.

The information below is illustrative only. Our dilution following the closing of this offering will change based on the actual public offering price and other terms of this offering determined at pricing. You should read this table in conjunction with "*Management's Discussion and Analysis of Financial Condition and Results of Operations*" and the financial statements and related notes included elsewhere in this prospectus.

After giving effect to (i) the issuance of [●] shares of common stock since March 31, 2025 upon the conversion of shares of Series B Preferred Stock; and (ii) the sale of the shares of Common Stock offered hereby (assuming no exercise by the underwriters of their option to purchase additional shares), at a public offering price of $[●] per share of Common Stock, and after deducting estimated underwriters compensation and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of [●], would have been approximately $[●] million, or approximately $[●] per share of Common Stock. This amount represents an immediate increase in a pro forma as adjusted net tangible book value of $[●] per share of Common Stock to our existing stockholders and an immediate dilution of $[●] per share of Common Stock to investors participating in this offering. We determine dilution per share of Common Stock to investors participating in this offering by subtracting as adjusted net tangible book value per share of Common Stock after giving effect to this offering from the public offering price per share of Common Stock paid by investors participating in this offering.

---

| | | |
|:---|:---|:---|
| Assumed offering price per share of Common Stock |  | $|
| Historical net tangible book value per share of Common Stock as of March 31, 2024<sup>(1)</sup> | $6.19 |  |
| Increase in pro forma net tangible book value per share attributable to pro forma adjustments |  |  |
| Increase in net tangible book value per share attributable to new investors in this offering<sup>(2)</sup> | $— |  |
| Pro forma as adjusted net tangible book value per share after this offering<sup>(3)</sup> |  | $|
| Immediate dilution in net tangible book value per share to new investors |  | $|

---

(1) Determined by dividing (i) net tangible book value (total assets less intangible assets) less total liabilities by (ii) the total number of shares of common stock issued and outstanding prior to the offering.

(2) Represents the difference between (i) as adjusted net tangible book value per share after this offering and (ii) net tangible book value per share as of March 31, 2025.

(3) Determined by dividing (i) as adjusted net tangible book value, which is our net tangible book value plus the cash proceeds of this offering, after deducting the estimated offering expenses payable by us, by (ii) the total number of shares of common stock to be outstanding following this offering.

A $[●] increase (decrease) in the assumed combined public offering price per share of $[●] would increase (decrease) the as adjusted net tangible book value by approximately $[●] ($[●]) per share and the dilution to new investors by $[●] ($[●]) per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriters compensation and estimated offering expenses payable by us. An increase (decrease) of [●] in the number of shares offered by us would increase (decrease) the as adjusted net tangible book value by approximately $[●] ($[●]) per share and the dilution to new investors by $[●] ($[●]) per share, assuming no change in the public offering price per share of Common Stock, and after deducting estimated underwriters compensation and estimated offering expenses payable by us.

The table and discussion above are based on an aggregate of 2,187,446 shares of our Common Stock outstanding as of March 31, 2025, and excludes:

● 9,686 shares of Common Stock issuable upon exercise of the GEM Warrant as of March 31, 2025;

● 2,688,432 shares of Common Stock issuable upon conversion of 1,300 shares of Series B Preferred Stock as of March 31, 2025;

● 22,668 shares of Common Stock issuable upon exercise of outstanding options with an average exercise price of $998.26 as of March 31, 2025; and

● 10,933 shares of Common Stock available for future issuance under the Amended and Restated 2023 Jet.AI Inc. Omnibus Incentive Plan as of March 31, 2025.

**INDUSTRY AND MARKET DATA**

Some of the market and industry data contained in this prospectus are based on independent industry publications or other publicly available information. We believe this information is reliable as of the applicable date of its publication, however, we have not independently verified and cannot assure you as to the accuracy or completeness of this information. As a result, you should be aware that the market and industry data contained herein, and our beliefs and estimates based on such data, may not be reliable.

**JET.AI, INC.**

**UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS**

The following unaudited pro forma consolidated financial information gives effect to the Separation and related adjustments in accordance with Article 11 of the SEC's Regulation S-X, as amended. The Separation and related transactions are described in the section of this prospectus entitled "*Prospectus Summary — Company Overview — Recent Events*."

The unaudited pro forma consolidated financial information has been derived from our historical unaudited condensed consolidated statement of operations for the three months ended March 31, 2025, our historical audited consolidated statement of operations for the year ended December 31, 2024, and our historical unaudited condensed consolidated balance sheet at March 31, 2025. The pro forma adjustments to the unaudited pro forma consolidated statements of operations for the three months ended March 31, 2025 and for the year ended December 31, 2024 assume that the Separation and related transactions occurred as of January 1, 2024. The unaudited pro forma consolidated balance sheet gives effect to the Separation and related transactions as if they had occurred on March 31, 2025, our latest balance sheet date.

The unaudited pro forma consolidated financial information has been prepared to include transaction accounting adjustments to reflect the financial condition and results of operations as if we were a separate standalone entity.

Transaction accounting adjustments include the following:

● the effect of our anticipated post-Separation capital structure, including (1) the issuance of 100,000 common shares upon execution of the Series C Preferred Stock Agreement as contemplated by the Amended and Restated Merger Agreement, based on the closing price of $4.13 per share of our common stock on May 20, 2025; and

● the one-time expenses associated with the Separation and related transactions which are expected to be incurred subsequent to March 31, 2025, as well as the removal of one-time expenses associated with the Separation and related transactions which were incurred during the three months ended March 31, 2025 and during the year ended December 31, 2024, and are not expected to have a continuing impact on the Company's results of operations following the completion of the Separation.

The unaudited pro forma condensed consolidated financial statements are subject to the assumptions and adjustments described in the accompanying notes. Management believes these assumptions and adjustments are reasonable under the circumstances and given the information presently available. The unaudited pro forma condensed consolidated financial statements are provided for informational purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Jet.AI would have been if the Separation had occurred on the dates indicated, nor is it necessarily indicative of the Company's future consolidated results of operations or consolidated financial position. Jet.AI actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, accompanying notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and the unaudited consolidated financial statements, accompanying notes, and Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2025.

**JET.AI, INC.**

**UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS**

**AS OF MARCH 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **(A)**<br>**Historical**<br>**Jet.AI** | **(B)**<br>**Separation of**<br>**SpinCo** | **Transaction**<br>**Accounting**<br>**Adjustments** |<br>**Pro Forma**<br>**Jet.AI** |
| Assets |  |  |  |  |
| Current assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $12245419 | $(12245419) |  | $- |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 398873 | (398873) |  |  |
| &nbsp;&nbsp;&nbsp;Other current assets | 336692 | (313772) |  | 22920 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 12980984 | (12958064) |  | 22920 |
| Property and equipment, net | 4417 |  |  | 4417 |
| Intangible assets, net | 86745 |  |  | 86745 |
| Right-of-use lease asset | 914915 | (914915) |  |  |
| Investment in joint venture | 100000 |  |  | 100000 |
| Deposit on aircraft | 3500000 | (3500000) |  |  |
| Deposits and other assets | 871561 | (689750) |  | 181811 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $18458622 | $(18062729) | $- | $395893 |
| Liabilities and Stockholders' Deficit |  |  |  |  |
| Current liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $551800 | $(536746) |  | $15054 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 2109418 | (1808421) | 3750000 **C** | 4050997 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 1282397 | (927372) |  | 355025 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | 529499 | (529499) |  | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 4473114 | (3802038) | 3750000 | 4421076 |
| &nbsp;&nbsp;&nbsp;Lease liability, net of current portion | 361916 | (361916) |  | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4835030 | (4163954) | 3750000 | 4421076 |
| Commitments and contingencies | $- | $- | $- | $- |
| Stockholders' Deficit |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Stock |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Common stock | 218 |  |  | 218 |
| &nbsp;&nbsp;&nbsp;Subscription receivable | (6724) |  |  | (6724) |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 69345980 | (16588264) | 413000 **D** | 52907216 |
|  |  |  | (263500) **F** |  |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (55715882) | 2689489 | (3899500) **E** | (56925893) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' deficit | 13623592 | (13898775) | (3750000) | (4025183) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' deficit | $18458622 | $(18062729) | $- | $395893 |

---

**JET.AI, INC.**

**UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS**

**FOR THE THREE MONTHS ENDED MARCH 31, 2025**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **(A)**<br>**Historical**<br>**Jet.AI** | **(B)**<br>**Separation of**<br>**SpinCo** | **Transaction**<br>**Accounting**<br>**Adjustments** |<br>**Pro Forma**<br>**Jet.AI** |
| Revenues | $3474638 | $(2447581) | $- | $1027057 |
| Cost of revenues | 3590152 | (2819052) | - | 771100 |
| &nbsp;&nbsp;&nbsp;Gross profit (loss) | (115514) | 371471 | - | 255957 |
| Operating Expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 2652427 | (935694) | (168500) **F** | 1548233 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 294408 | (207384) |  | 87024 |
| &nbsp;&nbsp;&nbsp;Research and development | 108924 | - | - | 108924 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3055759 | (1143078) | (168500) | 1744181 |
| &nbsp;&nbsp;&nbsp;Operating loss | (3171273) | 1514549 | 168500 | (1488224) |
| Other expense (income): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income | (1469) | - | - | (1469) |
| Total other expense (income) | (1469) | - | - | (1469) |
| Loss before provision for income taxes | (3169804) | 1514549 | 168500 | (1486755) |
| Provision for income taxes | - | - | - | - |
| &nbsp;&nbsp;&nbsp;Net Loss | $(3169804) | $1514549 | $168500 | $(1486755) |
| Weighted average shares outstanding - basic and diluted | 1711490 |  | **G** | 1809626 |
| Net loss per share - basic and diluted | $(1.85) |  |  | $(0.82) |

---

**JET.AI, INC.**

**UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS**

**FOR THE YEAR ENDED DECEMBER 31, 2024**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **(A)**<br>**Historical**<br>**Jet.AI** | **(B)**<br>**Separation of**<br>**SpinCo** | **Transaction**<br>**Accounting**<br>**Adjustments** |<br>**Pro Forma**<br>**Jet.AI** |
| Revenues | $14022628 | $(9828312) | $- | $4194316 |
| Cost of revenues | 14723981 | (10983987) | - | 3739994 |
| &nbsp;&nbsp;&nbsp;Gross profit (loss) | (701353) | 1155675 | - | 454322 |
| Operating Expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 10752048 | (2358666) | (95000) **F** | 8298382 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 951049 | (666581) |  | 284468 |
| &nbsp;&nbsp;&nbsp;Research and development | 162152 | - | - | 162152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 11865249 | (3025247) | (95000) | 8745002 |
| Operating loss | (12566602) | 4180922 | 95000 | (8290680) |
| Other expense (income): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 167054 |  |  | 167054 |
| &nbsp;&nbsp;&nbsp;Other income | (221) | - | - | (221) |
| Total other expense (income) | 166833 | - | - | 166833 |
| Loss before provision for income taxes | (12733435) | 4180922 | 95000 | (8457513) |
| Provision for income taxes | - | - | - | - |
| &nbsp;&nbsp;&nbsp;Net Loss | $(12733435) | $4180922 | $95000 | $(8457513) |
| &nbsp;&nbsp;&nbsp;Deemed dividend from warrant exchange offer | (540255) |  |  | (540255) |
| &nbsp;&nbsp;&nbsp;Cumulative preferred stock dividends | (109303) | - | - | (109303) |
| &nbsp;&nbsp;&nbsp;Net Loss to common stockholders | $(13382993) | $4180922 | $95000 | $(9107071) |
| Weighted average shares outstanding - basic and diluted | 279201 |  | **G** | 377357 |
| Net loss per share - basic and diluted | $(47.93) |  |  | $(24.13) |

---

**NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS**

Notes provide important information about the presentation of the unaudited pro forma condensed consolidated financial statements, including a description of the adjustments reflected therein:

&nbsp;&nbsp;&nbsp;&nbsp;A. The
 "Historical Jet.AI" column in the unaudited pro forma consolidated financial
 statements reflects the historical consolidated financial statements of Jet.AI for the periods
 presented, prepared in accordance with accounting principles generally accepted in the United
 States of America (GAAP), and does not reflect any adjustments related to the Separation.

&nbsp;&nbsp;&nbsp;&nbsp;B. The
 adjustments included within the "Separation of SpinCo" column of the unaudited
 pro forma condensed consolidated financial statements remove the assets, liabilities, and
 equity and the results of operations attributable to SpinCo, which were included in the Company's
 historical consolidated financial statements.

*Unaudited Pro Forma Condensed Consolidated Balance Sheet*

 

&nbsp;&nbsp;&nbsp;&nbsp;C. To
 reflect additional nonrecurring costs Jet.AI expects to incur subsequent to March 31, 2025
 to complete the Separation and related transactions. These costs primarily relate to $750,000
 in legal and advisory fees directly related to the Separation and $3 million in special cash
 bonuses to be paid to executive officers at the effective date of a change of control transaction
 in accordance with their employment agreements.

&nbsp;&nbsp;&nbsp;&nbsp;D. To
 reflect the issuance of 100,000 shares subsequent to March 31, 2025, based on the closing
 price of $4.13 per share of our common stock on May 20, 2025. Such shares are due upon execution
 of the Series C Preferred Stock Agreement as a closing condition in the Merger Agreement
 to complete the Separation.

&nbsp;&nbsp;&nbsp;&nbsp;E. To
 reflect the net impact on stockholders' deficit of the Separation adjustments described
 in notes C, D, and F.

*Unaudited Pro Forma Condensed Consolidated Statements of Operations*

 

&nbsp;&nbsp;&nbsp;&nbsp;F. To
 reflect the removal of $168,500 and $95,000 of nonrecurring costs related to the Separation
 which are included in the Company's historical results of operations for the three
 months ended March 31, 2025 and the fiscal year ended December 31, 2024, respectively. These
 costs relate to stock-based compensation from the issuance of 25,000 shares during the three
 months ended March 31, 2025 and the fiscal year ended December 31, 2024, respectively, for
 legal and advisory fees directly related to the Separation and are not expected to have a
 continuing impact on the Company's results of operations following the completion of
 the Separation.

 **

***Pro Forma Earnings Per Share***

 **

&nbsp;&nbsp;&nbsp;&nbsp;G. The
 table below presents the computation of proforma basic and dilutive net loss per share:

---

| | | |
|:---|:---|:---|
| *Shares and per share individual units* | **Three Months ended<br> March 31, 2025** | **Year ended<br>December 31, 2024** |
| **Pro forma weighted-average shares outstanding (Basic and diluted)** |  |  |
| &nbsp;&nbsp;&nbsp;Historical weighted-average shares outstanding | 1711490 | 279201 |
| &nbsp;&nbsp;&nbsp;Issuance of shares under Series C Preferred Stock Agreement (D) | 100000 | 100000 |
| &nbsp;&nbsp;&nbsp;Removal of stock-based compensation (F) | (1864) | (1844) |
| **Pro forma weighted-average shares outstanding (Basic and diluted)** | 1809626 | 377357 |
| **Pro forma loss per share** |  |  |
| &nbsp;&nbsp;&nbsp;Pro forma net loss | $(1486755) | $(9107071) |
| &nbsp;&nbsp;&nbsp;Pro forma basic and diluted loss per share | $(0.82) | $(24.13) |

---

Unaudited pro forma net loss per share for all periods excludes potentially dilutive shares of common stock that would have been antidilutive.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL<br> 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 consolidated financial, and the related notes that are included elsewhere in this prospectus.*

*Certain of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, 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 "Risk Factors," 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 prospectus. We assume no obligation to update any of these forward-looking statements.*

*Percentage amounts included in this prospectus have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this prospectus may vary from those obtained by performing the same calculations using the figures in the consolidated financial statements included elsewhere in this prospectus. Certain other amounts that appear in this prospectus may not sum due to rounding.*

*Unless otherwise indicated, all information in this prospectus gives effect to a 225-for-1 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 Inc., 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 Elite aircraft by Cirrus, (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:

● <u>Reroute AI:</u> recycles aircraft waiting to embark to their next revenue flight into prospective new charter bookings to destinations within specific operational parameters.

● <u>DynoFlight:</u> enables aircraft operators to estimate aircraft emissions then purchase carbon removal credits via our DynoFlight application programming interface API.

In 2023 and 2024, we launched two AI-enhanced booking apps called CharterGPT and Ava, respectively.

***Business Combination***

On August 10, 2023, the Company, formerly known as Oxbridge Acquisition Corp., 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 the Company, OXAC Merger Sub I, Inc., a direct, wholly owned subsidiary of the Company ("First Merger Sub"), Summerlin Aviation LLC, a direct, wholly owned subsidiary of the Company ("Second Merger Sub"), and Jet Token Inc., a Delaware corporation ("Jet Token"). Pursuant to the Business Combination Agreement, the Company 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 the Company, and (b) Jet Token merged with and into Second Merger Sub with Second Merger Sub surviving the merger as a wholly owned subsidiary of the Company (each merger and all other transactions contemplated by the Business Combination Agreement, the "Business Combination").

Following the Business Combination, the Company's common stock was listed on the Nasdaq Stock Market LLC under the ticker symbol "JTAI".

The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP, whereby the Company 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 the Company, accompanied by a recapitalization. The net assets of the Company 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.

***Potential Sale of Aviation Business Assets***

On February 13, 2025, the Company, entered into an Agreement and Plan of Merger and Reorganization (the "Original Merger Agreement") with flyExclusive, Inc. ("flyExclusive"), FlyX Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of flyExclusive ("Merger Sub"), and Jet.AI SpinCo, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("SpinCo"). Pursuant to the Merger Agreement, (i) as a condition to closing on the Merger Agreement, the Company will distribute all of the shares of SpinCo, on a pro rata basis, to the Company's stockholders (the "Distribution"), (ii) Merger Sub will merge with and into SpinCo (the "Merger" and, together with the Distribution and all other transactions contemplated under the Merger Agreement, the "Transactions") with SpinCo surviving the Merger as a wholly owned subsidiary of flyExclusive and (iii) as consideration for the Merger, the Company's existing stockholders will have the right to receive shares of Class A common stock of flyExclusive. Additionally, the Company's stockholders will continue to own and hold their existing shares of the Company's common stock as of closing of the Merger.

On May 6, 2025, the parties entered into an Amended and Restated Agreement and Plan of Merger and Reorganization (the "Merger Agreement"). The Merger Agreement amends, restates, replaces and supersedes the Original Merger Agreement in its entirety. Except as follows, the material terms of the Transactions remain unchanged in the Merger Agreement. The Merger Agreement amended the Original Merger Agreement to provide for the concept that 20% of the merger consideration will not be issued upon closing, but will instead be issued post-closing, if any, upon final determination of the purchase price. Previously, the Original Merger Agreement contemplated all of the merger consideration shares being issued upon closing, with 20% of such merger consideration shares being "Restricted Shares" subject to potential post-closing claw back upon determination of the final purchase price. Additionally, the Original Merger Agreement contained a condition to closing which would have required the Company to amend its existing securities purchase agreement with Ionic Ventures, LLC. The Merger Agreement amended the closing condition to instead require the Company to execute a new securities purchase agreement with a third-party investor, pursuant to which the Company will issue the investor a warrant to purchase up to $50 million worth of shares of a newly-designated series of preferred stock.

In connection with executing the Original Merger Agreement, the Company, SpinCo, and flyExclusive entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement") pursuant to which the Company will transfer the business, operations, services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and jet card business (the "Separation"). Upon the terms and subject to the conditions set forth in the Separation and Distribution Agreement, the Company will consummate the Distribution. As such, the Company will no longer operate a fractional or jet card business as of consummation of the Distribution. There will be no change expected to the Company's board of directors or executive officers as a result of the Merger, Separation, Distribution, or other Transactions.

The Merger Agreement contains customary conditions to closing, including the following mutual conditions: (i) the Separation and Distribution and the other transactions contemplated by the Separation and Distribution Agreement shall have been consummated in accordance with the Separation and Distribution Agreement; (ii) a registration statement on Form S-4 covering the merger consideration shares shall be effective; (iii) the approval of the Transactions by holders of the Company's common stock shall have been obtained; and (iv) the shares of flyExclusive Class A common stock issuable pursuant to the Transactions shall have been approved for listing on the NYSE American LLC.

The Transactions are subject to shareholder approval and are expected to close during the third quarter of 2025.

After the Transactions Jet.AI will continue to operate and retain its software and intellectual property assets, but will cease to hold its aircraft fractional, jet card and management assets and expects to pursue additional business opportunities in the broader artificial intelligence (AI) and data-center enterprise sectors.

***Joint Venture Agreement***

On June 26, 2025, the Company and Consensus Core Technologies Inc. ("Consensus Core") entered into a Joint Venture Agreement (the "JV Agreement"), pursuant to which the parties agreed to enter into a joint venture to collaborate in developing data centers. The JV Agreement provided certain terms of the joint venture, including: (i) the parties would enter into a Contribution Agreement (the "Contribution Agreement") with a joint venture limited liability company outlining the full terms of the joint venture; (ii) the joint venture limited liability company would be organized under the laws of the State of Delaware prior to any initial closing under the Contribution Agreement, which would initially be wholly owned by Consensus Core; and (iii) the joint venture limited liability company would establish separate subsidiaries for each data center project to be contributed to the joint venture.

On July 2, 2025, the Company entered into the Contribution Agreement with Consensus Core and Convergence Compute LLC, a Delaware limited liability company ("Convergence Compute"), pursuant to which Jet.AI contributed $300,000 to Convergence Compute in the first closing of the transactions contemplated by the JV Agreement. As consideration for its contribution, Jet.AI acquired a 0.5% equity interest in Convergence Compute. Upon the completion of certain data center project milestones, each of the Company and Consensus Core will make additional contributions to Convergence Compute and will receive additional equity interests in Convergence Compute and its subsidiaries.

The Company will contribute up to an aggregate $20 million to Convergence Compute in five tranches, which are each tied to specific project development milestones. Consensus Core will contribute 100% of the equity interests of its Midwest data center project to Convergence Compute at the second closing under the Contribution Agreement and will contribute 100% of the equity interests of its Maritime data center project to Convergence Compute at the third closing under the Contribution Agreement. In consideration for such contributions, the Company and Consensus Core will each receive a 17.5% equity interest in the Midwest project upon the second closing and a 17.5% equity interest in the Maritime project upon the third closing. The Company will also receive an additional 0.5% equity interest in Convergence Compute upon each additional closing, for an aggregate equity interest of up to 2.5% if all five tranches are consummated.

**Results of Operations**

***<u>Comparison of the Three Months Ended March 31, 2025 and 2024</u>***

 ****

The following table sets forth our results of operations for the periods indicated:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Revenues | $3474638 | $3848598 |
| Cost of revenues | 3590152 | 3972954 |
| Gross loss | (115514) | (124356) |
| Operating Expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative (including stock-based compensation of $550,936 and $1,199,318, respectively) | 2652427 | 2546294 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 294408 | 446600 |
| &nbsp;&nbsp;&nbsp;Research and development | 108924 | 32546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3055759 | 3025440 |
| &nbsp;&nbsp;&nbsp;Operating loss | (3171273) | (3149796) |
| Other expense (income): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | 79314 |
| &nbsp;&nbsp;&nbsp;Other income | (1469) | (61) |
| Total other expense | (1469) | 79253 |
| Loss before provision for income taxes | (3169804) | (3229049) |
| Provision for income taxes | - | - |
| &nbsp;&nbsp;&nbsp;Net Loss | $(3169804) | $(3229049) |
| &nbsp;&nbsp;&nbsp;Less cumulative preferred stock dividends | - | (29728) |
| &nbsp;&nbsp;&nbsp;Net Loss to common stockholders | $(3169804) | $(3258777) |
| Weighted average shares outstanding - basic and diluted | 1711490 | 50851 |
| Net loss per share - basic and diluted | $(1.85) | $(64.08) |

---

 ****

***Revenues***

Revenue for the three months ended March 31, 2025, totaled $3.5 million, a 9.7% decrease of $374,000 from $3.8 million for the same period in 2024. This revenue included $1.8 million from our software App and Cirrus Charter program, comprising $1.0 million from software-related services and $0.8 million from chartering our HondaJet aircraft through our operating partner, Cirrus; $1.3 million from aircraft management services; and $343,000 from Jet Card and fractional programs, reflecting hours flown and additional charges.

The following table sets forth a breakout of revenue components by subcategory for the three months ended March 31, 2025 and 2024.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Software App and Cirrus Charter | $1849950 | $2371091 |
| Jet Card and Fractional Programs | 343345 | 677320 |
| Management and Other Services | 1281343 | 800187 |
|  | $3474638 | $3848598 |

---

Software-related revenue from our proprietary booking platform declined to $1.0 million in the first quarter of 2025, a 39% decrease from $1.7 million in the first quarter of 2024, primarily due to reduced marketing efforts, and an industry-wide decline in private jet travel demand.

Aircraft management service revenue increased to $1.3 million in the first quarter of 2025, a 60% increase from $0.8 million in the first quarter of 2024, driven by a management agreement entered into in the fourth quarter of 2023 and the addition of a second managed aircraft starting in April 2024.

In the first quarter of 2025, we sold 20 prepaid flight hours under our Jet Card and fractional programs for $116,000 and recognized $343,000 in revenue, reflecting 52 flight hours flown or forfeited, plus additional charges for fuel cost adjustments and federal excise tax reimbursements. As of March 31, 2025, deferred revenue related to prepaid flight hours was $0.9 million, representing hours not yet flown or forfeited.

In the first quarter of 2024, we sold 55 prepaid flight hours for $333,000 and recognized $677,000 in revenue, reflecting 95 flight hours flown or forfeited, plus additional charges. Deferred revenue as of March 31, 2024, was $1.2 million.

The reduction in flight hours flown in the first quarter of 2025 reflects a challenging economic environment. Additionally, our revised pricing strategy, which bases Jet Card sales on HondaJet rates with an option to upgrade to the managed Cessna Citation CJ4, combined with efforts to increase Jet Card pricing, led to a 4.2% decrease in revenue per flight hour compared to the first quarter of 2024.

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 quarter of 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,** | **For the three months ended March 31,** |
|  | **2025** | **2024** |
| Deferred revenue at the beginning of the period (1) | $1319746 | $1779794 |
| Prepaid flight hours sold |  |  |
| &nbsp;&nbsp;&nbsp;Amount | $116000 | $333000 |
| &nbsp;&nbsp;&nbsp;Total Flight Hours | 20 | 55 |
| Prepaid flight hours flown |  |  |
| &nbsp;&nbsp;&nbsp;Amount | $296096 | $636502 |
| &nbsp;&nbsp;&nbsp;Total flight hours | 52 | 95 |
| &nbsp;&nbsp;&nbsp;Additional charges | $47249 | $49052 |
| &nbsp;&nbsp;&nbsp;Total flight hour revenue | $343345 | $677320 |
| Deferred revenue at the end of the period (2) | $1282397 | $1395285 |

---

(1) Deferred
 revenue at December 31, 2024 and 2023 also includes $212,278 and $268,818, 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 March 31, 2025 and 2024 also includes $355,025 and $187,811, 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.

Revenue from direct chartering of our HondaJet Elite aircraft by Cirrus totaled $0.8 million in the first quarter of 2025, a 20.3% increase of $139,000 from the first quarter of 2024. The increased revenue was a direct result of increased charter activity, both ad hoc and by Cirrus.

***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 HondaJet Elites were unavailable. The management of our aircraft by Cirrus covers all our aircraft operating costs 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.

Due to fleet expansion and increased fixed and variable operating costs, payments to Cirrus for aircraft management and operations rose by $306,000 to $2.4 million in the first quarter of 2025 from $2.1 million in the first quarter of 2024. Aircraft lease expenses remained stable at $326,000. Third-party charter costs decreased by $0.6 million to $0.8 million in the first quarter of 2025, reflecting lower software-related revenue and reduced reliance on subcharters for Jet Card flights. Federal excise taxes and merchant fees associated with charter flights declined by $69,000 to $92,000 in the first quarter of 2025 from $161,000 in the prior-year period, driven by decreased software revenue.

Total costs to operate our five aircraft in the first quarter of 2025 were $2.8 million, compared to $2.6 million for four aircraft in the first quarter of 2024.

***Gross loss***

Gross loss for the first quarter of 2025 was $116,000, slightly improved from $124,000 in the first quarter of 2024, reflecting lower maintenance costs and pilot wages, as well as lower utilization of our HondaJet Elites, partially offset by stable fixed costs.

***Total Operating Expenses***

Total operating expenses for the first quarter of 2025 increased by $30,000 to $3.1 million from $3.0 million in the first quarter of 2024. This increase reflects a $106,000 rise in general and administrative expenses, a $76,000 increase in research and development expenses, but offset in part by a $152,000 decrease in sales and marketing expenses. Excluding non-cash stock-based compensation of $0.6 million in 2025 and $1.2 million in 2024, general and administrative expenses rose by $755,000, primarily due to $282,000 in higher professional fees for accounting, legal, and Board of Directors services—largely related to financing activities and fees and costs incurred in connection with the potential transaction with flyExclusive—and a $414,000 increase in wages.

Sales and marketing expenses decreased by 34% to $294,000 in the first quarter of 2025 from $446,000 in the first quarter of 2024, reflecting reduced promotional activities for certain of our legacy services and programs.

Research and development expenses increased by $76,000 to $109,000 in the first quarter of 2025 from $33,000 in the first quarter of 2024, driven by enhanced development efforts for new software offerings.

***Operating Loss***

The operating loss for the first quarter of 2025 was $3.2 million, a $21,000 increase from $3.1 million in the first quarter of 2024. Excluding the impact of stock-based compensation, the operating loss increased by $663,000, primarily due to higher general and administrative expenses.

***Other (Income) Expense***

In the first quarter of 2025, we recorded $1,000 in other income, compared to $79,000 in other expense in the first quarter of 2024, primarily due to the absence of interest expense during the 2025 period related to the Bridge Agreement described in Note 4 to the Company's financial statements for the three months ended March 31, 2025.

***Net Loss to Common Stockholders***

Net loss to common stockholders for the first quarter of 2025 was $3.2 million, an $89,000 improvement from $3.3 million in the first quarter of 2024. This decrease was primarily due to the absence of $30,000 in cumulative preferred stock dividends accrued during the 2024 period following the redemption in the fourth quarter of 2024 of all of the then outstanding shares of the Company's Series A Convertible Preferred Stock (the "Series A Preferred Shares") and Series A-1 Convertible Preferred Stock (the "Series A-1 Preferred Shares") and the elimination of $79,000 in interest expense.

 ****

 ****

***<u>Comparison of the Years Ended December 31, 2024 and 2023</u>***

The following table sets forth our results of operations for the periods indicated:

---

| | | |
|:---|:---|:---|
|  | **For the Year Ended<br> December 31,** | **For the Year Ended<br> December 31,** |
|  | **2024** | **2023** |
| Revenues | $14022628 | $12214556 |
| Cost of revenues | 14987245 | 12393089 |
| &nbsp;&nbsp;&nbsp;Gross loss | (964617) | (178533) |
| Operating Expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative (including stock-based compensation of $4,287,236 and $6,645,891, respectively) | 10752048 | 11597173 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 687785 | 573881 |
| &nbsp;&nbsp;&nbsp;Research and development | 162152 | 160858 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 11601985 | 12331912 |
| &nbsp;&nbsp;&nbsp;Operating loss | (12566602) | (12510445) |
| Other expense (income): |  |  |
| Interest expense | 167054 | 103615 |
| Other income | (221) | (116) |
| Total other expense | 166833 | 103499 |
| Loss before provision for income taxes | (12733435) | (12613944) |
| Provision for income taxes |  | 2464 |
| &nbsp;&nbsp;&nbsp;Net Loss | $(12733435) | $(12616408) |
| &nbsp;&nbsp;&nbsp;Less deemed dividend from warrant exchange offer | (540255) |  |
| &nbsp;&nbsp;&nbsp;Less cumulative preferred stock dividends | (109303) | (46587) |
| &nbsp;&nbsp;&nbsp;Net Loss to common stockholders | $(13382993) | $(12662995) |
| Weighted average shares outstanding - basic and diluted | 279201 | 28119 |
| Net loss per share - basic and diluted | $(47.93) | $(450.34) |

---

***Revenues***

Revenues for 2024 totaled $14.0 million, a $1.8 million increase from revenues of $12.2 during the comparable period for 2023. Revenues in 2024 were comprised of approximately $8.1 of revenues related to our software App and Cirrus charter services (comprised of approximately $4.2 million in software-related revenue and $3.9 million in revenue from the chartering of our HondaJet Elites by our operating partner Cirrus), $3.6 million in services revenue from the management of customers' aircraft, and $2.3 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 years ended December 31, 2024 and 2023.

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Software App and Cirrus Charter | $8128997 | $7125230 |
| Jet Card and Fractional Programs | 2288036 | 2847533 |
| Management and Other Services | 3605595 | 2241793 |
|  | $14022628 | $12214556 |

---

The Company began recording revenue in September 2020 reflecting services and software revenues related to charter bookings made through its App and in 2023, the Company recognized $3.9 million in revenue related to App-generated charter bookings. During 2024 these revenues totaled $4.2 million, a $247,000 or 6.3% increase from 2023 reflecting increased marketing, including the introduction to the agentic model Ava, and greater awareness of the Company.

The Company recognized $3.6 million in service revenue in 2024, an increase of $1.4 million compared to 2023, 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 $2.2 million in service revenues in 2023.

During 2024, the Company sold 285 prepaid flight hours under its jet card and fractional programs, amounting to $1.7 million, and recognized $2.1 of revenue for 348 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 December 31, 2024, the Company recorded deferred revenue of $1.1 million on its consolidated balance sheet, which represents prepaid flight hours for which the related travel had not yet occurred.

In 2023, we sold 534 prepaid flight hours amounting to approximately $3.0 million and recognized approximately $2.8 million of revenue for 436 flight hours flown or forfeited, as well as additional charges. At December 31, 2023, the Company recorded deferred revenue of $1.5 million on its consolidated balance sheet.

The decrease in flight hours flown is a direct result of the Company's efforts to increase Jet Card pricing which resulted in a 6.1% increase in flight hour revenue per flight hour 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 year ended December 31, 2024 and 2023:

---

| | | |
|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** |
|  | 2024 | 2023 |
| Deferred revenue at the beginning of the year (1) | $1779794 | $933361 |
| Prepaid flight hours sold |  |  |
| &nbsp;&nbsp;&nbsp;Amount | $1662250 | $3045769 |
| &nbsp;&nbsp;&nbsp;Total Flight Hours | 285 | 534 |
| Prepaid flight hours flown |  |  |
| &nbsp;&nbsp;&nbsp;Amount | $2080371 | $2456354 |
| &nbsp;&nbsp;&nbsp;Total flight hours | 348 | 436 |
| &nbsp;&nbsp;&nbsp;Additional charges | $207665 | $391179 |
| &nbsp;&nbsp;&nbsp;Total flight hour revenue | $2288036 | $2847533 |
| Deferred revenue at the end of the year (2) | $1319746 | $1779794 |

---

(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 December 31, 2024 and 2023 also includes $212,278 and $268,818, respectively, with respect to customer prepayments associated
 with software app transactions and $16,233 and $0, respectively, with respect to the management of aircraft.

During 2024 revenue generated through the direct chartering of the Company's HondaJet Elite aircraft by Cirrus amounted to approximately $3.9 million, an increase of $0.8 million, or 23.8% 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 Gen 2.

***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 HondaJet Elites 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.

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 $2.2 million from $7.1 million in 2023 to $9.3 million in the 2024 year period and aircraft lease payments increased $162,000 from $1.2 million in 2023 to $1.4 million in 2024. The Company also incurred third-party charter costs of approximately $3.7 million in 2024, a $91,000 decrease over 2023, as a result of a reduced need for subcharters used for covering jet card flights when our HondaJet Elites were unavailable. Federal excise tax and merchant fees relating to charter flights increased $333,000 in 2024 to $637,000 from $304,000 in 2023 reflecting increased software revenue.

In total as disclosed above, it cost $10.7 million to operate the Company's five aircraft in 2024, compared to $8.3 million in 2023 for four aircraft.

***Gross loss***

The resulting gross loss totaled $965,000 for 2024, compared to $178,000 for the 2023 fiscal year period. The increased gross loss in these operations was a result of increased maintenance costs, together with lower utilization on our HondaJet Elites.

***Total Operating Expenses***

In 2024, the Company's operating expenses decreased $730,000 due to a $845,000 decrease in general and administrative expenses, offset by $114,000 in higher sales and marketing expenses. Excluding non-cash stock-based compensation of $4.3 million and $6.6 million in 2024 and 2023, respectively, general and administrative expenses rose by approximately $1.5 million primarily due to (1) increased wages of $749,000, primarily due to increased commissions compensation payable on charter sales, as well as a greater number of software developers in 2024, (2) increased directors' and officers' insurance of $181,000 and (3) increased professional services expenses resulting from higher legal expenses and a full year of board of directors expenses.

The Company's sales and marketing expenses increased by approximately $114,000 to $688,000 in 2024 from $574,000 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 increased $1,000 to $162,000 in 2024 from $161,000 in 2023.

***Operating Loss***

As a result of all of the above, in 2024 the Company recognized an operating loss of approximately $12.6 million, which was a increase in operating loss of $56,000 compared to the 2023 fiscal year period. The increase was primarily due to an increase in the Company's gross operating loss of $965,000, offset by reduced general and administrative expenses of $845,000.

***Other Expense (Income)***

During 2024, the Company recognized approximately $167,000 in other expense due primarily to interest expense related to the Bridge Agreement (defined below), compared to $103,000 recorded for 2023.

***Net Loss to Common Stockholders***

After deducting cumulative preferred stock dividends of approximately $109,000 in 2024, which have been accruing since the August 2023 issuance date of the Series A Preferred Shares and the Series A-1 Preferred Shares, and a $540,000 deemed dividend from the Company's warrant exchange offer, net loss to common stockholders increased by $720,000.

**Liquidity and Capital Resources**

As of March 31, 2025, our cash and cash equivalents totaled $12.2 million. Current assets exceeded current liabilities by $8.5 million, including $1.3 million in deferred revenue, which will be recognized as revenue upon the utilization or forfeiture of prepaid flight hours.

In the first quarter of 2025, we raised $11.0 million through the issuance of 1,100 shares of Series B Preferred Stock, which was the primary factor causing our cash and cash equivalent assets and current assets as a whole to increase from December 31, 2024.

We have historically incurred negative cash flows from operations and significant operating losses, resulting in an accumulated deficit of $55.7 million as of March 31, 2025. We anticipate revenue and operating profit growth from strategic initiatives, including aircraft acquisitions, increased Jet Card pricing, enhanced charter activity through CharterGPT, Ava, and Reroute AI, and SaaS revenue from DynoFlight. However, we expect to incur operating losses for at least the next 12 months, depending on the success and timing of these initiatives. To fund operations, we plan to utilize funds from share issuances under the Share Purchase Agreement and potential sales of equity or debt securities. Contractual limitations may restrict additional funding under the Share Purchase Agreement, and further equity issuances may adversely affect our stock price and ability to raise capital. To support growth, we have entered into a $50 million agreement with Hexstone Capital LP, with economic terms similar to our existing $16.5 million arrangement with Ionic Ventures LLC. In the absence of external financing, we are prepared to reduce cash utilization by halting marketing, suspending software development, streamlining operations, and focusing on existing customers, enabling operations to continue for at least one year, during which we would seek new financing to resume expansion. Forward-looking statements regarding our financial condition and liquidity are subject to risks and uncertainties, as detailed in Part I, Item 1A, "Risk Factors" of our Annual Report on Form 10-K.

***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, 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 (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.

At the initial closing 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 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 "Certificate of Designations"). The Series B Preferred Stock ranks 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, which was initially set at 4.99%, but is currently set at 9.99% (calculated in accordance with the rules promulgated under Section 13(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act")), and which can be decreased to a beneficial ownership limitation of less than 9.99% upon written notice at Ionic's discretion, but may not be further increased. 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. Although the beneficial ownership limitation imposes a legally binding limitation on the Selling Stockholder's beneficial ownership at any point in time, it does not prohibit the Selling Stockholder from, over time, receiving shares of Common Stock upon separate conversions of its shares of Series B Preferred Stock that, in the aggregate and over a period of time, exceed the beneficial ownership limitation.

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 the lower of (i) $2.50, or (ii) 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, then we may be required to redeem the Series B Preferred Stock for cash at 110% of the stated value.

*Other Transaction Documents and Subsequent Agreements*

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. As of the date of this prospectus, Ionic has fully exercised the Ionic Warrant for a total of 1,500 shares of Series B Preferred Stock, resulting in gross proceeds to the Company of $15.0 million.

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 the 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 was 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.

*Registration Statements*

Pursuant to the Registration Rights Agreement, we filed a Registration Statement on Form S-1 (File No. 333-279385), which was originally filed with the SEC on May 13, 2024, and as amended (the "First Registration Statement"), that registered the offer and resale of 133,778 shares of common stock (as adjusted to reflect the subsequent reverse stock split) by Ionic and was declared effective by the SEC on October 23, 2024. On November 13, 2024, Ionic notified the Company that it had sold all shares of common stock that were registered under the First Registration Statement.

Since the number of shares of common stock available under the First Registration Statement was insufficient to cover all of the shares of common stock issuable to Ionic, we were required to file at least one additional registration statement. Accordingly, on November 13, 2024, we filed a Registration Statement on Form S-3 (File No. 333-283207) with the SEC (as amended, the "Second Registration Statement"), which registered the offer and resale of 600,000 shares of common stock by Ionic and was declared effective by the SEC on December 27, 2024. On February 20, 2025, Ionic notified the Company that it had sold all shares of common stock that were registered under the Second Registration Statement.

Since the number of shares of common stock available under the First Registration Statement and the Second Registration Statement were, in the aggregate, insufficient to cover all of the shares of common stock issuable to Ionic, we were required to file at least one additional registration statement. Accordingly, on January 24, 2025, we filed another Registration Statement on Form S-3 (File No. 333-284504) with the SEC (as amended, the "Third Registration Statement"), which registered the offer and resale of 1,270,000 shares of common stock by Ionic and was declared effective on April 18, 2025..

*Conversions of Series B Preferred Stock; Warrant Exercises*

Starting in October 2024, and through the date of this prospectus, Ionic has converted in full the 150 shares of Series B Preferred Stock issued to it at the initial closing, the 50 additional shares of Series B Preferred Stock issued to it in connection with the Letter Agreement, and [511] shares of Series B Preferred Stock issued to it pursuant to partial exercises of the Ionic Warrant. Those conversions, in total, resulted in the issuance of [2,079,261] shares of Common Stock (as adjusted to give effect to the reverse stock split).

On October 28, 2024 Ionic partially exercised the Ionic Warrant, for 150 additional shares of Series B Preferred Stock, resulting in total proceeds to the Company of $1.5 million. Additionally, on November 14, 2024 Ionic partially exercised the Ionic Warrant, for 250 additional shares of Series B Preferred Stock, resulting in total proceeds to the Company of $2.5 million and on January 23, 2025 Ionic partially exercised the Ionic Warrant, for 250 additional shares of Series B Preferred Stock, resulting in total proceeds to the Company of $2.5 million. Finally, on February 27, 2025, Ionic exercised the remainder of the Ionic Warrant, for 850 additional shares of Series B Preferred Stock, resulting in total proceeds to the Company of $8.5 million.

*Adjustment to Beneficial Ownership Limitation*

On February 14, 2025, Ionic delivered a notice to the Company that it has elected to increase the beneficial ownership limitation from 4.99% to 9.99%. The adjusted beneficial ownership limitation took effect on April 16, 2025. All issuances prior to April 16, 2025 were subject to a 4.99% beneficial ownership limitation.

***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 paid GEM a commitment fee equal to $800,000 in shares of common stock. Upon the Company's issuance of shares in connection with any drawdown purchase made by GEM, the Company was 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 58,447 shares of common stock to satisfy in full the outstanding commitment fee payable discussed in Note 5 to our financial statements for the period ended March 31, 2025 and 44,225 shares of common stock under the Share Purchase Agreement with GEM for total consideration of $2.5 million.

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 GEM Warrant included an adjustment mechanism, whereby the exercise price is subject to adjustment from time to time. Pursuant to the Warrant, on the first anniversary following the Public Listing Date as defined in the GEM Warrant (the "Adjustment Date"), if all or any portion of the GEM Warrant remains unexercised and the average closing price of the Company's common stock for the 10 trading days following the Adjustment Date is less than 90% of the then current exercise price of the warrant (the "Baseline Price"), then the exercise price of the unexercised Warrant Shares that remain exercisable pursuant to the Warrant shall be adjusted to 110% of the Baseline Price. Accordingly, the warrant exercise price was reduced to $9.07 per share as of March 31, 2025. 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 the Company'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.

***Cash Flows for the Three Months Ended March 31, 2025 and 2024***

 ****

As of March 31, 2025, cash and cash equivalents totaled $12,245,419, including $500,000 of restricted cash related to aircraft leasing arrangements.

The following table summarizes our cash flows for the three months ended March 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **For the three months ended March 31,** | **For the three months ended March 31,** |
|  | 2025 | 2024 |
| Net cash used in operating activities | $(2180208) | $(2520790) |
| Net cash used in investing activities | (1177000) | (12922) |
| Net cash provided by financing activities | 9730000 | 1028724 |
| Increase (decrease) in cash and cash equivalents | $6372792 | $(1504988) |

---

*Cash Flow from Operating Activities*

Net cash used in operating activities for the first quarter of 2025 was $2.2 million, a decrease from $2.5 million net cash used in the first quarter of 2024. The 2025 cash outflow primarily resulted from a net loss, adjusted for $685,000 in non-cash charges, a $246,000 increase in accounts receivable and other current assets, and a $130,000 reduction in lease liabilities, partially offset by a $550,000 increase in operating liabilities. The increase in operating liabilities was driven by a $717,000 rise in accounts payable and accrued liabilities related to aircraft operations, partially offset by a $37,000 decrease in deferred Jet Card revenue and a $130,000 reduction in operating lease liabilities.

*Cash Flow from Investing Activities*

Net cash used in investing activities for the first quarter of 2025 was $1.2 million, compared to $13,000 in the first quarter of 2024, primarily due to $1.1 million in aircraft deposits paid to Textron and $77,000 in net charter deposits. In addition to the $1.1 million in aircraft deposits paid to Textron during the first quarter of 2025, the Company will be required to make additional deposits totaling $2.1 million during 2025, including $550,000 due by May 15, 2025.

*Cash Flow from Financing Activities*

Net cash provided by financing activities for the first quarter of 2025 was $9.7 million, primarily from $11.0 million in proceeds from exercise of Series B Preferred Stock warrants, partially offset by $1.3 million in offering costs.

 ****

***Cash Flows for the Years Ended December 31, 2024 and 2023***

As of December 31, 2024, the Company's cash and equivalents were approximately $5.9 million, including approximately $500,000 of restricted cash under its aircraft leasing arrangements described below.

The following table summarizes our cash flows for the years ended December 31, 2024 and 2023:

---

| | | |
|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2024** | **2023** |
| Net cash used in operating activities | $(8225594) | $(3783473) |
| Net cash used in by investing activities | (2409372) | $(190998) |
| Net cash provided by financing activities | 14407050 | $4547623 |
| Increase in cash and cash equivalents | $3772084 | $573152 |

---

***Cash Flow from Operating Activities***

Net cash used in operating activities for the year ended December 31, 2024 was $8.2 million compared to $3.8 million for the year ended December 31, 2023. The cash outflow from operating activities in the 2024 period primarily consisted of our net loss, net of non-cash charges of $4.9 million, a $0.5 million reduction in lease liability and a $295,000 increase in accounts receivables and other current assets, which were offset by a $183,000 decrease in operating liabilities. The decrease in operating liabilities was primarily driven by a $0.5 million decrease in deferred jet card revenue relating to the sale of jet card hours not yet flown and a $0.5 million decrease in the Company's operating lease liability, offset by an $0.8 million increase in the Company's accounts payable and accrued liabilities relating to the operation of the Company's aircraft. The increase in net cash used in operating activities for the 2024 period was primarily driven by a $116,000 increase in our net loss, net of non-cash charges resulting from the Company's higher level of operations during 2024 as a result of operating a greater number of operational aircraft and startup expenses incurred during 2024 as well as the $0.4 million change in operating assets and liabilities.

***Cash Flow from Investing Activities***

Net cash used in investing activities for the year ended December 31, 2024 was $2.4 million as compared to $191,000 in the 2023 year period, primarily relating to $2.4 million in aircraft deposits made to Textron in 2024 and the Company's 2023 investment in 380 Software LLC, a 50/50 joint venture subsidiary with Cirrus.

***Cash Flow from Financing Activities***

Net cash provided by financing activities for the year ended December 31, 2024 was $14.4 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 of $0.7 million, redemption costs of $1.2 million for the Company's Series A Preferred Shares and Series A-1 Preferred Shares and offering costs of $1.9 million.

**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 financial statements for the three months ended March 31, 2025 for a further description of these leasing arrangements.

**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 continued into 2025. 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 the Company 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 the Company, accompanied by a recapitalization. The net assets of the Company 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 former stockholders had the greatest voting interest in the combined entity;

● Jet Token's former stockholders had 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."

***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.

***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.

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.

***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.

 ***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.

&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Chartering Third-Party Aircraft:</u> 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.

&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Aircraft Lease Expenses:</u> 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. <u>Pilot Training and Wages:</u> 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. <u>Aircraft Fuel:</u> 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. <u>Aircraft Maintenance:</u> 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. <u>Other Aircraft Operating Expenses:</u> 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.

 

**CURRENT BUSINESS**

**Explanatory Note**

On August 10, 2023, we consummated a "Business Combination" pursuant to the Business Combination Agreement and Plan of Reorganization, dated February 24, 2023, as amended by Amendment No. 1 to the Business Combination Agreement, dated as of May 11, 2023. In connection with the Business Combination, we changed our name from "Oxbridge Acquisition Corp." to "Jet.AI Inc."

Unless otherwise noted in this prospectus, "Jet.AI," "the Company," "we," "us," "our" and similar terms refer to (a) Oxbridge Acquisition Corp. prior to the closing of the Business Combination and (b) Jet.AI Inc. after giving effect to the closing of the Business Combination. See "*Management's Discussion and Analysis of Financial Condition and Results of Operations – Business Combination.*"

**Overview**

Our business strategy has historically combined concepts from fractional jet and charter jet programs with innovations in artificial intelligence, also referred to herein as "AI."

We formed our company on June 4, 2018. We developed and, in September 2019, launched our booking platform represented by our iOS app Jet Token (the "App"), which originally functioned as a prospecting and quoting platform to arrange private jet travel with third party carriers. Following our acquisition of HondaJet HA-420 aircraft (the "HondaJet Elites"), we began selling jet cards and fractional ownership interests in our aircraft. In 2023 and 2024, we launched two AI-enhanced booking apps called CharterGPT and Ava, respectively, as more fully discussed under "*Our Software Platforms*" and "*Strategy* – *Artificial Intelligence*" below.

Beginning in 2023, we launched our Jet.AI Operator Platform to provide a B2B software platform for SaaS products. Currently we offer the following SaaS software to aircraft owners and operators generally:

● Reroute AI: recycles aircraft waiting to return to base into prospective new charter bookings to destinations within specific distances.

● DynoFlight: enables aircraft operators to estimate aircraft emissions then purchase carbon removal credits via our DynoFlight API.

We have also established a specific version of a private jet by-the-seat booking tool for the Las Vegas Golden Knights professional ice hockey team and Great Western Air, LLC (DBA Cirrus Aviation Services, LLC) ("Cirrus") via 380 Software LLC. 380 Software LLC is a by-the-seat charter joint venture between us and Cirrus.

Our strategy historically has involved expanding our fleet of aircraft with larger aircraft capable of traveling longer distances, developing a national jet card program based on third party aircraft, further enhancing the AI functionality of CharterGPT, and expanding upon our B2B software offerings. Our strategy currently involves further enhancing the AI functionality of Ava and CharterGPT, and expanding upon Reroute AI and DynoFlight.

**Recent Events**

***Nasdaq Compliance***

Our common stock is currently listed on The Nasdaq Capital Market under the symbol "JTAI". On December 1, 2023, the Company received a notification letter (the "Initial Notice Letter") from the Listing Qualifications Staff of Nasdaq notifying the Company that its amount of stockholders' equity had 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 April 14, 2024, the Company received an additional notification letter from Nasdaq (the "Second Notice Letter") stating that the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1), as the minimum bid price of the Company's common stock had been below $1.00 per share for 30 consecutive business days (the "Minimum Bid Price Requirement"). The Company had 180 calendar days, or until October 14, 2024, to regain compliance with the Minimum Bid Price Requirement. Although the Company did not regain compliance with the Minimum Bid Price Requirement by October 14, 2024, it was eligible for an additional 180-calendar day compliance period because it elected to transfer to The Nasdaq Capital Market.

On May 30, 2024, the Company received an additional notification letter from Nasdaq (the "Third Notice Letter") stating that the Company had 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. As directed in the Third Notice Letter, the Company timely requested a hearing before the Nasdaq Hearings Panel to appeal the delisting notice. The Company's hearing request stayed the suspension of trading on the Company's securities, and the Company's securities continued to trade on Nasdaq. On August 14, 2024, in connection with 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 of 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.

The Company effected a reverse stock split of its issued and outstanding shares of common stock at a ratio of 225-for-1 on November 12, 2024 to, in part, to regain compliance with the Minimum Bid Price Requirement. As a result of that reverse stock split and other transactions that occurred during 2024, on November 26, 2024, the Company received a letter from Nasdaq stating that the Company regained compliance with both the Minimum Stockholders' Equity Requirement and the Minimum Bid Price Requirement. However, pursuant to Nasdaq Listing Rule 5815(d)(4)(B), the Company is subject to a Mandatory Panel Monitor for a period of one year from November 26, 2024. If, within that one-year monitoring period, Nasdaq finds the Company again out of compliance with the Minimum Stockholders' Equity Requirement, which was the subject of the exception, notwithstanding Nasdaq Listing Rule 5810(c)(2), the Company would not be permitted to provide Nasdaq with a plan of compliance with respect to that deficiency and Nasdaq would not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor would the Company be afforded an applicable cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, Nasdaq would issue a Delist Determination Letter and the Company would have an opportunity to request a new hearing with the initial Nasdaq Hearings Panel or a newly convened panel if the initial panel were unavailable. The Company would have the opportunity to respond/present to the Nasdaq Hearings Panel as provided by Nasdaq Listing Rule 5815(d)(4)(C). The Company's securities could at that time be delisted from Nasdaq.

Although the Company believes it will be able to maintain compliance with Nasdaq's continued listing requirements, there can be no assurance that the Company will be able to maintain compliance with all such requirements.

***Reverse Stock Split***

 ****

On November 12, 2024, the Company effected a reverse stock split of the Company's issued and outstanding shares of common stock at a ratio of 225-for-1. On the effective date, every 225 shares of common stock issued and outstanding were combined into one issued share of common stock. In addition, the aggregate number of equity-based awards that remain available to be granted under the Company's equity compensation plans was decreased proportionately and proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of outstanding stock options, as applicable, as well as to the number of shares that would be owned upon vesting and settlement of restricted stock units and other equity-based awards, as applicable. Similar proportionate adjustments were also made to the outstanding GEM Warrant. No fractional shares were issued as a result of the reverse stock split and any fractional shares resulting from the reverse stock split were rounded down to the nearest number of whole shares so that we issued cash in lieu of any fractional shares that such stockholder would have received as a result of the reverse stock split. In accordance with ASC 260-10-55-12, the Company has adjusted the number of shares, per-share computations and the computations of basic and diluted EPS retroactively for all periods presented in the consolidated financial statements and related notes.

***Potential Sale of Aviation Business Assets***

On February 13, 2025, the Company, entered into an Agreement and Plan of Merger and Reorganization (the "Original Merger Agreement") with flyExclusive, Inc. ("flyExclusive"), FlyX Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of flyExclusive ("Merger Sub"), and Jet.AI SpinCo, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("SpinCo"). Pursuant to the Merger Agreement, (i) as a condition to closing on the Merger Agreement, the Company will distribute all of the shares of SpinCo, on a pro rata basis, to the Company's stockholders (the "Distribution"), (ii) Merger Sub will merge with and into SpinCo (the "Merger" and, together with the Distribution and all other transactions contemplated under the Merger Agreement, the "Transactions") with SpinCo surviving the Merger as a wholly owned subsidiary of flyExclusive and (iii) as consideration for the Merger, the Company's existing stockholders will have the right to receive shares of Class A common stock of flyExclusive. Additionally, the Company's stockholders will continue to own and hold their existing shares of the Company's common stock as of closing of the Merger.

On May 6, 2025, the parties entered into an Amended and Restated Agreement and Plan of Merger and Reorganization (the "Merger Agreement"). The Merger Agreement amends, restates, replaces and supersedes the Original Merger Agreement in its entirety. Except as follows, the material terms of the Transactions remain unchanged in the Merger Agreement. The Merger Agreement amended the Original Merger Agreement to provide for the concept that 20% of the merger consideration will not be issued upon closing, but will instead be issued post-closing, if any, upon final determination of the purchase price. Previously, the Original Merger Agreement contemplated all of the merger consideration shares being issued upon closing, with 20% of such merger consideration shares being "Restricted Shares" subject to potential post-closing claw back upon determination of the final purchase price. Additionally, the Original Merger Agreement contained a condition to closing which would have required the Company to amend its existing securities purchase agreement with Ionic Ventures, LLC. The Merger Agreement amended the closing condition to instead require the Company to execute a new securities purchase agreement with a third-party investor, pursuant to which the Company will issue the investor a warrant to purchase up to $50 million worth of shares of a newly-designated series of preferred stock.

In connection with executing the Original Merger Agreement, the Company, SpinCo, and flyExclusive entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement") pursuant to which the Company will transfer the business, operations, services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and jet card business (the "Separation"). Upon the terms and subject to the conditions set forth in the Separation and Distribution Agreement, the Company will consummate the Distribution. As such, the Company will no longer operate a fractional or jet card business as of consummation of the Distribution. There will be no change expected to the Company's board of directors or executive officers as a result of the Merger, Separation, Distribution, or other Transactions.

The Merger Agreement contains customary conditions to closing, including the following mutual conditions: (i) the Separation and Distribution and the other transactions contemplated by the Separation and Distribution Agreement shall have been consummated in accordance with the Separation and Distribution Agreement; (ii) a registration statement on Form S-4 covering the merger consideration shares shall be effective; (iii) the approval of the Transactions by holders of the Company's common stock shall have been obtained; and (iv) the shares of flyExclusive Class A common stock issuable pursuant to the Transactions shall have been approved for listing on the NYSE American LLC.

After the Transactions Jet.AI will continue to operate and retain its software and intellectual property assets, but will cease to hold its aircraft fractional, jet card and management assets and expects to pursue additional business opportunities in the artificial intelligence (AI) sector utilizing its remaining assets to enhance those business operations and model. The Transactions are subject to shareholder approval and are expected to close during the third quarter of 2025.

***Joint Venture Agreement***

On June 26, 2025, the Company and Consensus Core Technologies Inc. ("Consensus Core") entered into a Joint Venture Agreement (the "JV Agreement"), pursuant to which the parties agreed to enter into a joint venture to collaborate in developing data centers. The JV Agreement provided certain terms of the joint venture, including: (i) the parties would enter into a Contribution Agreement (the "Contribution Agreement") with a joint venture limited liability company outlining the full terms of the joint venture; (ii) the joint venture limited liability company would be organized under the laws of the State of Delaware prior to any initial closing under the Contribution Agreement, which would initially be wholly owned by Consensus Core; and (iii) the joint venture limited liability company would establish separate subsidiaries for each data center project to be contributed to the joint venture.

On July 2, 2025, the Company entered into the Contribution Agreement with Consensus Core and Convergence Compute LLC, a Delaware limited liability company ("Convergence Compute"), pursuant to which Jet.AI contributed $300,000 to Convergence Compute in the first closing of the transactions contemplated by the JV Agreement. As consideration for its contribution, Jet.AI acquired a 0.5% equity interest in Convergence Compute. Upon the completion of certain data center project milestones, each of the Company and Consensus Core will make additional contributions to Convergence Compute and will receive additional equity interests in Convergence Compute and its subsidiaries.

The Company will contribute up to an aggregate $20 million to Convergence Compute in five tranches, which are each tied to specific project development milestones. Consensus Core will contribute 100% of the equity interests of its Midwest data center project to Convergence Compute at the second closing under the Contribution Agreement and will contribute 100% of the equity interests of its Maritime data center project to Convergence Compute at the third closing under the Contribution Agreement. In consideration for such contributions, the Company and Consensus Core will each receive a 17.5% equity interest in the Midwest project upon the second closing and a 17.5% equity interest in the Maritime project upon the third closing. The Company will also receive an additional 0.5% equity interest in Convergence Compute upon each additional closing, for an aggregate equity interest of up to 2.5% if all five tranches are consummated.

**Our Aircraft Operations**

In July 2021, we leased a HondaJet aircraft under a short-term lease arrangement, which terminated in February 2022, to accelerate our aircraft operations and sales of jet card memberships. We previously acquired four HondaJet Elite aircraft under our 2020 purchase agreement with Honda Aircraft Company, LLC ("Honda Aircraft Company"), discussed under "*Our Aircraft*" below, all four of which have been sold, but three of which remain part of our fleet, as discussed below, with three of the four aircraft having been delivered in 2022. Cirrus is managing, operating, and maintaining our aircraft and has a growing team of pilots that have been specially trained on the HondaJet at the Flight Safety facility on the Honda Aircraft Company campus in Greensboro, NC. Cirrus has additionally developed a safety co-pilot training program in coordination with the FAA and a local flight training academy for licensed pilots already skilled with the Garmin 1000 avionics suite.

We offer the following programs for our HondaJet Elite aircraft:

● Fractional ownership program: This program provides potential owners the ability to purchase a share in a jet at a fraction of the cost of acquiring an entire aircraft. Each 1/5 share guarantees 75 occupied hours of usage per year with 24 hours of notice. The fractional ownership program consists of a down payment, one or more progress payments, a payment on delivery, a monthly management fee and an hourly usage fee. As part of the aircraft purchase agreement, the buyer enters into an aircraft management agreement which lasts three years and, at the end of the contract period, the aircraft is typically sold, and the owners are given their pro-rata share of the sale proceeds. The three-year term is not renewable. Our current contracts do not contemplate the re-fractioning of the aircraft to other buyers at the end of the term, but rather a whole aircraft sale to a single buyer. Monthly management fees are in general subject to an annual CPI-W based step-up. CPI-W is a measure of cost inflation commonly used in long term aviation service contracts with OEMs and engine manufacturers.

● Jet card program: A membership in our jet card program generally includes 10, 25 or 50 occupied hours of usage per year with 24 hours of notice. Members generally pay 100% upfront and then fly for a fixed hourly rate over the next twelve months. Those who require guaranteed availability may pay a membership fee for an additional charge. Jet card program members may interchange as a set ratio per aircraft onto any one of twenty jets operated by our partner, Cirrus.

In addition to servicing members, fractional owners and third-party charter clients, we intend for our HondaJet Elites to be available to address unexpected cancellations or delays on brokered charters. Unlike most of our brokerage competitors, as well as many business jet management companies which require owner approval before their aircraft can be used for third party charter, we believe maintaining a fleet of readily available aircraft to back fill third party charter services provides more reliability and is an attractive selling point for potential clients.

In 2022, we entered into agreements with Cirrus under which we will sell jet cards for Cirrus's aircraft, for a commission for sales and client management services, and we make Cirrus's aircraft available to our customers for charter bookings at preferred rates and with certain service guarantees. As a result, our jet card members and charter customers have access to twenty of Cirrus's aircraft in the light, mid, super-mid, heavy, and ultra-long-range categories, comprising the following aircraft: CJ3+, CJ4, Lear 45XR, Citation XLS+, Lear 60, Hawker 900XP, Challenger 300, Challenger 604, Falcon 900EX, Challenger 850, Gulfstream V and Gulfstream G550.

In the fourth quarter of 2022, we launched the Onboard Program to allow aircraft owners to contribute their aircraft to the Company's charter and jet card inventory. The Onboard Program requires one month FAA conformity of aircraft onto the Cirrus Part 135 certificate, a one-week pilot recertification course for charter operation and execution of a limited management agreement. We currently have one Cessna Citation Jet CJ4 aircraft ("Citation CJ4 Gen 2") and one Beechcraft Super King Air B300 (350I) aircraft ("King Air 350i") managed pursuant to our OnBoard Program.

The above description of our aircraft operations assumes that the Company's current operations will remain the same. However, if the Company consummates the proposed Transactions pursuant to the Merger Agreement with flyExclusive, the Company will transfer the business, operations, services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and jet card business.

**Our Software Platforms**

***Our Booking Platform – CharterGPT***

Our booking platform displays a variety of options across private aircraft types in addition to the pricing of our own aircraft, with a range of prices drawn from a list of thousands of aircraft for hire. We offer users the ability to request a jet and to simultaneously task us with seeking a lower-cost otherwise superior alternative. Our App (or CharterGPT) is directly connected via our application programming interface (API) to Avinode, the major centralized database in private aviation. Through Avinode we can electronically and automatically correspond with operators of private jets who have posted their aircraft for hire. We envision a time when CharterGPT draws upon resources other than Avinode for private aircraft inventory, in particular we contemplate a connection between the inventory found in Reroute AI and CharterGPT.

The CharterGPT app, which we released in the iOS and Android stores in 2023 to replace the charter booking function of our Jet Token App, automates certain of these manual steps involved in charter bookings, and we believe this automation will enable us to scale charter activity with fewer persons than would be normally required. In particular, CharterGPT is designed to do the following: (1) intake travel requirements in natural language and then interact with customers to provide substantive replies and actionable suggestions with quality indistinguishable from an experienced charter professional; (2) power the content behind outbound calls to smaller charter operators to confirm electronic indications of interest communicated via the Avinode centralized booking database of private aircraft; (3) reconcile the natural language terms in a third party jet operator contract with the terms and conditions in the contract the customer signs with us (4) verify that payment for the charter has cleared.

***Our Booking Platform –Ava***

In late 2024 we announced the launch of our cutting-edge agentic AI model, "Ava," that books private jets. Through Ava, customers can now conveniently book private jets by calling or texting a toll-free number where the AI provides real-time aircraft availability, transparent pricing, and expert guidance to help users select the perfect jet for their intended journey. For those who prefer texting, Ava enables full conversational experience via SMS, responding to inquiries, sharing details, and providing a direct link to the CharterGPT app for seamless trip management. The AI is intended to ensure every customer receives a personalized and efficient experience, whether they're seasoned flyers or first-time travelers.

***Jet.AI Operator Platform***

Jet.AI provides and continues to develop a B2B software platform for a suite of SaaS products termed "Jet.AI Operator Platform" which currently consists of:

*Reroute AI*

In 2024 we launched Reroute AI. Reroute AI software is web based and enables FAA Part 135 operators to earn revenue on otherwise empty flight legs. When prompted with basic travel itinerary information such as city pair and date of travel, Reroute AI searches its database of empty flight legs and proposes novel combinations of those legs that meet these constraints it has been given. Its database of empty flight legs comes from API integrations with certain other databases and a ChatGPT enhanced scrape of publicly available empty leg lists published by Part 135 operators. An operator may upload its own aircraft tail numbers and empty leg list if for any reason one or both have not already been uploaded into the system. Jet.AI generates revenue from Reroute AI when an operator wishes to book an itinerary proposed by the software that involves the use of aircraft outside that operator's fleet. In that instance, Jet.AI acts as broker to the operator using Reroute AI's proposed itinerary and a human in the loop to negotiate the new pricing and new routing of the third party operator's aircraft.

*DynoFlight*

DynoFlight is a software API that we launched at the end of 2023. It enables aircraft operators to track and estimate emissions and then purchase carbon offset credits. DynoFlight offers small to medium sized operators a way to begin tracking and offsetting their carbon credits with advances estimation techniques, compliant practices, and quality credits at prices usually only accessible to operators working at a much larger scale that are buying in bulk. In February, 2024, the Company announced a collaboration with FL3XX, a web and app-based aviation management platform, to introduce the DynoFlight carbon offset platform to FL3XX customers. We believe the DynoFlight API may offer an advantage even to large organizations that wish to manage working capital more efficiently (i.e. pay as they fly instead of buying in bulk). We are currently in the process of integrating the DynoFlight API with the FL3XX systems. We believe that, once the DynoFlight API has been integrated with FL3XX and future customers, it will generate monthly and usage-based revenues with modest operating costs limited to server administration and maintenance of the code base.

***AI Data Centers***

With our announcement of the potential sale of our fractional and jet card business assets, we also announced our entry into the AI infrastructure space and have entered into the JV Agreement for our first 50-megawatt project as part of a new one-hundred-and-twenty-acre campus that will allow room for the phased construction of a full gigawatt of capacity in the years ahead. Consensus Core is a Vancouver-based provider of high-performance graphics processing unit infrastructure and AI cloud services. The joint venture is expected to develop two hyperscale data center campuses - one located in Midwestern Canada and the other in Maritime Canada - with a combined power capacity target of approximately 1.5 gigawatts. The Midwestern Project currently has 2 megawatts of capacity live and is expected to reach 100 megawatts within 12 months, while the Maritime Project is expected to begin with 40 megawatts and scale to over 1 gigawatt. Under the JV Agreement and Contribution Agreement, we plan to invest the initial $[●] million in the [●] quarter of 2025, securing a 17.5% equity interest in each project and an initial 0.5% equity interest in Convergence Compute, with the option to increase our total commitment up to $20 million. The joint venture is structured to generate recurring cash flow from our equity interests and offer potential capital appreciation, aligning with our long-term strategy to become a leading developer of AI infrastructure. The projects feature access to large-scale power infrastructure, including transmission lines, natural gas pipelines, and proximity to hydroelectric sources, positioning them for scalable and sustainable growth in the rapidly evolving AI compute market.

**Strategy**

***Aircraft Operations***

Having successfully purchased and sold four HondaJet Elite aircraft, three of which remain part of our fleet, as discussed below, we plan to gradually expand our fleet with larger light jet and super-mid-size aircraft and the help of our operating partner, Cirrus. Cirrus manages a fleet of 30 jets in Las Vegas, where we are headquartered. In October 2024, we entered into an aircraft purchase agreement with Textron Aviation Inc. ("Textron"), for the purchase of three Citation CJ4 Gen 2 aircraft. The aircraft are expected to be delivered in the second, third and fourth quarters of 2026, respectively. Upon delivery, the jets would, in turn, be managed by Cirrus and listed on their Part 135 certificate. Customers who purchase fractional interest in these jets would be expected to make a down payment and progress payments, consistent with fractional industry norms.

Given the timeframe prior to delivery the company may consider independent development of Part 135 operations, subject to management's internal return on capital targets and, depending on the level of scale, the prospective benefits of enhanced operational control on customer service.

Because all major manufacturers of larger cabin aircraft such as Gulfstream, Falcon, Bombardier, Embraer, and Textron each have one to three year waiting lists for purchasing an aircraft, many of our fractional competitors can only pre-sell, and remain otherwise unable to offer the related service. Our strategy is to allow customers, in advance of delivery, to fly on Cirrus's managed aircraft. In return the customer would pay a monthly management fee (MMF) and an occupied hourly fee (OHF) at rates substantially similar to those for their Citation CJ4 Gen 2. We believe this "buy and fly" approach may resonate with market participants who may appreciate the convenience of a fractional program without the extraordinarily long wait.

Conventional wisdom in private aviation has been that a very light jet FAA Part 135 operation presents financial challenges because the lower hourly rate that operators can charge for the use of a very light jet leaves little margin to pay a second pilot and remain profitable. Thanks to our partnership with Cirrus, we have sought to address this concern by having a type rated pilot in command with at least 1,500 hours in jets, 1,000 of which must have been in the HondaJet specifically, fly alongside a co-pilot who has been through an FAA approved ground school developed by Cirrus and Chennault Flying Service. This "safety co-pilot" is permitted to operate the aircraft in the unlikely event the pilot in command is incapacitated or otherwise unable to act. The HondaJet, which has been designated by the FAA for single pilot operation, integrates the Garmin 3000 flight system and by law does not require a second pilot to fly. This safety co-pilot program brings trained pilots who are already schooled in either the Garmin 1000 or Garmin 3000 flight system, gives them additional training on the HondaJet and Garmin 300 system, and then allows them to develop their skills alongside a mentor. Importantly, the presence of this safety co-pilot is regarded by our insurer as sufficient to maintain our present level of premium. The safety pilot does not require a full wage because of their status as a trainee and the professional value they gain from accruing jet flight hours. This lower cost of labor helps the company overcome the traditional costs of paying a second pilot and helps bring a stream of prospective pilot in command candidates. Some safety pilots are newer to aviation while others have had many years of flight training and thousands of hours of flight time on civilian (or military) jet or turboprop aircraft. We believe that the comparatively low cost of entry of the HondaJet and the proven capabilities of the Challenger 3500 are attractive to new and seasoned traveler alike, particularly given our ability to offer interchange between the two aircraft and onto any one of twenty of the thirty aircraft managed by Cirrus. In addition, while some customers have shorter mission profiles and lower passenger loads better suited to the HondaJet others have longer mission profiles with higher passenger loads – and so the HondaJet and the Citation CJ4 Gen 2 (plus Cirrus's fleet) again make an excellent combination in our view. We have taken a gradual approach to fleet expansion given the capital-intensive nature of aviation and our view that customers should bear the risk (and related tax reward) of owning and maintaining airplanes.

The above description of our aircraft operations strategy assumes that the Company's current operations will remain the same. However, if the Company consummates the proposed Transactions pursuant to the Merger Agreement with flyExclusive, the Company will transfer the business, operations, services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and jet card business.

***Artificial Intelligence***

We operate our App in the iOS and Android stores. The App functions as a prospecting and quoting tool for those interested in chartering a private jet. In 2023, we released our enhanced booking App, called CharterGPT, to automate much of the manual labor in charter bookings for all of the steps between a customer's firm indication of interest and their arrival at ultimate destination. In late 2024 we followed up with our agentic AI model, Ava. We believe this automation will enable us to scale charter activity with fewer persons than would be normally required. In particular, CharterGPT is designed to do the following: (1) intake travel requirements in natural language and then interact with customers to provide substantive replies and actionable suggestions with quality indistinguishable from an experienced charter professional; (2) power the content behind outbound calls to smaller charter operators to confirm electronic indications of interest communicated via the Avinode centralized booking database of private aircraft; (3) reconcile the natural language terms in a third party jet operator contract with the terms and conditions in the contract the customer signs with us; and (4) verify that payment for the charter has cleared.

In addition, in 2024, we incorporated the following AI-powered features into CharterGPT and Ava to offer a continually improving unique and personalized experience to customers:

*Aircraft Recommendation Engine*: This feature provides customers greater transparency and understanding of the characteristics of to the aircraft that are available for their trips, making it easier for customers to make an informed decision regarding which aircraft to book. The recommendation engine analyzes a list of available jets based on the traveler's request, and considers factors such as budget, preferred aircraft size, age of aircraft, distance of the trip compared with non-stop/range capability, number of passengers, ages and weights of passengers and their respective bags compared with cargo capacity, basic take-off weight limitations, operator safety audit (Argus/Wyvern), cabin amenities such as a fully enclosed lavatory, WiFi availability and years since last interior refurbishment.

 

*Customer service*: This feature provides intelligent customer service by using natural language processing and machine learning algorithms to understand and respond to initial booking requests. Our management believes that untrained call center staff and brittle chat bots characterize much of the customer facing experience today in the US. With the advent of AI, we believe that even for high ticket items, consumers will come to expect a natural language interface trained on terabytes of data that relate specifically to their respective purchases.

Charter brokerage is labor intensive, and most customers are highly price sensitive. We believe these two factors explain why no charter broker has acquired more than 3-5% of the 500,000 brokered flights that land each year in North America. The back end of the App is expected to provide three features that may address the labor intensity (and hence scalability) of our charter brokerage business. First, each charter operator has its own form of legal contract for carriage and that contract must be reconciled with the terms found in the charter brokers' agreement with the passenger. Our AI is expected to perform this reconciliation automatically, improving the speed to close with the client and reducing labor costs. Second, many charter operators do not initially respond to electronic requests delivered through the Avinode charter database that powers our app. Our generative chat AI is expected to perform outbound voice calls to prompt aircraft operators to respond to quotes we have requested via the web interface to their Avinode account. Third, we expect to develop our AI to integrate with Schedero (an Avinode based scheduling application) to generate a trip sheet for a given charter and then to further integrate with Stripe to invoice and confirm payment via credit card, wire, or ACH.

In addition, we are developing the following AI-powered features to incorporate into the AI functionality of CharterGPT:

*Predictive Destination Optimization*: CharterGPT uses historical traffic patterns and traveler preferences, and is expected to make use of information such as airport closures, fuel prices, and landing fees to then recommend which private airport to select when a traveler's destination address is serviced by multiple airstrips. For example, Los Angeles is serviced by Los Angeles International Airport (LAX), Van Nuys Airport (KVNY), Burbank Bob Hope Airport (KBUR), and John Wayne Airport (KSNA). Landing at an airport farther from one's ultimate destination may save time if doing so enables faster ground transportation.

*Predictive Departure Date*: CharterGPT analyzes historical pricing data and forward-looking event data related to a given itinerary to predict the best date to book a flight to obtain the lowest price for their desired charter itinerary. Although approximately thirty-five blackout days a year are widely understood to absorb most domestic private aviation capacity, a variety of lesser appreciated grey-out days centered around key sporting events or entirely new happenings can affect both regional and national pricing.

*Predictive Departure Time*: CharterGPT recommends optimal departure times based on both historical and live weather conditions, air traffic, and other factors, to help customers more reliably arrive at their destination on time.

*Predictive Ground Transportation*: CharterGPT recommends ground transportation. For example, some airports run out of rental cars at certain times each year because of an annual conference or other recurring special event. Some of our competitors have taken steps to remedy the shortage at some airports by positioning in their own vehicles for customer use.

**Sales and Marketing**

Our marketing and advertising efforts are focused on high-net-worth individuals. We have observed that many first-time private flyers came to market beginning in 2020 in an effort to avoid commercial travel and thereby curtail their prospective exposure to COVID-19. We intend to continue to expand our marketing and advertising through the following channels: online marketing, television advertising and event marketing. Paid social media and search engine advertising drive our online marketing. In the past we have launched 15 and 30 second advertising spots that are targeted at high-net-worth individuals and corporate executives through several channels, including CNBC, Fox Business, and The Golf Channel, as well as online through Facebook and LinkedIn. We intend to expand social media and event marketing in particular, provided those meet our internal return targets. With respect to event marketing, we intend to have a presence at sporting events, business jet industry gatherings and company hosted aircraft static displays.

**Market Opportunity**

Over the past 30 years, the market for private jet travel has transformed significantly. First the model of full aircraft ownership transformed into fractional ownership with companies such as NetJets and FlexJet. This was followed by operators offering jet cards and on-demand service through their fleet of aircraft. The latest iteration of private jet travel provides even more flexibility by providing an on-demand service to travelers while leveraging the flight availability of one or more third party carriers. The result of this transformation is a highly segmented industry with numerous market participants offering varying levels of ownership.

We believe that by combining the private jet on-demand model with commercial airline flight availability and the underutilized flight hours of private jet operators, our company will be positioned to provide optimum flexibility and cost efficiency for our clients.

**Our Aircraft**

The Company's owned and leased aircraft fleet consists of five aircraft – three HondaJet Elites, one Citation CJ4 Gen 2 aircraft and one King Air 350i aircraft. The Company acquired the three HondaJet Elites pursuant to a purchase agreement with Honda Aircraft Company for a multi-aircraft deal for four HondaJet Elites, all four of which have been sold, but three of which remain part of our fleet. One of the HondaJet Elites in our current fleet was sold and is now leased by the Company from Western Finance Company. The other two HondaJet Elites in our current fleet were purchased and subsequently financed through the sale of all fractional interests in each of these aircraft. Both of those HondaJet Elites are now operated by the Company. We also acquired a fourth HondaJet Elite pursuant to the purchase agreement with Honda Aircraft Company, but we sold this aircraft in June 2022, after we determined, based on our internal financial and legal review, that the sale of the aircraft would offer a net benefit to our stakeholders. That fourth HondaJet Elite is not operated by the Company. The fourth and fifth aircraft in our current fleet - the Citation CJ4 Gen 2 aircraft and King Air 350i aircraft - are wholly owned by one of our customers who committed his aircraft to us via our Onboard Program for management and charter pursuant to our limited management agreement. Under the terms of our management agreement, which has a term of one year that automatically renews unless otherwise terminated by either party upon 30 days prior notice, the customer pays us a monthly management fee for services, including aircraft management services, flight crew services, such as pilot hiring, flight operations services, aircraft maintenance management and other administrative services.

Many believe, including our management, that the HondaJet Elite aircraft are ideally suited for trips under 3 hours carrying 2-4 passengers plus two pilots. We believe the HondaJet Elite aircraft is one of the most spacious and cost-efficient light jets on the market with ample baggage and interior room (including an enclosed lavatory). The wing mounted engines allow for a tranquil, spacious interior. Engines on the wings mean less weight on the tail and more room in the cabin.

As discussed in "*Business – Strategy – Aircraft Operations*" above we have executed a fleet purchase agreement to acquire three Citation CJ4 Gen 2 aircraft from Textron Aviation, consisting of three firm orders. We are now actively pre-selling fractional interests in these aircraft. Upon delivery, the jets would in turn be managed by Cirrus and listed on their Part 135 certificate. Customers would be expected to make a down payment and progress payments, consistent with fractional industry norms.

We currently base our fleet at Harry Reid International airport in Las Vegas, NV, a top ten private jet destination, and may relocate the fleet based on seasonal travel patterns and the travel patterns of our membership.

Based on our experience, and in light of many of our competitors restricting charters on certain "blackout dates," we estimate that thirty calendar days per year (due to holidays, major sporting events, etc.) it is extremely difficult to fly private without the guaranteed access provided by a jet membership program such as ours. We believe that the ability to safely offer guaranteed capacity, on demand, is one of the most important features one can deliver in private aviation. Also, possessing a dedicated fleet enables us to offer dynamic pricing to customers, which is attractive to online customers.

We have entered into several Executive Aircraft Management and Charter Services Agreements with Cirrus. Under these agreements, Cirrus provides management services to us with respect to the marketing, operation, maintenance and administration of our aircraft. Specifically, following the initial set-up services, Cirrus provides Flight Crew Services, including selection, training, employment and management of the pilots necessary for operating the Company's Aircraft; Flight Operation Services, including flight scheduling, following and support services; Aircraft Maintenance Services, including maintenance of the Aircraft and/or management of maintenance of the Aircraft performed by third parties, related maintenance support functions and the administration of the Aircraft's log books, manuals, data, records, reports and subscriptions; Administrative Services, including budgeting, accounting and reporting services; Facility Services, including providing and/or arranging for aircraft hangar and support facilities at the Aircraft's Operating Base and other locations at which the Aircraft may be situated from time to time; and Insurance Services, including providing insurance policies for the Aircraft.

Cirrus is the largest private jet charter company based in Las Vegas. The Cirrus team has been managing and operating aircraft – commercially and privately – for more than 40 years. In addition, Cirrus is:

● FAA Eligible On-Demand Approved

● ARG/US Platinum Rated

● Wyvern Recommended

Cirrus maintains, services and operates our aircraft on our behalf and in compliance with all applicable FAA regulations and certification requirements. Cirrus has the capability to provide substitute aircraft at competitive rates in periods of excess demand for our aircraft.

The above description of our aircraft assumes that the Company's current operations will remain the same. However, if the Company consummates the proposed Transactions pursuant to the Merger Agreement with flyExclusive, the Company will transfer the business, operations, services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and jet card business.

**Competition**

Both the private jet charter companies and the legacy airlines and low-cost carriers have numerous competitive advantages that enable them to attract both business and leisure travelers. Our competitors may have corporate travel contracts that direct large numbers of employees to fly with a preferred carrier. The enormous route networks operated by our competitors, combined with their marketing and partnership relationships with regional airlines and international alliance partner carriers, allow them to generate increased passenger traffic from domestic and international cities. Our access to smaller aircraft fleet networks and lack of connecting traffic and marketing alliances puts us at a competitive disadvantage, particularly with respect to our appeal to higher-fare business travelers.

The fractional private jet companies and the legacy airlines and low-cost carriers each operate larger fleets of aircraft and have greater financial resources, which would permit them to add service in response to our entry into new markets. Due to our relatively small size, we are more susceptible to fare wars or other competitive activities, which could prevent us from attaining the level of traffic or maintaining the level of sales required to sustain profitable operations.

In 2018 and 2019, respectively, VistaJet acquired XOJET and JetSmarter, combining its heavy jet subscription-based service targeting multinational corporations and ultra-high net worth individuals with XOJET's super-midsize jet on demand service and JetSmarter's digital booking platform for business aviation. In addition, during 2020, Wheels Up acquired Delta Private Jets as well as Gama Aviation, a business jet services company and in 2021 Vista Jet acquired a number of smaller players as well as Apollo Jets. Increased consolidation in our industry could further intensify the competitive environment we face.

The above description of our competition assumes that the Company's current operations will remain the same. However, if the Company consummates the proposed Transactions pursuant to the Merger Agreement with flyExclusive, the Company will transfer the business, operations, services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and jet card business.

**Intellectual Property**

We registered a trademark on our brand name, Jet Token, and our logo with the United States Patent and Trademark Office. We have also purchased the domain names, jettoken.com and jet.ai, operating our website under those domains. We have an application pending with the United States Patent and Trademark Office for Jet.AI. We are the sole owner of the intellectual property rights in and to the software code underlying our App, CharterGPT and the software code underlying our Jet.AI Operator Platform offerings.

**Employees**

As of March 15, 2025, we have 8 full-time employees, including our Executive Chairman and Interim Chief Executive Officer, our Interim Chief Financial Officer, our Chief Operating Officer, our Chief Technology Officer and our Chief Marketing Officer.

 **Regulation**

***Regulations Applicable to the Ownership and Operation of Our Aircraft***

Once we have leased our aircraft, Cirrus, which maintains and manages our aircraft, is subject to a high degree of regulation that affects our business, including regulations governing aviation activity, safety standards and environmental standards.

*U.S. Department of Transportation ("DOT")*

The DOT primarily regulates economic issues affecting air transportation such as the air carrier's financial and management fitness, insurance, consumer protection and competitive practices. The DOT has the authority to investigate and bring proceedings to enforce its regulations and may assess civil penalties, revoke operating authority, and seek criminal sanctions. Our operating as an air charter carrier is regulated and certificated by the DOT. The DOT authorizes the carrier to engage in on-demand air transportation within the United States, its territories, and possessions. The DOT can suspend or revoke that authority for cause, essentially stopping all operations.

*Federal Aviation Administration ("FAA")*

The FAA primarily regulates flight operations, in particular matters affecting air safety, such as airworthiness requirements for aircraft and pilot, mechanic, dispatcher and flight attendant certification. The FAA regulates:

● aircraft and associated equipment (and all aircraft are subject to ongoing airworthiness standards),

● maintenance and repair facility certification,

● certification and regulation of pilots and cabin crew, and

● management of airspace.

In order to engage in air transportation for hire, each air carrier is required to obtain an FAA operating certificate authorizing the airline to operate using specified equipment in specified types of air service. In the case of our leased aircraft, it is a Part 135 license. The FAA has the authority to modify, suspend temporarily or revoke permanently the authority to provide air transportation for failure to comply with FAA regulations. The FAA can assess civil penalties for such failures or institute proceedings for the imposition and collection of monetary fines for the violation of certain FAA regulations. The FAA can revoke authority to provide air transportation on an emergency basis, without notice and hearing, where significant safety issues are involved. The FAA monitors compliance with maintenance, flight operations and safety regulations, maintains onsite representatives and performs inspections of a carrier's aircraft, employees and records.

The FAA also has the authority to issue maintenance/airworthiness directives and other mandatory orders relating to aircraft and engines, fire retardant and smoke detection devices, collision and windshear avoidance systems, navigational equipment, noise abatement and the mandatory removal and replacement of aircraft parts that have failed or may fail in the future. FAA enforcement authority over aircraft includes the power to ground aircraft or limit their usage.

*Transportation Security Administration ("TSA")*

The TSA is responsible for oversight of passenger and baggage screening, cargo security measures, airport security, assessment and distribution of intelligence and security research and development. Air carriers are subject to TSA mandates and oversight in connection with screening passenger identities and screening baggage. TSA regulations governing passenger identification, which we will apply at the time of the Company purchase as well as at the time of travel, requires all passengers to provide identification using a valid verifying identity document. In addition, all passengers must provide their full name, date of birth, and gender, which is screened against the travel ban watch list in effect at the time of initial screening and at the time of travel.

All air carriers are also subject to certain provisions of the Communications Act of 1934 because of their extensive use of radio and other communication facilities and are required to obtain an aeronautical radio license from the Federal Communications Commission, or the FCC.

**Properties**

We lease space for our corporate headquarters in Las Vegas, Nevada and a satellite office in San Francisco, consisting of office space and the use of shared conference facilities. We believe these leased offices are in satisfactory condition and are suitable for the conduct of our business.

 **Available Information**

We file annual reports, quarterly reports, current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public through the "Investor Relations" portion of our website as soon as practicable after we have electronically filed such material with, or furnished it to, the SEC. In addition, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Our internet address is www.jet.ai. The information on our website is not, and shall not be deemed to be, part of this prospectus or incorporated into any other filings we make with the SEC, except as shall be expressly set forth by specific reference in any such filings. All website addresses in this prospectus are intended to be inactive textual references only.

**DATA CENTER BUSINESS**

**Introduction to Our Data Center Business**

As described above, we are strategically transitioning into an artificial intelligence (AI) data center enterprise, capitalizing on the unprecedented demand for high-performance computing infrastructure to power the AI economy. According to a 2024 McKinsey & Company report, global demand for data center capacity is projected to grow at an annual rate of 19–22% from 2023 to 2030, reaching 171–219 gigawatts (GW), with a potential upper-range scenario of 298 GW. This surge is driven primarily by AI-ready data centers, which are expected to account for approximately 70% of total demand by 2030, fueled by the rapid adoption of generative AI and advanced-AI workloads. The report highlights a looming supply deficiency - with the United States alone facing a potential shortfall of over 15 GW by 2030 - underscoring the urgency and opportunity afforded to strategic players, like Jet.AI, that are poised to fulfill this capacity need.

Our data center business is built on a disciplined, high-return strategy that combines ground-up development, strategic joint ventures, and a seasoned leadership team with proven expertise in data center development and operations from industry giants such as SAP and Facebook. This blend of internal talent and external partnerships positions us to deliver scalable, sustainable, and value-accretive projects that meet the needs of hyperscale tenants and generate significant returns for our shareholders.

Our business model leverages the compelling economics of data center development. Generally speaking, each megawatt of data center capacity costs approximately $10 million to construct and would be expected to generate roughly $1 million in stabilized annual Net Operating Income (NOI), thereby yielding a 10% return on construction cost. Market valuations, typically based on a 6% capitalization rate, translate this NOI into substantial asset value. For example, a 50-megawatt data center, built for $500 million, that generates $50 million in NOI, would result in an $800 million valuation-creating $300 million in value. By utilizing 80% debt and 20% equity financing, it is possible to amplify equity returns, with the general partner's $20 million equity investment potentially growing to $80 million upon exit in this example, or a 300% return all else equal. This model is underpinned by long-term, triple-net leases with creditworthy tenants, ensuring stable cash flows and efficient use of leverage.

Our strategy is both tactical and opportunistic, balancing ground-up development with strategic partnerships to optimize capital deployment and accelerate growth. A prime example is our recently announced joint venture with Consensus Core, a Vancouver-based provider of high-performance graphics processing unit ("GPU") infrastructure and AI cloud services (the "Joint Venture"). This Joint Venture targets the development of two hyperscale data center campuses in Midwestern and Maritime Canada (the "Midwestern Project" and the "Maritime Project," respectively) with a projected combined capacity of up to 1.5 gigawatts. The Midwestern Project, which is already operational at 2 megawatts, is expected to scale to 100 megawatts within 12 months, potentially generating $100 million in incremental NOI, or $1 million per megawatt, if we apply the market rates described earlier. The Maritime Project, with 40 megawatts of immediate capacity is expected to exceed 1 gigawatt over time, and benefits from close geographic access to hydro-electric power. We believe this partnership exemplifies our ability to align with best-in-class operators to secure scarce, high-value infrastructure assets.

By combining our internal expertise, strategic partnerships, and a disciplined investment approach, Jet.AI is well-positioned to capture the growing demand for AI-driven data center capacity. Our projects are designed to deliver recurring cash flows, asset appreciation, and long-term value creation.

**About Consensus Core**

The Consensus Core leadership team brings unparalleled expertise to the Midwestern and Maritime projects.

Wayne Lloyd serves as Co-Founder and Chief Executive Officer of Consensus Core. Wayne is a seasoned technology executive with expertise in capital markets and emerging technologies. For the last 10 years he led the creation, funding, and growth of public and private companies with over 100MWs of data center capacity for blockchain and AI, and structured a number of data center M&A transactions. He transformed a greenfield infrastructure project into a cloud data center and launched one of Canada's first GPU-as-a-Service offerings. Wayne holds a bachelors degree from the University of British Columbia and, serves on several technology boards and is a CFA Charterholder.

Dr. Yan Zhang is Co-Founder and Chief Technology Officer of Consensus Core, responsible for the technical leadership, innovation, and operational delivery of advanced data center solutions in Canada. Dr. Yan Zhang is an experienced executive, author, and patent holder with over 50 patents across telecommunications, cybersecurity, computing, and blockchain and 10+ papers in top academic journals and proceedings. In the past 20 years, he built large scale IT infrastructure projects, including data centers, smart cities and wireless networks in North America, South East Asia and Middle East, serving international hyper-scale and telco clients. Yan sits on multiple boards, driving innovation and strategy. He is leading the Roam Project to deliver the next generation global wireless network, as well as DappWorks, a leader in cloud confidential computing. He holds a Bachelor 's from Tsinghua University and a PhD from Simon Fraser University.

Davy Wang is Chief Cloud Officer of Consensus Core and a globally experienced leader in artificial intelligence, blockchain and hyperscale cloud computing. He brings over two decades of executive experience across North America and the Asia-Pacific region. Davy has held senior leadership roles at leading technology companies, including Senior Expert at Intel, Global CTO at a Hong Kong-listed fintech company, and senior executive at several of the world's top 5 hyperscalers, including Oracle. He played a pivotal role in scaling hyperscaler from millions to billions of dollars in revenue and in building U.S. market entries from the ground up to hundreds of millions annually as well as in the Asia market. He is a published author and a frequent keynote speaker on AI innovation, cloud strategy, and digital infrastructure development.

Om Bhatia serves as Director of Consensus Core. Om is a seasoned finance and engineering professional specializing in large-scale infrastructure project finance globally. During his 16 years working at Wall Street banks, He has held senior director roles at Macquarie Group and Goldman Sachs, focusing on commodities derivatives, trading and project financing. Recently, Om has led a multi-billion-dollar sustainable industrial project financing and his core expertise spans financial risk, industrial operations, procurement, and project finance. Om holds a Master of Science in Engineering and MBA.

**Anticipated Projects**

 ****

***Midwestern Project with the Joint Venture***

The Joint Venture is developing a state-of-the-art data center campus in Midwestern Canada, to expand its portfolio of high-capacity, sustainable data infrastructure. Wayne Lloyd led a tour of the Midwestern data center site for the Jet.AI team, highlighting its unique convergence of energy infrastructure. The location sits adjacent to the largest natural gas pipeline in North America, historically intended to support the now-canceled Keystone Pipeline. This pipeline transports Alberta gas eastward and includes the Emerson line—once a major conduit to Chicago—creating a surplus of available gas due to shifting U.S. demand and the rise of renewables. The estimated gas flow through the site is equivalent to 4–6 GW of electrical capacity, with potential access to even more.

Electric power access is equally robust. The site connects directly to a 115 kV transmission line tied to a main generation aggregation point. This line terminates at a pad owned by Hydro, essentially a utility "jumping-off point" with scalability—rights-of-way on both sides allow for future capacity expansion. The site already hosts a 2 MVA transformer, switchgear, and a package substation capable of supporting a 15 MW load. This infrastructure is in place and operational, the result of zoning changes (from agricultural to industrial) and regulatory approvals.

A small proof-of-concept data center is currently installed and tested on-site, housing approximately 2 MW of capacity. Although idle due to provincial opposition to Bitcoin mining, the infrastructure is active, and the owner is an established commercial power customer. Under Canadian utility law, commercial users cannot be easily cut off—only expanded—making this a privileged and durable power arrangement.

The region's frigid climate allows for efficient ambient air cooling, which is advantageous for GPU-driven compute loads. Additionally, the site has direct access to fiber—installation costs have dropped from $500,000 to $30,000 due to broader regional buildout—making 10 Gbps connections feasible. Copper infrastructure is already present and maintained.

Further expansion is possible, with several adjacent parcels (ranging from 144 to 170 acres) available for purchase or lease. The team is negotiating with a neighbor who owns one such parcel and operates a civil excavation business; informal dumping practices on the land may motivate a sale. Environmental constraints are expected to be minimal, as the site is not intended for residential development.

The site is already equipped, permitted, and integrated into critical energy and communications infrastructure. It represents a uniquely viable location for large-scale data center deployment, benefiting from natural cooling, underutilized power and gas capacity, and a favorable regulatory and utility environment.

 ****

***Maritime Project with the Joint Venture***

The Joint Venture is developing a high-capacity data center campus in Maritime Canada. Strategically positioned to capitalize on the region's robust energy infrastructure and sustainability potential, the Maritime Project strengthens our portfolio of scalable data centers, addressing the escalating demand for cloud computing, artificial intelligence, and digital infrastructure across North America.

The Maritime Project benefits from immediate access to 40 megawatts of substation capacity, that would be expected to enable operations to commence promptly upon development. The site is expected to scale to 100 megawatts in the near term, with long-term plans to exceed 1 gigawatt, which at that scale would position the site as a major hub for hyperscale data center operations. Located alongside an established large-scale critical energy hub, the campus has access to substantial natural gas resources, increasing the probability of reliable and cost-effective power delivery. Additionally, the site is adjacent to 10,000 acres of developable land earmarked for future green energy production expansion.

Maritime Canada's strategic location provides excellent connectivity to national and international networks, supporting low-latency data services for enterprise and hyperscale clients. The region's growing reputation as a data center destination, combined with its stable energy infrastructure, positions the Maritime Project to attract leading technology companies seeking secure and scalable solutions.

**Conclusion**

The foregoing projects illustrate how we may allocate proceeds from this offering, reflecting our intent to develop scalable, high-performance data centers and to position Jet.AI for long-term shareholder value. These initiatives are expected to represent a strategic use of capital aimed at advancing cutting-edge data infrastructure. In addition, Jet.AI may pursue further partnerships and evaluate prospective projects that could support efficient deployment of offering proceeds and promote sustained growth within the data center sector.

**DIRECTORS AND EXECUTIVE OFFICERS**

The following is a list of our directors and executive officers.

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
| Michael D. Winston, CFA | 48 | Executive Chairman and Interim Chief Executive Officer, Director |
| George Murnane | 67 | Interim Chief Financial Officer, Director |
| William Yankus<sup>(1)(3)</sup> | 65 | Director |
| Wrendon Timothy<sup>(1)(2)(3)</sup> | 45 | Director |
| Patrick McNulty | 41 | Chief Operating Officer |
| Lt. Col. Ran David<sup>(2)</sup> | 49 | Director |
| Donald Jeffrey Woods<sup>(3)</sup> | 50 | Director |
| Ehud Talmor<sup>(1)(2)</sup> | 50 | Director |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Member of the audit committee.

(2) Member of the compensation committee.

(3) Member of the nominating and corporate governance committee.

Effective upon the Closing of the Business Combination, Michael D. Winston was appointed to serve as the Company's Executive Chairman and as Company's interim Chief Executive Officer (the "***CEO***") and George Murnane was appointed to serve as Company's interim Chief Financial Officer (the "***CFO***") until Company completes its ongoing search for a long-term CFO, at which point Mr. Winston will step down from his role as interim CEO and Mr. Murnane will transition from Company's interim CFO to its CEO.

***Executive Officers***

**Michael D. Winston, CFA** founded Jet Token in 2018 and has served as its Executive Chairman since its founding. Upon completion of the Business Combination, he began serving as Jet.AI's Interim Chief Executive Officer. Mr. Winston began his career in 1999 with Credit Suisse First Boston Corporation and later worked as a portfolio manager at Millennium Partners LP. In 2012, Mr. Winston formed the Sutton View group of companies, an alternative asset management platform where he advised one of the largest academic endowments in the world until 2022. Mr. Winston received an MBA in Finance and Real Estate from Columbia Business School in 2005, and a BA in Economics from Cornell University in 1999. While at Cornell he studied for a year at the London School of Economics and at age 18 won a $1 million prize from IBM for his first startup company. Mr. Winston is a CFA Charterholder, and a member of the Economic Club of New York.

**George Murnane** served as Jet Token's Chief Executive Officer from September 2019 to August 2023. Upon completion of the Business Combination, he was named Interim Chief Financial Officer of Jet.AI until such time as the Company hires a permanent Chief Financial Officer, at which time he will again assume the role of Chief Executive Officer. Mr. Murnane has over 20 years of senior executive experience, including 14 years as a Chief Operating Officer and/or Chief Financial Officer in the air transportation and aircraft industry, including as Chief Executive Officer for ImperialJet S.a.l from 2013 to 2019, Chief Operating Officer and Acting Chief Financial Officer of VistaJet Holdings, S.A. in 2008, Chief Financial Officer of Mesa Air Group from 2002 to 2007, Chief Operating Officer and Chief Financial Officer of North-South Airways from 2000 to 2002, Executive Vice President, Chief Operating Officer and Chief Financial Officer of International Airline Support Group from 1996 to 2002 and Executive Vice President and Chief Operating Officer of Atlas Air, Inc. from 1995 to 1996. From 2009 until he joined Jet Token, Mr. Murnane was a managing partner of Barlow Partners, a consulting services firm providing operational and financial management, merger and acquisition, financing and restructuring expertise to industrial and financial companies. Mr. Murnane received an MBA from The Wharton School of the University of Pennsylvania and a BA in Economics from the University of Pennsylvania in 1980. Mr. Murnane is also a Certified Public Accountant.

**Patrick McNulty** served as Jet Token's Chief Operating Officer since June 2021 and now serves as Jet.AI's Chief Operating Officer. Prior to joining Jet.AI, Mr. McNulty was employed by Honda Aircraft Company starting in 2013 and served in various roles, including as a manager of Sales Operations and Business Development with Honda Aircraft Company. While with Honda Aircraft Company, Mr. McNulty led the development of a robust sales engineering team and was instrumental in product development and market analysis for the manufacturer. Prior to Honda Aircraft Company, Mr. McNulty worked in the aircraft engine division of Rolls-Royce North America and at light jet manufacturer Eclipse Aviation. Mr. McNulty is a graduate of the Embry-Riddle Aeronautical University (BS Aerospace Engineering, MBA Aviation).

***Non-Employee Directors***

**Wrendon Timothy** serves as the Company's lead independent director, chairman of the audit committee, and member of the compensation, and nominating and corporate governance committees of the board. Mr. Timothy served as the Chief Financial Officer, Treasurer, Secretary and director of Oxbridge Acquisition Corp. (NASDAQ: OXAC) from April 2021 until the business combination with Jet.AI, and also served as a director on OXAC's sponsor, OAC Sponsor Ltd. from April 2021 to March 2025. Mr. Timothy serves as a director of Oxbridge Re Holdings Limited ("Oxbridge Re")(NASDAQ:OXBR) since November 2021, and has served as the Chief Financial Officer and Corporate Secretary of our Oxbridge Re since August 2013. In his role, he has provided financial and accounting consulting services with a focus on technical and SEC reporting, compliance, internal auditing, corporate governance, mergers & acquisitions analysis, risk management, and CFO and controller services. Mr. Timothy also serves as an executive and director of Oxbridge Reinsurance Limited and Oxbridge Re NS, the licensed reinsurance subsidiaries of Oxbridge Re. Mr. Timothy also serves as a director of subsidiaries SurancePlus Holdings Ltd., and SurancePlus Inc., a British Virgin Islands Web3 entity.

Mr. Timothy holds directorship and leadership roles with a number of other privately-held companies, and also serves on various not-for-profit organizations, including his governance role as Chairman of Audit & Risk Committee of The Utility Regulation & Competition Office of the Cayman Islands from May 2021 to December 2022, and June 2023 to present.

Mr. Timothy started his financial career at PricewaterhouseCoopers (Trinidad) in 2004 as an Associate in their assurance division, performing external and internal audit work, and tax-related services. Throughout his career progression and transitions through KPMG Trinidad and PricewaterhouseCoopers (Cayman Islands), Mr. Timothy has successfully delivered services across both the public and private sectors. Mr. Timothy management roles allowed him to be heavily involved in the planning, budgeting, and leadership of engagement teams, serving as a liaison for senior client management, and advising on technical accounting matters. Mr. Timothy is a Fellow of the Association of Chartered Certified Accountants (ACCA), a Chartered Corporate Secretary and also holds a Postgraduate Diploma in Business Administration and a Master of Business Administration, with Distinction (with a Specialism in Finance (with Distinction)), from Heriot Watt University in Edinburg, Scotland. Mr. Timothy is an active Fellow Member of the ACCA, an active member of the Cayman Islands Institute of Professional Accountants (CIIPA), and an active Fellow Member of the Chartered Governance Institute, and active member of the Cayman Islands Directors Association (CIDA) and holds the Accredited Director (Acc. Dir.) designation through the Chartered Governance Institute of Canada.

Mr. Timothy brings considerable finance, accounting, corporate governance and risk management experience to our Board.

**William L. Yankus** has served as one of the Company's independent directors since August 2021. Mr. Yankus is an experienced investment banking specialist with a demonstrated history of working in the insurance industry. Since July 2015, Mr. Yankus has served as Founder and Principal of Pheasant Hill Advisors, LLC, a Connecticut based consulting firm that provides various research, advisory, private equity capital raising and M&A services primarily to the insurance industry and insurance industry investors. Since March 2016, Mr. Yankus has served on the board of directors of Kingstone Companies, Inc. (NASDAQ: KINS), a New York based NASDAQ-listed property and casualty insurance company. He has also served as the Chairman of Kingstone's Compensation Committee since April 2017, and as the Chairman of Kingstone's Investment Committee since February 2020. Mr. Yankus is also a Senior Advisor at Independent Insurance Analysts LLC, which provides investment analysis, credit research and investment banking services related to the life insurance industry.

From September 2011 to June 2015, Mr. Yankus served as Managing Director for Sterne Agee, one of the oldest privately owned financial services firm in the USA. Sterne Agee offered wealth management and investment services to a diverse client base. Prior to Sterne Agee, Mr. Yankus also held executive and leadership roles with other reputable financial services and investment banking firms, including serving as Head of Insurance Research at Macquarie Group from December 2009 to November 2010, Managing Director-Insurance Research for Fox-Pitt, Kelton from May 1993 to November 2009, and Vice President, Insurance Research at Conning & Company from June 1985 to Apr 1993. He completed the CFA program in 1989 and passed the CT uniform CPA exam in 1984. He received his B.A. degree in Economics and Accounting from The College of the Holy Cross.

**Ehud Talmor** (Maj. IAF Ret.) is a decorated, retired, senior officer from the Israeli Air Force with over twenty-five years of experience in all aspects of air combat and aircraft logistics. He began his career in 1995 as a fighter pilot and later, flight instructor. He subsequently took on a variety of supervisory roles, including F-16 deputy squadron commander. In 2007, he joined the Acquisitions Department of the Israeli Ministry of Defense and later held the position of Project Manager for three separate Air Force jet acquisition projects. The jet acquisition projects were: (1) the Beechcraft T-6II, (2) the Leonardo M-346, and (3) the Lockheed Martin F-35A. In addition to serving as Project Manager for the F-35 program, Mr. Talmor was also the Israeli Air Force's Chief Instructor for the F-35. Mr. Talmor graduated from I.D.C. Herzliya with a B.A. in Psychology.

**Lt. Col. Ran David** (IAF) is a decorated combat pilot in the Israeli Air Force. He has served as a deputy squadron commander and spent ten years as a flight instructor. One of Lt. Col David's primary responsibilities has been to train, test and approve new IAF fighter pilots. Lt. Col David is a graduate of the USAF Air Command and Staff College and the University of Haifa.

**Jeff Woods** is currently the Co-Founder, Chief Product Officer, and a director of Puzl, Inc., a company using artificial intelligence to transform retail. He has served in these roles since 2020. He also currently serves as President and Board Member of Woods Supermarket, Inc., a mid-sized family-owned chain of supermarkets operating across Missouri, which has been serving its communities for over 75 years. He has served in these roles since 2020. Prior to these roles, from 2011 to 2019, Mr. Woods served in roles of Vice President of Marketing Strategy and Chief Product Strategist with SAP SE (NYSE: SAP) in London and New York. From 2001 to 2011, Mr. Woods served as Vice President of Enterprise Applications Research at Gartner Inc (NYSE: IT) where he was the global lead for enterprise applications. Prior to this, Mr. Woods built and sold his own logistics company. Mr. Woods is a graduate of Cornell University in Applied Economics and holds an MBA from Columbia Business School.

**Family Relationships**

There are no familial relationships among the Company's directors and executive officers.

**Board Composition**

The Board is comprised of seven directors and is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. The Company's directors are among the three classes as follows:

● the Class I directors are Lt. Col. Ran David and Donald Jeffrey Woods and their terms will expire at the 2027 annual meeting of stockholders;

● the Class II directors are William Yankus and Wrendon Timothy and their terms will expire at the 2025 annual meeting of stockholders; and

● the Class III directors are Michael Winston, George Murnane and Ehud Talmor and their terms will expire at the 2026 annual meeting of stockholders.

Directors in a particular class are elected for three-year terms at the annual meeting of stockholders in the year in which their terms expire. As a result, only one class of directors is elected at each annual meeting of Jet.AI stockholders, with the other classes continuing for the remainder of their respective three-year terms. Each director's term continues until the election and qualification of his or her successor, or the earlier of his or her death, resignation or removal. This classification of the Board may have the effect of delaying or preventing changes in Jet.AI's control or management.

The Company's Certificate of Incorporation and Bylaws provide that only the Board can fill vacant directorships, including newly-created seats. Any additional directorships resulting from an increase in the authorized number of directors would be distributed pro rata among the three classes so that, as nearly as possible, each class would consist of one-third of the authorized number of directors. The Certificate of Incorporation and Bylaws also provide that Jet.AI's directors may only be removed for cause and by the affirmative vote of the holders of at least two-thirds of the voting power of the then-outstanding shares entitled to vote in the election of directors, voting together as a single class.

**Director Independence**

The Board determined that each of the directors serving on the Board, other than Michael Winston and George Murnane, qualifies as an independent director, as defined under the listing rules of Nasdaq, and the Board consists of a majority of "independent directors," as defined under the applicable rules of the SEC and Nasdaq relating to director independence requirements. In addition, the Company is subject to certain rules of the SEC and Nasdaq relating to the membership, qualifications and operations of the audit committee, as discussed below.

**Board Leadership Structure**

The Board does not have a policy requiring the positions of the Chairperson of the Board and Chief Executive Officer to be separate or held by the same individual. The members of the Board believe that this determination should be based on circumstances existing from time to time, based on criteria that are in the Company's best interests and the best interests of its stockholders, including the composition, skills and experience of the board and its members, specific challenges faced by the Company or the industry in which it operates and governance efficiency. The Board adopted Corporate Governance Guidelines, which provide for the appointment of a lead independent director at any time when the Chairperson is not independent. Wrendon Timothy serves as the lead independent director.

**Board Committees**

The Board has established an audit committee, a compensation committee and a nominating and corporate governance committee, each of which have the composition and responsibilities described below. The Board and its committees set schedules for meeting throughout the year and can also hold special meetings and act by written consent from time to time, as appropriate. The Board delegates various responsibilities and authority to its committees and the committees regularly report on their activities and actions to the full board of directors. Members serve on these committees until their resignation or until otherwise determined by the Board. The Board may establish other committees to facilitate the management of the Company's business as it deems necessary or appropriate from time to time.

Each committee of the Board operates under a written charter approved by the Board. Copies of each charter are posted on the Investor Relations section of Jet.AI's website at *investors.jet.ai*. The inclusion of the Company's website address or the reference to Jet.AI's website in this prospectus does not include or incorporate by reference the information on the Company's website into this prospectus.

***Audit Committee***

Jet.AI's audit committee is comprised of Wrendon Timothy, William Yankus and Ehud Talmor, with Mr. Timothy serving as audit committee chairperson. The Board determined that Messrs. Timothy, Yankus and Talmor each meet the requirements for independence and financial literacy under the current Nasdaq listing standards and SEC rules and regulations, including Rule 10A-3. In addition, the Board determined that each of Messrs. Timothy and Yankus is an "audit committee financial expert" within the meaning of Item 407(d) of Regulation S-K promulgated under the Securities Act. This designation does not impose any duties, obligations or liabilities that are greater than are generally imposed on members of the audit committee and the Board. The audit committee is responsible for, among other things:

● selecting a qualified firm to serve as the independent registered public accounting firm to audit Jet.AI's financial statements;

● helping to ensure the independence and overseeing the performance of the independent registered public accounting firm;

● reviewing and discussing the results of the audit with the independent registered public accounting firm and reviewing, with management and that firm, Jet.AI's interim and year-end operating results;

● reviewing Jet.AI's financial statements and critical accounting policies and estimates;

● reviewing the adequacy and effectiveness of Jet.AI's internal controls;

● developing procedures for employees to submit concerns anonymously about questionable accounting, internal accounting controls or audit matters;

● overseeing Jet.AI's policies on risk assessment and risk management;

● overseeing compliance with Jet.AI's code of business conduct and ethics;

● reviewing related party transactions; and

● approving or, as permitted, pre-approving all audit and all permissible non-audit services (other than de minimis non-audit services) to be performed by the independent registered public accounting firm.

The audit committee operates under a written charter, which satisfies the applicable rules of the SEC and the listing standards of Nasdaq, and which is available on Jet.AI's website. All audit services to be provided to Jet.AI and all permissible non-audit services, other than de minimis non-audit services, to be provided to Jet.AI by Jet.AI's independent registered public accounting firm will be approved in advance by the audit committee.

***Compensation Committee***

Jet.AI's compensation committee is comprised of Lt. Col. Ran David, Wrendon Timothy and Ehud Talmor, and Mr. Talmor is the chairperson of the compensation committee. The Board determined that each member of the compensation committee meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. Each member of the committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. The compensation committee is responsible for, among other things:

● reviewing, approving and determining, or making recommendations to the Board regarding, the compensation of Jet.AI's executive officers, including the Chief Executive Officer;

● making recommendations regarding non-employee director compensation to the full Board;

● administering Jet.AI's equity compensation plans and agreements with Jet.AI executive officers;

● reviewing, approving and administering incentive compensation and equity compensation plans; and

● reviewing and approving Jet.AI's overall compensation philosophy.

The compensation committee operates under a written charter, which satisfies the applicable rules of the SEC and Nasdaq listing standards, and is available on Jet.AI's website.

***Nominating and Corporate Governance Committee***

The nominating and corporate governance committee is comprised of William Yankus, Wrendon Timothy and Jeff Woods, and Mr. Woods is the chairperson of the nominating and corporate governance committee. The Board determined that each member of the nominating and corporate governance committee meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations. The nominating and corporate governance committee is responsible for, among other things:

● identifying, evaluating and selecting, or making recommendations to the Board regarding nominees for election to the Board and its committees;

● considering and making recommendations to the Board regarding the composition of the Board and its committees;

● developing and making recommendations to the Board regarding corporate governance guidelines and matters;

● overseeing Jet.AI's corporate governance practices;

● overseeing the evaluation and the performance of the Board and individual directors; and

● contributing to succession planning.

The nominating and corporate governance committee operates under a written charter, which satisfies the applicable rules of the SEC and Nasdaq listing standards and is available on Jet.AI's website.

**Code of Business Conduct and Ethics**

The Board adopted a Code of Business Conduct and Ethics that applies to all of Jet.AI's directors, officers and employees, including Jet.AI's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Business Conduct and Ethics is available on the Corporate Governance section of Jet.AI's website at *https://investors.jet.ai/documents-charters*. In addition, Jet.AI has posted on the Corporate Governance section of Jet.AI's website all disclosures that are required by law or the listing standards of Nasdaq concerning any amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics.

**Compensation Committee Interlocks and Insider Participation**

None of the members of the Jet.AI compensation committee is or has been at any time one of Jet.AI's officers or employees. None of Jet.AI's executive officers currently serve, or in the past fiscal year has served, as a member of the board of directors or compensation committee (or other board of directors committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has or has had one or more executive officers serving as a member of the Board or compensation committee.

**Limitation on Liability and Indemnification of Directors and Officers**

The Certificate of Incorporation limits Jet.AI's directors' liability to the fullest extent permitted under the DGCL. The DGCL provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability:

● for any transaction from which the director derives an improper personal benefit;

● for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

● for any unlawful payment of dividends or redemption of shares; or

● for any breach of a director's duty of loyalty to the corporation or its stockholders.

If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of Jet.AI's directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.

Delaware law and the Bylaws provide that Jet.AI will, in certain situations, indemnify Jet.AI's directors and officers and may indemnify other employees and other agents, to the fullest extent permitted by law. Any indemnified person is also entitled, subject to certain limitations, to advancement, direct payment or reimbursement of reasonable expenses (including attorneys' fees and disbursements) in advance of the final disposition of the proceeding.

In addition, Jet.AI has entered into separate indemnification agreements with Jet.AI's directors and officers. These agreements, among other things, require Jet.AI to indemnify its directors and officers for certain expenses, including attorneys' fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of Jet.AI's directors or officers or any other company or enterprise to which the person provides services at Jet.AI's request.

Jet.AI also maintains a directors' and officers' insurance policy pursuant to which Jet.AI's directors and officers are insured against liability for actions taken in their capacities as directors and officers. We believe these provisions in the Certificate of Incorporation and Bylaws, and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or control persons, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

**EXECUTIVE COMPENSATION**

We are considered a smaller reporting company and an "emerging growth company" within the meaning of the JOBS Act and have opted to comply with the executive compensation disclosure rules applicable to such companies. These rules provide for reduced compensation disclosure for the principal executive officer and the two most highly compensated executive officers other than the principal executive officer (the "***named executive officers***"). This section provides an overview of our executive compensation programs, including a narrative description of the material factors necessary to understand the information disclosed in the summary compensation table below. In order to provide a fuller understanding of the compensation arrangements with our executive officers, the Company has presented full year 2024 and 2023 information, including compensation paid by Jet Token prior to the completion of the Business Combination.

For fiscal year 2024 and 2023, the named executive officers were:

● Michael Winston, Executive Chairman and Interim Chief Executive Officer of Jet.AI Inc. following the Business Combination (Founder and Executive Chairman and Treasurer of Jet Token);

● George Murnane, Interim Chief Financial Officer of Jet.AI Inc. following the Business Combination (Chief Executive Officer and President of Jet Token); and

● Patrick McNulty, Chief Operating Officer of Jet.AI Inc. following the Business Combination (Chief Operating Officer of Jet Token).

Jet.AI believes its compensation programs should promote the success of the Company and align executive incentives with the long-term interests of its stockholders. Jet.AI's compensation programs reflect its startup origins and consist primarily of salary, bonus and equity awards. As Jet.AI's needs evolve, it intends to continue to evaluate its philosophy and compensation programs as circumstances require.

**Summary Compensation Table**

The following table provides information concerning compensation awarded to, earned by, and paid to each of the named executive officers for services rendered to Jet.AI and Jet Token in all capacities during the years ended December 31, 2024 and 2023, respectively:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary <br> ($)** | **Bonus / Commission<br> ($)** | **Option**<br> **Awards<sup>(1)</sup>($)** | **All Other<br> Compensation**<br> **($)<sup>(12)</sup>** | **Total**<br> **($)** |
| Michael D. Winston | 2024 | $357606 | $100000 | $32760 | $46632 | $536998 |
| *Executive Chairman and Interim Chief Executive Officer (formerly Founder, Executive Chairman and Treasurer of Jet Token)* | 2023 | $281606 | $100000 | $— | $52814 | $434420 |
| George Murnane | 2024 | $232212 | $100000 | $4914 | $58008 | $395134 |
| *Interim Chief Financial Officer (formerly Chief Executive Officer and President of Jet Token)* | 2023 | $234615 | $100000 | $359745 | $63720 | $758080 |
| Patrick McNulty | 2024 | $185769 | $47732 | $7371 | $45192 | $286064 |
| *Chief Operating Officer (formerly Chief Operating Officer of Jet Token)* | 2023 | $172933 | $18106 | $205035 | $40886 | $436960 |

---

(1) The amounts in this column do not represent amounts the named executive officers received or are entitled to receive. Rather, the reported amounts represent the aggregate grant date fair value of option awards granted to each named executive officer, computed in accordance with FASB ASC Topic 718, as further described in Note 2 of the notes to our Consolidated Financial Statements included elsewhere in this prospectus, which contains a discussion of all assumptions made by us in determining the grant date fair value of our equity awards. The reported amounts do not reflect the risk the option awards may be forfeited in certain circumstances and, for awards that are subject to performance conditions, the risk there is no payout because the performance conditions are not met.

(2) The reported amounts of all other compensation for 2024 include the following items:

---

| | | | |
|:---|:---|:---|:---|
| ***Name*** | ***Contributions to<br> Qualified<br> Defined<br> Contribution<br> Plan<sup>(a)</sup>*** | ***Fringe<br> Benefits<sup>(b)</sup>*** | ***Health and<br> Disability***<br> ***Benefits<sup>(c)</sup>*** |
| Michael D. Winston | $14015 | $8640 | $23977 |
| George Murnane | $12569 | $20016 | $25423 |
| Patrick McNulty | $— | $7200 | $37992 |

---

*(a)* *Represents Jet.AI's contributions to the Jet.AI 401(k) Retirement Plan, a broad-based tax qualified defined contribution plan, based on the same fixed and matching contribution formula applicable to all participants in this plan.* 

*(b)* *Represents amounts paid directly to the named executive officer for certain fringe benefits including:* 

 

● *Bi-weekly reimbursement for automotive costs (up to $600);* 

● *Bi-weekly reimbursement for mobile phone costs (up to $150);* 

● *Bi-weekly reimbursement for health club (up to $100);* 

● *For employees that opt for the High Deductible Health Plan offered by our healthcare provider, a $1,500 annual tax-free contribution to an HSA by the company on the employee's behalf; and* 

● *Employee achievement awards - up to $1,600 of non-taxable tangible personal property each year, other than cash, cash equivalent or gift card Employee achievement awards (up to $1,600).* 

 

*(c)* *Represents amounts paid by the Company towards the named executive officer's health, dental and vision insurance, health savings account and life insurance expenses.* 

**Narrative Disclosure to Summary Compensation Table**

For 2024, the compensation program for Jet.AI's named executive officers consisted of base salary, bonus and equity awards.

***Compensation Arrangements following the Business Combination***

A condition to Jet Token's obligation to close the Business Combination was that the Company enter into new or amended employment agreements or arrangements with Michael Winston, George Murnane and Patrick McNulty, effective as of the Closing. The terms of those employment agreements and arrangements are disclosed below.

*Michael Winston*

 

On August 8, 2023, Michael Winston entered into an employment offer letter with Jet.AI to serve as the Company's Executive Chairman and as the chief executive officer of the Company until a chief financial officer is appointed by the Company to replace Mr. Murnane, who will serve as chief financial officer during this interim period until he becomes the chief executive officer of the Company. Pursuant to the offer letter, Mr. Winston is entitled to receive a base salary of $385,000.00 and will be eligible to participate in the Company's performance bonus program, which is expected to be established by [●], 2025. Mr. Winston is entitled to participate in the Company's commission plan for new customer sales and renewal customers and sales of aircraft. Mr. Winston will be eligible for a special cash bonus of $1,500,000 upon a Change of Control (as defined in the offer letter). Pursuant to the offer letter, if Mr. Winston's employment is terminated without "Cause" or for "Good Reason" (as such terms are defined in the offer letter), Mr. Winston will be entitled to severance in the amount equal to three times his then current base salary, less all applicable withholdings and deductions, paid over a 12 month period, conditioned upon Mr. Winston delivering a general release of claims in favor of the Company within 30 days following his termination date.

 

*George Murnane*

On August 10, 2023, Mr. Murnane, entered into an amended and restated employment offer letter with Jet.AI to serve as the chief financial officer of the Company until a replacement chief financial officer is appointed by the Company, at which point he will become the chief executive officer of the Company. Pursuant to the employment offer letter, Mr. Murnane is entitled to receive a base salary of $250,000 and will be eligible to participate in the Company's performance bonus program. Mr. Winston is entitled to participate in the Company's commission plan for new customer sales and renewal customers and sales of aircraft. Mr. Murnane will be eligible for a special cash bonus of $1,500,000 upon a Change of Control (as defined in the offer letter). Pursuant to the offer letter, if Mr. Murnane's employment is terminated without "Cause" or for "Good Reason" (as such terms are defined in the offer letter), Mr. Murnane will be entitled to severance in the amount equal to one times his then current base salary, less all applicable withholdings and deductions, paid over a 12 month period, conditioned upon Mr. Murnane delivering a general release of claims in favor of the Company within 30 days following his termination date.

 

*Patrick McNulty*

 

On July 11, 2023, Patrick McNulty entered into an amended and restated employment offer letter with Jet.AI to serve as the Company's Chief Operating Officer. Pursuant to the offer letter, Mr. McNulty is entitled to receive a base salary of $200,000.00 and will be eligible to participate in the Company's performance bonus program, which is expected to be established by [●], 2025. Mr. McNulty is entitled to participate in the Company's commission plan for new customer sales and renewal customers and sales of aircraft.

 

The foregoing descriptions of Mr. Winston's, Mr. Murnane's and Mr. McNulty's offer letters are qualified in their entirety by the full text of such agreements.

 

*2023 and 2024 Equity Awards*

 

In 2023, following the Business Combination, Mr. Murnane received options to purchase 150,000 shares of our common stock, par value $0.0001 per share ("Common Stock") under the 2023 Jet.AI Inc. Omnibus Incentive Plan (as amended, the "Omnibus Incentive Plan") adopted in connection with the Business Combination, described below, and Mr. McNulty received options to purchase 50,000 shares of Common Stock under the Omnibus Incentive Plan. During 2024, Mr. Winston, Mr. Murnane and Mr. McNulty received options to purchase 1,778, 267 and 400 shares of our Common Stock, respectively.

 

*Benefits and Perquisites*

 

Prior to the Business Combination Jet Token provided, benefits to the named executive officers on the same basis as provided to all of its employees, including health, dental and vision insurance; health savings account; life insurance; and a tax-qualified Section 401(k) plan for which the company matched 100% of contributions up to 6% of the employee's salary.

 

Following the Business Combination, the Company adopted a Fringe Benefit Perk Policy for all full-time employees. This Policy provides for the following fringe benefits:

● Bi-weekly reimbursement for automotive costs (up to $600);

● Bi-weekly reimbursement for mobile phone costs (up to $150);

● Bi-weekly reimbursement for health club (up to $100);

● For employees that opt for the High Deductible Health Plan offered by our healthcare provider, a $1,500 annual tax-free contribution to an HSA by the company on the employee's behalf; and

● Employee achievement awards - up to $1,600 of non-taxable tangible personal property each year, other than cash, cash equivalent or gift card Employee achievement awards (up to $1,600).

The Company also provides a tax-qualified Section 401(k) plan to its employees for which the Company matches 100% of contributions up to 6% of the employee's salary. In addition, directors and officers may make personal use of company aircraft provided (1) the aircraft and its crew cannot reasonably be utilized for profit during the time required to safely execute a proposed flight, (2) the aircraft and its pilots are not moved out of geographical position so as to impair the company's ability to utilize it (or them) for profit thereafter, (3) ample aircraft and crew are available at the time of departure to service customers, (4) a customary charter trip sheet is generated for the flight and retained electronically for not less than 12 months, (5) at least one officer and one director must both review and approve the trip sheet, and (6) the value of the charter flight for an aircraft in that category is independently quoted and retained with the trip sheet. If these conditions are met, the relevant employee is responsible for paying:

● 2.0x the cost of fuel, oil, lubricants, and other additives.

● Travel expenses of the crew, including food, lodging, and ground transportation.

● Hangar and tie-down costs away from the aircraft's base of operation.

● Insurance obtained for the specific flight.

● Landing fees, airport taxes, and similar assessments.

● Customs, foreign permit, and similar fees directly related to the flight.

● In-flight food and beverages.

● Passenger ground transportation.

● Flight planning and weather contract services.

The contributions made on behalf of the named executive officers for fiscal years 2023 and 2024 are disclosed above in the notes to the Summary Compensation Table.

***Jet Token Compensation Arrangements prior to the Business Combination***

Prior to the Business Combination, Jet Token did not have any formal compensation arrangements with its Founder and Executive Chairman, Mr. Winston. Rather, Mr. Winston, as its sole board member, determined the compensation to be paid to him from time to time in consultation with Jet Token's Chief Executive Officer and President, Mr. Murnane.

*Base Salary*

In 2024, each of Mr. Murnane and Mr. McNulty received an annual base salary from Jet Token to compensate them for services rendered to the Company. Prior to the Business Combination, the base salaries of Mr. McNulty and Mr. Murnane were $175,000 and $250,000, respectively, and following the Business Combination were $200,000 and $250,000. The actual base salary received by each named executive officer is set forth above in the Summary Compensation Table in the column titled "Salary." Prior to the Business Combination, Jet Token did not have any formal compensation arrangements with its Founder and Executive Chairman, Mr. Winston. Rather, Mr. Winston, as its sole board member, determined the compensation to be paid to him from time to time in consultation with Jet Token's Chief Executive Officer and President, Mr. Murnane.

*Cash Bonus*

Each of Mr. Murnane's and Mr. McNulty's Jet Token employment arrangement provided that the named executive officer would be eligible to earn a discretionary annual bonus subject to achievement of certain goals (including revenue and profitability targets) as determined by the board of directors of Jet Token ("Jet Token Board"). In 2024 and 2023, Mr. Winston, Mr. Murnane and Mr. McNulty were eligible to earn annual cash bonuses based on their performance, as determined by the Jet Token Board, in its discretion.

The actual annual cash bonuses awarded to each of the named executive officers for fiscal 2024 and fiscal 2023 performance are set forth above in the Summary Compensation Table in the column titled "Bonus."

*Potential Payments on Termination or Change in Control of Jet Token*

 

Mr. Murnane was entitled to a special cash bonus of $1.5 million paid at the effective date of a change of control transaction provided he was still employed by the Company at the time of the closing. The Business Combination did not constitute a change of control under Mr. Murnane's employment agreement.

**Outstanding Equity Awards at Fiscal Year-End Table**

The following table provides information regarding each outstanding option award or unvested stock award held by Messrs. Winston, Murnane and McNulty as of December 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Option Awards** | **Option Awards** | **Option Awards** | **Option Awards** |
| <br>**Name** | **Number of**<br> **Securities**<br> **Underlying**<br> **Unexercised**<br> **Jet.AI**<br> **Options (#)**<br> **Exercisable** | **Number of**<br> **Securities**<br> **Underlying**<br> **Unexercised**<br> **Jet.AI**<br> **Options (#)**<br> **Unexercisable** | **Jet.AI**<br> **Option**<br> **Exercise**<br> **Price ($)** | **Jet.AI**<br> **Option**<br> **Expiration**<br> **Date** |
| Michael Winston | 645 | $1133 | $24.345 | 9/24/34 |
| George Murnane | 864 | $- | $186.75 | 9/23/29 |
|  | 864 | $- | $186.75 | 9/23/29 |
|  | 1727 | $| $938.25 | 12/31/30 |
|  | 1649 | $51575 | $2344.50 | 7/30/31 |
|  | 130 | $7 | $2344.50 | 3/16/32 |
|  | 291 | $374 | $562.50 | 9/22/33 |
| (1) | 100 | 167 | 24.345 | 9/24/34 |
| Patrick McNulty | 13 | $- | $2344.50 | 8/2/31 |
|  | 55 | $- | $2344.50 | 7/1/31 |
|  | 68 | $- | $2344.50 | 7/1/31 |
|  | 136 | $- | $2344.50 | 10/31/31 |
|  | 136 | $- | $2344.50 | 1/5/32 |
|  | 17 | $- | $2344.50 | 3/1/32 |
|  | 34 | $- | $2344.50 | 8/31/32 |
|  | 68 | $- | $2344.50 | 9/30/32 |
|  | 101 | $120 | $562.50 | 9/22/33 |
| (1) | 145 | 255 | 24.345 | 9/24/34 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) These option grants were made pursuant to the Omnibus Incentive Plan, which was initially was approved by the Company's board of directors on July 10, 2023, and by the Company's stockholders in connection with the approval of the Business Combination on August 7, 2023. The Omnibus Incentive Plan became effective as of August 10, 2023, upon the completion of the Business Combination and is described below under "– The Omnibus Incentive Plan."

In addition, on December 26, 2023, the Board approved, at the recommendation of the compensation committee and subject to stockholder approval of an amendment to the Omnibus Incentive Plan at the Company's 2024 annual meeting, the grant of incentive stock options to Mr. Murnane, exercisable for 60,000 shares of Common Stock, and to Mr. McNulty, exercisable for 90,000 shares of Common Stock. The amendment was approved at, and these options were granted following, the 2024 annual meeting. The options vest 1/3 each year beginning December 26, 2024 at an exercise price equal to the fair market value of the Common Stock on the date of grant, and expiring on the 10<sup>th</sup> anniversary of the grant date.

***Equity Grant Timing***

The Board does not determine the timing or terms of equity awards, including stock options or similar awards whose exercise price is related to the market value of our common stock, in connection with the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement, and we do not time the public release of such information based on stock option grant dates. During fiscal year 2024, there were no equity awards granted to any of our named executive officers within either four business days before or one business day after the filing of our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and any Current Report on Form 8-K that contained any material nonpublic information.

**The Omnibus Incentive Plan**

In connection with the Business Combination, the Company adopted the Omnibus Incentive Plan. At the 2024 annual meeting of stockholders the Company's stockholders approved the Amended and Restated 2023 Jet.AI Inc. Omnibus Incentive Plan that established a fixed number of shares of Common Stock that may be issued under the plan and to eliminate an evergreen provision. The Omnibus Incentive 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 Omnibus Incentive 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 Omnibus Incentive Plan effective as of the consummation of the Business Combination. As of December 31, 20234, subject to adjustment and annual increases (as described under "– *Stock Subject to the Omnibus Incentive Plan*" below), the maximum number of shares of Common Stock available for issuance under the Omnibus Incentive Plan is 10,933 shares (on a post-split basis).

***Summary***

The following is a summary of the principal features of the Omnibus Incentive Plan. The summary is qualified in its entirety by reference to the full text of the Omnibus Incentive Plan.

***Purpose***

The purpose of the Omnibus Incentive Plan is to advance the interests of Jet.AI and its stockholders by enabling Jet.AI and its subsidiaries and affiliates to attract and retain qualified individuals to perform services, by providing incentive compensation for such individuals in a form that is linked to the growth and profitability of Jet.AI and increases in stockholder value, and by providing opportunities for equity participation that align the interests of recipients with those of its stockholders.

***Administration***

The board of directors of Jet.AI administers the Omnibus Incentive Plan. The board has the authority under the Omnibus Incentive Plan to delegate plan administration to a committee of the board or a subcommittee thereof. The board of directors of Jet.AI or the committee of the board to which administration of the Omnibus Incentive Plan has been delegated is referred to in this prospectus as the Committee. Subject to certain limitations, the Committee will have broad authority under the terms of the Omnibus Incentive Plan to take certain actions under the plan.

To the extent permitted by applicable law and subject to certain limitations as provided in the Omnibus Incentive Plan, the Committee may delegate to one or more of its members or to one or more officers of Jet.AI such administrative duties or powers under the Omnibus Incentive Plan, as it may deem advisable.

***No Re-pricing***

The Committee may not, without prior approval of the stockholders of Jet.AI, effect any re-pricing of any previously granted "underwater" option or SAR by: (i) amending or modifying the terms of the option or SAR to lower the exercise price or grant price; (ii) canceling the underwater option or SAR in exchange for (A) cash; (B) replacement options or SARs having a lower exercise price or grant price; or (C) other awards; or (iii) repurchasing the underwater options or SARs and granting new awards under the Omnibus Incentive Plan. An option or SAR will be deemed to be "underwater" at any time when the fair market value of Common Stock of Jet.AI is less than the exercise price of the option or the grant price of the SAR.

 ****

***Stock Subject to the Omnibus Incentive Plan***

Subject to adjustment (as described below), the maximum number of shares of Common Stock available for issuance under the Omnibus Incentive Plan is 394,329 shares, with an annual increase on the first day of each calendar year beginning on January 1, 2024 and ending on January 1, 2033 equal to: (A) such amount of shares of Common Stock such that the total number of shares available for issuance under this Plan, plus the total number of shares reserved for issuance under outstanding Jet Token Options and Jet Token RSU Awards (as such terms are defined in the Business Combination Agreement) assumed in is equal to ten percent (10%) of the total number of shares then issued and outstanding as of the last day of the prior fiscal year; and (B) such smaller number of shares of Common Stock as may be determined by the Board.

Shares that are issued under the Omnibus Incentive Plan or that are subject to outstanding awards will be applied to reduce the maximum number of shares remaining available for issuance under the Omnibus Incentive Plan only to the extent they are used; provided, however, that the full number of shares subject to a stock-settled SAR or other stock-based award will be counted against the shares authorized for issuance under the Omnibus Incentive Plan, regardless of the number of shares actually issued upon settlement of such SAR or other stock-based award. Any shares withheld to satisfy tax withholding obligations on awards issued under the Omnibus Incentive Plan, any shares withheld to pay the exercise price or grant price of awards under the Omnibus Incentive Plan and any shares not issued or delivered as a result of the "net exercise" of an outstanding option or settlement of a SAR in shares will not be counted against the shares authorized for issuance under the Omnibus Incentive Plan and will be available again for grant under the Omnibus Incentive Plan. Shares subject to awards settled in cash will again be available for issuance pursuant to awards granted under the Omnibus Incentive Plan. Any shares related to awards granted under the Omnibus Incentive Plan that terminate by expiration, forfeiture, cancellation or otherwise without the issuance of the shares will be available again for grant under the Omnibus Incentive Plan. Any shares repurchased by Jet.AI on the open market using the proceeds from the exercise of an award will not increase the number of shares available for future grant of awards. To the extent permitted by applicable law, shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by Jet.AI or a subsidiary or otherwise will not be counted against shares available for issuance pursuant to the Omnibus Incentive Plan. The shares available for issuance under the Omnibus Incentive Plan may be authorized and unissued shares or treasury shares.

***Adjustments***

In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin off) or other similar change in the corporate structure or shares of Common Stock of Jet.AI, the Committee will make the appropriate adjustment or substitution. These adjustments or substitutions may be to the number and kind of securities and property that may be available for issuance under the Omnibus Incentive Plan. In order to prevent dilution or enlargement of the rights of participants, the Committee may also adjust the number, kind, and exercise price or grant price of securities or other property subject to outstanding awards.

***Eligible Participants***

Awards may be granted to employees, non-employee directors and consultants of Jet.AI or any of its subsidiaries. A "consultant" for purposes of the Omnibus Incentive Plan is one who renders services to Jet.AI or its subsidiaries that are not in connection with the offer and sale of its securities in a capital raising transaction and do not directly or indirectly promote or maintain a market for its securities.

***Types of Awards***

The Omnibus Incentive Plan permits Jet.AI to grant non-statutory and incentive stock options, stock appreciation rights ("SARs"), restricted stock awards, restricted stock units, deferred stock units, performance awards, non-employee director awards and other stock-based awards. Awards may be granted either alone or in addition to or in tandem with any other type of award.

 

*Stock Options*

Stock options entitle the holder to purchase a specified number of shares of Common Stock of Jet.AI at a specified price, which is called the exercise price, subject to the terms and conditions of the stock option grant. The Omnibus Incentive Plan permits the grant of both non-statutory and incentive stock options. Incentive stock options may be granted solely to eligible employees of Jet.AI or its subsidiaries. Each stock option granted under the Omnibus Incentive Plan must be evidenced by an award agreement that specifies the exercise price, the term, the number of shares underlying the stock option, the vesting and any other conditions. The exercise price of each stock option granted under the Omnibus Incentive Plan must be at least 100% of the fair market value of a share of Common Stock of Jet.AI as of the date the award is granted to a participant. Fair market value under the Omnibus Incentive Plan means, unless otherwise determined by the Committee, the closing sale price of Common Stock of Jet.AI, as reported on Nasdaq, on the grant date. The Committee will fix the terms and conditions of each stock option, subject to certain restrictions, such as a ten-year maximum term.

*Stock Appreciation Rights*

A SAR is a right granted to receive payment of cash, stock, or a combination of both equal to the difference between the fair market value of shares of our Common Stock and the grant price of such shares. Each SAR granted must be evidenced by an award agreement that specifies the grant price, the term, and such other provisions as the board may determine. The grant price of a SAR must be at least 100% of the fair market value of our Common Stock on the date of grant. The board fixes the term of each SAR, but SARs granted under the Omnibus Incentive Plan will not be exercisable more than 10 years after the date the SAR is granted.

*Restricted Stock Awards, Restricted Stock Units and Deferred Stock Units*

 

Restricted stock awards, restricted stock units, or RSUs, and/or deferred stock units, or DSUs, may be granted under the Omnibus Incentive Plan. A restricted stock award is an award of Common Stock of Jet.AI that is subject to restrictions on transfer and risk of forfeiture upon certain events, typically including termination of service. RSUs are similar to restricted stock awards except that no shares are actually awarded to the participant on the grant date. DSUs permit the holder to receive shares of Common Stock or the equivalent value in cash or other property at a future time as determined by the board. The Committee will determine, and set forth in an award agreement, the period of restriction, the number of shares of restricted stock awards or the number of RSUs or DSUs granted, and other such conditions or restrictions.

*Performance Awards*

Performance awards, in the form of cash, shares of Common Stock of Jet.AI, other awards or a combination of both, may be granted under the Omnibus Incentive Plan in such amounts and upon such terms as the Committee may determine. The Committee shall determine, and set forth in an award agreement, the amount of cash and/or number of shares or other awards, the performance goals, the performance periods and other terms and conditions. The extent to which the participant achieves his or her performance goals during the applicable performance period will determine the amount of cash and/or number of shares or other awards earned by the participant. The Committee retains discretion to adjust performance awards either upward or downward, either on a formula or discretionary basis or any combination, as the Committee determines.

*Non-Employee Director Awards; Limit on Non-Employee Director Compensation*

The Committee at any time and from time-to-time may approve resolutions providing for the automatic or other grant to non-employee directors of awards. Such awards may be granted singly, in combination, or in tandem, and may be granted pursuant to such terms, conditions and limitations as the Committee may establish in its sole discretion consistent with the provisions of the Omnibus Incentive Plan. The Committee may permit non-employee directors to elect to receive all or any portion of their annual retainers, meeting fees or other fees in restricted stock, RSUs, DSUs or other stock-based awards in lieu of cash. Under the Omnibus Incentive Plan the sum of any cash compensation, or other compensation, and the value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of awards granted to a non-employee director as compensation for services as a non-employee director during any fiscal year of the Company may not exceed $750,000 (increased to $800,000 with respect to any Non-Employee Director serving as Chairman of the Board or Lead Independent Director).

 

*Other Stock-Based Awards*

 

Consistent with the terms of the plan, other stock-based awards may be granted to participants in such amounts and upon such terms as the Committee may determine.

*Dividend Equivalents*

 

With the exception of stock options, SARs, and unvested performance awards, awards under the Omnibus Incentive Plan may, in the Committee's discretion, earn dividend equivalents with respect to the cash or stock dividends or other distributions that would have been paid on the shares of Common Stock of Jet.AI covered by such award had such shares been issued and outstanding on the dividend payment date. However, no dividends may be paid on awards until they are vested. Such dividend equivalents will be converted to cash or additional shares of Common Stock of Jet.AI by such formula and at such time and subject to such limitations as determined by the Committee.

***Termination of Employment or Other Service***

The Omnibus Incentive Plan provides for certain default rules in the event of a termination of a participant's employment or other service. These default rules may be modified in an award agreement or an individual agreement between Jet.AI and a participant. If a participant's employment or other service with Jet.AI is terminated for cause, then all outstanding awards held by such participant will be terminated and forfeited. In the event a participant's employment or other service with Jet.AI is terminated by reason of death, disability or retirement, then:

● All outstanding stock options (excluding non-employee director options in the case of retirement) and SARs held by the participant will, to the extent exercisable, remain exercisable for a period of one year after such termination, but not later than the date the stock options or SARs expire;

● All outstanding stock options and SARs that are not exercisable and all outstanding restricted stock will be terminated and forfeited; and

● All outstanding unvested RSUs, performance awards and other stock-based awards held by the participant will terminate and be forfeited. However, with respect to any awards that vest based on the achievement of performance goals, if a participant's employment or other service with Jet.AI or any subsidiary is terminated prior to the end of the performance period of such award, but after the conclusion of a portion of the performance period (but in no event less than one year), the Committee may, in its sole discretion, cause shares to be delivered or payment made with respect to the participant's award, but only if otherwise earned for the entire performance period and only with respect to the portion of the applicable performance period completed at the date of such event, with proration based on the number of months or years that the participant was employed or performed services during the performance period.

In the event a participant's employment or other service with Jet.AI is terminated by reason other than for cause, death, disability or retirement, then:

● All outstanding stock options (including non-employee director options) and SARs held by the participant that then are exercisable will remain exercisable for three months after the date of such termination, but will not be exercisable later than the date the stock options or SARs expire;

● All outstanding restricted stock will be terminated and forfeited; and

● All outstanding unvested RSUs, performance awards and other stock-based awards will be terminated and forfeited. However, with respect to any awards that vest based on the achievement of performance goals, if a participant's employment or other service with Jet.AI or any subsidiary is terminated prior to the end of the performance period of such award, but after the conclusion of a portion of the performance period (but in no event less than one year), the Committee may, in its sole discretion, cause shares to be delivered or payment made with respect to the participant's award, but only if otherwise earned for the entire performance period and only with respect to the portion of the applicable performance period completed at the date of such event, with proration based on the number of months or years that the participant was employed or performed services during the performance period.

 ****

 ****

***Modification of Rights upon Termination***

Upon a participant's termination of employment or other service with Jet.AI or any subsidiary, the Committee may, in its sole discretion (which may be exercised at any time on or after the grant date, including following such termination) cause stock options or SARs (or any part thereof) held by such participant as of the effective date of such termination to terminate, become or continue to become exercisable or remain exercisable following such termination of employment or service, and restricted stock, RSUs, DSUs, performance awards, non-employee director awards and other stock-based awards held by such participant as of the effective date of such termination to terminate, vest or become free of restrictions and conditions to payment, as the case may be, following such termination of employment or service, in each case in the manner determined by the Committee; provided, however, that no stock option or SAR may remain exercisable beyond its expiration date any such action by the Committee adversely affecting any outstanding award will not be effective without the consent of the affected participant, except to the extent the Committee is authorized by the Omnibus Incentive Plan to take such action.

***Forfeiture and Recoupment***

If a participant is determined by the Committee to have taken any action while providing services to Jet.AI or within one year after termination of such services, that would constitute "cause" or an "adverse action," as such terms are defined in the Omnibus Incentive Plan, all rights of the participant under the Omnibus Incentive Plan and any agreements evidencing an award then held by the participant will terminate and be forfeited. The Committee has the authority to rescind the exercise, vesting, issuance or payment in respect of any awards of the participant that were exercised, vested, issued or paid, and require the participant to pay to Jet.AI, within 10 days of receipt of notice, any amount received or the amount gained as a result of any such rescinded exercise, vesting, issuance or payment. Jet.AI may defer the exercise of any stock option or SAR for up to six months after receipt of notice of exercise in order for the Board to determine whether "cause" or "adverse action" exists. Jet.AI is entitled to withhold and deduct future wages or make other arrangements to collect any amount due.

In addition, if Jet.AI is required to prepare an accounting restatement due to material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws, then any participant who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 will reimburse Jet.AI for the amount of any award received by such individual under the Omnibus Incentive Plan during the 12 month period following the first public issuance or filing with the SEC, as the case may be, of the financial document embodying such financial reporting requirement. Jet.AI also may seek to recover any award made as required by the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any other clawback, forfeiture or recoupment provision required by applicable law or under the requirements of any stock exchange or market upon which Common Stock of Jet.AI is then listed or traded or any policy adopted by Jet.AI.

***Effect of Change in Control***

Generally, a change in control will mean:

● The acquisition, other than from Jet.AI, by any individual, entity or group of beneficial ownership of 50% or more of the then outstanding shares of Common Stock of Jet.AI;

● The consummation of a reorganization, merger or consolidation of Jet.AI with respect to which all or substantially all of the individuals or entities who were the beneficial owners of Common Stock of Jet.AI immediately prior to the transaction do not, following the transaction, beneficially own more than 50% of the outstanding shares of Common Stock and voting securities of the corporation resulting from the transaction; or

● A complete liquidation or dissolution of Jet.AI or the sale or other disposition of all or substantially all of the assets of Jet.AI.

Subject to the terms of the applicable award agreement or an individual agreement between Jet.AI and a participant, upon a change in control, the Committee may, in its discretion, determine whether some or all outstanding options and SARs shall become exercisable in full or in part, whether the restriction period and performance period applicable to some or all outstanding restricted stock awards and RSUs shall lapse in full or in part and whether the performance measures applicable to some or all outstanding awards shall be deemed to be satisfied. The Committee may further require that shares of stock of the corporation resulting from such a change in control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock of Jet.AI subject to an outstanding award and that any outstanding awards, in whole or in part, be surrendered to Jet.AI by the holder, to be immediately cancelled by Jet.AI, in exchange for a cash payment, shares of capital stock of the corporation resulting from or succeeding Jet.AI or a combination of both cash and such shares of stock.

***Governing Law; Mandatory Jurisdiction***

Except to the extent as provided in the Omnibus Incentive Plan, the validity, construction, interpretation, administration and effect of the Omnibus Incentive Plan and any rules, regulations and actions relating to the Omnibus Incentive Plan will be governed by and construed exclusively in accordance with the laws of the State of Delaware, notwithstanding the conflicts of laws principles of any jurisdictions. Unless otherwise expressly provided in an applicable award agreement, Jet.AI and recipients of an award under the Omnibus Incentive Plan irrevocably submit to the jurisdiction and venue of the Federal or State courts of the State of Delaware relative to any and all disputes, issues and/or claims that may arise out of or relate to the Omnibus Incentive Plan or any related award agreement, with such jurisdiction and venue selected by and at the sole discretion of Jet.AI.

***Term, Termination and Amendment***

Unless sooner terminated by the Board, the Omnibus Incentive Plan will terminate at midnight on the day before the ten year anniversary of its effective date. No award will be granted after termination of the Omnibus Incentive Plan, but awards outstanding upon termination of the Omnibus Incentive Plan will remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of the Omnibus Incentive Plan.

Subject to certain exceptions, the Board has the authority to suspend or terminate the Omnibus Incentive Plan or terminate any outstanding award agreement and the Board has the authority to amend the Omnibus Incentive Plan or amend or modify the terms of any outstanding award at any time and from time to time. No amendments to the Omnibus Incentive Plan will be effective without approval of Jet.AI's stockholders if: (a) stockholder approval of the amendment is then required pursuant to Section 422 of the Code, the rules of the primary stock exchange on which Common Stock of Jet.AI is then traded, applicable U.S. state and federal laws or regulations and the applicable laws of any foreign country or jurisdiction where awards are, or will be, granted under the Omnibus Incentive Plan; or (b) such amendment would: (i) modify the re-pricing provisions of the Omnibus Incentive Plan; (ii) increase the aggregate number of shares of Common Stock of Jet.AI issued or issuable under the Omnibus Incentive Plan; or (iii) reduce the minimum exercise price or grant price as set forth in the Omnibus Incentive Plan. No termination, suspension or amendment of the Omnibus Incentive Plan or an award agreement shall adversely affect any award previously granted under the Omnibus Incentive Plan without the written consent of the participant holding such award.

**Jet Token Prior Option Plans**

<u>General</u>. On June 4, 2018, Jet Token's board of directors adopted the Jet Token Inc. 2018 Stock Option and Grant Plan (the "2018 Plan"). The 2018 Plan provided for the grant of equity awards to employees, and consultants, to purchase shares of Jet Token's common stock. As of December 31, 2020, up to 3,434 shares of its common stock could be issued pursuant to awards granted under the 2018 Plan. During the year ended December 31, 2021, the 2018 Plan was amended three times to increase the total number of shares reserved for issuance thereunder. As of December 31, 2024 and 2023, the total number of shares reserved for issuance under the 2018 Plan was 10,301 shares. The 2018 Plan is administered by Jet Token's board of directors.

In August 2021, Jet Token's board of directors adopted the Jet Token Inc. 2021 Stock Plan (the "2021 Plan"). The 2021 plan provided 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. As of December 31, 2021, up to 688 shares of non-voting 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 non-voting common stock authorized under the 2021 Plan to 2,063. In the event that shares of non-voting common stock subject to outstanding options or other securities under the Jet Token's 2018 Stock Open 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.

<u>Plan Administration</u>. The Jet Token Board administered the Jet Token Option Plan. The compensation committee of the Board currently administers the Jet Token Option Plan following the Closing Date.

<u>Types of Awards</u>. The Jet Token Option Plan provides for the grant of incentive Jet Token Options, non-statutory Jet Token Options, Jet Token Restricted Stock, restricted stock units and stock appreciation rights.

<u>Stock Options</u>. The Jet Token Board has the discretion to grant incentive or non-statutory Jet Token Options under the Jet Token Option Plan, provided that incentive Jet Token Options may only be granted to employees. The exercise price per share applicable to such Jet Token Options must generally be equal to at least the fair market value per share of Jet Token Common Stock on the date of grant. Subject to the provisions of the Jet Token Option Plan, the Jet Token Board has the discretion to determine the remaining terms of the Jet Token Options (e.g., vesting). After the termination of a participant's service, the participant may only exercise his or her Jet Token Option, to the extent vested, for a specified period of time stated in his or her option agreement. Generally, if termination is due to death or disability, the Jet Token Option will remain exercisable for 18 months and 12 months following the termination of service, respectively. In all other cases except for a termination for cause, the Jet Token Option will generally remain exercisable for three months following the termination of service. In the event of a termination for cause, the Jet Token Option will immediately terminate. However, in no event may a Jet Token Option be exercised later than the expiration of its maximum term.

<u>Restricted Stock</u>. The Jet Token Board has the discretion to grant Jet Token Restricted Stock under the Jet Token Option Plan. Jet Token Restricted Stock are generally shares of Jet Token Common Stock that are issued or sold to a participant pursuant to the Jet Token Option Plan and subject to repurchase by Jet Token under certain circumstances and that are fully vested at grant or that will vest in accordance with terms and conditions established by the Jet Token Board, in its sole discretion. The Jet Token Board has the discretion to determine the number of shares that the participant may receive or purchase, the price to be paid (if any), and the time by which the participant must accept the shares/offer.

<u>Restricted Stock Units</u>. The Jet Token Board has the discretion to grant restricted stock units under the Jet Token Option Plan. Each restricted stock unit is a bookkeeping entry representing an amount equal to the fair market value of one share of Jet Token Common Stock. The Jet Token Board, in its discretion, determines whether restricted stock units should be granted, the total units granted and/or the vesting terms applicable to such units. Participants holding restricted stock units will hold no voting rights by virtue of such restricted stock units. The Jet Token Board may, in its sole discretion, award dividend equivalents in connection with the grant of restricted stock units. Restricted stock units may be settled in cash, shares of Jet Token Common Stock, as applicable, or any combination thereof or in any other form of consideration, as determined by the Jet Token Board, in its sole discretion.

 <u>Stock Appreciation Rights</u>. The Jet Token Board has the discretion to grant stock appreciation rights under the Jet Token Option Plan and to determine the terms and conditions of each stock appreciation right, except that the exercise price for each stock appreciation right cannot be less than 100% of the fair market value of the underlying shares of Jet Token Common Stock on the date of grant. Upon exercise of a stock appreciation right, a participant will receive payment from Jet Token in an amount determined by multiplying the difference between the fair market value of a share on the date of exercise over the exercise price by the number of shares with respect to which the stock appreciation right is exercised. Stock appreciation rights may be paid in cash, shares of Jet Token Common Stock, or any combination thereof, or in any other form of consideration, as determined by the Jet Token Board in its discretion. Stock appreciation rights are exercisable at the times and on the terms established by the Jet Token Board, in its discretion.

<u>Non-transferability of Awards</u>. Unless the Jet Token Board provides otherwise, awards granted under the Jet Token Option Plan are generally not transferable.

<u>Certain Adjustments</u>. In the event of certain corporate events or changes in Jet Token's capitalization, to prevent diminution or enlargement of the benefits or potential benefits available under the Jet Token Option Plan, the Jet Token Board will make adjustments to one or more of the number, kind and class of securities that may be delivered under the Jet Token Option Plan and/or the number, kind, class and price of securities covered by each outstanding award.

<u>Dissolution or liquidation</u>. In the event of Jet Token's dissolution or liquidation, each outstanding award will terminate immediately prior to the consummation of such action, unless otherwise determined by the Jet Token Board.

<u>Change in Control</u>. The Jet Token Option Plan provides that in the event of a change in control, unless otherwise provided in the applicable award agreement or as determined by the Jet Token Board at the time of grant, outstanding awards will be assumed, canceled if not exercised/settled or cashed out in lieu of exercise as determined by the Jet Token Board.

<u>Amendment or Termination</u>. The Jet Token Board may amend or terminate the Jet Token Option Plan at any time, provided such action does not impair the rights or obligations of any participant without his or her consent. In addition, stockholder approval must be obtained to the extent necessary and desirable to comply with applicable laws.

**Director Compensation**

Neither Mr. Winston nor Mr. Murnane receives additional compensation for service on our Board.

**Non-Employee Director Compensation Arrangements**

Following the Business Combination, the compensation committee recommended, and the Board approved, a Non-Employee Director Compensation Policy (the "Policy"). The Policy has been designed to attract and retain high quality non-employee directors by providing competitive compensation and aligning their interests with the interests of our stockholders through equity awards. This Policy provides for an annual cash retainer to each eligible non-employee director of $50,000. In addition, each of the following is entitled to an additional annual retainer in the following amounts:

● Lead Independent Director: $25,000

● Audit Committee Chair: $15,000

● Compensation Committee Chair: $10,000

● Nominating and Corporate Governance Committee Chair: $6,250

Under the Non-Employee Director Compensation Policy, as amended, the non-executive directors of the Company are also entitled to receive the equity compensation under the Omnibus Incentive Plan, subject to approval of an amendment to the Omnibus Incentive Plan by stockholders at the 2025 annual meeting, At the close of business on the date of each annual meeting of stockholders, each person who is then a non-employee director, will automatically receive a restricted stock unit ("RSU") award having a value of $25,000 and a restricted stock grant of $25,000. Each annual RSU and annual restricted stock grant will vest on the date of the following year's annual meeting (or the date immediately preceding the date of the following year's annual meeting if the non-employee director's service as a director ends at such meeting as a result of the director's failure to be re-elected or the director not standing for re-election. The vesting of each annual RSU and annual restricted stock grant is subject to the non-employee director's continuous service on the applicable vesting date of each such awards.

For each non-employee director who remains in continuous service with the Company until immediately prior to the closing of a Change in Control (as defined in the Omnibus Incentive Plan), such non-employee director's then-outstanding annual RSU and annual restricted stock grant will become fully vested immediately prior to the closing of such Change in Control. The grants will be eligible for deferred settlement in accordance with such deferral program as may be established by the Company and approved by the Board.

The Company began paying cash compensation to non-employee directors following the Business Combination in accordance with the terms of the Non-Employee Director Compensation Policy. The table below describes the compensation earned by the non-employee directors during fiscal 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Fees Earned**<br> **or Paid in**<br> **Cash** | **Stock**<br> **Awards<sup>(1)</sup>** | **All Other**<br> **Compensation** | **Total** |
| Ehud Talmor <sup>(2)</sup> | $52000 | $35000 | – $| 87000 |
| Wrendon Timothy <sup>(3)</sup> | $82000 | $35000 | – $| 117000 |
| William Yankus | $42000 | $35000 | – $| 77000 |
| Lt. Col. Ran David | $42000 | $35000 | – $| 77000 |
| Donald Jeffrey Woods<sup>(4)</sup> | $48250 | $35000 | – $| 83250 |

---

(1) Amounts in the table reflect equity grants granted in 2024 and recommended by the compensation committee and approved by the Board in January 2025 and as contemplated by the Policy to each of the directors. These grants, which have not been made and are subject to stockholder approval of an amendment to the Omnibus Incentive Plan, equal 1,029 RSUs to each such director, representing the then value of $25,000, and a grant of 1,029 restricted stock to each such director, representing the then value of $25,000. Each of these grants will be made, and will fully vest, on the date of the Company's 2025 annual meeting, assuming stockholders approve the amendment to the Omnibus Incentive. If either Mr. Timothy or Mr. Yankus is not elected as a Class II director at the 2025 annual meeting, these equity grants will be deemed made, and will vest, on the date immediately preceding the 2025 annual meeting. There are no other awards outstanding or anticipated to be granted to directors for services rendered in 2024.

(2) Mr. Talmor is chairperson of the compensation committee.

(3) Mr. Timothy is the lead independent director and chairperson of the audit committee.

(4) Mr. Woods is chairperson of the nominating and corporate governance committee.

Under the Non-Employee Director Compensation Policy, the Company will also reimburse each non-employee director for any ordinary and reasonable out-of-pocket expenses actually incurred by such director in connection with in-person attendance at and participation in Board and committee meetings; provided, that such director timely submits to us appropriate documentation substantiating such expenses in accordance with our travel and expense policy as in effect from time to time.

**CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS**

*In addition to the compensation arrangements with directors and executive officers described under "Executive Compensation" and "Management" and the registration rights described elsewhere in this prospectus, the following is a description of each transaction since January 1, 2023 and each currently proposed transaction in which:*

● *we have been or are to be a participant;* 

● *the amount involved exceeds or will exceed the lesser of $120,000 or one percent of the average of the Company's total assets at year end for the last two completed fiscal years; and* 

● *any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest.* 

**Related Party Transactions in Connection with and Subsequent to the Business Combination**

***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 in a private placement pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act, (a) 270,000 shares of common stock to Maxim Partners 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 to Maxim Partners in an amount equal in value to $1,127,000. Following the issuance of the securities, Maxim beneficially owned greater than five percent of the Company's common stock. The Series A Preferred Shares accrued interest at the rate of 8% per annum (which would increase to 18% if the Company failed 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 were convertible into 112,700 shares of common stock. The Company also issued 115,000 shares of common stock to Maxim Partners on August 16, 2021, in a private placement exempt from registration under Section 4(a)(2) of the Securities Act, to meet a payment obligation under the underwriting agreement in connection with the Company's IPO, representing a value of $9.00 per share reflecting an allocation of the $10.00 per Unit IPO price. The shares described above were subject to a registration rights agreement.

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 had not closed upon one or more equity financings that, in total, resulted in gross proceeds to the Company of $10.0 million or greater.

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 Series A Preferred Shares.

During 2024, the Company issued 10,167 shares of common stock upon the conversion of 551 Series A Preferred Shares. In November 2024, the Company redeemed in full all of the remaining 576 Series A Preferred Shares for an aggregate redemption price of $663,740. As a result of the redemption, there are no Series A Preferred Shares issued and outstanding.

***Sponsor Settlement Agreement***

On August 10, 2023, the Company entered into settlement agreement ("Sponsor Settlement Agreement") with OAC Sponsor Ltd., a Cayman Islands exempted company (the "Sponsor"). The Sponsor beneficially owned more than five percent of the Company's common stock at the time the parties entered into the Sponsor Settlement Agreement. Pursuant to the Sponsor Settlement Agreement, the Company issued, in a private placement exempt from registration under Section 4(a)(2) of the Securities Act, 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 Sponsor. The Series A-1 Preferred Shares accrued interest at the rate of 5% per annum (which would increase to 18% if the Company failed to meet certain obligations under the terms thereof), payable quarterly in cash. The Series A-1 Preferred Shares were convertible into 57,500 shares of common stock. The shares described above were subject to a registration rights agreement between the Company and Sponsor.

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 had not closed upon one or more equity financings that, in total, resulted in gross proceeds to the Company of $10.0 million or greater.

In August 2024, Sponsor agreed to waive certain notice and redemption rights in favor of Sponsor pursuant to terms of the Series A-1 Preferred Shares held by Sponsor related to equity financings conducted by the Company in consideration of $100,000 which was paid in October 2024.

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.

***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. During the month of September, the Company engaged in discussions with numerous third parties to secure short-term bridge funding but was not offered terms it found acceptable. Rather, certain related parties of the Company and other parties agreed to provide the Company with this financing on substantially better material terms than it had received from unaffiliated third parties.

The Bridge Agreement was entered into with, and funding was provided by, Michael Winston, the Executive Chairman of the Board and Interim Chief Executive Officer, Wrendon Timothy, a member of the Board and all three Committees of the Board, William Yankus, a member of the Board and two of its Committees, and Oxbridge RE Holdings Limited, a significant stockholder of the Company for which Mr. Timothy serves as a director and officer, as well as the four other investors named in the Bridge Agreement.

Given Mr. Winston's dual role as a participant in the negotiations with third parties and his participation in the bridge financing itself, for avoidance of doubt, he waived any right to receive accrued interest on the principal amount of his Note, as well as any redemption premium or any increase in the principal amount of his Note in connection with an event of default (the "Waiver"). The Company's Audit Committee pursuant to its Certificate of Incorporation, and the full Board, including a majority of disinterested directors, unanimously approved the Agreement, in each case finding that the Agreement was in the best interests of the Company and its stockholders.

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.

***Maxim Advisory Agreement***

On January 5, 2024, the Company entered into an agreement (the "Agreement") pursuant to which it retained Maxim as a financial advisor and investment banker to provide general financial advisory and investment banking services.

As consideration for Maxim's services pursuant to the Agreement, the Company paid Maxim fees in cash totaling $75,000. In addition, the Company shall promptly upon request from time to time reimburse Maxim for all reasonable expenses (including, without limitation, fees and disbursements of counsel and all travel and other out-of-pocket expenses) incurred by Maxim in connection with its engagement. Such expenses will not exceed $2,500 without prior authorization of the Company.

The Company has also agreed to indemnify and hold harmless Maxim, and each of its present and former affiliated entities, managers, members, officers, employees, legal counsel, agents and controlling persons (within the meaning of the federal securities laws), and the officers, directors, partners, stockholders, members, managers, employees, legal counsel, agents and controlling persons of any of them, from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, and any and all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise (including, without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing, pursing or defending any such action, suit, proceeding or investigation), directly or indirectly caused by, relating to, based upon, arising out of, or in connection with, Maxim's acting for the Company, including, without limitation, any act or omission by Maxim in connection with its acceptance of or the performance or non-performance of its obligations under the Agreement, any breach by the Company of any representation, warranty, covenant or agreement contained in any instrument, document or agreement relating thereto, including any agency agreement, or the enforcement by Maxim of its rights under the Agreement, except to the extent that any such losses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from the gross negligence or willful misconduct of the person seeking indemnification under the Agreement. The Company also agreed that no indemnified person will have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of Maxim by the Company or for any other reason, except to the extent that any such liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from such indemnified person's gross negligence or willful misconduct.

Either Maxim or the Company may terminate the Agreement at any time with thirty (30) days' prior written notice to the other party after the six (6) month anniversary of the Agreement (the effective date of such termination, the "Termination Date"). The Agreement may be earlier terminated by the Company only for Cause (as defined below). Furthermore, in the event, in the course of due diligence performed by Maxim, Maxim deems it necessary to terminate the engagement, Maxim may do so at any time upon immediate written notice. "**Cause**" means gross negligence, willful misconduct or an uncured material breach of the Agreement by Maxim of which the Company has provided Maxim with reasonable notice and opportunity to cure. Certain provisions in the agreement, primarily compensation, expenses reimbursement and indemnification survive termination of the agreement.

***Maxim Placement Agency Agreement***

In connection with the transactions under the Securities Purchase Agreement with Ionic, the Company entered into a placement agency agreement (the "Placement Agency Agreement") with Maxim. Pursuant to the terms of the Placement Agency Agreement, the Company was required pay Maxim a cash fee equal to 7% of the aggregate gross proceeds raised under the Securities Purchase Agreement and reimburse Maxim, directly upon the initial closing under the Securities Purchase Agreement for all travel and other documented out-of-pocket expenses incurred by Maxim, including the reasonable fees, costs and disbursements of its legal counsel, in an amount not to exceed an aggregate of $15,000. The Company paid Maxim a total of $120,000 out of the gross proceeds it received on March 29, 2024. Because the Company issued additional securities to Ionic as contemplated by the Securities Purchase Agreement, the Company paid Maxim cash fees of $1,050,000.

The Company also granted Maxim a right of first refusal to act as sole agent or sole managing underwriter and sole book runner for any and all future public and private equity and public debt offerings of the Company, or any successor to or any subsidiary of the Company for a period until the earlier of (i) December 31, 2024 and (ii) redemption and/or conversion in full of all Series A Preferred Shares beneficially owned by Maxim. The Company also agreed to indemnify Maxim and its affiliates, directors, officers, employees and controlling persons against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of its activities pursuant to the Placement Agency Agreement.

***Administrative Services Agreement***

Commencing on the effective date of the Company's IPO, Oxbridge agreed to pay its Sponsor a total of up to $10,000 per month for office space, utilities, secretarial and administrative support. Upon completion of the Business Combination, the Company ceased paying these monthly fees.

**Jet Token's Related Party Transactions**

From time to time, related parties made payments on Jet Token's behalf or advance cash to Jet Token for operating costs which require repayment. Such transactions are considered short-term advances and non-interest bearing. During the years ended December 31, 2023 and 2022, Michael Winston, Jet Token's Founder and Executive Chairman, advanced a total of $0 and $72,000, respectively, to Jet Token in the form of a non-interest-bearing loan and Jet Token repaid $0 and $242,196 of these advances, respectively. As of December 31, 2023 such advances had been fully repaid.

**Related Party Transaction Policy**

Our audit committee charter provides that the audit committee will establish and periodically review policies and procedures for the review, approval and ratification of related person transactions (as defined in applicable SEC rules and regulations), review related person transactions, and oversee other related party transactions governed by applicable accounting standards.

On April 17, 2024, our audit committee and board approved the Jet.AI Related Party Transaction Policy, which establishes a framework for identifying, reviewing, and approving "Related Party Transactions", defined as a transaction, arrangement, or relationship, or any series of similar transactions, arrangements, or relationships in which the Company and any Related Party have a direct or indirect interest, including but not limited to sales or purchases of goods or services, loans or guarantees, leasing arrangements, compensation arrangements and joint ventures or investments.

A "Related Party" under the policy includes:

● Any person who is, or at any time since the beginning of the Company's last fiscal year was, a

● director, executive officer or employee of the Company (or its subsidiaries);

● Any stockholder owning 5% or more of the Company's voting securities;

● Any person or entity that controls, is controlled by, or under common control with the

● Company;

● Any entity in which a director or executive officer has a significant influence;

● Any other party with whom the Company has a close business relationship that could create

● a conflict of interest;

● Any immediate family member of any of the foregoing persons, including spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, and anyone (other than domestic employees) who shares such person's home.

The policy is administered by the Audit Committee. It provides for notification to the Corporate Secretary of the initiation or negotiation of any potential transaction involving a Related Party followed by an assessment by the Chairman and/or the Chief Financial Officer of materiality and potential for conflicts of interest and whether or not the transaction requires review by the audit committee under the policy. The audit committee is then responsible for reviewing and considering whether the transaction is conducted on arm's-length terms and in accordance with fair market value; whether the transaction is in the best interests of the Company and its stockholders; and any potential conflicts of interest that may arise from the transaction. The audit committee must approve the transaction prior to its initiation unless not practicable, in which case the audit committee may retrospectively review and ratify the transaction. The audit committee is also responsible for reviewing ongoing Related Party Transactions annually.

Prior to the adoption of this policy, it was generally the Company's practice to obtain pre-approval from the audit committee for any related party transactions occurring subsequent to the Business Combination that our Interim Chief Executive Officer believed were significant. The transactions described under "*– Related Party Transactions in Connection with and Subsequent to the Business Combination – Maxim Payment and Settlement Agreement*" and "*– Related Party Transactions in Connection with and Subsequent to the Business Combination – Sponsor Settlement Agreement*" above were approved by the Company's audit committee prior to the consummation of the Business Combination. The transactions described under "*– Related Party Transactions in Connection with and Subsequent to the Business Combination – Bridge Agreement*" above were pre-approved by our audit committee. The engagement described under "*– Related Party Transactions in Connection with and Subsequent to the Business Combination – Maxim Advisory Agreement*" was not approved by either the Board or the audit committee. The Placement Agreement described under "*– Related Party Transactions in Connection with and Subsequent to the Business Combination – Maxim Placement Agreement*" above was pre-approved by unanimous consent by the Board. Prior to the Business Combination, the Company's audit committee was responsible for approving transactions with the Sponsor, any officer, any director or their respective affiliates and for reviewing any payments made to such persons on a quarterly basis. The transactions described under "*– Related Party Transactions prior to the Business Combination – Administrative Services Agreement"* above were approved by the Company's board of directors in connection with the Company's IPO and, subsequent to the IPO, were approved by the Company's audit committee.

**MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**

We have one class of Common Stock, listed on Nasdaq under the ticker symbol "JTAI". The transfer agent and registrar for our Common Stock is Continental Stock Transfer & Trust Company.

As of July 16, 2025, we had 3,754 holders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

The following table sets forth information regarding the beneficial ownership of shares of Common Stock as of July 16, 2025, by:

● each person who is, or is expected to be, the beneficial owner of more than 5% of the outstanding shares of Common Stock upon the Closing of the Business Combination;

● each of the Company's executive officers and directors; and

● all of the Company's executive officers and directors as a group upon the Closing.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and restricted stock units that are currently exercisable or vested or that will become exercisable or vest within 60 days. This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13G or 13D filed with the SEC. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes that all persons named in the table have sole voting and investment power with respect to all shares of Common Stock beneficially owned by them. The beneficial ownership percentages set forth in the table below are based on 3,261,256 shares of Common Stock issued and outstanding as of July 16, 2025 and other than as noted below.

---

| | | |
|:---|:---|:---|
| **Name and Address of Beneficial Owner<sup>(1)</sup>** | **Number of**<br> **Shares** | **% of Common**<br> **Stock**<br> **Outstanding** |
| **Directors and Executive Officers:** |  |  |
| Michael D. Winston, CFA<sup>(2)</sup> | 30727 | \*% |
| George Murnane<sup>(3)</sup> | 5811 | \* |
| William L. Yankus<sup>(4)</sup> | 423 | \* |
| Wrendon Timothy<sup>(5)</sup> | 1206 | \* |
| Patrick McNulty<sup>(6)</sup> | 889 | \* |
| Lt. Col. Ran David<sup>(7)</sup> | 874 | \* |
| Jeffrey Woods<sup>(8)</sup> | 97 | \* |
| Ehud Talmor<sup>(9)</sup> | 737 | \* |
| ***All Directors and Executive Officers as a group (8 individuals)*** | 40764 | 1.2% |
| **Five Percent Holders:** |  |  |
| Ionic Ventures, LLC <sup>(10)</sup> | 361959 | 9.99% |

---

\* Less than 1%.

(1) Unless otherwise indicated, the business address of each of the directors and executive officers of the Company is c/o Jet.AI Inc., 10845 Griffith Peak Drive, Suite 200, Las Vegas, NV 89135.

(2) Includes 29,740 shares of Common Stock, and 987 shares of Common Stock issuable upon the exercise of vesting options within 60 days of July 16, 2025.

(3) Comprised of 5,811 shares of common stock issuable upon the exercise of vesting options within 60 days of July 16, 2025.

(4) Comprised of 423 shares of common stock.

(5) Comprised of 1,206 shares of common stock.

(6) Comprised of 889 shares of common stock issuable upon the exercise of vesting options within 60 days of July 16, 2025.

(7) Includes 97 shares of Common Stock, and 777 shares of Common Stock issuable upon the exercise of vesting options within 60 days of July 16, 2025.

(8) Comprised of 97 shares of common stock.

(9) Includes 97 shares of Common Stock, and 640 shares of Common Stock issuable upon the exercise of vesting options within 60 days of July 16, 2025.

(10) Consists of an aggregate of up to 361,959 shares of Common Stock issuable upon conversion of shares of Series B Preferred Stock within 60 days of July 16, 2025. Keith Coulston and Brendan O'Neil, each as managers of Ionic Management, LLC, the manager of Ionic Ventures, LLC, have shared power to vote and/or dispose of the Shares beneficially owned by Ionic Ventures, LLerC. Mr. Coulston and Mr. O'Neil each disclaim beneficial ownership of the Company's securities reported herein except to the extent of their pecuniary interest therein. The principal business address for Ionic Ventures, LLC is 3053 Fillmore St, Suite 256, San Francisco, CA 94123.

**UNDERWRITING**

We are offering, on firm commitment basis, up to [●] shares of our Common Stock (or Pre-Funded Warrants in lieu thereof) at a public offering price of $[●] per share, which represents the closing price of our common stock on Nasdaq on [●], 2025, for gross proceeds of $[●] million, before deduction of the underwriting fees and estimated offering expenses. If the over-allotment option is exercised in full, we estimate that our gross proceeds will be approximately $[●], before deducting the underwriting fees and estimated offering expenses.

Pursuant to an underwriting agreement, dated as of [●], 2025, we have engaged Maxim Group LLC to act as our exclusive managing underwriter and sole book running manager in connection with this offering. In addition, Ladenburg Thalmann & Co. Inc. will be acting as the co-manager in connection with this offering. The underwriters have agreed to arrange for the sale of the securities offered by this prospectus on a firm commitment basis. We have agreed to pay the underwriters the fees set forth in the table below. Because we will deliver the securities to be issued in this offering upon our receipt of investor funds, there is no arrangement for funds to be received in escrow, trust, or similar arrangement. The underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the securities in this offering are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the securities in this offering if any such securities are taken.

We will deliver the securities being issued to the investors upon receipt of investor funds for the purchase of the securities offered pursuant to this prospectus. There is no arrangement for funds to be received in escrow, trust or similar arrangement and the shares of common stock (or Pre-Funded Warrants in lieu thereof) will be offered at a fixed price and are expected to be issued in a single closing. We expect to deliver the securities being offered pursuant to this prospectus on or about [●], 2025.

**Underwriting Fees, Commissions and Expenses**

Upon the closing of this offering, we will pay the underwriters a cash transaction fee equal to 7.0% of the total gross proceeds to us from the sale of the securities in the offering. In addition, we will reimburse the underwriters for all reasonable out-of-pocket expenses incurred by the underwriters, including travel, databases, fees and disbursements of counsel and of other consultants and advisors retained by the underwriters, up to $100,000 in the event of a closing of this offering. If this offering does not close, the total reimbursement amount will not exceed $25,000.

The following table shows the combined public offering price and underwriting fees and proceeds, before expenses to us.

---

| | | | |
|:---|:---|:---|:---|
|  | **Per Share** | **Per Pre-Funded Warrant** | **Total** |
| Public Offering Price | $| $| $|
| Underwriting fees (7.0%) | $| $| $|
| Proceeds to us (before expenses) | $| $| $|

---

We estimate that the total expenses of this offering, including registration and filing fees, printing fees ,and legal and accounting expenses, but excluding the underwriting fees, will be approximately $[●], all of which are payable by us. This figure includes, among other things, the underwriters' expenses (including the legal fees, costs, and expenses for the underwriters' legal counsel) that we have agreed to reimburse.

If within twelve months after the date of termination or expiration of our agreement with the underwriters, we sell securities to investors contacted by the underwriters on our behalf (excluding investors that we had previously contacted), then we shall pay to the underwriters at the time of each such sale the fees applicable to this offering as set forth above with respect to any such sale.

**Over-Allotment**

We have granted the underwriters a 45-day option from the date of this prospectus to purchase up to [●] additional shares of Common Stock (or Pre-Funded Warrants in lieu thereof) representing 15% of the total number of securities offered by us in the offering.

**Lock-Up Agreements**

We and each of our officers and directors and our and their respective affiliates have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our Common Stock or other securities convertible into or exercisable or exchangeable for our Common Stock for two months after this offering is completed without the prior written consent of the underwriters.

**Indemnification**

We have agreed to indemnify the underwriters against certain liabilities, including certain liabilities under the Securities Act. If we are unable to provide this indemnification, we have agreed to contribute to payments the underwriters may be required to make in respect of those liabilities.

**Determination of Offering Price**

The actual offering price of the securities we are offering was negotiated between us, the underwriters and the investors in the offering based on the trading of our shares of Common Stock prior to the offering, among other things. Other factors considered in determining the public offering price of the securities we are offering include our history and prospects, the market price of our Common Stock on Nasdaq, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, the general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.

**Electronic Distribution**

A prospectus in electronic format may be made available on a website maintained by the underwriters or the Company. In connection with the offering, the underwriters may distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe<sup>®</sup> PDF will be used in connection with this offering.

Other than the prospectus in electronic format, the information on any website maintained by the Company or the underwriters is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriters in their capacity as the underwriters and should not be relied upon by investors.

**Other Relationships**

The underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and certain of their affiliates have, from time to time, performed, and may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses. However, except as disclosed in this prospectus, we have no present arrangements with the underwriters for any further services.

In the ordinary course of their various business activities, the underwriters and certain of its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments issued by us and our affiliates. If the underwriters or their affiliates have a lending relationship with us, they routinely hedge their credit exposure to us consistent with their customary risk management policies. The underwriters and their affiliates may hedge such exposure by entering into transactions that consist of either the purchase of credit default swaps or the creation of short positions in our securities or the securities of our affiliates, including potentially the securities offered hereby. Any such short positions could adversely affect future trading prices of the securities offered hereby. The underwriters and certain of their affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

**Selling Restrictions**

***General***

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

***Australia***

This prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and, unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months after its transfer to the offeree under this prospectus.

***China***

The information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People's Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than directly to "qualified domestic institutional investors."

***European Economic Area - Belgium, Germany, Luxembourg and Netherlands***

The information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under the Directive 2003/71/EC (the "***Prospectus Directive***"), as implemented in Member States of the European Economic Area (each, a "***Relevant Member State***"), from the requirement to produce a prospectus for offers of securities.

An offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:

● to legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

● to any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements) and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated financial statements);

● to fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive) subject to obtaining the prior consent of us or any underwriter for any such offer; or

● in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

***France***

This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers ("***AMF***"). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.

This document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.

Such offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number of non-qualified investors (cercle restreint d'investisseurs) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation.

Pursuant to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed (directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 to L.621-8-3 of the French Monetary and Financial Code.

***Ireland***

The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the "***Prospectus Regulations***"). The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.

***Israel***

The securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or ISA, nor have such securities been registered for sale in Israel. The securities may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection with this offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly, to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli securities laws and regulations.

***Italy***

The offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa, "CONSOB" pursuant to the Italian securities legislation and, accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 ("***Decree No. 58***"), other than:

● to Italian qualified investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 ("  ***Regulation No. 1197l***") as amended ("  ***Qualified Investors*** "); and

● in other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.

Any offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:

● made by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and

● in compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.

Any subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity transferring the securities for any damages suffered by the investors.

***Japan***

The securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the "***FIEL***") pursuant to an exemption from the registration requirements applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article 2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors. Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to that effect.

***Portugal***

This document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissăo do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are "qualified investors" (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it, or the information contained in it, to any other person.

***Sweden***

This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are "qualified investors" (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it, or the information contained in it, to any other person.

***Switzerland***

The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("***SIX***") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).

This document is personal to the recipient only and not for general circulation in Switzerland.

***United Arab Emirates***

Neither this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates, nor have we received authorization or licensing from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of an offer or invitation. No services relating to the securities, including the receipt of applications and/or the Allotment or redemption of such shares, may be rendered within the United Arab Emirates by us.

No offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.

***United Kingdom***

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("***FSMA***")) has been published or is intended to be published in respect of the securities. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to us.

In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("***FPO***"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

***Canada***

The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the placement agent is not required to comply with the disclosure requirements of NI33-105 regarding underwriter conflicts of interest in connection with this offering.

**DESCRIPTION OF SECURITIES**

***Authorized Capitalization***

The Company is authorized to issue 204,000,000 shares of capital stock, consisting of two classes: 200,000,000 shares of Common Stock and 4,000,000 shares of Preferred Stock, of which 1,127 are designated as Series A Preferred Shares, 575 are designated as Series A-1 Preferred Shares, and 5,000 are designated as Series B Preferred Stock. As of July 16, 2025, the Company had the following outstanding securities:

● 3,261,256 shares of Common Stock;

● the GEM Warrant, exercisable for up to 9,686 shares of Common Stock at a price of $9.07 per share; and

● 989 shares of Series B Preferred Stock.

***Securities Offered in this Offering***

We are offering [●] shares of Common Stock (or Pre-Funded Warrants in lieu thereof).

***Common Stock***

*Voting Rights*

The Certificate of Incorporation provides that, except as otherwise expressly provided by the Certificate of Incorporation or as provided by law, the holders of Common Stock shall at all times vote together as a single class on all matters; provided however, that, except as otherwise required by law, holders of shares of Common Stock shall not be entitled to vote on any amendment to the Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to the Certificate of Incorporation. Except as otherwise expressly provided in the Certificate of Incorporation or by applicable law, each holder of Common Stock shall have the right to one vote per share of Common Stock held of record by such holder.

*Dividend Rights*

Subject to preferences that may apply to any shares of Preferred Stock outstanding at the time, shares of Common Stock will be treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time by the Board out of any assets of the Company legally available therefor.

*Rights Upon Liquidation, Dissolution and Winding Up*

Subject to any preferential or other rights of any holders of Preferred Stock then outstanding, upon the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of Common Stock will be entitled to receive ratably all assets of the Company available for distribution to its stockholders.

*Other Rights*

The holders of Common Stock do not have preemptive, subscription, redemption or conversion rights. There will be no redemption or sinking fund provisions applicable to the Common Stock. The rights, preferences and privileges of holders of shares of Common Stock will be subject to those of the holders of any shares of Preferred Stock that the Company may issue in the future.

 **

***Pre-Funded Warrants***

 **

The following summary of certain terms and provisions of the pre-funded warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the pre-funded warrant, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of pre-funded warrant for a complete description of the terms and conditions of the pre-funded warrants.

 

*Duration and Exercise Price*

 

Each pre-funded warrant offered hereby will have an initial exercise price per share equal to $[●]. The pre-funded warrants will be immediately exercisable and may be exercised at any time until the pre-funded warrants are exercised in full. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock and the exercise price.

*Exercisability*

Each pre-funded warrant may be exercised, in cash or by a cashless exercise at the election of the holder at any time following the date of issuance and from time to time thereafter until the pre-funded warrants are exercised in full. The pre-funded warrants will be exercisable in whole or in part by delivering to the Company a completed instruction form for exercise and complying with the requirements for exercise set forth in the pre-funded warrant. Payment of the exercise price may be made in cash or pursuant to a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant.

 

*Cashless Exercise*

At the time a holder exercises its pre-funded warrants, in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the pre-funded warrants.

*Exercise Limitation*

 

In general, a holder will not have the right to exercise any portion of a pre-funded warrant if the holder (together with its Attribution Parties (as defined in the pre-funded warrant)) would beneficially own in excess of 4.99% or 9.99%, at the election of the holder, of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the pre-funded warrant. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon notice to us, provided, that any increase in this limitation will not be effective until 61 days after such notice from the holder to us and such increase or decrease will apply only to the holder providing such notice.

*Transferability*

Subject to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded warrant to us together with the appropriate instruments of transfer.

*Fractional Shares*

No fractional shares of common stock will be issued upon the exercise of the pre-funded warrants. Rather, the number of shares of common stock to be issued will, at our election, either be rounded up to the nearest whole number or we will pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the exercise price.

*Trading Market*

There is no trading market available for the pre-funded warrants on any securities exchange or nationally recognized trading system.

*Right as a Stockholder*

Except as otherwise provided in the pre-funded warrants or by virtue of such holder's ownership of shares of our common stock, the holders of the pre-funded warrants do not have the rights or privileges of holders of our common stock, including any voting rights, until they exercise their pre-funded warrants.

**Anti-Takeover Effects of Delaware Law and Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws** 

Certain provisions of the DGCL and of our certificate of incorporation and bylaws effective immediately prior to the completion of this Offering could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and, as a consequence, they might also inhibit temporary fluctuations in the market price of our Common Stock that often result from actual or rumored hostile takeover attempts. These provisions are also designed in part to encourage anyone seeking to acquire control of us to first negotiate with our board of directors. These provisions might also have the effect of preventing changes in our board of directors or management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests. However, we believe that the advantages gained by protecting our ability to negotiate with any unsolicited and potentially unfriendly acquirer outweigh the disadvantages of discouraging such proposals, including those priced above the then-current market value of our Common Stock, because, among other reasons, the negotiation of such proposals could improve their terms.

***Delaware Takeover Statute***

We are subject to the provisions of Section 203 of the DGCL. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

● before the stockholder became interested, our board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

● upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or

● at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 defines a business combination to include:

● any merger or consolidation involving the corporation and the interested stockholder;

● any sale, transfer, lease, pledge, exchange, mortgage or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;

● subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

● subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

● the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

**MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS**

The following discussion is a summary of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of the Common Stock and Pre-Funded Warrants acquired in this offering and does not purport to be a complete analysis of all the potential tax considerations relating thereto. This discussion is based on the current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed U.S. Treasury regulations promulgated thereunder, and administrative rulings and court decisions in effect as of the date hereof, all of which are subject to change at any time, possibly with retroactive effect, with the resulting U.S. federal income tax consequences being different from those set forth below. No ruling has been or will be sought from the Internal Revenue Service ("IRS"), with respect to the matters discussed below, and there can be no assurance the IRS will not take a contrary position regarding the tax consequences of the acquisition, ownership or disposition of the Common Stock or Pre-Funded Warrants, or that any such contrary position would not be sustained by a court.

We assume in this discussion that the shares of Common Stock and Pre-Funded Warrants will be held as capital assets (generally, property held for investment). This discussion does not address all aspects of U.S. federal income taxes, does not discuss the potential application of the Medicare contribution tax or the alternative minimum tax and does not address state or local taxes or U.S. federal gift and estate tax laws, except as specifically provided below with respect to non-U.S. holders, or any non-U.S. tax consequences that may be relevant to holders in light of their particular circumstances. This discussion also does not address the special tax rules applicable to particular holders, such as:

● persons who acquired our Common Stock or Pre-Funded Warrants as compensation for services;

● traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

● persons that own, or are deemed to own, more than 5% of our Common Stock (except to the extent specifically set forth below);

● persons required for U.S. federal income tax purposes to conform the timing of income accruals to their financial statements under Section 451(b) of the Code (except to the extent specifically set forth below);

● persons for whom our Common Stock constitutes "qualified small business stock" within the meaning of Section 1202 of the Code or "Section 1244 stock" for purposes of Section 1244 of the Code;

● persons deemed to sell our Common Stock or Pre-Funded Warrants under the constructive sale provisions of the Code;

● banks or other financial institutions;

● brokers or dealers in securities or currencies;

● tax-exempt organizations or tax-qualified retirement plans;

● pension plans;

● regulated investment companies or real estate investment trusts;

● persons that hold the Common Stock or Pre-Funded Warrants as part of a straddle, hedge, conversion transaction, synthetic security or other integrated investment;

● insurance companies;

● controlled foreign corporations, passive foreign investment companies, or corporations that accumulate earnings to avoid U.S. federal income tax; and

● certain U.S. expatriates, former citizens, or long-term residents of the United States.

In addition, this discussion does not address the tax treatment of partnerships (including any entity or arrangement classified as a partnership for U.S. federal income tax purposes) or other pass-through entities or persons who hold shares of Common Stock or Pre-Funded Warrants through such partnerships or other entities which are pass-through entities for U.S. federal income tax purposes. If such a partnership or other pass-through entity holds shares of Common Stock or Pre-Funded Warrants, the treatment of a partner in such partnership or investor in such other pass-through entity generally will depend on the status of the partner or investor and upon the activities of the partnership or other pass-through entity. A partnership or other pass-through entity, a partner in such a partnership and an investor in such other pass-through entity that will hold shares of Common Stock or Pre-Funded Warrants should consult his, her or its own tax advisor regarding the tax consequences of the ownership and disposition of shares of Common Stock or Pre-Funded Warrants.

**This discussion of U.S. federal income tax considerations is for general information purposes only and is not tax advice. Prospective investors should consult their own tax advisors regarding the U.S. federal, state, local and non-U.S. income and other tax considerations of acquiring, holding and disposing of our Common Stock and Pre-Funded Warrants.**

For the purposes of this discussion, a "U.S. Holder" means a beneficial owner of shares of Common Stock or Pre-Funded Warrants that is for U.S. federal income tax purposes (a) an individual citizen or resident of the United States (b) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes), created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (d) a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons (within the meaning of Section 7701(a)(30) of the Code) has the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a domestic trust. A "Non-U.S. Holder" is, for U.S. federal income tax purposes, a beneficial owner of shares of Common Stock or Pre-Funded Warrants that is not a U.S. Holder or a partnership (or other entity treated as a partnership) for U.S. federal income tax purposes.

**Treatment of Pre-Funded Warrants**

Although it is not entirely free from doubt, we believe that a Pre-Funded Warrant should be treated as a share of Common Stock for U.S. federal income tax purposes and a holder of Pre-Funded Warrants should generally be taxed in the same manner as a holder of Common Stock, as described below. Accordingly, no gain or loss should be recognized upon the exercise of a Pre-Funded Warrant and, upon exercise, the holding period of a Pre-Funded Warrant should carry over to the share of Common Stock received. Similarly, we believe that the tax basis of the Pre-Funded Warrant should carry over to the share of Common Stock received upon exercise, increased by the exercise price of $[●] per share.

However, our characterization of a Pre-Funded Warrant is not binding on the IRS, and the IRS may treat the Pre-Funded Warrants as warrants to acquire Common Stock; if so, the amount and character of a holder's gain with respect to an investment in a Pre-Funded Warrant could change.

Each holder should consult his, her or its own tax advisor regarding the risks associated with the acquisition of Pre-Funded Warrants pursuant to this offering (including potential alternative characterizations). The balance of this discussion generally assumes that the characterization described above is respected for U.S. federal income tax purposes.

**Tax Considerations Applicable to U.S. Holders**

***Distributions***

As discussed above, we currently anticipate that we will retain future earnings, if any, to finance the growth and development of our business and do not intend to pay cash dividends in respect of shares of Common Stock in the foreseeable future. In the event that we do make distributions on our Common Stock to a U.S. Holder, those distributions generally will constitute dividends for U.S. tax purposes to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of our current and accumulated earnings and profits will constitute a return of capital that is applied against and reduces, but not below zero, a U.S. Holder's adjusted tax basis in our Common Stock. Any remaining excess will be treated as gain realized on the sale or exchange of shares of Common Stock as described below under the section titled *"—Disposition of Common Stock or Pre-Funded Warrants*."

Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders may be eligible for taxation as "qualified dividend income" and therefore may be taxable at rates applicable to long-term capital gains. U.S. Holders should consult their tax advisors regarding the availability of the reduced tax rate on dividends in their particular circumstances. Dividends received by a corporate U.S. Holder may be eligible for the dividends-received deduction if the U.S. Holder meets certain holding period and other applicable requirements.

***Certain Adjustments to Pre-Funded Warrants***

The number of shares of Common Stock issued upon the exercise of the Pre-Funded Warrants and the exercise price of Pre-Funded Warrants are subject to adjustment in certain circumstances. Adjustments (or failure to make adjustments) that have the effect of increasing a U.S. Holder's proportionate interest in our assets or earnings and profits may, in some circumstances, result in a constructive distribution to the U.S. Holder. Adjustments to the conversion rate made pursuant to a bona fide reasonable adjustment formula which has the effect of preventing the dilution of the interest of the holders of Pre-Funded Warrants generally should not be deemed to result in a constructive distribution. If an adjustment is made that does not qualify as being made pursuant to a bona fide reasonable adjustment formula, a U.S. Holder of Pre-Funded Warrants may be deemed to have received a constructive distribution from us, even though such U.S. Holder has not received any cash or property as a result of such adjustment. The tax consequences of the receipt of a distribution from us are described above under "*Distributions*."

***Disposition of Common Stock or Pre-Funded Warrants***

Upon a sale or other taxable disposition (other than a redemption treated as a distribution, which will be taxed as described above under "*Distributions*") of shares of Common Stock or Pre-Funded Warrants, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized upon the disposition and the U.S. Holder's adjusted tax basis in the Common Stock or Pre-Funded Warrants sold. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder's holding period for the Common Stock or Pre-Funded Warrants exceeds one year at the time of the disposition. The deductibility of capital losses is subject to certain limitations. U.S. Holders who recognize losses with respect to a disposition of shares of Common Stock or Pre-Funded Warrants should consult their own tax advisors regarding the tax treatment of such losses.

***Information Reporting and Backup Withholding***

Information reporting requirements generally will apply to payments of distributions (including constructive distributions) on the Common Stock and Pre-Funded Warrants and to the proceeds of a sale or other disposition of Common Stock and Pre-Funded Warrants paid by us to a U.S. Holder unless such U.S. Holder is an exempt recipient, such as a corporation. Backup withholding will apply to those payments if the U.S. Holder fails to provide the holder's taxpayer identification number, or certification of exempt status, or if the holder otherwise fails to comply with applicable requirements to establish an exemption.

Backup withholding is not an additional tax. Rather, any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the U.S. Holder's U.S. federal income tax liability provided the required information is timely furnished to the IRS. U.S. Holders should consult their own tax advisors regarding their qualification for an exemption from information reporting and backup withholding and the procedure for obtaining such an exemption.

**Tax Considerations Applicable to Non-U.S. Holders**

***Certain Adjustments to Pre-Funded Warrants***

As described under "*—U.S. Holders—Certain Adjustments to Pre-Funded Warrants*," an adjustment to the Pre-Funded Warrants could result in a constructive distribution to a Non-U.S. Holder, which would be treated as described under "*Distributions*" below. Any resulting withholding tax attributable to deemed dividends would be collected from other amounts payable or distributable to the Non-U.S. Holder. Non-U.S. Holders should consult their tax advisors regarding the proper treatment of any adjustments to the Pre-Funded Warrants.

In addition, regulations governing "dividend equivalents" under Section 871(m) of the Code may apply to the Pre-Funded Warrants. Under those regulations, an implicit or explicit payment under the Pre-Funded Warrants that references a dividend distribution on our Common Stock would possibly be taxable to a Non-U.S. Holder as described under "*Distributions*" below. Such dividend equivalent amount would be taxable and subject to withholding whether or not there is actual payment of cash or other property, and the Company may satisfy any withholding obligations it has in respect of the Pre-Funded Warrants by withholding from other amounts due to the Non-U.S. Holder. Non-U.S. Holders are encouraged to consult their own tax advisors regarding the application of Section 871(m) of the Code to the Pre-Funded Warrants.

***Distributions***

As discussed above, we currently anticipate that we will retain future earnings, if any, to finance the growth and development of our business and do not intend to pay cash dividends in respect of our Common Stock in the foreseeable future. In the event that we do make distributions on our Common Stock to a Non-U.S. Holder, those distributions generally will constitute dividends for U.S. federal income tax purposes as described in "*—U.S. Holders—Distributions*." To the extent those distributions do not constitute dividends for U.S. federal income tax purposes (i.e., the amount of such distributions exceeds both our current and our accumulated earnings and profits), they will constitute a return of capital and will first reduce a Non-U.S. Holder's basis in our Common Stock (determined separately with respect to each share of Common Stock), but not below zero, and then will be treated as gain from the sale of that Common Stock as described below under the section titled "*—Disposition of Common Stock or Pre-Funded Warrants*."

Any distribution (including constructive distributions) on shares of Common Stock that is treated as a dividend paid to a Non-U.S. Holder that is not effectively connected with the holder's conduct of a trade or business in the United States will generally be subject to withholding tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty between the United States and the Non-U.S. Holder's country of residence. To obtain a reduced rate of withholding under a treaty, a Non-U.S. Holder generally will be required to provide the applicable withholding agent with a properly executed IRS Form W-8BEN, IRS Form W-8BEN-E or other appropriate form, certifying the Non-U.S. Holder's entitlement to benefits under that treaty. Such form must be provided prior to the payment of dividends and must be updated periodically. If a Non-U.S. Holder holds stock through a financial institution or other agent acting on the holder's behalf, the holder will be required to provide appropriate documentation to such agent. The holder's agent may then be required to provide certification to the applicable withholding agent, either directly or through other intermediaries. If you are eligible for a reduced rate of U.S. withholding tax under an income tax treaty, you should consult with your own tax advisor to determine if you are able to obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the IRS.

We generally are not required to withhold tax on dividends paid (or constructive dividends deemed paid) to a Non-U.S. Holder that are effectively connected with the holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base that the holder maintains in the United States) if a properly executed IRS Form W-8ECI, stating that the dividends are so connected, is furnished to us (or, if stock is held through a financial institution or other agent, to the applicable withholding agent). In general, such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular tax rates applicable to U.S. persons. A corporate Non-U.S. Holder receiving effectively connected dividends may also be subject to an additional "branch profits tax," which is imposed, under certain circumstances, at a rate of 30% (or such lower rate as may be specified by an applicable treaty) on the corporate Non-U.S. Holder's effectively connected earnings and profits, subject to certain adjustments.

See also the sections below titled "*—Backup Withholding and Information Reporting*" and "*—Foreign Accounts*" for additional withholding rules that may apply to dividends paid to certain foreign financial institutions or non-financial foreign entities.

***Disposition of Common Stock or Pre-Funded Warrants***

Subject to the discussions below under the sections titled "*—Backup Withholding and Information Reporting*" and "*—Foreign Accounts*," a Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax with respect to gain recognized on a sale or other disposition (other than a redemption treated as a distribution, which will be taxable as described above under "*Distributions*") of shares of Common Stock or Pre-Funded Warrants unless:

● the gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States, and if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States; in these cases, the Non-U.S. Holder will be taxed on a net income basis at the regular tax rates and in the manner applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, an additional branch profits tax at a rate of 30%, or a lower rate as may be specified by an applicable income tax treaty, may also apply;

● the Non-U.S. Holder is a nonresident alien present in the United States for 183 days or more in the taxable year of the disposition and certain other requirements are met, in which case the Non-U.S. Holder will be subject to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder's country of residence) on the net gain derived from the disposition, which may be offset by certain U.S.-source capital losses of the Non-U.S. Holder, if any; or

● the Common Stock constitutes a U.S. real property interest because we are, or have been at any time during the five-year period preceding such disposition (or the Non-U.S. Holder's holding period of the Common Stock or Pre-Funded Warrants, if shorter), a "U.S. real property holding corporation," unless the Common Stock is regularly traded on an established securities market, as defined by applicable Treasury Regulations, and the Non-U.S. Holder held no more than 5% of our outstanding Common Stock, directly or indirectly, during the shorter of the five-year period ending on the date of the disposition or the period that the Non-U.S. Holder held the Common Stock. Special rules may apply to the determination of the 5% threshold in the case of a holder of Pre-Funded Warrants. Non-U.S. Holders are urged to consult their own tax advisors regarding the effect of holding Pre-Funded Warrants on the calculation of such 5% threshold. Generally, a corporation is a "U.S. real property holding corporation" if the fair market value of its "U.S. real property interests" (as defined in the Code and applicable regulations) equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. Although there can be no assurance, we believe that we are not currently, and we do not anticipate becoming, a "U.S. real property holding corporation" for U.S. federal income tax purposes. No assurance can be provided that the Common Stock will be regularly traded on an established securities market for purposes of the rules described above. Non-U.S. Holders are urged to consult their own tax advisors regarding the U.S. federal income tax considerations that could result if we are, or become, a "U.S. real property holding corporation."

See the sections titled "*—Backup Withholding and Information Reporting*" and "*—Foreign Accounts*" for additional information regarding withholding rules that may apply to proceeds of a disposition of the Common Stock or Pre-Funded Warrants paid to foreign financial institutions or non-financial foreign entities.

***Backup Withholding and Information Reporting***

We must report annually to the IRS and to each Non-U.S. Holder the gross amount of the distributions (including constructive distributions) on the Common Stock or Pre-Funded Warrants paid to such holder and the tax withheld, if any, with respect to such distributions. Non-U.S. Holders may have to comply with specific certification procedures to establish that the holder is not a U.S. person (as defined in the Code) in order to avoid backup withholding at the applicable rate, currently 24%, with respect to dividends (or constructive dividends) on the Common Stock or Pre-Funded Warrants. Generally, a holder will comply with such procedures if it provides a properly executed IRS Form W-8BEN (or other applicable Form W-8) or otherwise meets documentary evidence requirements for establishing that it is a Non-U.S. Holder, or otherwise establishes an exemption. Dividends paid to Non-U.S. Holders subject to withholding of U.S. federal income tax, as described above under the heading "*Distributions*," will generally be exempt from U.S. backup withholding.

Information reporting and backup withholding generally will apply to the proceeds of a disposition of the Common Stock or Pre-Funded Warrants by a Non-U.S. Holder effected by or through the U.S. office of any broker, U.S. or foreign, unless the holder certifies its status as a Non-U.S. Holder and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a Non-U.S. Holder where the transaction is effected outside the United States through a non-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Non-U.S. Holders should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

Copies of information returns may be made available to the tax authorities of the country in which the Non-U.S. Holder resides or is incorporated under the provisions of a specific treaty or agreement.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a Non-U.S. Holder can be refunded or credited against the Non-U.S. Holder's U.S. federal income tax liability, if any, provided that an appropriate claim is timely filed with the IRS.

***Foreign Accounts***

The Foreign Account Tax Compliance Act, or FATCA, generally imposes a 30% withholding tax on dividends (including constructive dividends) on the Common Stock and Pre-Funded Warrants if paid to a non-U.S. entity unless (i) if the non-U.S. entity is a "foreign financial institution," the non-U.S. entity undertakes certain due diligence, reporting, withholding, and certification obligations, (ii) if the non-U.S. entity is not a "foreign financial institution," the non-U.S. entity identifies certain of its U.S. investors, if any, or (iii) the non-U.S. entity is otherwise exempt under FATCA.

Withholding under FATCA generally will apply to payments of dividends (including constructive dividends) on our Common Stock and Pre-Funded Warrants. While withholding under FATCA would have also applied to payments of gross proceeds from a sale or other disposition of the Common Stock or Pre-Funded Warrants, under proposed U.S. Treasury Regulations withholding on payments of gross proceeds is not required. Although such regulations are not final, applicable withholding agents may rely on the proposed regulations until final regulations are issued.

An intergovernmental agreement between the United States and an applicable foreign country may modify the requirements described in this section. Under certain circumstances, a holder may be eligible for refunds or credits of the tax. Holders should consult their own tax advisors regarding the possible implications of FATCA on their investment in the Common Stock or Pre-Funded Warrants.

***Federal Estate Tax***

Common stock owned or treated as owned by an individual who is not a citizen or resident of the United States (as specially defined for U.S. federal estate tax purposes) at the time of death will be included in the individual's gross estate for U.S. federal estate tax purposes and, therefore, may be subject to U.S. federal estate tax, unless an applicable estate tax or other treaty provides otherwise. The foregoing may also apply to Pre-Funded Warrants. A Non-U.S. Holder should consult his, her, or its own tax advisor regarding the U.S. federal estate tax consequences of the ownership or disposition of shares of the Common Stock and Pre-Funded Warrants.

**The preceding discussion of material U.S. federal tax considerations is for informational purposes only. It is not tax advice. Prospective investors should consult their own tax advisors regarding the particular U.S. federal, state, local and non-U.S. tax consequences of purchasing, holding and disposing of the Common Stock or Pre-Funded Warrants, including the consequences of any proposed changes in applicable laws.**

**LEGAL MATTERS**

Certain legal matters in connection with this offering will be passed upon for us by Dykema Gossett PLLC. Certain legal matters related to this offering will be passed upon for the underwriters by Pryor Cashman LLP, New York, New York.

**EXPERTS**

The consolidated financial statements of the Company as of December 31, 2024 and December 31, 2023 included in this prospectus have been audited by Hacker Johnson & Smith PA, an independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

**WHERE YOU CAN FIND MORE INFORMATION**

We have filed with the SEC a registration statement on Form S-1, which includes amendments and exhibits, under the Securities Act and the rules and regulations under the Securities Act for the registration of Common Stock being offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all the information that is in the registration statement and its exhibits and schedules. Statements in this prospectus that summarize documents are not necessarily complete, and in each case you should refer to the copy of the document filed as an exhibit to the registration statement. The registration statement and other public filings can be obtained from the SEC's website at *www.sec.gov*.

As a public company, we are required to file our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A and other information (including any amendments) with the SEC. You can find the Company's SEC filings at the SEC's website at *www.sec.gov*.

Our Internet address is *www.jet.ai*. Information contained on our website is not part of this prospectus. Our SEC filings (including any amendments) will be made available free of charge on *www.sec.gov*, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

**JET.AI INC.**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| <u>[Consolidated Balance Sheets at March 31, 2025 (unaudited) and December 31, 2024](#Y-003)</u> | F-2 |
| <u>[Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 (unaudited)](#Y-004)</u> | F-3 |
| <u>[Consolidated Statements of Stockholders' Equity (Deficit) for the Three Months Ended March 31, 2025 and 2024 (unaudited)](#Y-005)</u> | F-4 |
| <u>[Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (unaudited)](#Y-006)</u> | F-5 |
| <u>[Notes to Consolidated Financial Statements](#Y-007)</u> | F-6 |

---

---

| | |
|:---|:---|
| <u>[Report of Independent Registered Public Accounting Firm](#fw_001)</u> (PCAOB ID No. 34) | F-22 |
| <u>[Consolidated Balance Sheets](#fw_002)</u> | F-24 |
| <u>[Consolidated Statements of Operations](#fw_003)</u> | F-25 |
| <u>[Consolidated Statements of Stockholders' Equity (Deficit)](#fw_004)</u> | F-26 |
| <u>[Consolidated Statements of Cash Flows](#fw_005)</u> | F-27 |
| <u>[Notes to Consolidated Financial Statements](#fw_006)</u> | F-28 |

---

**JET.AI, INC.**

**CONSOLIDATED BALANCE SHEETS**

**(UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **December 31,**<br>**2024** |
| Assets |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $12245419 | $5872627 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 398873 | 132230 |
| &nbsp;&nbsp;&nbsp;Other current assets | 336692 | 357751 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 12980984 | 6362608 |
| Property and equipment, net | 4417 | 5055 |
| Intangible assets, net | 86745 | 86745 |
| Right-of-use lease asset | 914915 | 1048354 |
| Investment in joint venture | 100000 | 100000 |
| Deposit on aircraft | 3500000 | 2400000 |
| Deposits and other assets | 871561 | 794561 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $18458622 | $10797323 |
| Liabilities and Stockholders' Equity |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $551800 | $280450 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 2109418 | 1663338 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 1282397 | 1319746 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | 529499 | 525547 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 4473114 | 3789081 |
| &nbsp;&nbsp;&nbsp;Lease liability, net of current portion | 361916 | 495782 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4835030 | 4284863 |
| Commitments and contingencies (Note 2 and 5) |  |  |
| Stockholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Stock, 4,000,000 shares authorized, <br> par value $0.0001, 0 issued and outstanding (except for the Series B<br> Shares identified below) |  |  |
| &nbsp;&nbsp;&nbsp;Series B Convertible Preferred Stock, 5,000 shares authorized,<br> par value $0.0001, 1,300 and 250 issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, 200,000,000 shares authorized, par value $0.0001,<br> 2,187,446 and 1,629,861 issued and outstanding | 218 | 162 |
| &nbsp;&nbsp;&nbsp;Subscription receivable | (6724) | (6724) |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 69345980 | 59065100 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (55715882) | (52546078) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 13623592 | 6512460 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $18458622 | $10797323 |

---

See accompanying notes to consolidated financial statements

**JET.AI, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Revenues | $3474638 | $3848598 |
| Cost of revenues | 3590152 | 3972954 |
| &nbsp;&nbsp;&nbsp;Gross loss | (115514) | (124356) |
| Operating Expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative (including stock-based <br> compensation of $550,936, and $1,199,318, respectively) | 2652427 | 2546294 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 294408 | 446600 |
| &nbsp;&nbsp;&nbsp;Research and development | 108924 | 32546 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 3055759 | 3025440 |
| &nbsp;&nbsp;&nbsp;Operating loss | (3171273) | (3149796) |
| Other expense (income): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | 79314 |
| &nbsp;&nbsp;&nbsp;Other income | (1469) | (61) |
| Total other expense | (1469) | 79253 |
| Loss before provision for income taxes | (3169804) | (3229049) |
| Provision for income taxes | - | - |
| &nbsp;&nbsp;&nbsp;Net Loss | $(3169804) | $(3229049) |
| &nbsp;&nbsp;&nbsp;Cumulative preferred stock dividends | - | (29728) |
| &nbsp;&nbsp;&nbsp;Net Loss to common stockholders | $(3169804) | $(3258777) |
| Weighted average shares outstanding - basic and diluted | 1711490 | 50851 |
| Net loss per share - basic and diluted | $(1.85) | $(64.08) |

---

See accompanying notes to consolidated financial statements

**JET.AI, INC.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)**

**THREE MONTHS ENDED MARCH 31, 2025 AND 2024**

**(UNAUDITED)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series B Preferred Stock** | **Series B Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Subscription**<br>**Receivable** | **Additional Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total<br> Stockholders' Equity**<br>**(Deficit)** |
| Balance at December 31, 2023 |  | $- | 43353 | $4 | $(6724) | $35343069 | $(39272388) | $(3936039) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  |  |  |  | 1199318 |  | 1199318 |
| &nbsp;&nbsp;&nbsp;Sale of Series B Convertible Preferred Units | 150 |  | 1111 |  |  | 1500025 |  | 1500025 |
| &nbsp;&nbsp;&nbsp;Offering costs |  |  |  |  |  | (155000) |  | (155000) |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock upon exercise of warrants |  |  | 6892 | 1 |  | 742473 |  | 742474 |
| &nbsp;&nbsp;&nbsp;Sale of Common Stock for cash |  |  | 4444 |  |  | 1110000 |  | 1110000 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | - | (3229049) | (3229049) |
| Balance at March 31, 2024 (unaudited) | 150 | $- | 55800 | $5 | $(6724) | $39739885 | $(42501437) | $(2768271) |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series B Preferred Stock** | **Series B Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Subscription**<br>**Receivable** | **Additional Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total<br> Stockholders' Equity**<br> **(Deficit)** |
| Balance at December 31, 2024 | 250 | $- | 1629861 | $162 | $(6724) | $59065100 | $(52546078) | 6512460 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 25485 | 3 |  | 550933 |  | 550936 |
| &nbsp;&nbsp;&nbsp;Issuance of Series B Convertible Preferred Stock upon exercise of warrants | 1100 |  |  |  |  | 11000000 |  | 11000000 |
| &nbsp;&nbsp;&nbsp;Series B Preferred Stock conversion | (50) |  | 532100 | 53 |  | (53) |  |  |
| &nbsp;&nbsp;&nbsp;Offering costs |  |  |  |  |  | (1270000) |  | (1270000) |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | - | (3169804) | (3169804) |
| Balance at March 31, 2025 (unaudited) | 1300 | $- | 2187446 | $218 | $(6724) | $69345980 | $(55715882) | $13623592 |

---

See accompanying notes to consolidated financial statements

**JET.AI, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(3169804) | $(3229049) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in <br> operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and depreciation | 638 | 33813 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount |  | 80761 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 550936 | 1199318 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash operating lease costs | 133439 | 129605 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (266643) | (66423) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 21059 | 85414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 271350 | (270529) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 446080 | 26889 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (37349) | (384509) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability | (129914) | (126080) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (2180208) | (2520790) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of intangible assets |  | (12922) |
| &nbsp;&nbsp;&nbsp;Deposit on aircraft | (1100000) |  |
| &nbsp;&nbsp;&nbsp;Deposits and other assets | (77000) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1177000) | (12922) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Repayments of notes payable |  | (371250) |
| &nbsp;&nbsp;&nbsp;Repayments of related party notes payable |  | (297500) |
| &nbsp;&nbsp;&nbsp;Offering costs | (1270000) | (155000) |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of common stock warrants |  | 742474 |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of Series B Convertible Preferred Stock warrants | 11000000 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of Common Stock | - | 1110000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 9730000 | 1028724 |
| &nbsp;&nbsp;&nbsp;Increase (decrease) in cash and cash equivalents | 6372792 | (1504988) |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents, beginning of period | 5872627 | 2100543 |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents, end of period | $12245419 | $595555 |
| &nbsp;&nbsp;&nbsp;Supplemental disclosures of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $79314 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes | $- | $- |
| &nbsp;&nbsp;&nbsp;Non-cash financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock for Series B Preferred Stock conversion | $53 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subscription receivable from sale of Common and Preferred Stock | $- | $1500025 |

---

See accompanying notes to consolidated financial statements

**JET.AI, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS**

Jet.AI Inc., formerly known as Oxbridge Acquisition Corp. ("Jet.AI" or the "Company"), was incorporated as a Cayman Islands exempted company on April 12, 2021. The Company was incorporated for the purpose of effecting a merger, capital stock or share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Jet Token, Inc. was formed on June 4, 2018 in the State of Delaware and is headquartered in Las Vegas, Nevada.

On August 10, 2023, the Company consummated the business combination transaction ("Business Combination") pursuant to the Business Combination Agreement and Plan of Reorganization (the "Business Combination Agreement") with OXAC Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of the Company ("First Merger Sub"), Summerlin Aviation LLC (f/k/a OXAC Merger Sub II, LLC), a Delaware limited liability company and a direct wholly owned subsidiary of the Company ("Second Merger Sub"), and Jet Token, Inc., a Delaware corporation ("Jet Token"). Pursuant to the terms of the Business Combination Agreement, a business combination between the Company and Jet Token was effected through the merger of First Merger Sub and Jet Token, with Jet Token emerging as the surviving company, followed by a merger between Jet Token and Second Merger Sub, with Second Merger Sub emerging as the surviving company as a wholly owned subsidiary of the Company. In connection with the Business Combination, the Company was domesticated and continues as a Delaware corporation (the "Domestication") and immediately changed its name to "Jet.AI Inc."

Following the closing of the Business Combination, the Company's common stock was listed on the Nasdaq Stock Market under the ticker symbol "JTAI" and Jet Token was determined to be the accounting acquirer in the Business Combination. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Jet Token issuing stock for the net assets of the Company, accompanied by a recapitalization. The Company is now a holding company for several wholly owned subsidiaries, including Second Merger Sub.

The Company, directly and indirectly through its subsidiaries, is 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 (the "App"), 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, (v) aircraft brokerage and (vi) service revenue from the monthly management and hourly operation of customer aircraft.

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Going Concern and Management Plans*

The Company has limited operating history and has incurred losses from operations since inception. These matters raise concern about the Company's ability to continue as a going concern.

During the next twelve months, the Company intends to fund its operations with capital from its operations, drawdowns under its Share Purchase Agreement with GEM Yield LLC SCS and GEM Yield Bahamas Limited, proceeds from the exercise of warrants contemplated under the terms set forth in a term sheet entered into with Hexstone Capital LP ("Hexstone") in February of 2025 (as further described in Item 2 of Part I of this Quarterly Report), and other sales of debt or equity securities. Additionally, the Company may explore other potential sources of outside capital. The Company could, if necessary, 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, or that the transactions contemplated by the term sheet with Hexstone will be consummated on the terms agreed to in principle, or at all. 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*

 

The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP, whereby the Company 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 the Company, accompanied by a recapitalization. The net assets of the Company were stated at historical cost, with no goodwill or other intangible assets recorded.

Jet Token was determined to be the accounting acquirer in the Business Combination based on the following predominate factors:

● Jet Token's former stockholders had the greatest voting interest in the combined entity;

● Jet Token's former stockholders had 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."

*Unaudited Interim Financial Statements*

 

Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these unaudited consolidated interim financial statements have been included. Such adjustments consist of normal recurring adjustments. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the full year.

 

*Reverse Stock Split*

 

On November 12, 2024, the Company effected a reverse common stock split of the Company's issued and outstanding shares of common stock at a ratio of one-for-225. On the effective date, every 225 shares of common stock issued and outstanding were combined into one issued share of common stock. In addition, the aggregate number of equity-based awards that remain available to be granted under the Company's equity compensation plans was decreased proportionately and proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of outstanding stock options, as applicable, as well as to the number of shares that would be owned upon vesting and settlement of restricted stock units and other equity-based awards, as applicable. Similar proportionate adjustments were also made to the outstanding warrants. No fractional shares were issued as a result of the reverse stock split and any fractional shares resulting from the reverse stock split were rounded down to the nearest number of whole shares so that we issued cash in lieu of any fractional shares that such stockholder would have received as a result of the reverse stock split. In accordance with ASC 260-10-55-12, the Company has adjusted the number of shares, per-share computations and the computations of basic and diluted EPS retroactively for all periods presented in the consolidated financial statements and related notes.

*Principles of Consolidation*

The accompanying consolidated financial statements include the accounts of Jet.AI Inc. and its wholly owned subsidiaries, Summerlin Aviation LLC, Jet Token Software Inc., Jet Token Management Inc., Galilee LLC, and Galilee 1 SPV LLC. All intercompany accounts and transactions have been eliminated in consolidation.

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.

*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.

*Fair Value of Financial Instruments*

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

*Risks and Uncertainties*

The Company has a limited operating history and has only recently begun generating revenue from operations. The Company's business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with local, state, and federal governmental policy decisions. A host of factors beyond the Company's control could cause fluctuations in these conditions. Adverse conditions may include but are not limited to: changes in the private 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 consolidated results of its operations.

*Cash and Cash Equivalents*

For purpose of the consolidated statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Included within cash and cash equivalents is restricted cash of $500,000 at March 31, 2025 and December 31, 2024.

*Offering Costs*

The Company complies with the requirements of ASC 340 with regards to offering costs. Prior to the completion of an offering, offering costs will be capitalized as deferred offering costs on the consolidated balance sheets. The deferred offering costs will be charged to stockholders' equity upon the completion of an offering or to expenses if the offering is not completed.

*Other Current Assets*

Other current assets include security deposits, which relate primarily to contractual prepayments to third-parties for future services, prepaid expenses and customer receivables for additional expenses incurred in their charter trips.

*Property and Equipment*

Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. As of March 31, 2025 and December 31, 2024, property and equipment consisted entirely of equipment which is being depreciated over a three-year period.

*Internal Use Software*

The Company incurs software development costs to develop software programs to be used solely to meet its internal needs and cloud-based applications used to deliver its services. In accordance with ASC 350-40, Internal-Use Software, the Company capitalizes development costs related to these software applications once a preliminary project stage is complete, funding has been committed, and it is probable that the project will be completed, and the software will be used to perform the function intended. As of March 31, 2025 and December 31, 2024, the Company has capitalized approximately $398,000 of internal software related costs, which is included in intangible assets in the accompanying consolidated balance sheets and was fully amortized through December 31, 2023.

*Investments in Joint Ventures*

In January 2023, the Company formed a 50/50 joint venture subsidiary with Great Western Air LLC (dba Cirrus Aviation Services), 380 Software LLC, a Nevada limited liability company. Costs and profits are to be shared equally. The Company accounts for these investments using the equity method whereby the initial investment is recorded at cost and subsequently adjusted by the Company's share of income or loss from the joint venture. There is currently no financial activity or material assets to report for this joint venture beyond this initial investment.

*Allowance for Credit Losses*

 

The Company recognizes an expected allowance for credit losses with respect to its accounts receivable. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. Accounts receivable are evaluated individually for impairment. This estimate is adjusted for management's assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses. The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in operations or an offset to credit loss expense in the year of recovery, in accordance with the entity's accounting policy election. No allowance for credit losses was considered necessary at March 31, 2025 and December 31, 2024*.*

 

*Leases*

The Company determines if an arrangement is a lease at inception on an individual contract basis. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, non-current on the consolidated balance sheets. Operating lease right-of-use assets represent the right to use an underlying asset for the lease term. Operating lease right-of-use assets are recognized at lease commencement date based on the present value of the future minimum lease payments over the lease term. The interest rate implicit in each lease was readily determinable to discount lease payments.

The operating lease right-of-use assets include any lease payments made, including any variable amounts that are based on an index or rate, and exclude lease incentives. Lease terms may include options to extend or terminate the lease. Renewal option periods are included within the lease term and the associated payments are recognized in the measurement of the operating right-of-use asset when they are at the Company's discretion and considered reasonably certain of being exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has elected the practical expedient not to recognize leases with an initial term of 12 months or less on the Company's consolidated balance sheets and lease expense is recognized on a straight-line basis over the term of the short-term lease.

*Impairment of Long-Lived Assets*

The Company follows ASC 360, Accounting for Impairment or Disposal of Long-Lived Assets. ASC 360 requires that if events or changes in circumstances indicate that the carrying value of long-lived assets or asset groups may be impaired, an evaluation of recoverability would be performed by comparing the estimated future undiscounted cash flows associated with the asset to the asset's carrying value to determine if a write-down to market value would be required. Long-lived assets or asset groups that meet the criteria in ASC 360 as being held for sale are reflected at the lower of their carrying amount or fair market value, less costs to sell.

*Revenue Recognition*

In applying the guidance of ASC 606, Revenue from Contracts with Customers, 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 Company's App 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. 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. As of March 31, 2025 and December 31, 2024, the Company deferred revenue $911,139 and $1,091,235, respectively, related to prepaid flight hours under the jet card program for which the related travel had not yet occurred.

The Company also generates revenues from individual ad hoc charter bookings processed through the Company's App, whereby the Company sources, negotiates, and arranges 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 Aviation markets charters on the Company's aircraft for the Company's benefit. Deferred revenue with respect to the App was $355,025 and $212,278 as of March 31, 2025 and December 31, 2024, respectively.

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. Deferred revenue with respect to the management of aircraft was $16,233 as of March 31, 2025 and December 31, 2024.

The following is a breakout of revenue components by subcategory for the three months ended March 31, 2025 and 2024.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2025** | **2024** |
| Software App and Cirrus Charter | $1849950 | $2371091 |
| Jet Card and Fractional Programs | 343345 | 677320 |
| Management and Other Services | 1281343 | 800187 |
|  | $3474638 | $3848598 |

---

*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 third-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. The Company recorded no aircraft sales for the three months ended March 31, 2025 and 2024.

*Pass-Through Costs*

In applying the guidance of ASC 606, the Company recognizes revenue when a 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 third-party costs when the Company determines that it is acting as the principal.

*Cost of Sales*

The cost of sales expenses includes costs incurred in providing air transportation services, such as chartering third-party aircraft, aircraft lease expenses, pilot training and wages, aircraft fuel, aircraft maintenance, and other aircraft operating expenses, each of which is discussed below.

&nbsp;&nbsp;&nbsp;&nbsp;1. Chartering Third-Party Aircraft: The cost of chartering third-party aircraft is recorded as a part of the cost of sales expense. These expenses include the fees paid to third-party operators for providing aircraft services on behalf of the company. Expenses are recognized in the statements of operations 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 statements of operations 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 statements of operations 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 statements of operations 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 statements of operations as part of the cost of sales expenses in the period when they are incurred and are reported on an accrual basis.

*Advertising Costs*

The Company expenses the cost of advertising and promoting the Company's services as incurred. Such amounts are included in sales and marketing expense in the consolidated statements of operations and totaled $294,408 and $446,600 for the three months ended March 31, 2025 and 2024, respectively.

*Research and Development*

The Company incurs research and development costs during the process of researching and developing its technologies and future offerings. The Company's research and development costs consist primarily of payments for third party software development that is not capitalizable. The Company expenses these costs as incurred until the resulting product has been completed, tested, and made ready for commercial use.

*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.

*Income Taxes*

The Company applies ASC 740 Income Taxes ("ASC 740"). Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any and the change during the period in deferred tax assets and liabilities.

ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position is recognized only if it is "more likely than not" that the position is sustainable upon examination by the relevant taxing authority based on its technical merit.

The Company is subject to tax in the United States ("U.S.") and files tax returns in the U.S. Federal jurisdiction and Nevada state jurisdiction. The Company is subject to U.S. Federal, state, and local income tax examinations by tax authorities for all periods since inception. The Company currently is not under examination by any tax authority.

 

*Loss per Common Share*

The Company presents basic loss per share ("EPS") and diluted EPS on the face of the consolidated statements of operations. Basic EPS is computed as net loss divided by the weighted average number of common shares outstanding for the period. For periods in which the Company incurs a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from the diluted EPS calculations. For the three months ended March 31, 2025 and 2024, there were (i) 22,668 and 16,268 options, (iii) 9,686 and 112,095 warrants to purchase common stock, and (iii) 2,688,432 and 8,032 common shares issuable upon conversion of Series B Preferred Stock, respectively, excluded.

*Concentration of Credit Risk*

The Company maintains its cash with several major U.S. financial institutions which it believes to be creditworthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, however the Company may maintain balances in excess of the federally insured limits.

*Segment Reporting*

The Company identifies operating segments as components of the Company for which discrete financial information is available and is regularly reviewed by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and performance assessment. The chief operating decision maker is the chief executive officer. The Company determined that the Company operates in a single operating and reportable segment, private aviation services, as the chief operating decision maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue, for purposes of making operating decisions, allocating resources, and assessing performance. All of the Company's long-lived assets are located in the U.S. and revenue from private aviation services is substantially earned from flights throughout the U.S.

*Recent Accounting Pronouncements*

 

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures." ASU 2023-09 requires disclosure of specific categories in the income tax rate reconciliation and requires additional information for reconciling items that meet a quantitative threshold. The standard requires an annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. The standard is effective for fiscal years beginning after December 15, 2024. The adoption of the standard did not have a material impact on the Company's disclosures.

In November 2024, the FASB issued ASU 2024-03, "Expense Disaggregation Disclosures." ASU 2024-03 requires disclosure to disaggregate prescribed expenses within relevant statement of operations captions. The standard is effective for fiscal years beginning after December 15, 2026 and for interim periods after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its existing disclosures.

**NOTE 3 – OTHER ASSETS**

Other assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **December 31,**<br>**2024** |
| Deposits | $181811 | $104811 |
| Lease Maintenance Reserve | 689750 | 689750 |
| Total Other Assets | $871561 | $794561 |

---

**NOTE 4 – NOTES PAYABLE**

*Bridge Agreement*

On September 11, 2023, the Company entered into a binding term sheet (the "Bridge Agreement") with eight investors whereby the investors purchased senior secured promissory notes (the "Bridge Notes") from the Company in the aggregate principal amount of $625,000, which included $281,250 from related parties.

The Company received net proceeds from the sale of the Bridge Notes of $500,000, resulting in an original issue discount of $112,500. The notes accrued interest at five percent (5%) per annum and matured on March 11, 2024. The Company recognized a debt discount of $168,250 from the Bridge Notes, of which $90,625 was amortized during the three months ended March 31, 2024. Interest expense was $79,314 for the three months ended March 31, 2024.

These notes and accrued interest payable were fully repaid during the three months ended March 31, 2024.

**NOTE 5 – COMMITMENTS AND CONTINGENCIES**

*Operating Lease*

In November 2021, the Company entered into a leasing arrangement with a third party for an aircraft to be used in the Company's operations. The lease term is for 60 months, expiring November 2026, and requires monthly lease payments. At any time during the lease term, the Company has the option to purchase the aircraft from the lessor at the aircraft's fair market value at that time.

The lease agreement also requires the Company to hold a liquidity reserve of $500,000 in a separate bank account as well as a maintenance reserve of approximately $690,000 for the duration of the lease term. The liquidity reserve is held in a bank account owned by the Company. As such, this is classified as restricted cash in the accompanying consolidated balance sheets. The maintenance reserve are funds held by the lessor to be used for reasonable maintenance expenses in excess of those covered by the airframe and engine maintenance programs maintained by the Company. These maintenance programs are designed to fully cover the Company's aircraft's maintenance costs, both scheduled and unscheduled, and therefore the Company does not expect these funds will be drawn upon. If funds from the maintenance reserve are expended by the lessor, the Company is required to replenish the maintenance reserve account up to the required reserve amount. Any funds remaining at the end of the Lease term will be returned to the Company. The maintenance reserve is included within deposits and other assets in the accompanying consolidated balance sheets.

Total lease expense for the three months ended March 31, 2025 and 2024 was $325,350 and $320,775, respectively, which is included within cost of revenues in the accompanying statements of operations.

Right-of-use lease assets and lease liabilities for our operating leases was recorded in the consolidated balance sheet as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31,**<br>**2025** | **December 31,**<br>**2024** |
| Operating lease right-of-use asset | $2576036 | $2576036 |
| Accumulated amortization | (1661121) | (1527682) |
| Net balance | $914915 | $1048354 |
| Lease liability, current portion | $529499 | $525547 |
| Lease liability, long-term | 361916 | 495782 |
| Total operating lease liabilities | $891415 | $1021329 |

---

As of March 31, 2025, the weighted average remaining lease term was 1.5 years, and the weighted average discount rate was 3%.

As of March 31, 2025, future minimum required lease payments due under the non-cancellable operating lease are as follows:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 (nine months) | 411750 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2026 | 503250 |
| Total future minimum lease payments | 915000 |
| Less imputed interest | (23585) |
| Maturities of lease liabilities | $891415 |

---

*<u>GEM Share Purchase Agreement</u>*

Jet Token executed a 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"), which was automatically assumed by the Company when the Business Combination was effected. The Company has the right to periodically issue and sell to GEM, and GEM has agreed to purchase, up to $40,000,000 aggregate value of shares of the Company's common stock during the 36-month period following the date of listing on Nasdaq.

No shares of common stock were sold pursuant to this agreement during the three months ended March 31, 2025.

During the three months ended March 31, 2024, the Company issued 4,444 shares of common stock pursuant to the agreement for total consideration of $1.1 million.

Pursuant to the Share Purchase Agreement, the Company issued to GEM a warrant (the "GEM Warrant") granting it the right to purchase up to 9,686 shares of common stock of the Company on a fully diluted basis. The GEM Warrant was issued with an exercise price of $1,935.00 and a term of three years. The GEM Warrant included an adjustment mechanism, whereby the exercise price is subject to adjustment from time to time. Pursuant to the Warrant, on the first anniversary following the Public Listing Date as defined in the GEM Warrant (the "Adjustment Date"), if all or any portion of the GEM Warrant remains unexercised and the average closing price of the Company's common stock for the 10 trading days following the Adjustment Date was less than 90% of the then current exercise price of the warrant (the "Baseline Price"), then the exercise price of the unexercised Warrant Shares that remained exercisable pursuant to the Warrant would be adjusted to 110% of the Baseline Price. Accordingly, the warrant exercise price was reduced to $9.07 per share as of March 31, 2025.

On August 4, 2022, the Company entered into a Registration Rights Agreement with GEM, obligating the Company to file a registration statement with respect to resales of the shares of common stock issuable to GEM under the Share Purchase Agreement and upon exercise of the GEM Warrant. Because that registration statement was not declared effective by October 23, 2023 (the "Effectiveness Deadline"), the Company was obligated to pay GEM an amount equal to $10,000 for each day following the Effectiveness Deadline until the registration statement was declared effective subject to a $300,000 cap if such delay in the declaration of effectiveness of the registration statement was caused by delays in SEC review of the registration statement or the SEC's refusal to declare the registration statement effective. The Company has accrued $300,000 as of March 31, 2025 and December 31, 2024 with respect to this agreement.

On October 23, 2023, the Company entered into a warrant amendment agreement retroactively effective as of August 10, 2023 (the "GEM Warrant Amendment"). The GEM Warrant Amendment provides that GEM can elect to limit the exercisability of the "GEM Warrant" to purchase shares of the Company's common stock, 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 the Company's common stock outstanding immediately after giving effect to such exercise. On October 23, 2023, GEM provided a notice to the Company electing to have this limit apply to the GEM Warrant effective as of August 10, 2023. GEM may revoke this election notice by providing written notice to the Company of such revocation, which revocation would not be effective until 61 days after such notice is delivered to the Company.

*<u>Textron Aircraft Purchase Agreement</u>*

 

On October 31, 2024, the Company entered into an aircraft purchase agreement with Textron Aviation Inc. ("Textron"), for the purchase of three 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 $40.5 million. The aircraft are expected to be delivered in the third and fourth quarter of 2026. The Company made deposits totaling $3.5 million under the purchase agreement through March 31, 2025 and will be required to make additional deposits totaling $2.1 million during 2025, including $550,000 of which is due by May 15, 2025.

*<u>December 2024 Engagement Letter</u>*

 

On December 4, 2024, the Company entered into an engagement letter (the "2024 Maxim Engagement Letter") with Maxim Group LLC ("Maxim"), pursuant to which the Company engaged Maxim to serve as its exclusive financial advisor with respect to one or more potential business combinations involving the Company for a period of seven months. Pursuant to the 2024 Maxim Engagement Letter, the Company agreed to pay Maxim a non-refundable stock fee of 25,000 shares (the "Retainer") which were issued upon execution of the engagement letter.

If the Company consummates certain transactions, then Maxim is due a fee (the "Success Fee") of $500,000 upon the closing of the transaction. In the event that the Company enters into an agreement with respect to a transaction during the term of this Agreement that is subsequently terminated, and the Company becomes entitled to a break-up, termination, topping, expense reimbursement or similar fee or payment (including any judgment for damages or amount in settlement of any dispute as a result of such termination, or any profit on any stock acquired from, or stock option granted by, any party to such transaction), a fee (the "Break-up Fee") equal to 25% of all such amounts, payable promptly upon receipt of such amounts by the Company. In addition to the Retainer, Success Fee and Break-up Fee payable pursuant to the 2024 Maxim Engagement Letter, and regardless of whether any transaction is proposed or consummated, the Company will reimburse Maxim for certain out of pocket expenses incurred under the 2024 Maxim Engagement Letter.

*<u>February 2025 Engagement Letter</u>*

On February 25, 2025, the Company entered into an engagement letter (the "2025 Maxim Engagement Letter") with Maxim, pursuant to which the Company engaged Maxim to serve as its exclusive financial advisor with respect to a spin-out transaction. Pursuant to the 2025 Maxim Engagement Letter, the Company agreed to pay Maxim a non-refundable stock fee of 25,000 shares which were issued upon execution of the 2025 Maxim Engagement Letter. If the Company consummates a spin-out transaction, then Maxim will receive a success fee of $500,000 upon closing. The Company also agreed to reimburse Maxim for certain expenses pursuant to the 2025 Maxim Engagement Letter.

The shares were recorded to General and Administrative expenses as stock-based compensation based on the fair value of the shares of $168,500.

**NOTE 6 – STOCKHOLDERS' EQUITY**

*Common Stock and Preferred Stock*

Under the Amended and Restated Certificate of Incorporation of the Company, as amended, the Company is authorized to issue up to 204,000,000 shares, consisting of two classes: 200,000,000 shares of common stock, $0.0001 par value per share, and 4,000,000 shares of preferred stock, $0.0001 par value per share, of which 5,000 shares of preferred stock have been designated as Series B Convertible Preferred Stock, par value $0.0001 ("Series B Preferred Stock"). As of March 31, 2025, there were no issued and outstanding shares of Series A Preferred Stock and Series A-1 Preferred Stock, and 1,300 issued and outstanding shares of Series B Preferred Stock.

*flyExclusive Transaction*

On February 13, 2025, the Company entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with flyExclusive, Inc. ("flyExclusive"), FlyX Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of flyExclusive ("Merger Sub"), and Jet.AI SpinCo, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("SpinCo"). Pursuant to the Merger Agreement, (i) as a condition to closing on the Merger Agreement, the Company will distribute all of the shares of SpinCo, on a pro rata basis, to the Company's stockholders and (ii) Merger Sub will merge with and into SpinCo (the "Merger" and, together with the Distribution and all other transactions contemplated under the Merger Agreement, the "Transactions") with SpinCo surviving the Merger as a wholly owned subsidiary of flyExclusive.

In connection with executing the Merger Agreement, the Company, SpinCo, and flyExclusive entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement") pursuant to which the Company will transfer the business, operations, services and activities of the Company's jet charter business to SpinCo (the "Separation"). Upon the terms and subject to the conditions set forth in the Separation and Distribution Agreement, the Company will distribute all of the shares of common stock of SpinCo, $0.001 par value per share ("SpinCo Common Stock") to the Company's stockholders on a pro rata basis as set forth in the Separation and Distribution Agreement (the "Distribution"). As such, the Company will no longer operate a jet charter business as of consummation of the Distribution. There will be no change to the Company's board of directors or executive officers as a result of the Transactions.

As consideration for the Merger and upon closing of the Merger, the holders of common stock of SpinCo will have their shares of SpinCo Common Stock converted on a pro rata basis into the right to receive shares of Class A common stock of flyExclusive ("flyExclusive Common Stock"), based on an exchange ratio equal to the quotient of (i) the "Initial Purchase Price" divided by the volume weighted average closing sale price of the flyExclusive Common Stock as reported on NYSE American for a period of 30 consecutive trading days ending on the trading day three trading days prior to the day of closing of the Merger (the "Merger Consideration Shares"), divided by (ii) the total outstanding shares of SpinCo Common Stock. The "Initial Purchase Price" is an amount equal to the product of (x) SpinCo's estimated net cash, multiplied by certain premium percentages depending on SpinCo's estimated net cash upon closing of the Merger. The number of Merger Consideration Shares that holders of SpinCo Common Stock will receive is subject to adjustment, depending on, among other things, the actual amount of SpinCo's net cash at closing of the Merger. The Company's stockholders will continue to own and hold their existing shares of the Company's common stock as of closing of the Merger.

The Transactions are subject to shareholder approval and are expected to close during the second or third quarter of 2025.

 

*Series B Convertible Preferred Stock Securities Purchase Agreement*

On March 28, 2024, the Company entered into a Securities Purchase Agreement (the "Series B Securities Purchase Agreement") with Ionic Ventures, LLC ("Ionic") for a private placement, which closed on March 29, 2024. Pursuant to the Series B Securities Purchase Agreement the Company sold 150 shares of Series B Preferred Stock, a warrant to purchase up to 1,500 shares of Series B Preferred Stock with an exercise price of $10,000 per share, and 1,111 shares of Jet.AI Common Stock for net proceeds of $1,345,025 after deducting offering costs of $155,000.

Each share of Series B Preferred Stock is convertible into a number of shares of Jet.AI 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 of 1934), which can be adjusted to a beneficial ownership limitation of 9.99% upon 61 days prior written notice by Iconic. Prior to the approval by the Company's stockholders of 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, shares of Series B Preferred Stock could not be converted into shares of common stock if, as a result of such conversion, the number of shares of common stock to be issued would exceed 19.9% of the total number of shares of the Company's outstanding common stock as of the closing date. At the annual meeting of stockholders held on September 24, 2024, the Company's stockholders approved a proposal that served to remove the 19.9% limitation.

Subject to the limitations set forth in the preceding paragraph and provided there is an effective registration statement covering Ionic's resale of the Jet.AI Common Stock underlying the Series B Preferred Stock, shares of Series B Preferred Stock will automatically convert into shares of Jet.AI 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 Common Stock over a period beginning on the trading day after the Company delivers 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 the Company's failure to convert the Series B Preferred Stock into common stock when a conversion right is exercised, then the Company may be required to redeem the Series B Preferred Stock for cash at 110% of the stated value.

In connection with the transactions under the Securities Purchase Agreement, the Company entered into a placement agency agreement (the "Placement Agency Agreement") with Maxim. Pursuant to the terms of the Placement Agency Agreement, the Company agreed to pay Maxim a cash fee equal to 7% of the aggregate gross proceeds raised under the Securities Purchase Agreement and reimburse Maxim, directly upon the initial closing under the Securities Purchase Agreement for all travel and other documented out-of-pocket expenses incurred by Maxim, including the reasonable fees, costs and disbursements of its legal counsel, in an amount not to exceed an aggregate of $15,000. The Company paid Maxim a total of $120,000 out of the gross proceeds it received at closing. From time to time as the Company issues additional securities to Ionic as contemplated by the Securities Purchase Agreement, the Company would be obligated to pay Maxim cash fees of up to $1,050,000.

In January and February 2025, the Company issued 1,100 shares of Series B Preferred Stock from the exercise of 1,100 Series B Preferred warrants for gross proceeds of $11,000,000 before deducting offering costs of $770,000. As a result of these exercises, there were no remaining Series B Preferred Stock warrants outstanding as of March 31, 2025.

During the three months ended March 31, 2025, the Company issued 532,100 shares of common stock for the conversion of 50 shares of Series B Convertible Preferred Stock.

*Regulation A offerings*

In June 2021, the Company undertook a Regulation A, Tier 2 offering for which it was selling up to shares of 4,012 non-voting common stock at $5,400 per share for a maximum of $21,880,000. During the year ended December 31, 2023, the Company issued an additional 293 shares of non-voting common stock under the Regulation A, Tier 2 campaign for aggregate gross proceeds of $1,598,630, with $6,724 of these proceeds pending release from escrow at March 31, 2025.

*Share Repurchase Program*

 

On November 13, 2024, the Company's Board of Directors authorized and approved a share repurchase program (the "Share Repurchase Program") pursuant to which the Company may repurchase up to $2 million of the Company's outstanding shares of common stock from time to time through December 31, 2025. The Company may buy back its common stock from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, pursuant to Rule 10b-18 of the Securities Exchange Act of 1934, and federal and state laws governing such transactions, through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions, purchases through 10b5-1 trading plans, or by any combination of such methods. The Share Repurchase Program does not oblige the Company to acquire any specific number of shares and may be modified, discontinued, or suspended at any time. As of March 31, 2025, no shares had been repurchased under the Share Repurchase Program.

 

*Stock Options*

In connection with the Business Combination, the Company adopted 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 10,933 shares and to eliminate the automatic share replenishment provision. As of March 31, 2025, the total number of shares reserved for issuance under the Omnibus Incentive Plan was 10,933 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 common stock. As of March 31, 2025, the total number of shares reserved for issuance under the 2018 Plan was 10,301. 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 688 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 2,063. 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.

There were no stock options granted during the three months ended March 31, 2025 and 2024.

During the three months ended March 31, 2025 and 2024, stock-based compensation expense of $550,936 and $1,199,318, respectively, was recognized for the vesting of these options. As of March 31, 2025, there was approximately $742,000 in unrecognized stock-based compensation, which will be recognized through September 2027.

A summary of our stock option activity for the three months ended March 31, 2025 and 2024, is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term |
| Outstanding at December 31, 2023 | 16268 | $1381.64 | 7.37 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Expired/Cancelled | - | - | - |
| Outstanding at March 31, 2024 | 16268 | $1381.64 | 7.12 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term |
| Outstanding at December 31, 2024 | 22668 | 998.26 | 7.32 |
| Granted |  |  |  |
| Exercised |  |  |  |
| Expired/Cancelled | - | - | - |
| Outstanding at December 31, 2024 | 22668 | $998.26 | 7.08 |
| Exercisable at December 31, 2024 | 19639 | $1554.20 | 6.90 |

---

*Warrants*

 

The number of outstanding warrants issued by the Company as of March 31, 2025 is as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Warrant** | **Expiration Date Date** | **Exercise Price** | **Number Outstanding** |
| GEM Common Stock Warrants | 8/11/2026 | $9.07 | 9686 |
| Total |  |  | 9686 |

---

**NOTE 7 – RELATED PARTY TRANSACTIONS**

See Note 5 for a discussion of the engagement letters entered into in December 2024 and February 2025.

See Note 6 for a discussion of related party Placement Agent Agreement and other placement agent agreements entered into in 2024 with Maxim.

**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 three months ended March 31, 2025 were as follows:

---

| | |
|:---|:---|
| Deferred revenue as of December 31, 2024 | $1319746 |
| &nbsp;&nbsp;&nbsp;Amounts deferred during the period | 1768623 |
| &nbsp;&nbsp;&nbsp;Revenue recognized from amounts included in the deferred revenue beginning balance | (435570) |
| &nbsp;&nbsp;&nbsp;Revenue from current year sales | (1370402) |
| Deferred revenue as of March 31, 2025 | $1282397 |

---

**NOTE 10 – SUBSEQUENT EVENTS**

In April 2025, the Company issued 112,255 shares of common stock upon the conversion of 361 shares of Series B Convertible Preferred Stock.

The Company has evaluated subsequent events that occurred after March 31, 2025 through May 15, 2025, the date of these consolidated financial statements were available to be issued, and noted no additional events requiring recognition for disclosure.

![](fin_001.jpg)

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors

Jet.AI Inc.

Las Vegas, Nevada:

*Opinion on the Consolidated Financial Statements*

We have audited the accompanying consolidated balance sheets of Jet.AI Inc. (the "Company"), as of December 31, 2024 and 2023 and the related consolidated statements of operations, changes in stockholders' equity (deficit) and cash flows for the years then ended and the related notes and consolidated financial statement schedules (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

*Going Concern*

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

*Basis for Opinion*

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

![](fin_002.jpg)

To the Shareholders and the Board of Directors

Jet.AI Inc.

Page Two

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

![](fin_003.jpg)

HACKER, JOHNSON & SMITH PA

We have served as the Company's auditor since 2023.

Tampa, Florida

March 26, 2025

**JET.AI INC.**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Assets |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $5872627 | $2100543 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 132230 | 96539 |
| &nbsp;&nbsp;&nbsp;Other current assets | 357751 | 190071 |
| &nbsp;&nbsp;&nbsp;Prepaid offering costs | - | 800000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 6362608 | 3187153 |
| Property and equipment, net | 5055 | 7604 |
| Intangible assets, net | 86745 | 73831 |
| Right-of-use lease asset | 1048354 | 1572489 |
| Investment in joint venture | 100000 | 100000 |
| Deposit on aircraft | 2400000 |  |
| Deposits and other assets | 794561 | 798111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $10797323 | $5739188 |
| Liabilities and Stockholders' Equity (Deficit) |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $280450 | $1656965 |
| &nbsp;&nbsp;&nbsp;Accrued liabilities | 1663338 | 2417115 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 1319746 | 1779794 |
| &nbsp;&nbsp;&nbsp;Operating lease liability | 525547 | 510034 |
| &nbsp;&nbsp;&nbsp;Note payable, net |  | 321843 |
| &nbsp;&nbsp;&nbsp;Notes payable - related party, net | - | 266146 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 3789081 | 6951897 |
| Lease liability, net of current portion | 495782 | 1021330 |
| Redeemable preferred stock | - | 1702000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 4284863 | 9675227 |
| Commitments and contingencies (Notes 2, 5, and 11) |  |  |
| Stockholders' Equity (Deficit) |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Stock, 4,000,000 shares authorized, <br> par value $0.0001, 0 issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Series B Convertible Preferred Stock, 5,000 shares authorized,<br> par value $0.0001,250 and 0 issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, 200,000,000 shares authorized, par value $0.0001,<br> 1,629,861 and 43,353 issued and outstanding | 162 | 4 |
| &nbsp;&nbsp;&nbsp;Subscription receivable | (6724) | (6724) |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 59065100 | 35343069 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (52546078) | (39272388) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity (deficit) | 6512460 | (3936039) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity (deficit) | $10797323 | $5739188 |

---

See accompanying notes to consolidated financial statements

**JET.AI INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Revenues | $14022628 | $12214556 |
| Cost of revenues | 14987245 | 12393089 |
| Gross loss | (964617) | (178533) |
| Operating Expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative (including stock-based <br> compensation of $4,287,236, and $6,645,891, respectively) | 10752048 | 11597173 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 687785 | 573881 |
| &nbsp;&nbsp;&nbsp;Research and development | 162152 | 160858 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 11601985 | 12331912 |
| Operating loss | (12566602) | (12510445) |
| Other expense (income): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 167054 | 103615 |
| &nbsp;&nbsp;&nbsp;Other income | (221) | (116) |
| Total other expense | 166833 | 103499 |
| Loss before provision for income taxes | (12733435) | (12613944) |
| Provision for income taxes | - | 2464 |
| &nbsp;&nbsp;&nbsp;Net Loss | $(12733435) | $(12616408) |
| &nbsp;&nbsp;&nbsp;Deemed dividend from warrant exchange offer | (540255) |  |
| &nbsp;&nbsp;&nbsp;Cumulative preferred stock dividends | (109303) | (46587) |
| &nbsp;&nbsp;&nbsp;Net Loss to common stockholders | $(13382993) | $(12662995) |
| Weighted average shares outstanding - basic and diluted | 279201 | 28119 |
| Net loss per share - basic and diluted | $(47.93) | $(450.34) |

---

See accompanying notes to consolidated financial statements

**JET.AI INC.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Series B Preferred Stock** | **Series B Preferred Stock** | **Common Stock** | **Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Subscription**<br>**Receivable** | **Additional Paid-in**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total Stockholders' Equity**<br>**(Deficit)** |
| Balance at December 31, 2022 |  |  | 19799 | 2 | (15544) | 27407815 | (26655980) | 736293 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 662 |  |  | 6645891 |  | 6645891 |
| &nbsp;&nbsp;&nbsp;Sale of Common Stock for cash |  |  | 293 |  | (86370) | 1598630 |  | 1512260 |
| &nbsp;&nbsp;&nbsp;Receipt of subscription receivable |  |  |  |  | 95190 |  |  | 95190 |
| &nbsp;&nbsp;&nbsp;Offering costs |  |  |  |  |  | (437665) |  | (437665) |
| &nbsp;&nbsp;&nbsp;Recapitalization |  |  | 19977 | 2 |  | (2128547) |  | (2128545) |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock upon exercise of warrants |  |  | 400 |  |  | 1035000 |  | 1035000 |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock pursuant to Forward Purchase Agreement |  |  | 2222 |  |  | 1221945 |  | 1221945 |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | - | (12616408) | (12616408) |
| Balance at December 31, 2023 | - | $- | 43353 | $4 | $(6724) | $35343069 | $(39272388) | $(3936039) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 50 |  | 25889 | 3 |  | 4287233 |  | 4287236 |
| &nbsp;&nbsp;&nbsp;Sale of Common Stock for cash |  |  | 976372 | 97 |  | 11849909 |  | 11850006 |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock for settlement of accounts payable and accrued liabilities |  |  | 162481 | 16 |  | 2916882 |  | 2916898 |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock from warrant exchange |  |  | 53528 | 5 |  | 540250 | (540255) |  |
| &nbsp;&nbsp;&nbsp;Issuance of Common Stock upon exercise of warrants |  |  | 6891 | 1 |  | 742473 |  | 742474 |
| &nbsp;&nbsp;&nbsp;Series A Preferred Stock conversion |  |  | 10166 | 1 |  | 550999 |  | 551000 |
| &nbsp;&nbsp;&nbsp;Sale of Series B Convertible Preferred Units | 150 |  | 1111 |  |  | 1500025 |  | 1500025 |
| &nbsp;&nbsp;&nbsp;Issuance of Series B Preferred Stock upon exercise of warrants | 400 |  |  |  |  | 4000000 |  | 4000000 |
| &nbsp;&nbsp;&nbsp;Series B Preferred Stock conversion | (350) |  | 293184 | 29 |  | (29) |  |  |
| &nbsp;&nbsp;&nbsp;Offering costs |  |  | 56886 | 6 |  | (2665711) |  | (2665705) |
| &nbsp;&nbsp;&nbsp;Net loss | - | - | - | - | - | - | (12733435) | (12733435) |
| Balance at December 31, 2024 | 250 | $- | 1629861 | $162 | $(6724) | $59065100 | $(52546078) | $6512460 |

---

See accompanying notes to consolidated financial statements

**JET.AI INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(12733435) | $(12616408) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and depreciation | 2557 | 135251 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 80761 | 87989 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 4287236 | 6645891 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash operating lease costs | 524135 | 509079 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (35691) | (96539) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | (167680) | 167790 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 740383 | 366594 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 46223 | 665426 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | (460048) | 846433 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability | (510035) | (494979) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (8225594) | (3783473) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment |  | (4339) |
| &nbsp;&nbsp;&nbsp;Purchase of intangible assets | (12922) | (51524) |
| &nbsp;&nbsp;&nbsp;Investment in joint venture |  | (100000) |
| &nbsp;&nbsp;&nbsp;Deposit on aircraft | (2400000) |  |
| &nbsp;&nbsp;&nbsp;Deposits and other assets | 3550 | (35135) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (2409372) | (190998) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from notes payable, net of discount |  | 275000 |
| &nbsp;&nbsp;&nbsp;Proceeds from related party notes payable, net of discount |  | 225000 |
| &nbsp;&nbsp;&nbsp;Repayments of notes payable | (371250) |  |
| &nbsp;&nbsp;&nbsp;Repayments of related party notes payable | (297500) |  |
| &nbsp;&nbsp;&nbsp;Redemption of Series A and Series A-1 Preferred Stock | (1151000) |  |
| &nbsp;&nbsp;&nbsp;Offering costs | (1865705) | (437665) |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of common stock warrants | 742474 | 1035000 |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of Series B Preferred Stock warrants | 4000000 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of Series B Preferred Stock | 1500025 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of Common Stock | 11850006 | 2829395 |
| &nbsp;&nbsp;&nbsp;Proceeds from business combination | - | 620893 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 14407050 | 4547623 |
| &nbsp;&nbsp;&nbsp;Increase in cash and cash equivalents | 3772084 | 573152 |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents, beginning of year | 2100543 | 1527391 |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents, end of year | $5872627 | $2100543 |
| &nbsp;&nbsp;&nbsp;Supplemental disclosures of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest | $167054 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes | $- | $2464 |
| &nbsp;&nbsp;&nbsp;Non cash financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock for settlement of accounts payable | $2116898 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock from warrant exchange | $540255 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock for Series A Preferred Stock conversion | $551000 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock for Series B Preferred Stock conversion | $29 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of Common Stock for offering costs | $175500 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in prepaid offering costs and accrued liabilities from issuance of common stock | $800000 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subscription receivable from sale of Common Stock | $- | $86370 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts payable due to Business Combination | $- | $1047438 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in redeemable preferred stock due to Business Combination | $- | $1702000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in prepaid offering costs and accounts payable | $- | $800000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discounts issued with notes payable | $- | $168750 |

---

See accompanying notes to consolidated financial statements

**JET.AI INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS**

Oxbridge Acquisition Corp. ("Oxbridge") was incorporated as a Cayman Islands exempted company on April 12, 2021. Oxbridge was incorporated for the purpose of effecting a merger, capital stock or share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Jet Token Inc. was formed on June 4, 2018 ("Inception") in the State of Delaware and is headquartered in Las Vegas, Nevada.

On August 10, 2023 (the "Closing Date"), Oxbridge consummated the business combination transaction ("Business Combination") pursuant to the Business Combination Agreement and Plan of Reorganization (the "Business Combination Agreement") with OXAC Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Oxbridge ("First Merger Sub"), Summerlin Aviation LLC (f/k/a OXAC Merger Sub II, LLC), a Delaware limited liability company and a direct wholly owned subsidiary of Oxbridge ("Second Merger Sub"), and Jet Token, Inc., a Delaware corporation ("Jet Token"). Pursuant to the terms of the Business Combination Agreement, a business combination between Oxbridge and Jet Token was effected through the merger of First Merger Sub and Jet Token, with Jet Token emerging as the surviving company, followed by a merger between Jet Token and Second Merger Sub, with Second Merger Sub emerging as the surviving company as a wholly owned subsidiary of Oxbridge. In connection with the finalization of the Business Combination on August 10, 2023, the Company was domesticated and continues as a Delaware corporation (the "Domestication") and immediately changed its name to Jet.AI, Inc. ("Jet.AI" or the "Company"). Following the Business Combination, the Company has one class of common stock, par value $0.0001 per share, which was then listed on The Nasdaq Global Market ("Nasdaq") under the ticker symbol "JTAI". The Company also had two forms of publicly traded warrants, being its five-year redeemable warrants (the "Redeemable Warrants") issued in connection with the Company's initial public offering and its ten-year merger consideration warrants (the "Merger Consideration Warrants") issued in connection with the Business Combination. The Redeemable Warrants and the Merger Consideration Warrants at the Closing Date were listed on Nasdaq under the ticker symbols "JTAIW" and "JTAIZ," respectively.

Following the closing of the Business Combination, the Company owns, directly or indirectly, all of the issued and outstanding equity interests in Second Merger Sub and its subsidiaries, and the stockholders of Jet Token as of immediately prior to the effective time of the First Merger (the "Jet Token Stockholders") hold a portion of the Company's common stock, par value $0.0001 per share (the "Jet.AI Common Stock").

As a result of and upon the effective time of the Domestication: (a) each then issued and outstanding Class A Ordinary Share of Oxbridge was converted automatically, on a one-for-one basis, into a share of Jet.AI Common Stock; (b) each then issued and outstanding Class B Ordinary Share of Oxbridge was converted automatically, on a one-for-one basis, into a share of Jet.AI Common Stock; (c) each then issued and outstanding Oxbridge Warrant was converted automatically into a warrant to purchase one share of Jet.AI Common Stock pursuant to the Warrant Agreement ("Jet.AI Warrant"); and (d) each then issued and outstanding Oxbridge Unit was converted automatically into a Jet.AI Unit, each consisting of one share of Jet.AI Common Stock and one Jet.AI Warrant.

At the effective time of the Business Combination (the "Effective Time"), (i) each outstanding share of Jet Token Common Stock, including each share of Jet Token Preferred Stock that was converted into shares of Jet Token Common Stock immediately prior to the Effective Time, was cancelled and automatically converted into the right to receive (x) the number of shares of Jet.AI Common Stock equal to the Stock Exchange Ratio of 0.03094529, and (y) the number of "Merger Consideration Warrants" equal to the Warrant Exchange Ratio of 0.04924242; (ii) each Jet Token Option, whether or not exercisable and whether or not vested, that was outstanding immediately prior to the Effective Time was automatically converted into an option to purchase a number of Jet.AI Options based on the Option Exchange Ratio (determined in accordance with the Business Combination Agreement and as further described in the Proxy Statement); (iii) each Jet Token Warrant issued and outstanding immediately prior to the Effective Time was automatically converted into a warrant to acquire (x) a number of shares of Jet.AI Common Stock equal to the Stock Exchange Ratio and (y) a number of Merger Consideration Warrants equal to the Warrant Exchange Ratio; and (iv) each Jet Token RSU Award that was outstanding immediately prior to the Effective Time was converted into a Jet.AI RSU Award with respect to a number of RSUs based on the applicable exchange ratio as determined in accordance with the Business Combination Agreement.

The Company, directly and indirectly through its subsidiaries, is 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 (the "App"), 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, (v) aircraft brokerage and (vi) service revenue from the monthly management and hourly operation of customer aircraft.

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

*Going Concern and Management Plans*

The Company has limited operating history and has incurred losses from operations since Inception. These matters raise concern about the Company's ability to continue as a going concern.

During the next twelve months, the Company intends to fund its operations with capital from its operations, drawdowns under its Share Purchase Agreement with GEM Yield LLC SCS and GEM Yield Bahamas Limited, proceeds from the exercise of warrants under its Securities Purchase Agreement with Ionic Ventures, LLC and other sales of debt or equity securities. Additionally, the Company may explore other potential sources of outside capital. The Company could, if necessary, 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*

 

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification ("ASC") and an Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements herein.

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 was determined to be the accounting acquirer in the Business Combination based on the following predominate factors:

● Jet Token's existing stockholders had the greatest voting interest in the combined entity;

● Jet Token existing stockholders had the ability to nominate a majority of the initial members of the combined entity's board of directors;

● 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."

 

 

*Reverse Stock Split*

 

On November 12, 2024, the Company effected a reverse common stock split of the Company's issued and outstanding shares of common stock at a ratio of one-for-225. On the effective date, every 225 shares of common stock issued and outstanding were combined into one issued share of common stock. In addition, the aggregate number of equity-based awards that remain available to be granted under the Company's equity compensation plans was decreased proportionately and proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of outstanding stock options, as applicable, as well as to the number of shares that would be owned upon vesting and settlement of restricted stock units and other equity-based awards, as applicable. Similar proportionate adjustments were also made to the outstanding warrants. No fractional shares were issued as a result of the reverse stock split and any fractional shares resulting from the reverse stock split were rounded down to the nearest number of whole shares so that we issued cash in lieu of any fractional shares that such stockholder would have received as a result of the reverse stock split. In accordance with ASC 260-10-55-12, the Company has adjusted the number of shares, per-share computations and the computations of basic and diluted EPS retroactively for all periods presented in the consolidated financial statements and related notes.

*Principles of Consolidation*

The accompanying consolidated financial statements include the accounts of Jet.AI and its wholly owned subsidiaries, Summerlin Aviation LLC, Jet Token Software Inc., Jet Token Management Inc., Galilee LLC and Galilee 1 SPV LLC. All intercompany accounts and transactions have been eliminated in consolidation.

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.

*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 consolidated 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.

*Fair Value of Financial Instruments*

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - Include other inputs that are directly or indirectly observable in the marketplace.

Level 3 - Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

*Risks and Uncertainties*

The Company has a limited operating history, and to date, has only generated limited revenue from intended operations. The Company's business and operations are sensitive to general business and economic conditions in the United States (the "U.S.") and worldwide along with local, state, and federal governmental policy decisions. A host of factors beyond the Company'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, adverse macro-economic conditions, 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 consolidated results of its operations.

*Cash and Cash Equivalents*

For purposes of the consolidated statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Included within cash and cash equivalents is restricted cash of $500,000 at December 31, 2024 and 2023.

*Offering Costs*

The Company complies with the requirements of ASC 340, Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion of an offering, offering costs will be capitalized as deferred offering costs on the consolidated balance sheets. The deferred offering costs will be charged to stockholders' equity (deficit) upon the completion of an offering or to expenses if the offering is not completed.

*Other Current Assets*

Other current assets include security deposits, which relate primarily to contractual prepayments to third-parties for future services, prepaid expenses and customer receivables for additional expenses incurred in their charter trips.

*Property and Equipment*

Property and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective year. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method for financial statement purposes. As of December 31, 2024 and 2023, property and equipment consisted entirely of equipment which is being depreciated over a three-year period.

*Internal Use Software*

The Company incurs software development costs to develop software programs to be used solely to meet its internal needs and cloud-based applications used to deliver its services. In accordance with ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software, the Company capitalizes development costs related to these software applications once a preliminary project stage is complete, funding has been committed, and it is probable that the project will be completed, and the software will be used to perform the function intended. As of December 31, 2024 and 2023, the Company has capitalized approximately $398,000 of internal software related costs, which is included in intangible assets in the accompanying consolidated balance sheets. Amortization expense for the years ended December 31, 2024 and 2023 was $0 and $99,527, respectively, and is included in cost of revenues in the accompanying consolidated statements of operations. Accumulated amortization as of December 31, 2024 and 2023 was $398,000.

*Investments in Joint Ventures*

In January 2023, the Company formed a 50/50 joint venture subsidiary with Great Western Air LLC dba Cirrus Aviation Services, 380 Software LLC, a Nevada limited liability company. Costs and profits are to be shared equally. The Company accounts for these investments using the equity method whereby the initial investment is recorded at cost and subsequently adjusted by the Company's share of income or loss from the joint venture. There is currently no financial activity or material assets to report for this joint venture beyond this initial investment.

*Allowance for Credit Losses*

 

The Company recognizes an expected allowance for credit losses with respect to its accounts receivable. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. Accounts receivable are evaluated individually for impairment. This estimate is adjusted for management's assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses. The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in operations or an offset to credit loss expense in the year of recovery, in accordance with the entity's accounting policy election. No allowance for credit losses was considered necessary at December 31, 2024 and 2023.

*Leases*

The Company determines if an arrangement is a lease at inception on an individual contract basis. Operating leases are included in operating lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, non-current on the consolidated balance sheets. Operating lease right-of-use assets represent the right to use an underlying asset for the lease term. Operating lease right-of-use assets are recognized at lease commencement date based on the present value of the future minimum lease payments over the lease term. The interest rate implicit in each lease was readily determinable to discount lease payments.

The operating lease right-of-use assets include any lease payments made, including any variable amounts that are based on an index or rate, and exclude lease incentives. Lease terms may include options to extend or terminate the lease. Renewal option periods are included within the lease term and the associated payments are recognized in the measurement of the operating right-of-use asset when they are at the Company's discretion and considered reasonably certain of being exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has elected the practical expedient not to recognize leases with an initial term of 12 months or less on the Company's consolidated balance sheets and lease expense is recognized on a straight-line basis over the term of the short-term lease.

*Impairment of Long-Lived Assets*

The Company follows ASC 360-10, Impairment and Disposal of Long-Lived Assets. ASC 360-10 requires that if events or changes in circumstances indicate that the carrying value of long-lived assets or asset groups may be impaired, an evaluation of recoverability should be performed by comparing the estimated future undiscounted cash flows associated with the asset to the asset's carrying value to determine if a write-down to market value is required. Long-lived assets or asset groups that meet the criteria in ASC 360-10 as being held for sale are reflected at the lower of their carrying amount or fair market value, less costs to sell.

*Revenue Recognition*

In applying the guidance of ASC 606, Revenue from Contracts with Customers, 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 Company's 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 (MMF) and an Occupied Hourly Fee (OHF). 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. As of December 31, 2024 and 2023, the Company deferred $1,091,235 and $1,510,976, respectively, related to prepaid flight hours under the jet card program for which the related travel had not yet occurred.

The Company also generates revenues from individual ad hoc charter bookings processed through the Company's App, whereby the Company sources, negotiates, and arranges 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 Aviation markets charters on the Company's aircraft for the Company's benefit. Deferred revenue with respect to the App was $212,278 and $268,818 as of December 31, 2024 and 2023, respectively.

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. Deferred revenue with respect to the management of aircraft was $16,233 and $0 as of December 31, 2024 and 2023, respectively.

The following is a breakout of revenue components by subcategory for the years ended December 31, 2024 and 2023.

---

| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Software App and Cirrus Charter | $8128997 | $7125230 |
| Jet Card and Fractional Programs | 2288036 | 2847533 |
| Management and Other Services | 3605595 | 2241793 |
| Total revenues | $14022628 | $12214556 |

---

*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 third-party sellers in the private aviation industry. The Company 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. The Company recorded aircraft sales of $0 for the years ended December 31, 2024 and 2023.

*Pass-Through Costs*

In applying the guidance of ASC 606, the Company recognizes revenue when a 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 third-party costs when the Company determines that it is acting as the principal.

*Cost of Sales*

The cost of sales expenses includes costs incurred in providing air transportation services, such as chartering third-party aircraft, aircraft lease expenses, pilot training and wages, aircraft fuel, aircraft maintenance, and other aircraft operating expenses, each of which is discussed below.

&nbsp;&nbsp;&nbsp;&nbsp;1. Chartering
 Third-Party Aircraft: The cost of chartering third-party aircraft is recorded as a part of the cost of sales expense. These expenses
 include the fees paid to third-party operators for providing aircraft services on behalf of the company. Expenses are recognized
 in the statements of operations 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 statements of operations 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 statements of operations 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 statements of operations 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 statements of operations s a part of the cost of sales expenses in the
 period when they are incurred and are reported on an accrual basis.

*Advertising Costs*

The Company expenses the cost of advertising and promoting the Company's services as incurred. Such amounts are included in sales and marketing expense in the consolidated statements of operations and totaled $687,785 and $573,881 for the years ended December 31, 2024 and 2023, respectively.

*Research and Development* 

The Company incurs research and development costs during the process of researching and developing its technologies and future offerings. The Company's research and development costs consist primarily of payments for third-party software development that is not capitalizable. The Company expenses these costs as incurred until the resulting product has been completed, tested, and made ready for commercial use.

*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.

*Income Taxes*

The Company applies ASC 740 Income Taxes. Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any and the change during the period in deferred tax assets and liabilities.

ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position is recognized only if it is "more likely than not" that the position is sustainable upon examination by the relevant taxing authority based on its technical merit.

The Company is subject to tax in the United States and files tax returns in the U.S. Federal jurisdiction and Nevada state jurisdiction. The Company is subject to potential U.S. Federal, state, and local income tax examinations by tax authorities for all periods since Inception. The Company currently is not under examination by any tax authority.

 

*Loss per Common Share*

The Company presents basic loss per share ("EPS") and diluted EPS on the face of the consolidated statements of operations. Basic EPS is computed as net loss divided by the weighted average number of common shares outstanding for the period. For periods in which the Company incurs a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from the diluted EPS calculations. For the years ended December 31, 2024 and 2023, there were 22,668 and 16,268 options, 9,686 and 115,444 warrants to purchase common stock, and 208,176 and 0 common shares issuable upon conversion of Series B Preferred Stock, respectively, excluded.

*Concentration of Credit Risk*

The Company maintains its cash with several major U.S. financial institutions which it believes to be creditworthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, however the Company may maintain balances in excess of the federally insured limits.

*Segment Reporting*

The Company identifies operating segments as components of the Company for which discrete financial information is available and is regularly reviewed by the chief operating decision maker (the "CODM"), or decision-making group, in making decisions regarding resource allocation and performance assessment. The CODM is the Company's chief executive officer. The Company determined that the Company operates in a single operating and reportable segment, private aviation services, as the CODM reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue, for purposes of making operating decisions, allocating resources, and assessing performance. All of the Company's long-lived assets are located in the United States and revenue from private aviation services is substantially earned from flights throughout the United States.

*Recent Accounting Pronouncements*

 

In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures." ASU 2023-09 requires disclosure of specific categories in the income tax rate reconciliation and requires additional information for reconciling items that meet a quantitative threshold. The standard requires an annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. The standard is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted. The Company does not expect the adoption of the standard to have a material impact on its disclosures.

In November 2024, the FASB issued ASU 2024-03, "Expense Disaggregation Disclosures." ASU 2024-03 requires disclosure to disaggregate prescribed expenses within relevant statement of operations captions. The standard is effective for fiscal years beginning after December 15, 2026 and for interim periods after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its existing disclosures.

**NOTE 3 – OTHER ASSETS**

Other assets consisted of the following:

SCHEDULE OF OTHER ASSETS

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Deposits | $104811 | $108361 |
| Lease Maintenance Reserve | 689750 | 689750 |
| Total Other Assets | $794561 | $798111 |

---

**NOTE 4 – NOTES PAYABLE**

 

*Bridge Agreement*

On September 11, 2023, the Company entered into a binding term sheet (the "Bridge Agreement") with eight investors whereby the investors purchased senior secured promissory notes (the "Bridge Notes") from the Company in the aggregate principal amount of $625,000, which included $281,250 from related parties.

The Company received net proceeds from the sale of the Bridge Notes of $500,000, resulting in an original issue discount of $112,500. The notes accrued interest at five percent (5%) per annum and matured on March 11, 2024. The Company recognized a debt discount of $168,250 from the Bridge Notes, of which $77,625 and $90,625 was amortized during the years ended December 31, 2024 and 2023, respectively. Interest expense was $79,314 and $103,615 for the years ended December 31, 2024 and 2023, respectively.

These Bridge Notes and accrued interest payable were fully repaid during the year ended December 31, 2024.

**NOTE 5 – COMMITMENTS AND CONTINGENCIES**

*Operating Lease*

In November 2021, the Company entered into a leasing arrangement with a third party for an aircraft to be used in the Company's operations. The lease term is for 60 months, expiring November 2026, and requires monthly lease payments. At any time during the lease term, the Company has the option to purchase the aircraft from the lessor at the aircraft's fair market value at that time.

The lease agreement also requires the Company to hold a liquidity reserve of $500,000 in a separate bank account as well as a maintenance reserve of approximately $690,000 for the duration of the lease term. The liquidity reserve is held in a bank account owned by the Company. As such, this is classified as restricted cash in the accompanying consolidated balance sheets. The maintenance reserve are funds held by the lessor to be used for reasonable maintenance expenses in excess of those covered by the airframe and engine maintenance programs maintained by the Company. These maintenance programs are designed to fully cover the Company's aircraft's maintenance costs, both scheduled and unscheduled, and therefore the Company does not expect these funds will be drawn upon. If funds from the maintenance reserve are expended by the lessor, the Company is required to replenish the maintenance reserve account up to the required reserve amount. Any funds remaining at the end of the Lease term will be returned to the Company. The maintenance reserve is included within deposits and other assets in the accompanying consolidated balance sheets.

Total lease expense for the years ended December 31, 2024 and 2023 was $1,357,520 and $1,192,184, respectively, which is included within cost of revenues in the accompanying statements of operations.

Right-of-use lease assets and lease liabilities for our operating leases was recorded in the consolidated balance sheets as follows:

SCHEDULE OF OPERATING LEASE RIGHT OF USE OF ASSETS AND LIABILITIES

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Operating lease right-of-use asset | $2576036 | $2576036 |
| Accumulated amortization | (1527682) | (1003547) |
| Net balance | $1048354 | $1572489 |
| Lease liability, current portion | $525547 | $510034 |
| Lease liability, long-term | 495782 | 1021330 |
| Total operating lease liabilities | $1021329 | $1531364 |

---

As of December 31, 2024, the weighted average remaining lease term was 1.8 years, and the weighted average discount rate was 3%.

As of December 31, 2024, future minimum required lease payments due under the non-cancellable operating lease are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2025 | 549000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2026 | 503250 |
| Total future minimum lease payments | 1052250 |
| Less imputed interest | (30921) |
| Maturities of lease liabilities | $1021329 |

---

*<u>GEM Share Purchase Agreement</u>*

Jet Token executed a 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"), which was automatically assumed by the Company when the Business Combination was effected. The Company has the right to periodically issue and sell to GEM, and GEM has agreed to purchase, up to $40,000,000 aggregate value of shares of the Company's common stock during the 36-month period following the date of listing on Nasdaq.

During the year ended December 31, 2024, the Company issued 58,447 shares of common stock pursuant to the agreement for total consideration of approximately $2.5 million.

The Company agreed to pay GEM a commitment fee equal to $800,000 payable in cash or freely tradable shares of the Company's common stock, payable on or prior to the first anniversary of the date of listing and which fee was satisfied in October 2024 through the issuance of 36,886 shares of common stock.

Pursuant to the Share Purchase Agreement, the Company issued to GEM a warrant (the "GEM Warrant") granting it the right to purchase up to 9,686 shares of common stock of the Company on a fully diluted basis. The GEM Warrant was issued with an exercise price of $1,935.00 and a term of three years. The GEM Warrant included an adjustment mechanism, whereby the exercise price is subject to adjustment from time to time. Pursuant to the Warrant, on the first anniversary following the Public Listing Date as defined in the GEM Warrant (the "Adjustment Date"), if all or any portion of the GEM Warrant remains unexercised and the average closing price of the Company's common stock for the 10 trading days following the Adjustment Date is less than 90% of the then current exercise price of the warrant (the "Baseline Price"), then the exercise price of the unexercised Warrant Shares that remain exercisable pursuant to the Warrant shall be adjusted to 110% of the Baseline Price. Accordingly, the warrant exercise price was reduced to $14.12 per share as of December 31, 2024.

On August 4, 2022, the Company entered into a Registration Rights Agreement with GEM, obligating the Company to file a registration statement with respect to resales of the shares of common stock issuable to GEM under the Share Purchase Agreement and upon exercise of the GEM Warrant. Because that registration statement was not declared effective by October 23, 2023 (the "Effectiveness Deadline"), the Company may be obligated to pay GEM an amount equal to $10,000 for each day following the Effectiveness Deadline until the registration statement has been declared effective subject to a $300,000 cap if such delay in the declaration of effectiveness of the registration statement is caused by delays in SEC review of the registration statement or the SEC's refusal to declare the registration statement effective. The registration statement was declared effective on December 21, 2023. The Company has accrued $300,000 as of December 31, 2024 and 2023 with respect to this agreement.

On October 23, 2023, the Company entered into a warrant amendment agreement retroactively effective as of August 10, 2023 (the "GEM Warrant Amendment"). The GEM Warrant Amendment provides that GEM can elect to limit the exercisability of the "GEM Warrant" to purchase shares of the Company's common stock, 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 the Company's common stock outstanding immediately after giving effect to such exercise. On October 23, 2023, GEM provided a notice to the Company electing to have this limit apply to the GEM Warrant effective as of August 10, 2023. GEM may revoke this election notice by providing written notice to the Company of such revocation, which revocation would not be effective until 61 days after such notice is delivered to the Company.

*<u>Forward Purchase Agreement</u>*

On August 6, 2023, Oxbridge entered into an agreement (the "Forward Purchase Agreement") with (i) Meteora Capital Partners, LP ("MCP"), (ii) Meteora Select Trading Opportunities Master, LP ("MSTO"), and (iii) Meteora Strategic Capital, LLC ("MSC" and, collectively with MCP and MSTO, "Seller") for OTC Equity Prepaid Forward Transactions. For purposes of the Forward Purchase Agreement, Oxbridge is referred to as the "Counterparty" prior to the consummation of the Business Combination, while Jet.AI is referred to as the "Counterparty" after the consummation of the Business Combination. Capitalized terms used in this description but not otherwise defined have the meanings ascribed to such terms in the Forward Purchase Agreement.

Pursuant to the terms of the Forward Purchase Agreement, Seller intended, but was not obligated, to purchase up to 5,275 (the "Purchased Amount") Class A ordinary shares, par value $0.0001 per share, of Oxbridge ("Oxbridge Shares") concurrently with the closing pursuant to the Seller's FPA Funding Amount PIPE Subscription Agreement (as defined below), less the number of Oxbridge Shares purchased by the Seller separately from third parties through a broker in the open market ("Recycled Shares"). The number of shares subject to the Forward Purchase Agreement was subject to reduction following a termination of the Forward Purchase Agreement with respect to such shares as described under "Optional Early Termination" in the Forward Purchase Agreement.

The Forward Purchase Agreement provided for a prepayment shortfall in an amount in U.S. dollars equal to $1,250,000 (the "Prepayment Shortfall"); provided that Seller was to pay one-half (1/2) of the Prepayment Shortfall to Counterparty on the Prepayment Date (which amount was netted from the Prepayment Amount) (the "Initial Shortfall") and, at the request of Counterparty, the other one-half (1/2) of the Prepayment Shortfall (the "Future Shortfall") on the date that the SEC declares the Registration Statement related to the Business Combination effective (the "Registration Statement Effective Date"), provided the VWAP Price is greater than $1,350.00 for any 45 trading days during the prior 90 consecutive trading day period and average daily trading value over such period equals at least four times the Future Shortfall. Seller in its sole discretion and had the right to sell Recycled Shares at any time following the Trade Date and at any sales price, without payment by Seller of any Early Termination Obligation until such time as the proceeds from such sales equal 100% of the Initial Shortfall and 100% of the Future Shortfall actually paid to Counterparty (as set forth under Shortfall Sales in the Forward Purchase Agreement) (such sales, "Shortfall Sales," and such Shares, "Shortfall Sale Shares"), all as further described in the "Optional Early Termination" and "Shortfall Sales" sections in the Forward Purchase Agreement.

The Forward Purchase Agreement provided that the Seller would be paid directly an aggregate cash amount (the "Prepayment Amount") equal to (x) the product of (i) the number of shares as set forth in a Pricing Date Notice and (ii) the redemption price per share as defined in Article 49.5 of Oxbridge's Amended and Restated Memorandum and Articles of Association, effective as of August 11, 2021, as amended from time to time (the "Initial Price"), less (y) the Prepayment Shortfall.

The Seller agreed to waive any redemption rights with respect to any Recycled Shares in connection with the Business Combination, as well as any redemption rights under Oxbridge's Amended and Restated Memorandum and Articles of Association that would require redemption by Oxbridge. Such waiver reduced the number of Oxbridge Shares redeemed in connection with the Business Combination, which may have altered the perception of the potential strength of the Business Combination.

The shares initially held by Seller consisted of 2,949 shares it purchased from third parties through a broker in open market transactions or by reversing previously submitted redemption requests and waived its redemption rights with respect to these shares. Furthermore, Seller purchased 1,101 "Additional Shares" directly from the Company for a per share price of $2,250.00 pursuant to a subscription agreement entered into on August 6, 2023 (the "FPA Funding Amount PIPE Subscription Agreement"). Of the shares it purchased, 222 shares represented Share Consideration to Seller under the Forward Purchase Agreement and are not subject to the terms of the Forward Purchase Agreement, meaning that Seller is free to sell such shares and retain all proceeds therefrom. Netting out the Share Consideration, the total "Number of Shares" initially subject to the terms of the Forward Purchase Agreement was 3,828, comprising 2,727 "Recycled Shares" and 1,101 Additional Shares. Following the closing of the Business Combination, approximately $7.4 million remained in the trust account pursuant to the Forward Purchase Agreement. The Company paid Seller $6,805,651, representing amounts payable by us to Seller under the Forward Purchase Agreement, net of the aggregate purchase price of the total number of Additional Shares issued to Seller under the FPA Funding Amount PIPE Subscription Agreement; and Seller paid the Company one-half (1/2) of the Prepayment Shortfall, or $625,000.

On August 31, 2023 and October 2, 2023, the Company entered into an amendment and a second amendment, respectively (together, the "Amendments") to the Forward Purchase Agreement.

The combined effect of the Amendments was to:

● increase the total number of additional shares Seller purchased from the Company under an FPA Funding Amount PIPE Subscription Agreement to 2,436 shares of the Company's common stock;

● provide payment to the Company of "Future Shortfall" amounts totaling $550,000 and reducing the Prepayment Shortfall to $1,175,000, all of which has been paid to the Company;

● increase the total share consideration to Seller to 1,222 shares of the Company's common stock,

● reduce the remaining number of Recycled Shares to 1,318;

● increase the number of shares subject to the Forward Purchase Agreement to 4,421; and

● extend the "Valuation Date" to the two-year anniversary of the Closing of the Business Combination, or earlier at the discretion of Seller and upon notice to the Company.

The Forward Purchase Agreement, as amended, provides for a cash settlement following the Valuation Date, at which time Seller is obligated to pay the Company an amount equal to the "Number of Shares" subject to the Forward Purchase Agreement (provided such Shares are registered for resale or freely transferrable pursuant to an exemption from registration) multiplied by a per share price reflecting the Company's volume weighted average trading price over a number of days following the Valuation Date, subject to alternate calculations in certain circumstances. At settlement, the Company is obligated to pay Seller a settlement adjustment of $450 per share for the total Number of Shares, which is payable in cash, or in shares of the Company's common stock if the settlement adjustment is greater than the settlement amount payable by Seller and provided that Seller's ownership would not exceed 9.9% of the Company's outstanding common stock. Provided further, that is the settlement amounts less the settlement amount adjustment is a negative number and the Company has elected to pay the settlement amount adjustment in cash, then neither Meteora nor the Company shall be liable to the other party for any payment under the Forward Purchase Agreement. The Forward Purchase Agreement was determined to be a freestanding equity-linked financial instrument under ASC 480. The FPA does not include an obligation to issue warrants. As such, the FPA shares were classified as equity and net payments made to the Company were recorded to additional paid in capital as part of the recapitalization.

*<u>FPA Funding Amount PIPE Subscription Agreements</u>*

On August 6, 2023, Oxbridge entered into a subscription agreement (the "FPA Funding Amount PIPE Subscription Agreement"*)* with Seller.

Pursuant to the FPA Funding PIPE Subscription Agreement, Seller agreed to subscribe for and purchase, and Oxbridge agreed to issue and sell to Seller, on the Closing Date, an aggregate of up to 5,275 Oxbridge Shares, less the Recycled Shares in connection with the Forward Purchase Agreement.

*<u>Maxim Settlement Agreement</u>*

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 1,200 shares of Jet.AI 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, which shares of Jet.AI Common Stock are subject to a Registration Rights Agreement. The Company also issued 1,127 shares of 8% Series A Cumulative Convertible Preferred Stock in an amount equal in value to $1,127,000 (the "Series A Preferred Shares"). The shares of Jet.AI Common Stock issuable upon conversion of the Series A Preferred Shares were subject to mandatory redemption on August 10, 2024, which was automatically extended by an additional three months as the Company did not complete one or more equity financings prior to such date 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 were required to be used to redeem the Series A Preferred Shares.

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 Preferred Stock.

During the year ended December 31, 2024, the Company issued 10,166 shares of Common Stock upon the conversion of 551 Series A Preferred Shares. In November 2024, the Company redeemed in full all of the remaining 576 Series A Preferred Shares for an aggregate redemption price of $663,740, which included cumulative unpaid preferred stock dividends totaling $87,740. As a result of this redemption there are no Series A Preferred Shares issued and outstanding as of December 31, 2024.

*<u>Sponsor Settlement Agreement</u>*

On August 10, 2023, Jet Token, Oxbridge, and OAC Sponsor Ltd. (the "Sponsor") entered into a settlement agreement (the "Sponsor Settlement Agreement"). Pursuant to the Sponsor Settlement Agreement, the Company issued 575 shares of the Company's 5% Series A-1 Convertible Preferred Stock (the "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 Sponsor. The shares of Jet.AI Common Stock issuable upon conversion of the Series A-1 Preferred Shares were subject to mandatory redemption on August 10, 2024, which was automatically extended by an additional three months as the Company did not complete one or more equity financings prior to such date 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 were required to be used to redeem the Series A-1 Preferred Shares.

In August 2024, Sponsor agreed to waive certain notice and redemption rights in favor of Sponsor pursuant to terms of the Series A-1 Preferred Convertible Stock held by Sponsor related to equity financings conducted by the Company in consideration of a $100,000 fee which was paid in full in October 2024.

In October 2024, the Company redeemed in full all of the 575 issued and outstanding Series A-1 Preferred Shares for an aggregate redemption price of $575,000. As a result of this redemption there are no Series A-1 Preferred Shares issued and outstanding as of December 31, 2024.

*<u>Sunpeak Settlement Agreement</u>*

On August 21, 2024, the Company entered into a Settlement Agreement and Stipulation, effective on August 28, 2024 (the "Sunpeak Settlement Agreement"), with Sunpeak Holdings Corporation ("SHC") to settle outstanding claims owed to SHC. Pursuant to the Sunpeak Settlement Agreement, SHC agreed to purchase certain outstanding payables between the Company and designated vendors of the Company totaling approximately $2.1 million (the "SHC Claims") and agreed to exchange the SHC Claims for shares of Common Stock (the "Settlement Shares"). The Company also agreed to issue to SHC an additional 444 shares of Common Stock pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance therewith as a settlement fee. The settlement fee was recorded to General and Administrative expenses as stock-based compensation based on the fair value of the shares of $33,800.

During the year ended December 31, 2024, the Company issued 162,481 shares of common stock for settlement of approximately $2.1 million in SHC Claims under the Sunpeak Settlement Agreement.

*<u>Textron Aircraft Purchase Agreement</u>*

On October 31, 2024, the Company entered into an aircraft purchase agreement with Textron Aviation Inc. ("Textron"), for the purchase of three 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 $40.5 million. The aircraft are expected to be delivered in the third and fourth quarter of 2026. The Company made deposits totaling $2.4 million under the purchase agreement through December 31, 2024, and will be required to make additional deposits totaling $3.2 million during 2025.

*<u>Engagement Letter with Maxim Group LLC</u>*

 

On December 4, 2024, the Company entered into an engagement letter (the "Maxim Engagement Letter") with Maxim Group LLC. ("Maxim"), pursuant to which the Company engaged Maxim to serve as its exclusive financial advisor with respect to one or more potential business combinations involving the Company for a period of seven months. Pursuant to the Maxim Engagement Letter, the Company agreed to pay Maxim a non-refundable stock fee of 25,000 shares (the "Retainer") which were issued upon execution of the engagement letter. The shares were recorded to General and Administrative expenses as stock-based compensation based on the fair value of the shares of $95,000.

If the Company consummates a Transaction with a Potential Buyer, then Maxim shall receive a fee (the "Success Fee") of $500,000 upon the closing of the Transaction. In the event that the Company enters into an agreement with respect to a Transaction during the term of this Agreement that is subsequently terminated, and the Company becomes entitled to a break-up, termination, topping, expense reimbursement or similar fee or payment (including any judgment for damages or amount in settlement of any dispute as a result of such termination, or any profit on any stock acquired from, or stock option granted by, any party to such transaction), a fee (the "Break-up Fee") equal 25% of all such amounts, payable promptly upon receipt of such amounts by the Company. In addition to the Retainer, Success Fee and Break-up Fee payable pursuant to the Maxim Engagement Letter, and regardless of whether any Transaction is proposed or consummated, the Company shall reimburse Maxim for all reasonable travel, food, lodging and other out-of-pocket expenses incurred in connection with the services performed by Maxim pursuant to Maxim Engagement Letter promptly after submission of such properly evidenced expenses to the Company.

**NOTE 6 – STOCKHOLDERS' EQUITY**

*Common Stock and Preferred Stock*

Under the Amended and Restated Certificate of Incorporation of the Company, as amended, the Company is authorized to issue up to 204,000,000 shares, consisting of two classes: 200,000,000 shares of common stock, $0.0001 par value per share, and 4,000,000 shares of preferred stock, $0.0001 par value per share, of which 5,000 shares of preferred stock have been designated as Series B Convertible Preferred Stock, par value $0.0001 ("Series B Preferred Stock"). As of December 31, 2024, there were no issued and outstanding shares of Series A and Series A-1 Preferred Stock, and 250 issued and outstanding shares of Series B Preferred Stock.

Upon the consummation of the Business Combination, 20,103 shares of Jet.AI Common Stock and 31,984 Merger Consideration Warrants were issued to the Historical Rollover Shareholders (as defined in the Business Combination Agreement) in exchange for all outstanding shares of Jet Token Common Stock (including shares of Jet Token Preferred Stock converted in the Conversion). The Company also reserved for issuance up to 14,598 shares of Common Stock in respect of Jet.AI Options issued in exchange for outstanding pre-merger Jet Token Options, and 662 shares of Jet.AI Common Stock and 1,053 Merger Consideration Warrants in respect of Jet.AI RSU Awards issued in exchange for outstanding pre-merger Jet Token RSU Awards. Each Merger Consideration Warrant entitled the holder to purchase one whole share of the Company's common stock at a price of $3,375 per share and were to expire ten years after issuance.

In addition, in connection with the Business Combination, the Jet.AI Board adopted the 2023 Omnibus Incentive Plan (the "2023 Plan") in order to facilitate the grant of equity awards to attract, retain and incentivize employees (including the named executive officers), independent contractors and directors of Jet.AI Inc. and its affiliates, which is essential to Jet.AI Inc.'s long term success. The 2023 Plan is a continuation of the 2018 Plan and 2021 Plan (each as defined below), which were assumed from Jet Token and amended, restated and re-named into the form of the 2023 Plan effective as of the consummation of the Business Combination.

On October 10, 2024, the Company entered into Securities Purchase Agreements (the "First Purchase Agreement") with institutional investors for the sale of 118,518 shares of common stock at a per share price of $20.25. 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 7.0% of the aggregate gross proceeds received by the Company from the sale of the shares in the offering. The Company also agreed to reimburse Maxim for certain expenses in an amount up to $100,000. The gross proceeds from the offering were approximately $2.4 million, before deducting the placement agent's fees and other estimated offering expenses payable by the Company of approximately $300,000.

On October 21, 2024, the Company entered into Securities Purchase Agreements (the "Second Purchase Agreement") with institutional investors for the sale of 69,444 shares of common stock at a per share price of $21.60. 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 7.0% of the aggregate gross proceeds received by the Company from the sale of the shares in the offering. The Company also agreed to reimburse Maxim for certain expenses in an amount up to $25,000. The gross proceeds from the offering were approximately $1.5 million, before deducting the placement agent's fees and other estimated offering expenses payable by the Company of approximately $150,000.

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 $0.0001 per share, having an aggregate offering price of up to $5,400,000. We pay a commission of up to 3% of gross sales proceeds of any common stock sold under the ATM Sales Agreement. The Company sold 729,963 shares for gross proceeds of $5.4 million, before deducting placement agent's fees and other estimated offering expenses payable by the Company of approximately $202,000.

On November 14, 2024, the Company issued 20,000 shares of common stock for offering costs. The fair value of the shares of $175,500 was recorded to stockholders' deficit as a reduction of additional paid-in capital.

*Warrant Exchange*

 

On July 30, 2024, the Company completed an exchange offer relating to its previously outstanding Redeemable Warrants, Merger Consideration Warrants, and private placement warrants (the "Private Placement Warrants"), whereby the holders of the Redeemable Warrants and Private Placement Warrants were offered 0.3054 shares of common stock, and holders of Merger Consideration Warrants were offered 1.0133 shares of common stock, in exchange for each outstanding warrant tendered (the "Warrant Exchange Offer"). In connection with the closing of the Warrant Exchange Offer, a total of 42,597 shares of common stock were issued in exchange for 87,644 warrants. Pursuant to an amendment to the warrant agreement with respect to each class of warrants approved by the holders in connection with the Warrant Exchange Offer, on September 9, 2024, the 14,764 outstanding warrants that were not tendered in the exchange were exchanged for 10,938 shares of common stock. There were no Redeemable Warrants, Merger Consideration Warrants, or Private Placement Warrants outstanding as of December 31, 2024.

As a result of these transactions, the Company recognized a deemed dividend of $540,255 from the excess of the fair value of the common stock over the fair value of the warrants immediately prior to the exchange.

*Series B Convertible Preferred Stock Securities Purchase Agreement* 

On March 28, 2024, the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with Ionic Ventures, LLC ("Ionic") for a private placement, which closed on March 29, 2024. Pursuant to the Securities Purchase Agreement the Company sold 150 shares of Series B Preferred Stock, a warrant to purchase up to 1,500 shares of Series B Preferred Stock with an exercise price of $10,000 per share, and 1,111 shares of Jet.AI Common Stock for net proceeds of $1,345,025 after deducting offering costs of $155,000.

Each share of Series B Preferred Stock is convertible into a number of shares of Jet.AI 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 of 1934), which can be adjusted to a beneficial ownership limitation of 9.99% upon 61 days prior written notice by Iconic. Prior to the approval by the Company's stockholders of 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, shares of Series B Preferred Stock could not be converted into shares of common stock if, as a result of such conversion, the number of shares of common stock to be issued would exceed 19.9% of the total number of shares of the Company's outstanding common stock as of the closing date. At the annual meeting of stockholders held on September 24, 2024, the Company's stockholders approved a proposal that served to remove the 19.9% limitation.

Subject to the limitations set forth in the preceding paragraph and provided there is an effective registration statement covering Ionic's resale of the Jet.AI Common Stock underlying the Series B Preferred Stock, shares of Series B Preferred Stock will automatically convert into shares of Jet.AI 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 Common Stock over a period beginning on the trading day after the Company delivers 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 the Company's failure to convert the Series B Preferred Stock into common stock when a conversion right is exercised, then the Company may be required to redeem the Series B Preferred Stock for cash at 110% of the stated value.

In connection with the transactions under the Securities Purchase Agreement, the Company entered into a placement agency agreement (the "Placement Agency Agreement") with Maxim. Pursuant to the terms of the Placement Agency Agreement, the Company agreed to pay Maxim a cash fee equal to 7% of the aggregate gross proceeds raised under the Securities Purchase Agreement and reimburse Maxim, directly upon the initial closing under the Securities Purchase Agreement for all travel and other documented out-of-pocket expenses incurred by Maxim, including the reasonable fees, costs and disbursements of its legal counsel, in an amount not to exceed an aggregate of $15,000. The Company paid Maxim a total of $120,000 out of the gross proceeds it received at closing. From time to time as the Company issues additional securities to Ionic as contemplated by the Securities Purchase Agreement, the Company would be obligated to pay Maxim cash fees of up to $1,050,000.

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 related to the Securities Purchase Agreement. Under the Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the Securities Purchase Agreement. In consideration for the waiver, the Company agreed to a release of Ionic and its affiliates and issued to Ionic 50 additional shares of Series B Preferred Stock. The share issuance was recorded to General and Administrative expenses as stock-based compensation based on the fair value of the equivalent common shares on the issuance date of $459,000.

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 200 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.

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 200 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.

In November and December 2024, the Company issued 400 shares of Series B Preferred Stock from the exercise of 400 Series B Preferred warrants for gross proceeds of $4,000,000 before deducting offering costs of $280,000.

During the year ended December 31, 2024, the Company issued 293,184 shares of common stock for the conversion of 350 shares of Series B Convertible Preferred Stock.

*Regulation A offerings*

In June 2021, the Company undertook another Regulation A, Tier 2 offering for which it was selling up to 4,012 non-voting common stock at $5,400 per share for a maximum of $21,880,000. During the year ended December 31, 2023, the Company issued an additional 293 shares of non-voting common stock under the Regulation A, Tier 2 campaign for aggregate gross proceeds of $1,598,630, with $6,724 of these proceeds pending release from escrow at December 31, 2024.

*Share Repurchase Program*

 

On November 13, 2024, the Company's Board of Directors authorized and approved a share repurchase program (the "<u>Share Repurchase Program</u>") pursuant to which the Company may repurchase up to $2 million of the Company's outstanding shares of common stock from time to time through December 31, 2025. The Company may buy back its common stock from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, pursuant to Rule 10b-18 of the Securities Exchange Act of 1934, and federal and state laws governing such transactions, through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions, purchases through 10b5-1 trading plans, or by any combination of such methods. The Share Repurchase Program does not oblige the Company to acquire any specific number of shares and may be modified, discontinued, or suspended at any time. As of December 31, 2024, no shares had been repurchased under the Share Repurchase Program.

 

*Stock Options*

In connection with the Business Combination, the Company adopted 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 10,933 shares and to eliminate the automatic share replenishment provision. As of December 31, 2024, the total number of shares reserved for issuance under the Omnibus Incentive Plan was 10,933 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 December 31, 2024, the total number of shares reserved for issuance under the 2018 Plan was 10,301. 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 688 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 2,063. 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 year ended December 31, 2023, the Company granted a total of 2,038 stock options to purchase common stock to various employees, advisors and consultants. The options have a ten-year life and weighted average exercise price of $880.41. Approximately 190 of the options vest over a period of two months, while the remaining options vest in monthly tranches over a three-year period. The options had a grant date fair value of approximately $2,113,000, which will be recognized over the vesting period.

During the year ended December 31, 2024, the Company granted a total of 6,400 stock options to purchase common stock and 485 restricted stock units to various employees, advisors and consultants. The options have a ten-year life and an exercise price ranging from $22.75 to $24.35. Approximately 3,958 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 $115,000, which will be recognized over the vesting period. The 485 restricted stock units were immediately vested on the grant date.

A summary of our stock option activity for the years ended December 31, 2024 and 2023, is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term |
| Outstanding at December 31, 2022 | 14299 | $1457.73 | 8.06 |
| Granted | 2038 | 880.41 | 10.00 |
| Exercised |  |  |  |
| Expired/Cancelled | (69) | 2345 | - |
| Outstanding at December 31, 2023 | 16268 | $1381.64 | 7.40 |
| Granted | 6400 | 23.74 | 10.00 |
| Exercised |  |  |  |
| Expired/Cancelled | - | - | - |
| Outstanding at December 31, 2024 | 22668 | $998.26 | 7.32 |
| Exercisable at December 31, 2024 | 14513 | $1555 | 6.70 |

---

The Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing model. The range of input assumptions used by the Company were as follows:

SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTIONS

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2023** |
| Expected life (years) | 6 | 6 to 10 |
| Risk-free interest rate | 3.55% - 3.95 | 3.55% - 4.55 |
| Expected volatility | 90% | 90% |
| Annual dividend yield | 0% | 0% |
| Per share grant date fair value | $18.19 | $1036.57 |

---

The Company recognizes stock option forfeitures as they occur as there is insufficient historical data to accurately determine future forfeitures rates.

The risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities appropriate for the expected term of the Company's stock options.

The expected term of stock options is calculated using the simplified method which takes into consideration the contractual life and vesting terms of the options.

The Company determined the expected volatility assumption for options granted using the historical volatility of comparable public company's common stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for future stock option grants, until such time that the Company's common stock has enough market history to use historical volatility.

The dividend yield assumption for options granted is based on the Company's history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future.

During the years ended December 31, 2024 and 2023, stock-based compensation expense of $4,287,236 and $6,645,891, respectively, was recognized for the vesting of these options and restricted stock units. As of December 31, 2024, there was approximately $1,125,000 in unrecognized stock-based compensation, which will be recognized through September 2027.

*Warrants*

 

The number of outstanding warrants issued by the Company as of December 31, 2024 is as follows:

SCHEDULE OF OUTSTANDING WARRANTS

---

| | | | |
|:---|:---|:---|:---|
| **Warrant** | **Expiration Date** | **Exercise Price** | **Number Outstanding** |
| GEM Common Stock Warrants | 8 /11/2026 | $14.12 | 9686 |
| Ionic Series B Preferred Stock Warrants | 3 /29/2026 | $10000 | 1100 |
| Total |  |  | 10786 |

---

**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 and Engagement Letter entered into with Maxim.

See Note 5 for a discussion of the related party Settlement Agreement entered into with Sponsor.

See Note 6 for a discussion of related party Placement Agent Agreement with Maxim.

**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 years ended December 31, 2024 and 2023 were as follows:

SCHEDULE OF DEFERRED REVENUE

---

| | |
|:---|:---|
| Deferred revenue as of December 31, 2022 | $933361 |
| &nbsp;&nbsp;&nbsp;Amounts deferred during the period | 3695476 |
| &nbsp;&nbsp;&nbsp;Revenue recognized from amounts included in the deferred revenue beginning balance | (933361) |
| &nbsp;&nbsp;&nbsp;Revenue from current year sales | (1915682) |
| Deferred revenue as of December 31, 2023 | $1779794 |
| &nbsp;&nbsp;&nbsp;Amounts deferred during the period | 7625047 |
| &nbsp;&nbsp;&nbsp;Revenue recognized from amounts included in the deferred revenue beginning balance | (1779794) |
| &nbsp;&nbsp;&nbsp;Revenue from current year sales | (6305301) |
| Deferred revenue as of December 31, 2024 | $1319746 |

---

**NOTE 10 – INCOME TAXES**

For the years ended December 31, 2024 and 2023, the Company did not record a current or deferred income tax expense or benefit due to current and historical losses incurred by the Company. The Company's losses before income taxes consist solely of losses from domestic operations.

A reconciliation of income tax expense (benefit) computed at the statutory federal income tax rate to income taxes as reflected in the financial statements is as follows:

SCHEDULE OF RECONCILIATION OF INCOME TAX EXPENSE (BENEFIT)

---

| | | |
|:---|:---|:---|
|  | 2024 | 2023 |
| Statutory US Federal tax rate | 21.0% | 21.0% |
| Permanent differences: |  |  |
| &nbsp;&nbsp;&nbsp;State and local income taxes, net of Federal benefit | 0.0% | 0.0% |
| &nbsp;&nbsp;&nbsp;Stock compensation | -7.0% | -11.1% |
| &nbsp;&nbsp;&nbsp;Other | 0.0% | -0.1% |
| Temporary differences | -0.4% | -1.3% |
| Valuation allowance | -13.6% | -8.5% |
| Total | 0.0% | 0.0% |

---

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company's deferred tax assets and liabilities as of December 31, 2024 and 2023 are comprised of the following:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

---

| | | |
|:---|:---|:---|
|  | 2024 | 2023 |
| Deferred tax asset attributable to: |  |  |
| &nbsp;&nbsp;&nbsp;Net operating loss carryover | $4299000 | $2529000 |
| &nbsp;&nbsp;&nbsp;Valuation allowance | (4299000) | (2529000) |
| Net deferred tax asset | $- | $- |

---

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which are comprised primarily of net operating loss carryforwards. Management has considered the Company's history of cumulative net losses in the United States, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than not that the Company will not realize the benefits of its U.S. federal and state deferred tax assets. Accordingly, a full valuation allowance has been established against these net deferred tax assets as of December 31, 2024 and 2023, respectively. The Company reevaluates the positive and negative evidence at each reporting period. The Company's valuation allowance increased during 2024 by approximately $1,770,000 primarily due to the generation of a net operating loss of approximately $8,200,000.

At December 31, 2024, the Company had federal net operating loss carry forwards of approximately $20,400,000. The federal operating losses since inception have no expiration.

Utilization of the U.S. federal and state net operating loss may be subject to a substantial annual limitation under Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of net operating loss that can be utilized annually to offset future taxable income and tax liabilities, respectively. The Company is currently performing an analysis but has not completed its study to assess whether a change of ownership has occurred, or whether there have been multiple ownership changes since its formation. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization.

The Company is subject to tax in the United States ("U.S.") and files income tax returns in the U.S. Federal jurisdiction and several states and local jurisdictions where the Company has determined it has tax nexus. The Company is subject to U.S. Federal, state and local income tax examinations by tax authorities for all periods since Inception. The Company currently is not under examination by any tax authority.

**NOTE 11 – SUBSEQUENT EVENTS**

*Share Issuances*

In January 2025, the Company issued 250 shares of Series B Preferred Stock upon the partial exercise of the Ionic Warrant for total consideration of $2,500,000.

In January 2025, the Company issued 532,100 shares of common stock for the conversion of 50 shares of Series B Preferred Stock.

In February 2025, the Company issued 850 shares of Series B Preferred Stock upon the full exercise of the Ionic Warrant for total consideration of $8,500,000.

*Potential flyExclusive Transaction*

On February 13, 2025, the Company entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with flyExclusive, Inc. ("flyExclusive"), FlyX Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of flyExclusive ("Merger Sub"), and Jet.AI SpinCo, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("SpinCo"). Pursuant to the Merger Agreement, (i) as a condition to closing on the Merger Agreement, the Company will distribute all of the shares of SpinCo, on a pro rata basis, to the Company's stockholders and (ii) Merger Sub will merge with and into SpinCo (the "Merger" and, together with the Distribution and all other transactions contemplated under the Merger Agreement, the "Transactions") with SpinCo surviving the Merger as a wholly owned subsidiary of flyExclusive.

In connection with executing the Merger Agreement, the Company, SpinCo, and flyExclusive entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement") pursuant to which the Company will transfer the business, operations, services and activities of the Company's jet charter business to SpinCo (the "Separation"). Upon the terms and subject to the conditions set forth in the Separation and Distribution Agreement, the Company will distribute all of the shares of common stock of SpinCo, $0.001 par value per share ("SpinCo Common Stock") to the Company's stockholders on a pro rata basis as set forth in the Separation and Distribution Agreement (the "Distribution"). As such, the Company will no longer operate a jet charter business as of consummation of the Distribution. There will be no change to the Company's board of directors or executive officers as a result of the Transactions.

As consideration for the Merger and upon closing of the Merger, the holders of common stock of SpinCo will have their SpinCo Common Stock converted on a pro rata basis into the right to receive shares of Class A common stock of flyExclusive, $0.0001 par value per share ("flyExclusive Common Stock"), based on an exchange ratio equal to the quotient of (i) the "Initial Purchase Price" divided by the volume weighted average closing sale price of the flyExclusive Common Stock as reported on NYSE American for a period of 30 consecutive trading days ending on the trading day three trading days prior to the day of closing of the Merger (the "Merger Consideration Shares"), divided by (ii) the total outstanding shares of SpinCo Common Stock. The "Initial Purchase Price" is an amount equal to the product of (x) SpinCo's estimated net cash, multiplied by certain premium percentages depending on SpinCo's estimated net cash upon closing of the Merger. The number of Merger Consideration Shares that holders of SpinCo Common Stock will receive is subject to adjustment, depending on, among other things, the actual amount of SpinCo's net cash at closing of the Merger. The Company's stockholders will continue to own and hold their existing shares of the Company's common stock as of closing of the Merger.

The Transactions are subject to shareholder approval and are expected to close during the second quarter of 2025.

The Company has evaluated subsequent events that occurred after December 31, 2024 through March ___, 2025, the date that these consolidated financial statements were available to be issued, and noted no additional events requiring recognition for disclosure.

**PROSPECTUS**

![](formdrs_002.jpg)

**[●] Shares of Common Stock**

**[●] Pre-Funded Warrants**

**[●] Shares of Common Stock Underlying the Pre-Funded Warrants**

**, 2025**

**PART II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution**

The following table presents the costs and expenses in connection with the issuance and distribution of the securities to be registered, other than underwriting discounts and commissions, payable by us in connection with the sale of Common Stock being registered. Except as otherwise noted, we will pay all of these amounts. All amounts are estimates except the Securities and Exchange Commission ("SEC") registration fee.

---

| | |
|:---|:---|
| SEC registration fee | $[●] |
| Accounting fees and expenses | $[●] |
| Legal fees and expenses | $[●] |
| Printing fees and expenses | $[●] |
| Total | $[●] |

---

\*Estimates not presently known

**Item 14. Indemnification of Directors and Officers**

Under Section 145 of the General Corporation Law of the State of Delaware (the "DGCL"), a corporation has the power to indemnify its directors and officers under certain prescribed circumstances and, subject to certain limitations, against certain costs and expenses, including attorneys' fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding, whether criminal, civil, administrative or investigative, to which any of them is a party by reason of his being a director or officer of the corporation if it is determined that he acted in accordance with the applicable standard of conduct set forth in such statutory provision. In addition, a corporation may advance expenses incurred by a director or officer in defending a proceeding upon receipt of an undertaking from such person to repay any amount so advanced if it is ultimately determined that such person is not eligible for indemnification. The registrant's certificate of incorporation provides that, pursuant to the DGCL, the registrant's directors shall not be liable for monetary damages to the fullest extent authorized under applicable law. This provision in the registrant's certificate of incorporation does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Delaware law. In addition, each director will continue to be subject to liability for breach of the director's duty of loyalty, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of the law, for actions leading to improper personal benefit to the director, and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Delaware law. The provision also does not affect a director's responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.

Article VI of the registrant's bylaws provides that the registrant will indemnify, to the fullest extent permitted by the DGCL, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding") (other than an action by or in the right of the registrant) by reason of the fact that such person is or was a director or officer of the registrant, or is or was a director or officer of the registrant serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful.

In addition to the above, the registrant has entered into indemnification agreements with each of the registrant's directors and officers. These indemnification agreements provide the registrant's directors and officers with the same indemnification and advancement of expenses as described above and provide that our directors and officers will be indemnified to the fullest extent authorized by any future Delaware law that expands the permissible scope of indemnification. The registrant also has directors' and officers' liability insurance, which provides coverage against certain liabilities that may be incurred by the registrant's directors and officers in their capacities as directors and officers of the registrant.

**Item 15. Recent Sales of Unregistered Securities**

Set forth below is information regarding securities issued by the registrant within the past three years that were not registered under the Securities Act. Also included is the consideration received by the registrant for such securities and information relating to the section of the Securities Act, or rule of the SEC, under which exemption from registration was claimed.

1. On
 November 14, 2022, the Company issued a promissory note in the aggregate principal amount of $575,000 to Sponsor Ltd. in connection
 with the extension of the termination date for the Company's initial business combination from November 16, 2022 to August
 16, 2023 which extension was approved at an extraordinary general meeting of shareholders held on November 9, 2022. The issuance
 of the note was made pursuant to Section 4(a)(2) of the Securities Act.

2. On
 August 6, 2023, the Company entered into a subscription agreement (the "FPA Funding Amount PIPE Subscription Agreement")
 with (i) Meteora Capital Partners, LP ("MCP"), (ii) Meteora Select Trading Opportunities Master, LP ("MSTO"),
 and (iii) Meteora Strategic Capital, LLC ("MSC" and, collectively with MCP and MSTO, "Meteora"). Pursuant
 to the FPA Funding Amount PIPE Subscription Agreement, Meteora agreed to subscribe for and purchase, and the Company agreed to issue
 and sell to Meteora, on the closing date of the business combination, an aggregate of up to 1,186,952 Class A ordinary shares, par
 value $0.0001 per share, of the Company ("Class A Ordinary Shares") concurrently with the closing, less the number of
 Class A Ordinary Shares purchased by Meteora separately from third parties through a broker in the open market ("Recycled Shares")
 in connection with the Forward Purchase Agreement. On August 10, 2023, Meteora was issued 247,756 shares of Common Stock pursuant
 to the FPA Funding Amount PIPE Subscription Agreement. On August 31, 2023, Jet.AI and Meteora entered into an amendment to the Forward
 Purchase Agreement ("Forward Purchase Agreement Confirmation Amendment"). Pursuant to the Forward Purchase Agreement
 Confirmation Amendment, the number of shares of Common Stock issued to Meteora was amended to 548,127 pursuant to the FPA Funding
 Amount PIPE Subscription Agreement. In each instance, the issuance of the securities was made pursuant to Section 4(a)(2) of the
 Securities Act.

3. Following
 the Business Combination on August 10, 2023, the Company entered into a settlement agreement ("Sponsor Settlement Agreement")
 with Sponsor. Pursuant to the Sponsor Settlement Agreement, the Company issued 575 shares of the Company's Series A-1 Convertible
 Preferred Stock (the "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 Sponsor. The issuance of the securities was made pursuant
 to Section 4(a)(2) of the Securities Act.

4. Following
 the Business Combination, on August 10, 2023, the Company entered into a settlement agreement ("Maxim Settlement Agreement")
 with Maxim. Pursuant to the Maxim Settlement Agreement, the Company issued 270,000 shares of Common Stock to Maxim Partners to settle
 the payment obligations of the Company under the underwriting agreement in connection with the Company's IPO dated on or about
 August 11, 2021, by and between the Company and Maxim. The Company also issued 1,127 shares of Series A Convertible Preferred Stock
 in an amount equal in value to $1,127,000 (the "Series A Preferred Shares"). The issuances of the securities were made
 pursuant to Section 4(a)(2) of the Securities Act.

5. 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.
 In an event of default, the principal amount of $625,000 is increased to by 120% and is convertible into shares of the Company's
 Common Stock. The issuance of the securities was made pursuant to Section 4(a)(2) of the Securities Act. The Company paid the full
 amounts due under the Bridge Agreement in March 2024.

6. On
 December 28, 2023, the Company entered into a Warrant Exchange Agreement with an unaffiliated third party investor and issued an
 aggregate of 807,851 shares of Common Stock to the warrant holder in exchange for the surrender and cancellation of the same number
 of Jet.AI Warrants held by such holder, in reliance upon the exemption from the registration requirements under Section 3(a)(9) under
 the Securities Act.

7. On
 January 17, 2024, the Company entered into a Warrant Exchange Agreement with an unaffiliated third party investor and issued an aggregate
 of 194,729 shares of Common Stock to the warrant holder in exchange for the surrender and cancellation of the same number of Jet.AI
 Warrants held by such holder, in reliance upon the exemption from the registration requirements under Section 3(a)(9) under the Securities
 Act.

8. On
 January 23, 2024, the Company entered into a Warrant Exchange Agreement with an unaffiliated third party investor and issued an aggregate
 of 483,637 shares of Common Stock to the warrant holder in exchange for the surrender and cancellation of the same number of Jet.AI
 Warrants held by such holder, in reliance upon the exemption from the registration requirements under Section 3(a)(9) under the Securities
 Act.

9. On
 various dates in the first quarter of 2024, the Company sold an aggregate of 1,500,000 shares of Common Stock to GEM under the Share
 Purchase Agreement, as described in the section titled "*Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Overview – Share Purchase Agreement"* for
 gross proceeds of $1,110,000. The issuance of the securities was made pursuant to Section 4(a)(2) of the Securities Act.

10. On
 March 28, 2024, the Company entered into a Securities Purchase Agreement with Ionic Ventures, LLC under which the Company issued
 (a) 150 shares of the Company's Series B Preferred Stock, (b) a warrant to purchase up to 1,500 shares of Series B Preferred
 Stock, at an exercise price of $10,000 per share, and (c) 250,000 shares of the Company's Common Stock, as described in the
 section titled "*Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Overview – Ionic Transaction"* for gross proceeds of approximately $1.5 million. The
 issuance of the securities was made pursuant to an exemption from the registration requirements of the Securities Act pursuant to
 Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated under the Securities Act.

11. On
 various dates in the second quarter of 2024, the Company sold an aggregate of 1,244,800 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.

12. On
 August 21, 2024, the Company entered into a Settlement Agreement and Stipulation with Sunpeak Holdings Corporation ("SHC"),
 which became effective on August 28, 2024, to settle outstanding claims owed to SHC. Pursuant to the Settlement Agreement, SHC has
 agreed to purchase certain outstanding payables between the Company and designated vendors of the Company totaling approximately
 $2.4 million (the "Claims") and will exchange such Claims for a settlement amount payable in shares of common stock of
 the Company (the "Settlement Shares"). The Settlement Shares shall be priced at the closing price of the Company's
 common stock on August 21, 2024, subject to adjustment pursuant to the terms of the Settlement Agreement. The Company shall also
 issue to SHC, on the issuance date(s), 100,000 freely trading shares pursuant to Section 3(a)(10) of the Securities Act in accordance
 herewith as a Settlement Fee (the "Settlement Fee Shares"). The issuance of the Settlement Shares and the Settlement
 Fee Shares is being made in reliance upon the exemption from registration provided by Section 3(a)(10) of the Securities Act.

13. On
 September 24, 2024, the Company entered into a Letter Agreement with Ionic pursuant to which the Company issued 50 shares of the
 Company's Series B Preferred Stock. The issuance of the securities was made pursuant to an exemption from the registration
 requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated
 under the Securities Act.

14. From
 October 2024 through the date of this prospectus, the Company issued 1,500 shares of Series B Preferred Stock from the full exercise
 of the Ionic Warrant for gross proceeds of $15.0 million before deducting offering costs of $280,000. During the year ended December
 31, 2024, the Company issued 293,137 shares of common stock for the conversion of 350 shares of Series B Preferred Stock. The securities
 were offered and sold in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule
 506(b) of Regulation D promulgated thereunder.

In each transaction in which we relied on Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder, we did not engage in any general solicitation or advertising, and we offered the securities to a limited number of persons with whom we had pre-existing relationships. We exercised reasonable care to ensure that the purchasers of securities were not underwriters within the meaning of the Securities Act, including making reasonable inquiry prior to accepting any subscription, making written disclosure regarding the restricted nature of the securities, and placing a legend on the certificates representing the shares. Further, stop-transfer restrictions were placed with our transfer agent and a restrictive legend was placed on the certificate in connection with these offerings. In addition, sales in the transactions exempt under Rule 506(b) were made exclusively to what the Company reasonably believed were accredited investors as defined in Rule 501 of the Securities Act. The recipients of securities in each of these transactions acquired the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.

**Item 16. Exhibits and Financial Statement Schedules**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Exhibits*. The
 Company has filed the exhibits listed on the accompanying Exhibit Index of this registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Financial Statements.* See page F-1 for an index of the financial statements included in the Registration Statement.

**Item 17. Undertakings**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The undersigned registrant hereby undertakes:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. *Provided, however*, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 1.1\* | [Underwriting Agreement] |
| 2.1 | [Business Combination Agreement and Plan of Reorganization, dated as of February 24, 2023, by and among the Company, First Merger Sub, Second Merger Sub and Jet Token (incorporated by reference to Exhibit 2.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223016447/forms-4a.htm#jw_001) |
| 2.2 | [Amendment No. 1 to Business Combination Agreement and Plan of Reorganization, dated May 11, 2023, by and among the Company, First Merger Sub, Second Merger Sub and Jet Token (incorporated by reference to Exhibit 2.2 of Jet.AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223025611/forms-4a.htm#ann_001) |
| 2.3# | [Amended and Restated Agreement and Plan of Merger and Reorganization dated as of May 6, 2025, by and among Jet.AI Inc., flyExclusive, Inc., FlyX Merger Sub, Inc., and Jet.AI SpinCo, Inc. (incorporated by reference to Exhibit 2.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on May 6, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000164117225008849/ex2-1.htm) |
| 3.1 | [Certificate of Incorporation of Jet.AI Inc., as amended through November 12, 2024 (incorporated by reference to Exhibit 3.1 of Jet.AI's Annual Report on Form 10-K filed with the SEC on March 26, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000164117225000794/ex3-1.htm) |
| 3.2 | [Certificate of Designation of the Series A Convertible Preferred Stock of Jet.AI Inc., as amended through July 15, 2024 (incorporated by reference to Exhibit 3.2 of Jet.AI's Annual Report on Form 10-K filed with the SEC on March 26, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000164117225000794/ex3-2.htm) |
| 3.3 | [Certificate of Designation of the Series A-1 Convertible Preferred Stock of Jet.AI Inc., dated August 10, 2023 (incorporated by reference to Exhibit 3.3 of Jet.AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223028481/ex3-3.htm) |
| 3.4 | [Certificate of Designations of Series B Convertible Preferred Stock of Jet.AI Inc., as amended through February 14, 2025 (incorporated by reference to Exhibit 3.4 of Jet.AI's Annual Report on Form 10-K filed with the SEC on March 26, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000164117225000794/ex3-4.htm) |
| 3.5 | [Bylaws of Jet.AI Inc., as amended through August 5, 2024 (incorporated by reference to Exhibit 3.5 of Jet.AI's Annual Report on Form 10-K filed with the SEC on March 26, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000164117225000794/ex3-5.htm) |
| 4.1 | [Warrant by and between Jet. AI Inc. and GEM Yield Bahamas Limited (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1 (File. No. 333-274432) of Jet.AI Inc. filed with the SEC on September 8, 2023).](https://www.sec.gov/ix?doc=/Archives/edgar/data/1861622/000149315223032111/forms-1.htm) |
| 4.2 | [Warrant Agreement Amendment by and between Jet.AI Inc. and GEM Yield Bahamas Limited (incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-1/A (File No. 333-274432) of Jet.AI Inc. filed with the SEC on October 27, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223038446/ex4-4.htm) |
| 4.3 | [Warrant by and between Jet.AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 4.5 of Jet.AI's Annual Report on Form 10-K filed with the SEC on April 1, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224012382/ex4-5.htm) |
| 4.4\* | [Form of Pre-Funded Warrant] |
| 5.1\* | Consent of Dykema Gossett PLLC. |
| 10.1+ | [2023 Jet.AI Inc. Amended and Restated Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on September 26, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224038298/ex10-1.htm) |
| 10.2+ | [Employment Offer Letter dated August 8, 2023 between George Murnane and Jet.AI Inc. incorporated by reference to Exhibit 10.12 of Jet.AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223028481/ex10-12.htm) |
| 10.3+ | [Employment Offer Letter dated August 8, 2023 between Michael Winston and Jet.AI Inc. (incorporated by reference to Exhibit 10.11 of Jet.AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223028481/ex10-11.htm) |
| 10.4+ | [Employment Offer Letter dated July 11, 2023 between Patrick McNulty and Jet.AI Inc. (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 (File No. 333-274432) of Jet.AI Inc. filed with the SEC on September 8, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223032111/ex10-4.htm) |

---

---

| | |
|:---|:---|
| 10.5 | [Share Purchase Agreement by and among Jet Token Inc., GEM Global Yield LLC SCS and GEM Yield Bahamas Limited, dated August 4, 2022 (incorporated by reference to Exhibit 10.7 of the Company's Form S-4/A (File No. 333-270848) filed with the SEC on May 11, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223016447/ex10-7.htm) |
| 10.6 | [Registration Rights Agreement by and among Jet Token Inc., GEM Global Yield LLC SCS and GEM Yield Bahamas Limited, dated August 4, 2022 (incorporated by reference to Exhibit 10.8 of the Company's Form S-4/A (File No. 333-270848) filed with the SEC on May 11, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223016447/ex10-8.htm) |
| 10.7 | [Form of Forward Purchase Agreement, dated August 6, 2023 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on August 7, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223026964/ex10-1.htm) |
| 10.8 | [Form of FPA Funding Amount PIPE Subscription Agreement, dated August 6, 2023 (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the SEC on August 7, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223026964/ex10-2.htm) |
| 10.9 | [Forward Purchase Agreement Confirmation Amendment dated as of August 31, 2023 (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on September 1, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223031477/ex10-1.htm) |
| 10.10 | [Forward Purchase Agreement Confirmation Second Amendment, dated as of October 2, 2023, among Jet.AI Inc. and the other parties named therein (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on October 10, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223036791/ex10-1.htm) |
| 10.11 | [Form of Indemnification Agreement (incorporated by reference to Exhibit 10.4 of Jet.AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).](https://www.sec.gov/Archives/edgar/data/1861622/000149315223028481/ex10-4.htm) |
| 10.12 | [Securities Purchase Agreement dated as of March 28, 2024 and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.30 of Jet.AI's Annual Report on Form 10-K filed with the SEC on April 1, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224012382/ex10-30.htm) |
| 10.13 | [Registration Rights Agreement dated as of March 29, 2024 between Jet.AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.32 of Jet.AI's Annual Report on Form 10-K filed with the SEC on April 1, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224012382/ex10-32.htm) |
| 10.14 | [Settlement Agreement and Stipulation dated August 21, 2024 by and between Jet.AI Inc. and Sunpeak Holdings Corporation (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on August 30, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224034606/form8-k.htm) |
| 10.15 | [Letter Agreement, dated September 24, 2024, between Jet.AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on September 25, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224038056/ex10-1.htm) |
| 10.16 | [Letter Agreement, dated October 10, 2024, between Jet.AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on October 10, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224040742/ex10-1.htm) |
| 10.17 | [Letter Agreement, dated October 18, 2024, between Jet.AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on October 18, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224041630/ex10-1.htm) |
| 10.18^ | [Aircraft Purchase Agreement, dated October 31, 2024, between Galilee, LLC, a wholly-owned subsidiary of Jet.AI Inc., and Textron Aviation Inc. (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on November 5, 2024).](https://www.sec.gov/Archives/edgar/data/1861622/000149315224043617/ex10-1.htm) |
| 10.19 | [Separation and Distribution Agreement dated as of February 13, 2025, by and among Jet.AI Inc., Jet.AI SpinCo, Inc., and flyExclusive, Inc. (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on February 20, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000149315225007719/ex10-1.htm) |
| 10.20 | [Form of Stockholder Support Agreement (incorporated by reference to Exhibit 10.2 of Jet.AI's Current Report on Form 8-K filed with the SEC on February 20, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000149315225007719/ex10-2.htm) |
| 10.21# | [Joint Venture Agreement, dated June 26, 2025, between Jet.AI Inc. and Consensus Core Technologies Inc. (incorporated by reference to Exhibit 10.1 of Jet.AI's Current Report on Form 8-K filed with the SEC on July 2, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000164117225017613/ex10-1.htm) |
| 10.22#^ | [Contribution Agreement, dated July 2, 2025, between Jet.AI Inc., Consensus Core Technologies Inc., and Convergence Compute LLC. (incorporated by reference to Exhibit 10.2 of Jet.AI's Current Report on Form 8-K filed with the SEC on July 2, 2025).](https://www.sec.gov/Archives/edgar/data/1861622/000164117225017613/ex10-2.htm) |
| 21.1\* | List of Subsidiaries of Jet.AI Inc. |
| 23.1\* | Consent of Hacker Johnson & Smith PA. |
| 23.2\* | Consent of Dykema Gossett PLLC (included in Exhibit 5.1). |
| 24.1\* | Power of Attorney (included on the signature page to the initial filing of this registration statement). |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) |
| 107\* | Filing Fee Table. |

---

---

| | |
|:---|:---|
| \* | To be filed by amendment. |
| + | Management contracts. |
| # | Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the SEC; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 under the Exchange Act for any exhibits or schedules so furnished. |
| ^ | Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the SEC; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 under the Exchange Act of 1934, as amended, for any exhibits or schedules so furnished. |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Las Vegas, State of Nevada, on [●], 2025.

---

| | |
|:---|:---|
| **JET.AI INC.** | **JET.AI INC.** |
| By: |  |
|  | Michael Winston |
|  | Executive Chairman and Interim Chief Executive Officer |
|  | *(Principal Executive Officer)* |

---

**POWER OF ATTORNEY**

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Michael Winston, as his or her true and lawful attorneys-in-fact and agent with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this registration statement (including post-effective amendments or any abbreviated registration statement and any amendments thereto filed pursuant to Rule 462(b) under the Securities Act of 1933 increasing the number of securities for which registration is sought), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact, proxy, and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact, proxy and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
|  | Executive Chairman and Interim Chief Executive Officer | [●], 2025 |
| Michael Winston | *(Principal Executive Officer)* |  |
|  | Interim Chief Financial Officer and Director | [●], 2025 |
| George Murnane | *(Principal Financial Officer, Principal Accounting Officer)* |  |
|  | Director | [●], 2025 |
| William Yankus |  |  |
|  | Director | [●], 2025 |
| Wrendon Timothy |  |  |
|  | Director | [●], 2025 |
| Lt. Col. Ran David |  |  |
|  | Director | [●], 2025 |
| Donald Jeffrey Woods |  |  |
|  | Director | [●], 2025 |
| Ehud Talmor |  |  |

---