Filed
pursuant to Rule 424(b)(5)
Registration
No. 333-281578
Prospectus
Supplement
(To
Prospectus dated September 9, 2024)
15,625,000 Shares of Common Stock
We are offering 15,625,000 shares of our common
stock, par value $0.0001 per share to investors pursuant to this prospectus supplement and accompanying prospectus at an offering
price per share equal to $0.096.
Our common stock is traded
on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “JTAI”. The last reported
sale price of our common stock on October 17, 2024 was $0.0969 per share. Our principal executive offices are located at
10845 Griffith Peak Drive, Suite 200, Las Vegas, Nevada 89135.
As of October 17,
2024, the aggregate market value of our outstanding common stock held by non-affiliates was approximately $20,074,720, which was
calculated based on 97,402,812 shares of outstanding common stock held by non-affiliates, at a price per share of $0.2061, the
closing price of our common stock on August 23, 2024, the highest closing price of the Company’s common stock on Nasdaq during
the preceding sixty (60) day trading period. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell the securities
described in this prospectus in a public primary offering with a value exceeding more than one-third (1/3) of the aggregate market value
of our common stock held by non-affiliates in any twelve (12)-month period, so long as the aggregate market value of our outstanding
common stock held by non-affiliates remains below $75,000,000. During the twelve (12) calendar months prior to and including the date
of this prospectus supplement, we have offered and sold aggregate gross proceeds of approximately $2,400,000 of our securities pursuant
to General Instruction I.B.6 of Form S-3.
Investing
in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading
“Risk Factors” contained in this prospectus supplement beginning on page S-4 and under similar headings in the other
documents that are incorporated by reference into this prospectus supplement.
| | |
Per
Share | | |
Total | |
| Offering Price | |
$ | 0.0960 | | |
$ | 1,500,000 | |
| Placement
agent fees(1) | |
$ | 0.0067 | | |
$ | 105,000 | |
| Proceeds, before expenses, to us | |
$ | 0.0893 | | |
$ | 1,395,000 | |
(1) See “Plan of Distribution”
for additional information with respect to the compensation we will pay the Maxim Group LLC (“Maxim” or the
“placement agent”).
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The
shares will be ready for delivery on or about October 21, 2024.
Sole
Placement Agent
MAXIM
GROUP LLC
The
date of this prospectus supplement is October 21, 2024.
Table
of Contents
Prospectus
Supplement
Prospectus
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
document is part of the registration statement that we filed with the Securities and Exchange Commission (the “SEC”)
using a “shelf” registration process and consists of two parts. The first part is this prospectus supplement, which describes
the specific terms of this offering. The second part, the accompanying prospectus, gives more general information, some of which may
not apply to this offering. Generally, when we refer only to the “prospectus,” we are referring to both parts combined. This
prospectus supplement may add to, update or change information in the accompanying prospectus and the documents incorporated by reference
into this prospectus supplement or the accompanying prospectus.
If
information in this prospectus supplement is inconsistent with the accompanying prospectus or with any document incorporated by reference
that was filed with the SEC before the date of this prospectus supplement, you should rely on this prospectus supplement. It is important
for you to read and consider all information contained or incorporated by reference in this prospectus supplement and the accompanying
prospectus in making your investment decision. This prospectus supplement, the accompanying prospectus and the documents incorporated
into each by reference include important information about us, the securities being offered and other information you should know before
investing in our securities. You should also read and consider information in the documents we have referred you to in the sections of
this prospectus supplement entitled “Information Incorporated by Reference” and “Where You Can Find More
Information.”
You
should rely only on this prospectus supplement, the accompanying prospectus, the documents incorporated or deemed to be incorporated
by reference herein or therein and any free writing prospectus prepared by us or on our behalf. We have not, and Maxim has not, authorized
anyone to provide you with information that is in addition to or different from that contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus. If anyone provides you with different or inconsistent information, you should not rely on
it. We and Maxim are not offering to sell these securities in any jurisdiction where the offer or sale is not permitted. This prospectus
supplement does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities
offered by this prospectus supplement by any person in any jurisdiction in which it is unlawful for such person to make such an offer
or solicitation.
You
should not assume that the information contained in this prospectus supplement, the accompanying prospectus or any free writing prospectus,
or incorporated by reference herein, is accurate as of any date other than as of the date of this prospectus supplement or the accompanying
prospectus or any free writing prospectus, as the case may be, or in the case of the documents incorporated by reference, the date of
such documents regardless of the time of delivery of this prospectus supplement and the accompanying prospectus or any sale of our securities.
Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference in this prospectus supplement or the accompanying prospectus 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.
Unless
otherwise indicated in this prospectus supplement or the context otherwise requires, all references to “we,” “us,”
“our,” “the Company,” and “Jet.AI” refer to Jet.AI Inc. and its consolidated subsidiaries. When we
refer to “you,” we mean the potential holders of the applicable series of securities.
This
prospectus supplement and the accompanying prospectus and the documents incorporated herein and therein by reference include trademarks,
service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included or incorporated
by reference into this prospectus supplement or the accompanying prospectus are the property of their respective owners. Solely for convenience,
trademarks and trade names referred to in this prospectus supplement or the accompanying prospectus, including logos, artwork and other
visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that their
respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display
of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
This
prospectus supplement and the accompanying prospectus and the documents incorporated herein and therein by reference include estimates
regarding market and industry data that we prepared based on our management’s knowledge and experience in the markets in which
we operate, together with information obtained from various sources, including publicly available information, industry reports and publications,
surveys, our customers, distributors, suppliers, trade and business organizations and other contacts in the markets in which we operate.
In some cases, we do not expressly refer to the sources from which this data is derived. Management estimates are derived from publicly
available information released by independent industry analysts and third-party sources, as well as data from our internal research,
and are based on assumptions made by us upon reviewing such data and our knowledge of such industry and markets which we believe to be
reasonable.
In
presenting this information, we have made certain assumptions that we believe to be reasonable based on such data and other similar sources
and on our knowledge of, and our experience to date in, the markets for the products we distribute. Market share data is subject to change
and may be limited by the availability of raw data, the voluntary nature of the data gathering process and other limitations inherent
in any statistical survey of market shares. In addition, customer preferences are subject to change.
No
action is being taken in any jurisdiction outside the United States to permit a public offering of the securities or possession or distribution
of this prospectus supplement or the accompanying prospectus in that jurisdiction. Persons who come into possession of this prospectus
supplement or the accompanying prospectus in jurisdictions outside the United States are required to inform themselves about and to observe
any restrictions as to this offering and the distribution of this prospectus supplement or the accompanying prospectus applicable to
that jurisdiction.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights information contained elsewhere in or incorporated by reference into this prospectus supplement or the accompanying
prospectus. This summary is not complete and does not contain all of the information that you should consider in making your investment
decision. Before investing in our common stock, you should carefully read the entire prospectus supplement, the accompanying prospectus,
and the documents incorporated by reference in this prospectus supplement and the accompanying prospectus carefully, including “Risk
Factors,” “Managements’ Discussion and Analysis of Financial Condition and Results of Operations,” our financial
statements and related notes incorporated by reference in this prospectus supplement and the accompanying prospectus, and the exhibits
to the registration statement of which this prospectus supplement and the accompanying prospectus are a part.
Company
Overview
Jet.AI
Inc. was formed on June 4, 2018, in the State of Delaware and is now headquartered in Las Vegas, Nevada. On August 10, 2023, we consummated
a business combination pursuant to which Jet Token Inc. combined with Oxbridge Acquisition Corp., a special purpose acquisition company
and in connection with that transaction the combined company was renamed Jet.AI Inc.
We
are a private air charter company that develops innovative artificial intelligence (“AI”) technology to facilitate
access to travel by private aircraft travel through our iOS and Android charter booking application, CharterGPT (“CharterGPT”),
and our B2B software platform, which provides a suite of software-as-a-service (“SaaS”) products that we offer
aircraft owners and operators. We strive to streamline and enhance the aviation experience for both operators and customers by leveraging
advanced natural language processing and advanced fleet logistics optimizations.
Our
business strategy combines concepts from fractional jet ownership programs and aviation jet membership cards with AI innovations. Our
CharterGPT application uses natural language processing and machine learning to improve the private jet booking experience, which is
advanced by CharterGPT’s direct connection via our application programming interface (“API”) to Avinode,
one of the largest centralized databases for charter services in the private-aviation industry. CharterGPT receives users’ requests
for private-aircraft travel, connects users to private-charter operators who have posted their aircraft for hire, displays a variety
of charter booking options at a range of prices drawn from thousands of aircraft listings on the Avinode platform along with pricing
for our own fleet of four aircraft, and facilitates communication, contract exchange, and payment between the user and the operator of
the aircraft ultimately selected for travel.
Our
Jet.AI Operation Platform currently consists of the following SaaS products:
| |
● |
Reroute
AI. Our newest SaaS product, Reroute AI, is web-based and enables Federal Aviation Administration (“FAA”)
Part 135 operators to earn revenue on otherwise empty flight legs. When prompted with basic travel itinerary information, Reroute
AI searches its database of empty flight legs and proposes combinations or adjustments of those legs that meet the constraints provided.
The Company generates revenue each time an operator wishes to book an itinerary proposed by Reroute AI that uses a third-party operator’s
aircraft. |
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|
|
| |
● |
DynoFlight.
DynoFlight is a software API that enables small- to medium-sized aircraft operators to track and estimate their emissions and
then to offset their emissions by purchasing carbon-offset credits via our DynoFlight API. |
| |
|
|
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● |
Flight
Club. Our Flight Club API enables FAA Part 135 operators to function simultaneously under FAA Part 380, which permits private
jet services to be sold by the seat rather than the whole aircraft. The Flight Club software integrates front-end ticketing and payment
collection with the flight management systems of an FAA Part 135 operator. We operate Flight Club through 380 Software LLC, a subsidiary
owned 50/50 by us and by Great Western Air, LLC d/b/a Cirrus Aviation Services, LLC (“Cirrus”), the largest
private jet charter company in Nevada. We currently limit our use of Flight Club to our partnership with the Las Vegas Golden Knights,
but we may expand the availability of Flight Club in the future. |
We
currently have a fleet of five aircraft, including three HondaJet HA-420 aircraft (the “HondaJet Elites”),
one Citation CJ4 Gen 2 and one King Air 350i. The three HondaJet Elites are managed, operated, and maintained by Cirrus pursuant to an
Executive Aircraft Management and Charter Services Agreement in compliance with all applicable FAA regulations and certification requirements.
The Citation CJ4 Gen 2 and King Air 350i in our fleet are owned by customers and managed through our OnBoard Program, which allows aircraft
owners to contribute their aircraft to our charter and jet-card inventory after they have completed certain FAA certifications and requirements.
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. As part of
the aircraft purchase agreement, the buyer enters into a three-year aircraft management agreement, after which the aircraft is typically
sold, and the owners are given their pro-rata share of the sale proceeds. |
| |
|
|
| |
● |
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, our HondaJet Elites are available to address unexpected
cancellations or delays on brokered charters. Our ability to maintain a fleet of readily available aircraft to backfill third-party charter
services gives us a competitive edge by providing more reliability than our competitors and is an attractive selling point for potential
clients.
Corporate
Information
Our
website address is www.jet.ai. The information contained in, or that can be accessed through, our website is not incorporated
by reference into this prospectus supplement and is not part of this prospectus supplement.
Our
common stock is listed on Nasdaq under the symbol “JTAI”. Our principal executive office is located at 10845 Griffith Peak
Drive, Suite 200, Las Vegas, Nevada 89135, and our telephone number is (702) 747-4000.
THE
OFFERING
| Common
stock offered by us |
|
15,625,000
shares of our common stock. |
| |
|
|
| Common
stock outstanding prior to this offering |
|
104,094,977
shares of common stock. |
| |
|
|
| Common stock to be outstanding after this offering |
|
119,719,977 shares of common stock. |
| |
|
|
| Use
of proceeds |
|
We
intend to use the net proceeds from this offering for working capital and general corporate purposes, which may include operating
expenses, research and development, and pending and future acquisitions. In addition, we intend to utilize a portion of the net proceeds
from this offering to redeem any outstanding Series A Preferred Shares and Series A-1 Preferred Shares, including any accrued interest
and/or consideration payable upon such redemption. Each of the Series A Preferred Shares and Series A-1 Preferred Shares is redeemable
in cash at its $1,000 original issue price, subject to adjustment, plus accrued and unpaid dividends. As a result, we will retain
broad discretion over the allocation of net proceeds. See the sections entitled “Use of Proceeds” and “Descriptions
of Capital Stock” for more information. |
| |
|
|
| Risk
factors |
|
Your
investment in shares of our common stock involves substantial risks. You should consider the “Risk Factors” included
and incorporated by reference in this prospectus supplement, including the risk factors incorporated by reference from our filings
with the SEC. |
| |
|
|
| Market
for the common stock |
|
Our
common stock is traded on Nasdaq under the symbol “JTAI”. |
Except
as otherwise indicated, all information in this prospectus supplement assumes:
| |
● |
no exercise of any outstanding warrants exercisable to acquire our Common Stock or other securities that are identified
in this prospectus or in other reports we file with the SEC that are incorporated herein; |
| |
|
|
| |
● |
no
conversion of our outstanding shares of convertible preferred stock identified above; and |
| |
|
|
| |
● |
no
exercise of outstanding options or settlement of outstanding equity awards that are identified in this prospectus or in other reports we file with the SEC that are incorporated herein. |
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Please see the risk factors under the heading “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2023, on file with the SEC, and those risk factors identified in reports subsequently
filed with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which are incorporated by reference
into this prospectus supplement. Before you invest in our securities, you should carefully consider these risks as well as other information
we include or incorporate by reference into this prospectus supplement and the accompanying prospectus. The risks and uncertainties we
have described are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently
deem immaterial may also affect our business operations. The occurrence of any of these risks might cause you to lose all or part of
your investment in the offered securities. The discussion of risks includes or refers to forward-looking statements; you should read
the explanation of the qualifications and limitations on such forward-looking statements discussed elsewhere in this prospectus supplement.
Risks
Relating to this Offering
We
may allocate the net proceeds from this offering in ways that stockholders may not approve.
We
currently intend to use the net proceeds of this offering, if any, for general corporate purposes, including the development and commercialization
of our SaaS products, aircraft acquisition, research and development, general and administrative expenses, license or technology acquisitions,
and working capital and capital expenditures. In addition, we intend to utilize a portion of the net proceeds from this offering to redeem Series A Preferred Shares
and Series A-1 Preferred Shares, including any accrued interest and/or consideration payable upon such redemption. We may also use the net proceeds to repay any debts and/or invest in or acquire
complementary businesses, products, or technologies, although we have no current commitments or agreements with respect to any such investments
or acquisitions as of the date of this prospectus supplement. This expected use of the net proceeds from this offering represents our
intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly
depending on numerous factors. Because of the number and variability of factors that will determine our use of the proceeds from this
offering, their ultimate use may vary substantially from their currently intended use. As a result, we will retain broad discretion over
the allocation of the net proceeds from this offering and could spend the proceeds in ways that do not necessarily improve our operating
results or enhance the value of our common stock. See the section entitled “Use of Proceeds” for more information.
Stockholders
may experience immediate and substantial dilution.
Based
on the per share common stock offering price of $0.096, purchasers of the shares will effectively incur dilution of approximately $0.088
per share in the net tangible book value of their purchased shares of common stock, or approximately 8.1% at the offering price of the
shares. Furthermore, you may experience further dilution to the extent that shares of our common stock are issued upon the exercise of
outstanding warrants or stock options. See the section entitled “Dilution” for a more detailed description of the
dilution to new investors in the 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 common stock at prices that may not be the same as the price per share in this offering. We may sell shares
or other securities in any other offering at a price per share that is less than the price per share paid by any investors in
this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.
The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock,
in future transactions may be higher or lower than the price per share paid by any investors in this offering.
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 fundraising 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, negative cash flows from operating activities and the need for additional capital there is
substantial doubt of 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, 2023. The financial statements have
been prepared in accordance with U.S. Generally Accepted Accounting Principles, which contemplate 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, seek alternative financing arrangements, declare bankruptcy or terminate
its operations entirely.
If
the Company cannot internally or externally finance its aircraft or generate sufficient funds to make payments to external financing
sources, the Company may not succeed.
As
is customary in the aviation industry, the Company is reliant on external financing for the acquisition of its aircraft and is likely
to need additional financing in the future in order to grow its fleet. If the Company is unable to generate sufficient revenue or other
funding to make payments on this lease arrangement, the lessor may take back the aircraft, which would have a material adverse effect
on the Company’s business and reputation. Furthermore, if the Company does not have access to external financing for future aircraft,
for whatever reason, including reasons relating to the Company’s business or prospects or the broader economy, the Company may
not be in a position to grow and/or survive.
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 anticipates needing access to credit in order to support its working capital requirements as it grows. Interest rates remain
historically elevated, 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’s business and reputation rely on, and will continue to rely on, third parties.
The
Company has relied on a third-party application developer to develop the initial versions of its application and the Company may continue
to rely on third parties for future development of portions of any new or revised application. In place of a third-party application 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 application development. If there were delays or complications in the further development of the application, 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 application 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 applications, 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 our application, it may lead to customer frustration
and disappointment. Anticipation for the application’s availability 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: The delay in launching our application 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 who successfully launch their applications within
a shorter timeframe 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 expects to rely 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 charters onto the Company’s aircraft. Cirrus books charters via its 24-hour
charter department and the Company books charters via its application. 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 may not have enough funds to sustain the business until it becomes profitable.
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.
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 Federal Aviation Administration (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 to maintain the quality of (i) its safety program, (ii) its training programs and (iii) its 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
Company’s pilots 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 to be employed for the Company’s operations.
In
addition, the Company’s operations and financial condition may be negatively impacted if it is unable to train pilots in a timely
manner. Due to an industry-wide shortage of qualified pilots, driven by the flight hours requirements under the FAA qualification standards
and attrition resulting from the hiring needs of other industry participants, pilot training timelines have significantly increased and
stressed the availability of flight simulators, instructors and related training equipment. As a result, the training of the Company’s
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 Company’s inability to perform
timely maintenance and repairs can result in its 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.
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 Transportation Security Administration, and “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.
Risks
Associated with Our Capital Stock
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.
On
December 1, 2023, the Company received the Initial Notice Letter from the Nasdaq Listing Qualifications Staff of Nasdaq (the “Initial
Notice Letter”) notifying the Company that its amount of stockholders’ equity had fallen below the $10 million
(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. The Initial Notice Letter further noted that the Company may consider applying to transfer the Company’s
securities to the Nasdaq Capital Market, which would require the Company to, among other things, meet Nasdaq’s continued listing
requirements. On August 14, 2024, the Nasdaq Hearings Panel granted the Company’s request to transfer the Company’s securities
from the Nasdaq Global Market to the Nasdaq Capital Market to be effective as of the opening of trading on August 16, 2024.
On
April 14, 2024, the Company received an additional notification letter from Nasdaq stating that the Company is not in compliance with
Nasdaq Listing Rule 5450(a)(1), as the minimum bid price of the Company’s Class A common stock had been below $1.00 for 30 consecutive
business days (the “Minimum Bid Price Requirement”). The notification of noncompliance
has no immediate effect on the listing or trading of the Company’s common stock on Nasdaq. The Company has 180 calendar days, or
until October 14, 2024, to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the minimum bid price of the
Company’s common stock must meet or exceed $1.00 per share for a minimum of ten consecutive business days during this 180-calendar
day grace period. In the event the Company does not regain compliance with the Minimum Bid Price Requirement by October 14, 2024, the
Company may be eligible for an additional 180-calendar day compliance period because it elected to transfer to The Nasdaq Capital Market.
To qualify, the Company would be required to meet the continued listing requirements for market value of publicly held shares and all
other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide
written notice of its intention to cure the bid price deficiency during the second compliance period. The Company’s failure to
regain compliance during this period could result in delisting. The Company intends to actively monitor the bid price of its common stock
and may, if appropriate, consider implementing available options to regain compliance with the Minimum Bid Price Requirement.
On
May 30, 2024, the Company received an additional notification letter from Nasdaq (the “Third Notice Letter”)
stating that the Company has not regained compliance with the Minimum Stockholders’ Equity Requirement for continued listing
discussed in the Initial Notice Letter, which it was required to meet by May 29, 2024, pursuant to its compliance plan. The Third Notice
Letter notified the Company that, unless the Company requested an appeal hearing before the Nasdaq Hearings Panel (the “Panel”)
by June 6, 2024, trading of the Company’s common stock would be suspended at the opening of business on June 10, 2024, and a Form
25-NSE would be filed with the SEC, which would remove the Company’s securities from listing and registration on Nasdaq (such notification,
the “Delisting Notice”).
As
directed in the Third Notice Letter, the Company timely requested a hearing before the Panel and paid the applicable fee to appeal the
Delisting Notice. The Delisting Notice has no immediate effect on the listing or trading of the Company’s common stock. The Company’s
hearing request stayed the suspension of trading on the Company’s securities, and the Company’s securities continue to trade
on Nasdaq. On August 14, 2024, in connection the implementation of the Company’s compliance plan, the Panel granted the Company’s
request to transfer the Company’s securities from The Nasdaq Global Market to The Nasdaq Capital Market to be effective as of the
opening of trading on August 16, 2024. Further the Panel granted the Company’s request to have until November 26, 2024, to demonstrate
compliance with its previously submitted plan, a deadline that the Company believes to be attainable. The Company is working diligently
to cure the deficiencies set forth in the Delisting Notice and plans to regain compliance with the continued listing requirements as
soon as practicable.
Although
the Company believes it will be able to achieve compliance with Nasdaq’s continued listing requirements, there can be no assurance
that the Company will be able to regain compliance with all applicable requirements or maintain compliance with any other listing requirements
within the time frame required by Nasdaq or at all, particularly because the Company’s stock has traded below $1.00
for a sustained period. Nasdaq’s determination that we fail to meet the continued listing standards of Nasdaq may result in our
securities being delisted from Nasdaq as set forth in the Delisting Notice.
A
delisting of our common stock and our inability to list on another national securities market could negatively impact us by: (i) reducing
the liquidity and market price of our common stock; (ii) reducing the number of investors willing to hold or acquire our common stock,
which could negatively impact our ability to raise equity financing; (iii) limiting our ability to use certain registration statements
to offer and sell freely tradable securities, thereby limiting our ability to access the public capital markets; and (iv) impairing our
ability to provide equity incentives to our employees. The perception among investors that we are at heightened risk of delisting could
also negatively affect the market price of our securities and trading volume of our common stock.
The
Company has never paid cash dividends on its capital stock, and the Company 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 and will depend on the Company’s financial condition, operating results, capital
requirements, general business conditions and other factors that the Board may deem relevant. As a result, capital appreciation, if any,
of the Company’s Common Stock will be the sole source of gain for the foreseeable future.
If
securities or industry analysts do not publish or cease publishing research or reports about the Company, its business or its market,
or if they change their recommendations regarding the Common Stock adversely, the price and trading volume of the Common Stock could
decline.
The
trading market for the Common Stock will be influenced by the research and reports that industry or securities analysts may publish about
the Company, its business, its market or its competitors. If any of the analysts who may cover the Company change their recommendation
regarding the Common Stock adversely, or provide more favorable relative recommendations about its competitors, the price of the Common
Stock would likely decline. If any analyst who may cover the Company were to cease their coverage or fail to regularly publish reports
on the Company, we could lose visibility in the financial markets, which could cause the stock price or trading volume of the Company
securities to decline.
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
or realize any value on your warrants.
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 supplement; |
| |
|
|
| |
● |
actual
or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar
to the Company; |
| |
|
|
| |
● |
failure
to meet or exceed financial estimates and projections of the investment community or that the Company 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 the Company; |
| |
|
|
| |
● |
the
Company’s ability to market new and enhanced products and technologies on a timely basis; |
| |
|
|
| |
● |
changes
in laws and regulations affecting the Company’s business; |
| |
|
|
| |
● |
the
Company’s ability to meet compliance requirements; |
| |
|
|
| |
● |
commencement
of, or involvement in, litigation involving the Company; |
| |
|
|
| |
● |
changes
in financial estimates and recommendations by securities analysts concerning the Company 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 Common Stock by the Company’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 Securities 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 the Company could depress our stock price regardless of our business, prospects, financial conditions or results
of operations. A decline in the market price of the Company’s securities also could adversely affect its ability to issue additional
securities and its ability to obtain additional financing in the future.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement, the accompanying prospectus, and the documents we have filed with the SEC that are incorporated by reference in
this prospectus supplement and the accompanying prospectus contain forward-looking statements regarding future events and our future
results that are based on our current expectations, estimates, forecasts and projections as well as the current beliefs and assumptions
of our management, including about our business, our financial condition, our results of operations, our operating requirements and utilization
of our capital resources, and the industry and environment in which we operate. Statements that include words such as “believe,”
“may,” “will,” “estimate,” “continue,” “anticipate,” “would,”
“could,” “should,” “intend” and “expect,” variations of these words, and similar expressions,
are intended to identify forward-looking statements. These forward-looking statements speak only as of the date of this prospectus supplement
and the accompanying prospectus and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, actual
results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute
to such differences, and other factors that we believe affect our performance, include those discussed in the sections titled “Risk
Factors” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations”
in our Annual Report on Form 10-K for the year ended December 31, 2023, as amended, and in our Quarterly Reports on Form 10-Q for the
periods ended March 31, 2024 and June 30, 2024, incorporated by reference herein, and in other reports we file with the SEC. While
forward-looking statements are based on the reasonable expectations of our management at the time that they are made, you should not
rely on them. We undertake no obligation to revise or update publicly any forward-looking statements for any reason, whether as a result
of new information, future events or otherwise, except as may be required by law.
USE
OF PROCEEDS
We estimate that the net proceeds from this offering, after deducting placement agent fees and estimated offering
expenses payable by us will be approximately $1,245,000. We intend to use the net proceeds from this offering
for working capital and general corporate purposes, which may include operating expenses, research and development, and pending and future
acquisitions. In addition, we intend to utilize a portion of the net proceeds from this offering to redeem any outstanding Series A Preferred
Shares and Series A-1 Preferred Shares, including any accrued interest and/or consideration payable upon such redemption. Each of the
Series A Preferred Shares and Series A-1 Preferred Shares is redeemable in cash at its $1,000 original issue price, subject to adjustment,
plus accrued and unpaid dividends. See the section entitled “Descriptions of Capital Stock” for more information.
The
amounts and timing of our actual expenditures will depend on numerous factors, including the factors described under “Risk Factors”
in this prospectus supplement, the accompanying prospectus and in the documents incorporated by reference herein and therein, as well
as the amount of cash used in our operations. Our expected use of net proceeds from this offering and our existing cash and cash equivalents
represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business
conditions evolve. We may find it necessary or advisable to use the net proceeds for other purposes, and our management will have broad
discretion in the application of the net proceeds to us from this offering, including for any of the purposes described above. Pending
the use of the net proceeds from this offering, we intend to invest the net proceeds in interest-bearing, investment-grade securities,
certificates of deposit or government securities.
CAPITALIZATION
The
following table sets forth our capitalization as of June 30, 2024:
| |
● |
on
an actual basis; |
| |
● |
on
a pro forma basis, to give effect to the issuance of (1) an aggregate of 12,045,411 shares of our Common Stock upon the exchange
of our previously issued and outstanding merger consideration warrants, private placement warrants and redeemable warrants; (2) an
aggregate of 21,039,656 shares of common stock to an investor upon conversion of shares of Series B Convertible Preferred Stock and
other obligations; (3) an aggregate of 26,666,666 of common stock issued for cash consideration to various investors on October
11, 2024; (4) 8,299,401 shares of our common stock to GEM under our, and in accordance with, a Share Purchase Agreement; (5) an aggregate
of 22,370,600 shares of our Common Stock to Sunpeak pursuant to the terms of a Settlement Agreement and Stipulation effective as
of August 28, 2024; and (6) 2,287,500 shares to Maxim under the partial conversion of its Series A Preferred Shares; and |
| |
● |
on an as adjusted basis to give further effect to the
issuance and sale by us of 15,625,000 shares of common stock in this offering at the offering price of $0.096 per share, after deducting
the estimated private placement fee and commissions and estimated offering expenses payable by us, and the use of proceeds therefrom. |
You
should read this table together with our financial statements and the related notes, and our most recent “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” which have been incorporated by reference into this
prospectus supplement.
| | |
As of June 30, 2024 (unaudited) | |
| | |
Actual | | |
Pro Forma | | |
Pro
Forma As
Adjusted | |
| Cash and cash equivalents | |
$ | 528,117 | | |
| 2,827,462 | | |
| 4,197,462 | |
| Total liabilities | |
| 8,343,954 | | |
| 5,936,964 | | |
| 5,936,964 | |
| Stockholder’s equity: | |
| | | |
| | | |
| | |
| Common stock | |
| 1,475 | | |
| 10,826 | | |
| 12,389 | |
| Subscription Receivable | |
| (6,724 | ) | |
| (6,724 | ) | |
| (6,724 | ) |
| Additional paid-in capital | |
| 41,557,422 | | |
| 45,592,573 | | |
| 46,961,010 | |
| Accumulated deficit | |
| (45,721,993 | ) | |
| (46,002,505 | ) | |
| (46,002,505 | ) |
| Total stockholders’ equity | |
$ | (4,169,820 | ) | |
| (405,830 | ) | |
| 964,170 | |
The
table and discussion above are based on 14,755,144 shares of common stock outstanding as of June 30, 2024, and 123,889,977 shares
as adjusted as of that date, and excludes as of June 30, 2024 common stock reserved for issuance under our omnibus incentive plan or issuable
upon:
| |
● |
the
conversion of Series A Preferred Shares; |
| |
● |
the
conversion of Series A-1 Convertible Preferred Stock; |
| |
● |
the
conversion of Series B Convertible Preferred Stock; and |
| |
● |
the
exercise of outstanding warrants. |
DILUTION
If
you invest in our common stock, your ownership interest will be diluted to the extent of the difference between the public offering price
per share and the as-adjusted net tangible book value per share after this offering. We calculate net tangible book value per share by
dividing the net tangible book value, which is tangible assets less total liabilities, by the number of outstanding shares of our common
stock. Dilution with respect to net tangible book value per share represents the difference between the amount per share paid by purchasers
of shares of common stock in this offering and the net tangible book value per share of our common stock immediately after this offering.
The net tangible book value of our common stock as of June 30, 2024, was $(4,169,820) or approximately $(0.283) per share of common
stock.
After
giving effect to (i) on a pro forma as-adjusted basis, the issuance of an aggregate of 28,217,265 shares of Common Stock for
net proceeds of $2,299,345 since June 30, 2024 together with the issuance of an aggregate of 65,292,568 shares for non-cash consideration
since June 30, 2024 and (ii) the sale of 15,625,000 shares of our common stock in this offering at the offering price
of $0.096 per share, and after deducting placement agent fees and estimated offering expenses payable by us (estimated
at $130,000), our as-adjusted net tangible book value as of June 30, 2024 would have been approximately $($964,170) or approximately
$0.008 per share. This represents an immediate increase in net tangible book value of approximately $0.012 per share of
common stock to our existing stockholders and an immediate dilution in as-adjusted net tangible book value of approximately $0.088 per share to purchasers of our common stock in this offering, as illustrated by the following table:
| Offering price per share of common stock | |
| | | |
$ | 0.096 | |
| Historical
Net tangible book value per share as of June 30, 2024(1) | |
$ | (0.283 | ) | |
| | |
| Pro forma increase in historical net tangible book value per share attributable to the pro forma transactions described in
the preceding paragraphs | |
| 0.279 | | |
| | |
| Pro forma net tangible book value per share as of June 30, 2024 | |
| (0.004 | ) | |
| | |
| Increase in net tangible book value per share attributable to this offering(2) | |
| 0.012 | | |
| | |
| Pro forma as
adjusted net tangible book value per share after giving effect to this offering(3) | |
| | | |
$ | 0.008 | |
| Dilution per share to new investors participating in this offering | |
| | | |
$ | 0.088 | |
| (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) pro forma as adjusted net tangible
book value per share after this offering and (ii) net tangible book value per share as of June 30, 2024. |
| (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. |
The table and discussion above are based on 14,755,144
shares of common stock outstanding as of June 30, 2024, and 123,889,977 shares as adjusted as of that date, and excludes as of June 30,
2024, common stock reserved for issuance under our omnibus incentive plan or issuable upon:
| |
● |
the
conversion of Series A Preferred Shares; |
| |
● |
the
conversion of Series A-1 Convertible Preferred Stock; |
| |
● |
the
conversion of Series B Convertible Preferred Stock; and |
| |
● |
the
exercise of outstanding warrants. |
To
the extent that any of our outstanding options or warrants are exercised, we grant additional options or other awards under our stock
incentive plan or issue additional warrants, or we issue additional shares of common stock in the future, there may be further dilution.
PLAN
OF DISTRIBUTION
Maxim
Group LLC has agreed to act as our exclusive placement agent in connection with this offering subject to the terms and conditions of
the placement agency agreement, dated October 21, 2024. The placement agent is not purchasing or selling any of the securities offered
by this prospectus supplement, nor is it required to arrange the purchase or sale of any specific number or dollar amount of securities,
but has agreed to use its reasonable best efforts to arrange for the sale of all of the securities offered hereby. We have entered into
a securities purchase agreement directly with the investors in connection with this offering and we may not sell the entire amount of
securities offered pursuant to this prospectus supplement. We will make offers only to a limited number of qualified institutional buyers
and accredited investors. The placement agent may retain sub-agents and selected dealers in connection with this offering.
We
have agreed to indemnify the placement agent against specified liabilities, including liabilities under the Securities Act of 1933, as
amended (the “Securities Act”), and to contribute to payments the placement agent may be required to make in
respect thereof.
Fees
and Expenses
We
have agreed to pay Maxim Group LLC a cash fee of $105,000, or 7.00% of the aggregate purchase price of our securities sold in this offering.
The following table shows the per share and total cash fees we will pay to the placement agent in connection with the sale of the securities
offered pursuant to this prospectus supplement and the accompanying prospectus, assuming the purchase of all of the securities offered
hereby.
| | |
Per Share | | |
Total | |
| Offering Price | |
$ | 0.0960 | | |
$ | 1,500,000 | |
| Placement agent fees(1) | |
$ | 0.0067 | | |
$ | 105,000 | |
| Proceeds, before expenses, to us | |
$ | 0.0893 | | |
$ | 1,395,000 | |
We
estimate that the total expenses of the offering payable by us, excluding the placement agent fees, will be approximately $130,000, which
includes up to $25,000 of legal fees and expenses that we have agreed to reimburse Maxim Group LLC in connection with this offering.
The
placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions
received by it and any profit realized on the resale of the securities sold by it while acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. As an underwriter, the placement agent would be required to comply with the requirements
of the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and
Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of securities by the placement
agent acting as principal. Under these rules and regulations, the placement agent:
| |
● |
may
not engage in any stabilization activity in connection with our securities; and |
| |
|
|
| |
● |
may
not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted
under the Exchange Act, until it has completed its participation in the distribution. |
Discretionary
Accounts
The
placement agent does not intend to confirm sales of the securities offered hereby to any accounts over which it has discretionary authority.
Listing
Our
common stock is listed on Nasdaq under the symbol “JTAI”.
Lock-Up
Agreements
On
October 10, 2024, our directors and officers entered into lock-up agreements in connection with an offering that closed on October 11,
2024. Under these agreements, these individuals agreed, subject to specified exceptions, not to sell or transfer any shares of common
stock or securities convertible into, or exchangeable or exercisable for, our common stock during a period ending ninety (90) days after
that offering. Specifically, these individuals agreed, in part, not to offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of transfer
any shares of common stock or securities convertible into or exchangeable or exercisable into shares of our common stock beneficially
owned by them.
Notwithstanding
these limitations, these shares of common stock may be transferred under limited circumstances, including, without limitation, by gift,
will or intestate succession.
In
addition, we agreed that we will not issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares
of common stock or common stock equivalents or file any registration statement, other than the effective registration statement Form
S-1, as amended, initially filed with the SEC on September 3, 2024 (File No. 333-281911) (the “Registration Statement”),
any preliminary prospectus included in the Registration Statement, as originally filed or as part of any amendment thereto, or filed
with the SEC pursuant to Rule 424(a) of the rules and regulations of the SEC under the Securities Act, the final pricing prospectus filed
for the Registration Statement, or filing a registration statement on Form S-8 in connection with any employee benefit plan.
Other
Relationships
The
placement agent and certain of its 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 placement agent and certain of its 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.
In
the ordinary course of their various business activities, the placement agent 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. The placement agent and certain of its 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.
DESCRIPTION
OF CAPITAL STOCK
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 stock, 575 are designated as Series A-1 preferred
stock, and 5,000 are designated as Series B preferred stock. As of October 17, 2024, the Company had the following outstanding
securities:
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104,094,977 shares of common stock; |
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|
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A
warrant issued to GEM Yield LLC SCS (“GEM”), exercisable for up to 2,179,447 shares of common stock at
a price of $5.81 per share (the “GEM Warrant”); |
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A
warrant issued to Ionic Ventures, LLC (“Ionic”), exercisable for up to 1,500 shares of Series B preferred
stock at a price of $10,000 per share (the “Ionic Warrant”) |
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|
|
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614
shares of Series A convertible preferred stock (the “Series A Preferred Shares”); |
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|
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575
shares of Series A-1 convertible preferred stock (the “Series A-1 Preferred Shares”); and |
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200
shares of Series B preferred stock (the “Series B Preferred Shares”). |
Common
Stock
Voting
Rights
The
Company’s 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 Company’s Board of Directors 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.
Preferred
Stock
Series
A Convertible Preferred Stock
On
August 10, 2023, the Company filed the Certificate of Designation of the Series A Convertible Preferred Stock (the “Series
A Certificate”) with the Secretary of State of the State of Delaware, establishing the rights, preferences, privileges
and other terms relating to the Series A Preferred Shares. The Series A Preferred Shares rank senior to the common stock with respect
to distribution rights and rights upon liquidation. Subject to certain exceptions, so long as any of the Series A Preferred Shares remain
outstanding, unless all dividends for all preceding full fiscal quarters have been declared and all accumulated dividends have been paid
with respect to the Company’s preferred stock, no dividend or distribution will be declared or paid on, and no redemption or repurchase
will be agreed to or consummated of, stock on a parity with the Series A Preferred Shares, common stock, or any other shares of stock
junior to the Series A Preferred Shares.
Each
of the Series A Preferred Shares has a stated value of the Series A Original Purchase Price (as defined in the Series A Certificate), and
holders of the Series A Preferred Shares will be entitled to cumulative dividends at the annual rate of 8% of the liquidation preference,
payable quarterly commencing on September 1, 2023. Dividends may be paid in cash or, in whole or in part, in PIK Shares (as defined in
the Series A Certificate). If dividends are paid in PIK Shares, the PIK Shares will be valued at the closing price of such securities
on the trading day prior to the date the dividend is declared by the Company’s Board of Directors. The Company’s Board of
Directors has authorized the Company, to the extent the payment of dividends is permitted under Delaware law, for the foreseeable future,
to pay dividends in PIK Shares.
Holders
of the Series A Preferred Shares have the right to vote on matters submitted to a vote of the holders of Common Stock on an as-converted
basis unless required by applicable law. Holders of the Series A Preferred Shares will be entitled to a number of votes equal to the
number of votes such holder would have had if all Series A Preferred Shares held by such holder had been converted into shares of common
stock. So long as any of the Series A Preferred Shares are outstanding, the affirmative vote or consent of the holders of the Series
A Preferred Shares constituting at least 90% of the outstanding Series A Preferred Shares, voting together as a separate class, will
be necessary to: (i) amend, alter or repeal any provision of the Certificate of Incorporation or the Series A Certificate if such amendment,
alteration or repeal would alter or change the powers, preferences or special rights of the Series A Preferred Shares so as to affect
them adversely; (ii) create, or authorize the creation of, or issue any series of Series A Dividend Senior Stock, or reclassify any class
or series of capital stock into any series of Series A Dividend Senior Stock (as defined in the Series A Certificate); (iii) purchase
or redeem, or permit any subsidiary of the Company to purchase or redeem, any shares of any Series A Dividend Junior Stock, Series A
Liquidation Junior Stock, Series A Qualifying Merger Junior Stock or Series A Qualifying Sale Junior Stock (each as defined in the Series
A Certificate), other than repurchases of shares of such capital stock from former directors, officers, employees, consultants or other
persons performing services for the Company or any subsidiary of the Company in connection with the cessation of employment or service
and for a purchase price per share of such capital stock not exceeding the original purchase price thereof; (iv) incur, or permit the
Company’s subsidiaries to incur, or issue, or permit the Company’s subsidiaries to issue, any indebtedness for borrowed money
(except payables and obligations incurred in the ordinary course of the Company’s business), including obligations (whether or
not contingent), under guaranties, or loans or debt securities, including equity-linked or convertible debt securities that, in total,
results in gross proceeds to the Company of $20.0 million or greater; (v) declare or pay any cash dividend on any Series A Dividend Junior
Stock; or (vi) enter into, or permit the Company’s subsidiaries to enter into, any agreement, arrangement or understanding providing
for any of the foregoing actions.
Holders
of the Series A Preferred Shares may convert their Series A Preferred Shares at any time into a number of shares of common stock equal
to the Series A Conversion Price (as defined in the Series A Certificate); provided, however, in no event shall outstanding
Series A Preferred Shares be converted into more than 19.99% of the outstanding shares of common stock.
The
Company may, subject to certain conditions, cause the outstanding Series A Preferred Shares to be redeemed in cash at the “Series
A Redemption Price” which is the Series A Original Purchase Price, subject to certain adjustments, plus the aggregate amount of
dividends then accrued and unpaid on such Series A Preferred Shares. The Company was required to redeem all the Series A Preferred Shares
that remain outstanding as of the one-year anniversary of the original issue date; however, the outside date for redemption was automatically
extended by an additional three (3) month period because the Company has not closed upon one or more equity financings that, in total,
result in gross proceeds to the Company of $10 million or greater. If the Company raises equity capital, 15% of the proceeds net of expenses
must be used to pay the redemption price on the Series A Preferred Shares.
In
July 2024 the Company and Maxim entered into an amendment a settlement agreement relating to the Company’s initial public offering
whereby the Company and Maxim 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 the Company’s common stock Maxim may acquire upon
the conversion of its Series A Preferred Shares.
Series
A-1 Convertible Preferred Stock
On
August 10, 2023, the Company filed the Certificate of Designation of the Series A-1 Convertible Preferred Stock (the “Series
A-1 Certificate”) with the Secretary of State of the State of Delaware, establishing the rights, preferences, privileges
and other terms relating to the Series A-1 Preferred Shares. The Series A-1 Preferred Shares ranks senior to the common stock with respect
to distribution rights and rights upon liquidation but junior to the Series A Preferred Shares. Subject to certain exceptions, so long
as any Series A-1 Preferred Shares remain outstanding, unless all dividends for all preceding full fiscal quarters have been declared
and all accumulated dividends have been paid with respect to the Company’s preferred stock, no dividend or distribution will be
declared or paid on, and no redemption or repurchase will be agreed to or consummated of, stock on a parity with the Series A-1 Preferred
Shares, common stock or any other shares of stock junior to the Series A-1 Preferred Shares.
Each
of the Series A-1 Preferred Shares has a stated value equal to the Series A-1 Original Purchase Price (as defined in the Series A-1 Certificate),
and commencing on the six month anniversary of the original issuance date the Series A-1 Preferred Shares, holders of the Series A-1
Preferred Shares will be entitled to cumulative dividends at the annual rate of 5% of the liquidation preference, payable quarterly commencing
on and including April 1, 2024 (but, with respect to any Series A-1 Preferred Shares outstanding on or after the six month anniversary
date of their original issuance date, dividends will be deemed to have accrued as of August 10, 2023).
Holders
of the Series A-1 Preferred Shares have the right to vote on matters submitted to a vote of the holders of Common Stock on an as-converted
basis unless required by applicable law. Holders of the Series A-1 Preferred Shares will be entitled to a number of votes equal to the
number of votes such holder would have had if all of the Series A-1 Preferred Shares held by such holder had been converted into shares
of common stock. So long as any of the Series A-1 Preferred Shares are outstanding, the affirmative vote or consent of the holders of
the Series A-1 Shares of at least 90% of the outstanding Series A-1 Preferred Shares, voting together as a separate class, will be necessary
to: (i) amend, alter or repeal any provision of the Certificate of Incorporation or the Series A-1 Certificate if such amendment, alteration
or repeal would alter or change the powers, preferences or special rights of the Series A-1 Preferred Shares so as to affect them adversely;
(ii) create, or authorize the creation of, or issue any series of Series A-1 Dividend Senior Stock Price (as defined in the Series A-1
Certificate), or reclassify any class or series of capital stock into any series of Series A-1 Dividend Senior Stock; (iii) purchase
or redeem, or permit any subsidiary of the Company to purchase or redeem, any shares of any Series A-1 Dividend Junior Stock, Series
A-1 Liquidation Junior Stock, Series A-1 Qualifying Merger Junior Stock or Series A-1 Qualifying Sale Junior Stock Price (each as defined
in the Series A-1 Certificate), other than repurchases of shares of such capital stock from former directors, officers, employees, consultants
or other persons performing services for the Company or any subsidiary of the Company in connection with the cessation of employment
or service and for a purchase price per share of such capital stock not exceeding the original purchase price thereof; (iv) incur, or
permit the Company’s subsidiaries to incur, or issue, or permit the Company’s subsidiaries to issue, any indebtedness for
borrowed money (except payables and obligations incurred in the ordinary course of the Company’s business), including obligations
(whether or not contingent), under guaranties, or loans or debt securities, including equity-linked or convertible debt securities that,
in total, results in gross proceeds to the Company of $20 million or greater; (v) declare or pay any cash dividend on any Series A-1
Dividend Junior Stock; or (vi) enter into, or permit the Company’s subsidiaries to enter into, any agreement, arrangement or understanding
providing for any of the foregoing actions.
Holders
of the Series A-1 Preferred Shares may convert their Series A-1 Preferred Shares at any time into a number of shares of common stock
equal to the quotient of the Series A-1 Original Purchase Price divided by the Series A-1 Conversion Price (as defined in the Series
A-1 Certificate); provided, however, in no event shall outstanding Series A-1 Preferred Shares be converted into more than
19.99% of the outstanding shares of common stock.
The
Company may, subject to certain conditions, cause the outstanding Series A-1 Preferred Shares to be redeemed in cash at the “Series
A-1 Redemption Price” which is the Series A-1 Original Purchase Price, subject to certain adjustments, plus the aggregate amount
of dividends then accrued and unpaid on such Series A-1 Preferred Shares. The Company was required to redeem all of the Series A-1 Preferred
Shares that remain outstanding as of the one-year anniversary of the original issue date; however, the outside date for redemption was
automatically extended by an additional three (3) month period because the Company has not closed upon one or more equity financings
that, in total, result in gross proceeds to the Company of $10 million or greater. If the Company raises equity capital, 15% of the proceeds
net of expenses must be used to pay the redemption price on the Series A Preferred Shares and an additional 15% of the proceeds net of
expenses must be used to pay the redemption price on the Series A-1 Preferred Shares.
Series
B Preferred Stock
On
March 28, 2024, the Company filed the Certificate of Designations of the Series B Preferred Shares (the “Series B Certificate”)
with the Secretary of State of the State of Delaware, establishing the rights, preferences, privileges and other terms relating to the
Series B Preferred Shares. The Series B Preferred Shares rank pari passu with the Series A Preferred Shares and Series A-1 Preferred
Shares and senior to all other capital stock of the Company.
Each
of the Series B Preferred Shares converts into a number of shares of our common stock, subject to certain limitations, including a beneficial
ownership limitation of 4.99% (calculated in accordance with the rules promulgated under Section 13(d) of the Exchange Act), which can
be adjusted to a beneficial ownership limitation of 9.99% upon 61 days prior written notice by Ionic. Prior to such conversion approval,
we may not convert the Series B Preferred Shares into shares of common stock if, as a result of such conversion, the number of shares
of common stock to be issued exceeds 19.9% of the total number of shares of common stock outstanding.
Subject
to the limitations set forth in the preceding paragraph and provided there is an effective registration statement covering Ionic’s
resale of common stock underlying the Series B Preferred Shares, the Series B Preferred Shares will automatically convert into shares
of common stock on or prior to the tenth trading day after the issuance date of such Series B Preferred Shares. The number of shares
of common stock issuable upon conversion of each of the Series B Preferred Shares is calculated by dividing the conversion amount per
share of Series B Preferred Shares by the then conversion price. The conversion amount is equal to the stated value of the Series B Preferred
Shares, which is $10,000, plus any additional amounts and late charges calculated in accordance with the Series B Certificate. The conversion
price is equal to 90% (or, in the case of a delisting, 80%) of the lowest daily VWAP 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 Series B Certificate occur, such as a breach of the Ionic Registration
Rights Agreement (as defined in the Series B Certificate), suspension of trading, or our failure to convert the Series B Preferred Shares
into common stock when a conversion right is exercised, then we may be required to redeem the Series B Preferred Shares for cash at 110%
of the stated value.
Warrants
Ionic
Warrant
The
Ionic Warrant entitles Ionic to purchase up to 1,500 Series B Preferred Shares, provided any such exercise shall be for a minimum of
fifty (50) Series B Preferred Shares. The Ionic Warrant exercise price is initially set at $10,000 per share of the Series B Preferred
Shares, subject to adjustment for certain events, such as stock split, issuance of additional shares as a dividend or otherwise. The
Ionic Warrant has a term of two years. At any time when the Ionic Warrant is exercisable for less than 1,000 of the Series B Preferred
Shares, the Company shall have the right to redeem all or a portion of the Ionic Warrant by paying to the holder an amount in cash equal
to $100 per share of Series B Preferred Shares that would otherwise be issuable pursuant to the Ionic Warrant.
GEM
Warrant
The
GEM Warrant entitles GEM to purchase up to 6% of the outstanding common stock of the Company on a fully diluted basis as of the date
of listing. The GEM Warrant has a term of three years. The exercise price of the GEM Warrant, as of June 30, 2024, was $5.81 per share;
provided, that, if the average closing price of the Company’s common stock for the 10 trading days following the first anniversary
of the date of listing is less than 90% of the then current exercise price of the GEM Warrant (the “Reset Event”),
then the exercise price of the GEM Warrant will be adjusted to 110% of our then current trading price. Given that the Reset Event occurred,
the revised exercise price of the GEM Warrant is $0.24. 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 in excess of this 4.99% ownership limit up to a 9.99% ownership restriction. GEM may revoke this election
by providing written notice, which revocation will not be effective until the sixty-first (61st) day thereafter.
LEGAL
MATTERS
The
validity of the issuance of the securities offered hereby will be passed upon by our counsel, Dykema Gossett PLLC. The placement agent
is being represented in connection with this offering by Pryor Cashman LLP.
EXPERTS
The
consolidated financial statements of the Company as of December 31, 2023 and December 31, 2022 included in this prospectus supplement
have been audited by Hacker Johnson & Smith P.A., 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
file reports, proxy statements and other information with the SEC. This prospectus supplement and the accompanying prospectus, which
constitute 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.
INCORPORATION
BY REFERENCE
The
SEC allows us to incorporate by reference the information and reports we file with it, which means that we can disclose important information
to you by referring you to these documents. Our SEC file number is 001-40725. The information incorporated by reference is an important
part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information already
incorporated by reference. We are incorporating by reference the documents listed below, which we have already filed with the SEC, and
any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, except as to any portion of any
future report or document that is not deemed filed under such provisions, until we sell all of the securities:
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Annual
Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, as amended by Amendment No.
1 on Form 10-K/A filed with the SEC on April 29, 2024, and as amended by Amendment No. 2 on Form 10-K/A filed with the SEC on August
15, 2024; |
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Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2024, filed with the SEC on May 15, 2024; |
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Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 2024, filed with the SEC on August 14, 2024; |
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Our
Current Reports on Form 8-K filed with the SEC on January
3, 2024, January
17, 2024, April
19, 2024, May
31, 2024, June
27, 2024, July
17, 2024, August
8, 2024, August
23, 2024, August
30, 2024, September
25, 2024, September
26, 2024, October
10, 2024, October
11, 2024, and October 18, 2024, (in each case, excluding information furnished pursuant to Items 2.02 and 7.01 of Form
8-K); and |
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The
description of the Company’s capital stock set forth in our Registration Statement on Form S-1/A, filed with the SEC on October
9, 2024, in the section entitled “Description of Capital Stock,” and any amendment or report filed with
the SEC for the purpose of updating the description. |
Upon
written or oral request, we will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus
is delivered a copy of the documents incorporated by reference into this prospectus. You may request a copy of these filings, and any
exhibits we have specifically incorporated by reference as an exhibit in this prospectus, at no cost by writing or telephoning us at
the following address:
Jet.AI
Inc.
Attn:
Corporate Secretary
10845
Griffith Peak Drive
Suite
200
Las
Vegas, NV 89135
(702)
747-4000
This
prospectus is part of a registration statement we filed with the SEC. We have incorporated exhibits into this registration statement.
You should read the exhibits carefully for provisions that may be important to you.
You
should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer
is not permitted. You should not assume that the information in this prospectus or in the documents incorporated by reference is accurate
as of any date other than the date on the front of this prospectus or those documents.
Prospectus
$50,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Rights
Units
This
prospectus provides you with a general description of the securities that Jet.AI Inc. may offer and sell, from time to time, either individually
or in units. Each time we sell securities pursuant to this prospectus we will provide a prospectus supplement that will contain specific
information about the terms of any securities we offer and the specific manner in which we will offer such securities. The prospectus
supplement will also contain information, where appropriate, about material United States federal income tax consequences relating to,
and any listing on a securities exchange of, the securities covered by the prospectus supplement. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read this prospectus and the applicable prospectus supplement
carefully before you invest in our securities.
We
may offer these securities in amounts, at prices and on terms determined at the time of offering. We may sell the securities directly
to you, through agents we select, or through underwriters and dealers we select. If we use agents, underwriters or dealers to sell the
securities, we will name them and describe their compensation in a prospectus supplement.
Our
common stock is listed on the Nasdaq Capital Market under the symbol “JTAI.” On August 22, 2024, the closing price
for our common stock as reported on the Nasdaq Capital Market was $0.20 per share. Our principal executive offices are
located at 10845 Griffith Peak Dr., Suite 200, Las Vegas, Nevada 89135.
As
of August 22, 2024, the aggregate market value of our outstanding shares of common stock held by non-affiliates was approximately $1,192,315
based on 24,576,880 shares of common stock outstanding, of which 17,884,715 shares were held by non-affiliates on such date, and based
on a closing sale price of our common stock of $0.20 per share on that date. Pursuant to General Instruction I.B.6 of Form S-3, in no
event will we sell securities in a public primary offering with a value exceeding one-third of our public float in any 12-month period
so long as our public float remains below $75,000,000.
Investing
in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the
heading “Risk Factors” contained in this prospectus beginning on page 3 and the applicable prospectus supplement, and
under similar headings in the other documents that are incorporated by reference into this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is September 9, 2024.
Table
of Contents
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement filed with the Securities and Exchange Commission (the “SEC”),
utilizing a shelf registration process. Under this shelf registration process, we may sell any combination of the securities described
in this prospectus, either individually or in units, in one or more offerings, up to a total dollar amount of $50,000,000.
This
prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that specific offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read this prospectus and the applicable prospectus supplement together
with the additional information described under the headings “Where You Can Find More Information” and “INFORMATION
INCORPORATED BY REFERENCE” and any additional information you may need to make your investment decision.
We
have not authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus,
any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you.
We take no responsibility for and can provide no assurance as to the reliability of, any other information that others may give you.
We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus and any applicable prospectus supplement to this prospectus is accurate as of the date on
the respective covers of such documents, and that any information incorporated by reference is accurate only as of the date of the document
incorporated by reference, regardless of the time of delivery of this prospectus, such prospectus supplement, or any sale or issuance
of a security, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed
materially since those dates. You should rely only
on the information contained or incorporated by reference in this prospectus or any accompanying prospectus supplement.
Unless
the context otherwise requires, all references to “Jet.AI,” “the Company,” “we,” “our,”
“us” or “our company” in this prospectus refer to Jet AI, Inc., a Delaware corporation, and its subsidiaries
together.
ABOUT
JET.AI INC.
Jet.AI
Inc. was formed on June 4, 2018 in the State of Delaware and is now headquartered in Las Vegas, Nevada. On August 10, 2023, we consummated
a business combination pursuant to which Jet Token Inc. (“Jet Token”) combined with Oxbridge Acquisition Corp.
(“Oxbridge”), a special purpose acquisition company and in connection with that transaction the combined company
was renamed Jet.AI Inc.
We
are a private air charter company that develops innovative artificial intelligence (“AI”) technology to facilitate
access to travel by private aircraft travel through our iOS and Android charter booking app, CharterGPT (“CharterGPT”),
and our B2B software platform (the “Jet.AI Operator Platform”), which provides a suite of software-as-a-service
(“SaaS”) products that we offer aircraft owners and operators. We strive to streamline and enhance the aviation
experience for both operators and customers by leveraging advanced natural language processing and advanced fleet logistics optimizations.
Our
business strategy combines concepts from fractional jet ownership programs and aviation jet membership cards with AI innovations. Our
CharterGPT app uses natural language processing and machine learning to improve the private jet booking experience, which is advanced
by CharterGPT’s direct connection via our application programming interface (“API”) to Avinode, one of
the largest centralized databases for charter services in the private-aviation industry. CharterGPT receives users’ requests for
private-aircraft travel, connects users to private-charter operators who have posted their aircraft for hire, displays a variety of charter
booking options at a range of prices drawn from thousands of aircraft listings on the Avinode platform along with pricing for our own
fleet of four aircraft, and facilitates communication, contract exchange, and payment between the user and the operator of the aircraft
ultimately selected for travel.
Our
Jet.AI Operation Platform currently consists of the following SaaS products:
| ● | Reroute
AI. Our newest SaaS product, Reroute AI, is web-based and enables Federal Aviation Administration
(“FAA”) Part 135 operators to earn revenue on otherwise empty flight
legs. When prompted with basic travel itinerary information, Reroute AI searches its database
of empty flight legs and proposes combinations or adjustments of those legs that meet the
constraints provided. The Company generates revenue each time an operator wishes to book
an itinerary proposed by Reroute AI that uses a third-party operator’s aircraft. |
| ● | DynoFlight.
DynoFlight is a software API that enables small- to medium-sized aircraft operators to
track and estimate their emissions and then to offset their emissions by purchasing carbon-offset
credits via our DynoFlight API. |
| ● | Flight
Club. Our Flight Club API enables FAA Part 135 operators to function simultaneously under
FAA Part 380, which permits private jet services to be sold by the seat rather than the whole
aircraft. The Flight Club software integrates front-end ticketing and payment collection
with the flight management systems of an FAA Part 135 operator. We operate Flight Club through
380 Software LLC, a subsidiary owned 50/50 by us and by Great Western Air, LLC d/b/a Cirrus
Aviation Services, LLC (“Cirrus”), the largest private jet charter
company in Nevada. We currently limit our use of Flight Club to our partnership with the
Las Vegas Golden Knights, but we may expand the availability of Flight Club in the future. |
We
currently have a fleet of five aircraft, including three HondaJet HA-420 aircraft (the “HondaJet Elites”),
one Citation CJ4 Gen 2 and one King Air 350i. The three HondaJet Elites are managed, operated, and maintained by Cirrus pursuant to an
Executive Aircraft Management and Charter Services Agreement in compliance with all applicable FAA regulations and certification requirements.
The Citation CJ4 Gen 2 and King Air 350i in our fleet are owned by customers and managed through our OnBoard Program, which allows aircraft
owners to contribute their aircraft to our charter and jet-card inventory after they have completed certain FAA certifications and requirements.
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. As part of the aircraft purchase
agreement, the buyer enters into a three-year aircraft management agreement, after which
the aircraft is typically sold, and the owners are given their pro-rata share of the sale
proceeds. |
| ● | 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, our HondaJet Elites are available to address unexpected
cancellations or delays on brokered charters. Our ability to maintain a fleet of readily available aircraft to backfill third-party charter
services gives us a competitive edge by providing more reliability than our competitors and is an attractive selling point for potential
clients.
Corporate
Information
Our
website address is www.jet.ai. The information contained in, or that can be accessed through, our website is not incorporated by reference
into this prospectus and is not part of this prospectus.
Our
common stock is listed on the Nasdaq Capital Market under the symbol “JTAI”. Our principal executive office is located at
10845 Griffith Peak Dr., Suite 200, Las Vegas, Nevada 89135, and our telephone number is (702) 747-4000.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Please see the risk factors under the heading “Risk Factors” in our Annual
Report on Form 10-K for the year ended December 31, 2023, on file with the SEC, and those risk factors identified in reports subsequently
filed with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which are incorporated by reference
into this prospectus. Before you invest in our securities, you should carefully consider these risks as well as other information we
include or incorporate by reference into this prospectus and the applicable prospectus supplement. The risks and uncertainties we have
described are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently
deem immaterial may also affect our business operations. The occurrence of any of these risks might cause you to lose all or part of
your investment in the offered securities. The discussion of risks includes or refers to forward-looking statements; you should read
the explanation of the qualifications and limitations on such forward-looking statements discussed elsewhere in this prospectus.
FORWARD-LOOKING
STATEMENTS
This
prospectus contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ
materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact
are statements that could be deemed forward-looking statements, including any projections of financing needs, revenue, expenses, earnings
or losses from operations, or other financial items; any statements of the plans, strategies and objectives of management for future
operations; any statements concerning our products and services and timelines; any statements of expectation or belief; and any statements
of assumptions underlying any of the foregoing. In addition, forward looking statements may contain the words “believe,”
“anticipate,” “expect,” “estimate,” “intend,” “plan,” “project,”
“will be,” “will continue,” “will result,” “seek,” “could,” “may,”
“might,” and similar expressions that convey uncertainty of future events or outcomes, or the negative version of those words
or phrases or other comparable words or phrases of a future or forward-looking nature.
The
forward-looking statements included in this prospectus represent our estimates as of the date of this prospectus. We specifically disclaim
any obligation to update these forward-looking statements in the future, except as required by law. These forward-looking statements
should not be relied upon as representing our estimates or views as of any date subsequent to the date of this prospectus.
USE
OF PROCEEDS
Except
as described in any prospectus supplement and any free writing prospectus in connection with a specific offering, we currently intend
to use the net proceeds from the sale of the securities offered under this prospectus for general corporate purposes, including the development
and commercialization of our SaaS products, aircraft acquisition, research and development, general and administrative expenses, license
or technology acquisitions, and working capital and capital expenditures. We may also use the net proceeds to repay any debts and/or
invest in or acquire complementary businesses, products, or technologies, although we have no current commitments or agreements with
respect to any such investments or acquisitions as of the date of this prospectus. We have not determined the amount of net proceeds
to be used specifically for the foregoing purposes. As a result, our management will have broad discretion in the allocation of the net
proceeds and investors will be relying on the judgment of our management regarding the application of the proceeds of any sale of the
securities. Pending use of the net proceeds, we intend to invest the proceeds in short-term, investment-grade, interest-bearing instruments.
Each
time we offer securities under this prospectus, we will describe the intended use of the net proceeds from that offering in the applicable
prospectus supplement. The actual amount of net proceeds we spend on a particular use will depend on many factors, including, our future
capital expenditures, the amount of cash required by our operations, and our future revenue growth, if any. Therefore, we will retain
broad discretion in the use of the net proceeds.
DESCRIPTION
OF THE SECURITIES
We
may offer, from time to time, in one or more offerings, up to $50,000,000 of the following securities:
| ● | subordinated
debt securities; |
| ● | any
combination of the foregoing securities. |
The
aggregate initial offering price of the offered securities that we may issue will not exceed $50,000,000. Until such time as the aggregate
market value of the voting and non-voting common equity held by non-affiliates of the Company is $75.0 million or more, the aggregate
market value of securities sold by or on behalf of the Company pursuant to this registration statement during the period of 12 calendar
months immediately prior to, and including, a sale under this registration statement will be no more than one-third of the aggregate
market value of the voting and non-voting common equity held by non-affiliates of the Company. If we issue debt securities at a discount
from their principal amount, then, for purposes of calculating the aggregate initial offering price of the offered securities issued
under this prospectus, we will include only the initial offering price of the debt securities and not the principal amount of the debt
securities.
This
prospectus contains a summary of the general terms of the various securities that we may offer. The prospectus supplement relating to
any particular securities offered will describe the specific terms of the securities, which may be in addition to or different from the
general terms summarized in this prospectus. Because the summary in this prospectus and in any prospectus supplement does not contain
all of the information that you may find useful, you should read the documents relating to the securities that are described in this
prospectus or in any applicable prospectus supplement. Please read “Where You Can Find
More Information” to find out how you can obtain a copy of those documents.
The
applicable prospectus supplement will also contain the terms of a given offering, the initial offering price and our net proceeds. Where
applicable, a prospectus supplement will also describe any material United States federal income tax consequences relating to the securities
offered and indicate whether the securities offered are or will be quoted or listed on any quotation system or securities exchange.
DESCRIPTION
OF COMMON STOCK
This
section describes the general terms and provisions of our common stock. The prospectus supplement relating to any offering of common
stock, or other securities convertible into or exchangeable or exercisable for common stock, will describe more specific terms of the
offering of common stock or other securities, including the number of shares offered, the initial offering price and market price and
dividend information. The prospectus supplement may provide information that is different from this prospectus. If the information in
the prospectus supplement with respect to our common stock being offered differs from this prospectus, you should rely on the information
in the prospectus supplement.
The
summary set forth below does not purport to be complete and is subject to and qualified in its entirety by reference to our certificate
of incorporation, dated August 10, 2023 (our “Certificate of Incorporation”), and our bylaws, dated August
10, 2023, as amended by the Amendment to the Bylaws, dated August 5, 2023 (as amended, our “Bylaws”), each
of which is incorporated by reference as an exhibit to the registration statement of which this prospectus forms a part. We encourage
you to read our Certificate of Incorporation and our Bylaws for additional information before you purchase any shares of our common stock.
Our common stock and the rights of the holders of our common stock are subject to the applicable statutes of the State of Delaware, our
Certificate of Incorporation, and our Bylaws, as amended.
General
Terms
We
are authorized to issue 55,000,000 shares of common stock. On August 22, 2024, we had 24,576,880 shares of common stock issued
and outstanding, held by approximately 32,276 holders of record. Except as otherwise provided by any series of preferred stock that may
later be created, holders of our common stock have exclusive voting rights for the election of directors and for all other purposes.
Holders of our common stock are entitled to one vote per share on all matters to be voted upon by our stockholders. Neither our Certificate
of Incorporation nor our Bylaws authorize cumulative voting. The holders of our common stock are entitled to receive dividends, if any,
as may be declared from time to time by our board of directors (our “Board”) out of funds legally available
for the payment of dividends, subject to the rights of any series of preferred stock. In the event of a liquidation, dissolution or winding
up of Jet.AI, the holders of our common stock are entitled to share ratably in all assets remaining after payment of the preferential
amounts, if any, to which the holders of our preferred stock, if any, are entitled. Our common stock has no preemptive, conversion or
other subscription rights. There are no redemption or sinking-fund provisions applicable to our common stock. All of our outstanding
shares of common stock are fully paid and non-assessable.
Our
Board of Directors
Our
Bylaws provide that the number of directors constituting our Board is fixed from time to time in accordance with our Certificate of Incorporation,
which provides that, subject to the rights of the holders of any series of preferred stock to elect additional directors under specified
circumstances, the total number of directors constituting the Board shall be fixed from time to time exclusively by resolution adopted
by a majority of the directors then in office, although less than a quorum (as defined in our Bylaws), or by the sole remaining director.
Our
Certificate of Incorporation provides for our Board to be divided into three classes of directors serving staggered terms. Approximately
one-third of the Board will be elected each year. The provision for a classified Board could prevent a party who acquires control of
a majority of our outstanding shares of voting stock from obtaining control of our Board until the second annual stockholders’
meeting following the date the acquirer obtains the controlling stock interest. The classified Board provision could discourage a potential
acquirer from making a tender offer or otherwise attempting to obtain control of us and could increase the likelihood that incumbent
directors will retain their positions. Our Certificate of Incorporation provides that directors may only be removed for cause by the
affirmative vote of the holders of at least two-thirds of the voting power of the then-outstanding shares of our capital stock.
Our
Certificate of Incorporation provides that, upon any vacancy occurring in the Board for any cause, and any newly created directorship
resulting from any increase in the authorized number of directors, shall, unless (a) the Board determines by resolution that any such
vacancies or newly created directorships shall be filled by the stockholders, or (b) as otherwise provided by law, be filled only by
the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and
not by the stockholders.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company.
Nasdaq
Our
common stock is listed for quotation on the Nasdaq Capital Market under the symbol “JTAI.”
DESCRIPTION
OF PREFERRED STOCK
We
are authorized to issue 4,000,000 shares of preferred stock. As of the date of this prospectus, we have designated three classes of preferred
stock, being Series A Preferred Stock, Series A-1 Preferred Stock and Series B Preferred Stock. We do not intend to offer and sell any
of those series of preferred stock pursuant to this prospectus.
The
following description of our preferred stock, together with any additional information we include in any applicable prospectus supplement
or any related free writing prospectus, summarizes the material terms and provisions of our preferred stock that we may offer under this
prospectus. While the terms we have summarized below will apply generally to any preferred stock that we may offer, we will describe
the particular terms of any class or series of these securities in more detail in the applicable prospectus supplement. For the complete
terms of our preferred stock, please refer to our Certificate of Incorporation, our Bylaws, and our Certificates of Designation that
are incorporated by reference into the registration statement of which this prospectus is a part or may be incorporated by reference
in this prospectus or any applicable prospectus supplement. The summary set forth below does not purport to be complete and is subject
to and qualified in its entirety by reference to our Certificate of Incorporation, our Bylaws, as amended, and our Certificates of Designation,
each of which is incorporated by reference as an exhibit to the registration statement of which this prospectus forms a part. We encourage
you to read our Certificate of Incorporation, our Bylaws, as amended, and our Certificates of Designation for additional information
before you purchase any shares of our preferred stock. Our preferred stock and the rights of the holders of our preferred stock are subject
to the applicable statutes of the State of Delaware, our Certificate of Incorporation, our Bylaws, as amended, and our Certificates of
Designation.
General
Terms
Our
Board may, without further action by our stockholders, from time to time, direct the issuance of shares of preferred stock in series
and may, at the time of issuance, determine the rights, preferences and limitations of each series, including voting rights, dividend
rights and redemption and liquidation preferences. Satisfaction of any dividend preferences of outstanding shares of preferred stock
would reduce the amount of funds available for the payment of dividends on shares of our common stock (although we do not anticipate
paying any dividends to the holders of our common stock in the foreseeable future). Holders of shares of preferred stock may be entitled
to receive a preference payment in the event of any liquidation, dissolution or winding-up of our Company before any payment is made
to the holders of shares of our common stock. In some circumstances, the issuance of shares of preferred stock may render more difficult
or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder of a large block of our securities
or the removal of incumbent management as discussed below. Upon the affirmative vote of our Board, without stockholder approval, we may
issue shares of preferred stock with voting and conversion rights that could adversely affect the holders of shares of our common stock.
If
we offer a specific series of preferred stock under this prospectus, we will describe the terms of the preferred stock in the prospectus
supplement for such offering and will file a copy of the articles of amendment to the Articles establishing the terms of the preferred
stock with the SEC. To the extent required, this description will include:
| ● | the
title and stated value; |
| ● | the
number of shares offered, the liquidation preference per share and the purchase price; |
| ● | the
dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such
dividends; |
| ● | whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends
will accumulate; |
| ● | the
procedures for any auction and remarketing, if any; |
| ● | the
provisions for a sinking fund, if any; |
| ● | the
provisions for redemption, if applicable; |
| ● | any
listing of the preferred stock on any securities exchange or market; |
| ● | whether
the preferred stock will be convertible into our common stock, and, if applicable, the conversion
price (or how it will be calculated) and conversion period; |
| ● | whether
the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange
price (or how it will be calculated) and exchange period; |
| ● | voting
rights, if any, of the preferred stock; |
| ● | a
discussion of any material and/or special United States federal income tax considerations
applicable to the preferred stock; |
| ● | the
relative ranking and preferences of the preferred stock as to dividend rights and rights
upon liquidation, dissolution or winding up of the affairs of Jet.AI; and |
| ● | any
material limitations on issuance of any class or series of preferred stock ranking senior
to or on a parity with the series of preferred stock as to dividend rights and rights upon
liquidation, dissolution or winding up of Jet.AI. |
The
preferred stock offered by this prospectus will, when issued, not have, or be subject to, any preemptive or similar rights.
Transfer
Agent and Registrar
The
transfer agent and registrar for our preferred stock in the United States will be Continental Stock Transfer & Trust Company.
DESCRIPTION
OF DEBT SECURITIES
We
may offer debt securities from time to time, as either senior or subordinated debt or as senior or subordinated convertible debt, in
one or more offerings under this prospectus. We will issue any such debt securities under one or more separate indentures that we will
enter into with a trustee to be named in the indenture and specified in the applicable prospectus supplement. The specific terms of debt
securities being offered will be described in the applicable prospectus supplement. We have filed a form of indenture as an exhibit to
the registration statement of which this prospectus forms a part.
The
prospectus supplement relating to a particular issue of debt securities will describe the terms of those debt securities and the related
indenture, which may include (without limitation) the following:
| ● | the
title or designation of the debt securities; |
| ● | any
limit upon the aggregate principal amount of the debt securities; |
| ● | the
price or prices at which the debt securities will be issued; |
| ● | the
maturity date or dates, or the method of determining the maturity date or dates, of the debt
securities; |
| ● | the
date or dates on which we will pay the principal on the debt securities; |
| ● | the
interest rate, which may be fixed or variable, or the method for determining the rate and
the date interest will begin to accrue, the date or dates interest will be payable and the
record dates for interest payment dates or the method for determining such dates; |
| ● | the
manner in which the amounts of payment of principal of, premium or interest on the debt securities
will be determined, if these amounts may be determined by reference to an index based on
a currency or currencies other than that in which the debt securities are denominated or
designated to be payable or by reference to a commodity, commodity index, stock exchange
index or financial index; |
| ● | any
conversion or exchange features; |
| ● | if
payments of principal of, premium or interest on the debt securities will be made in one
or more currencies or currency units other than that or those in which the debt securities
are denominated, the manner in which the exchange rate with respect to these payments will
be determined; |
| ● | the
place or places where the principal of, premium and interest on the debt securities will
be payable, where the debt securities may be surrendered for transfer or exchange and where
notices or demands to or upon the Company may be served; |
| ● | the
terms and conditions upon which we may redeem the debt securities; |
| ● | any
obligation we have to redeem or purchase the debt securities pursuant to any sinking fund
or analogous provisions or at the option of a holder of debt securities; |
| ● | the
dates on which and the price or prices at which we may repurchase the debt securities at
our option or at the option of the holders of debt securities and other detailed terms and
provisions of these repurchase obligations; |
| ● | the
denominations in which the debt securities will be issued, if other than denominations of
$1,000 and any integral multiple thereof; |
| ● | the
portion of principal amount of the debt securities payable upon declaration of acceleration
of the maturity date, if other than the entire principal amount; |
| ● | if
other than the U.S. dollar, the currencies or currency units in which the debt securities
are issued and in which the principal of, premium and interest, if any, on, and additional
amounts, if any, in respect of the debt securities will be payable; |
| ● | whether
the debt securities are to be issued at any original issue discount and the amount of discount
with which such debt securities may be issued; |
| ● | whether
the debt securities will be issued in the form of certificated debt securities or global
debt securities; |
| ● | the
extent to which any of the debt securities will be issuable in temporary or permanent global
form and, if so, the identity of the depositary for the global debt security, or the manner
in which any interest payable on a temporary or permanent global debt security will be paid; |
| ● | information
with respect to book-entry procedures; |
| ● | the
terms and conditions upon which the debt securities will be so convertible or exchangeable
into securities or property of another person, if at all, and any additions or changes, if
any, to permit or facilitate such conversion or exchange; |
| ● | whether
the debt securities will be subject to subordination and the terms of such subordination; |
| ● | any
restriction or condition on the transferability of the debt securities; |
| ● | a
discussion of any material United States federal income tax consequences of owning and disposing
of the debt securities; |
| ● | the
provisions related to compensation and reimbursement of the trustee which applies to securities
of such series; |
| ● | the
events of default and covenants with respect to the debt securities and the acceleration
provisions with respect to the debt securities; |
| ● | any
provisions for the satisfaction and discharge or defeasance or covenant defeasance of the
indenture under which the debt securities are issued; |
| ● | if
other than the trustee, the identity of each security registrar, paying agent and authenticating
agent; and |
| ● | any
other terms of the debt securities. |
The
indenture and the debt securities are expected to be governed by and construed in accordance with the laws of the State of New York.
We intend to disclose the relevant restrictive covenants for any issuance or series of debt securities in the applicable prospectus supplement.
Unless otherwise indicated in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange.
As of the date of this prospectus, we have no outstanding registered debt securities.
DESCRIPTION
OF WARRANTS
We
may issue warrants to purchase shares of our common stock, preferred stock, debt securities or other securities in one or more series
together with other securities or separately, as described in the applicable prospectus supplement. Below is a description of certain
general terms and provisions of the warrants that we may offer. Particular terms of the warrants will be described in the warrant agreements
and the prospectus supplement to the warrants.
The
applicable prospectus supplement will contain, where applicable, the following terms of and other information relating to the warrants:
| ● | the
specific designation and aggregate number of, and the price at which we will issue, the warrants; |
| ● | the
currency or currency units in which the offering price, if any, and the exercise price are
payable; |
| ● | the
designation, amount and terms of the securities purchasable upon exercise of the warrants; |
| ● | if
applicable, the exercise price for shares of our common stock and the number of shares of
common stock to be received upon exercise of the warrants; |
| ● | if
applicable, the exercise price for shares of our preferred stock, the number of shares of
preferred stock to be received upon exercise, and a description of that series of our preferred
stock; |
| ● | if
applicable, the exercise price for our debt securities, the amount of debt securities to
be received upon exercise, and a description of that series of debt securities; |
| ● | the
date on which the right to exercise the warrants will begin and the date on which that right
will expire or, if you may not continuously exercise the warrants throughout that period,
the specific date or dates on which you may exercise the warrants; |
| ● | whether
the warrants will be issued in fully registered form or bearer form, in definitive or global
form or in any combination of these forms, although, in any case, the form of a warrant included
in a unit will correspond to the form of the unit and of any security included in that unit; |
| ● | any
applicable material United States federal income tax consequences; |
| ● | the
identity of the warrant agent for the warrants and of any other depositaries, execution or
paying agents, transfer agents, registrars or other agents; |
| ● | the
proposed listing, if any, of the warrants or any securities purchasable upon exercise of
the warrants on any securities exchange; |
| ● | if
applicable, the date from and after which the warrants and the common stock, preferred stock
and/or debt securities will be separately transferable; |
| ● | if
applicable, the minimum or maximum amount of the warrants that may be exercised at any one
time; |
| ● | information
with respect to book-entry procedures, if any; |
| ● | the
anti-dilution provisions of the warrants, if any; |
| ● | any
redemption or call provisions; |
| ● | whether
the warrants are to be sold separately or with other securities as parts of units; and |
| ● | any
additional terms of the warrants, including terms, procedures and limitations relating to
the exchange and exercise of the warrants. |
Exercise
of Warrants
Each
warrant will entitle the holder to purchase for cash that principal amount of, or number of, securities, as the case may be, at the exercise
price set forth in, or to be determined as set forth in, the applicable prospectus supplement relating to the warrants. After the close
of business on the expiration date, unexercised warrants will become void. Upon receipt of payment and the warrant certificate properly
completed and duly executed, we will, as soon as practicable, issue the securities purchasable upon exercise of the warrant. If less
than all of the warrants represented by the warrant certificate are exercised, a new warrant certificate will be issued for the remaining
amount of warrants.
No
Rights of Security Holder Prior to Exercise
Before
the exercise of their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon the
exercise of the warrants, and will not be entitled to:
| ● | in
the case of warrants to purchase debt securities, payments of principal of, or any premium
or interest on, the debt securities purchasable upon exercise; or |
| ● | in
the case of warrants to purchase equity securities, the right to vote or to receive dividend
payments or similar distributions on the securities purchasable upon exercise. |
Transfer
Agent and Registrar
The
transfer agent and registrar for any warrants will be set forth in the applicable prospectus supplement.
DESCRIPTION
OF RIGHTS
As
specified in the applicable prospectus supplement, we may issue rights to purchase the securities offered in this prospectus to our existing
stockholders, and such rights may or may not be issued for consideration. The applicable prospectus supplement will describe the terms
of any such rights. The description in the prospectus supplement will not purport to be complete and will be qualified in its entirety
by reference to the documents pursuant to which such rights will be issued.
DESCRIPTION
OF UNITS
This
section outlines some of the provisions of the units and the unit agreements. This information may not be complete in all respects and
is qualified entirely by reference to the unit agreement with respect to the units of any particular series. The specific terms of any
series of units will be described in the applicable prospectus supplement. If so described in a particular supplement, the specific terms
of any series of units may differ from the general description of terms presented below.
We
may issue units comprised of shares of preferred stock, shares of common stock, warrants and debt securities in any combination. Each
unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit
will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide
that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date.
The
applicable prospectus supplement may describe:
| ● | the
designation and terms of the units and of the securities comprising the units, including
whether and under what circumstances those securities may be held or transferred separately; |
| ● | any
provisions of the governing unit agreement; |
| ● | the
price or prices at which such units will be issued; |
| ● | the
applicable United States federal income tax considerations relating to the units; |
| ● | any
provisions for the issuance, payment, settlement, transfer or exchange of the units or of
the securities comprising the units; and |
| ● | any
other terms of the units and of the securities comprising the units. |
The
provisions described in this section, as well as those described under “Description of Preferred Stock,” “Description
of Common Stock,” “Description of Warrants”, “Description of Debt Securities”, and “Description of
Rights” will apply to the securities included in each unit, to the extent relevant.
Issuance
in Series
We
may issue units in such amounts and in as many distinct series as we wish. This section summarizes terms of the units that apply generally
to all series. Most of the financial and other specific terms of any series will be described in the applicable prospectus supplement.
Unit
Agreements
We
will issue units under one or more unit agreements to be entered into between us and a bank or other financial institution, as unit agent.
We may add, replace or terminate unit agents from time to time. We will identify the unit agreement under which each series of units
will be issued and the unit agent under that agreement in the applicable prospectus supplement.
The
following provisions will generally apply to all unit agreements unless otherwise stated in the applicable prospectus supplement.
Modification
Without Consent.
We
and the applicable unit agent may amend any unit or unit agreement without the consent of any holder to:
| ● | cure
any ambiguity; any provisions of the governing unit agreement that differ from those described
below; |
| ● | correct
or supplement any defective or inconsistent provision; or |
| ● | make
any other change that we believe is necessary or desirable and will not adversely affect
the interests of the affected holders in any material respect. |
We
do not need any approval to make changes that affect only units to be issued after the changes take effect. We may also make changes
that do not adversely affect a particular unit in any material respect, even if they adversely affect other units in a material respect.
In those cases, we do not need to obtain the approval of the holder of the unaffected unit; we need only obtain any required approvals
from the holders of the affected units.
Modification
With Consent.
We
may not amend any particular unit or a unit agreement with respect to any particular unit unless we obtain the consent of the holder
of that unit, if the amendment would:
| ● | impair
any right of the holder to exercise or enforce any right under a security included in the
unit if the terms of that security require the consent of the holder to any changes that
would impair the exercise or enforcement of that right; or |
| ● | reduce
the percentage of outstanding units or any series or class the consent of whose holders is
required to amend that series or class, or the applicable unit agreement with respect to
that series or class, as described below. |
Any
other change to a particular unit agreement and the units issued under that agreement would require the following approval:
| ● | If
the change affects only the units of a particular series issued under that agreement, the
change must be approved by the holders of a majority of the outstanding units of that series;
or |
| ● | If
the change affects the units of more than one series issued under that agreement, it must
be approved by the holders of a majority of all outstanding units of all series affected
by the change, with the units of all the affected series voting together as one class for
this purpose. |
These
provisions regarding changes with majority approval also apply to changes affecting any securities issued under a unit agreement, as
the governing document.
In
each case, the required approval must be given by written consent.
Unit
Agreements Will Not Be Qualified Under Trust Indenture Act.
No
unit agreement will be qualified as an indenture, and no unit agent will be required to qualify as a trustee, under the Trust Indenture
Act. Therefore, holders of units issued under unit agreements will not have the protections of the Trust Indenture Act with respect to
their units.
Mergers
and Similar Transactions Permitted; No Restrictive Covenants or Events of Default.
The
unit agreements will not restrict our ability to merge or consolidate with, or sell our assets to, another corporation or other entity
or to engage in any other transactions. If at any time we merge or consolidate with, or sell our assets substantially as an entirety
to, another corporation or other entity, the successor entity will succeed to and assume our obligations under the unit agreements. We
will then be relieved of any further obligation under these agreements.
The
unit agreements will not include any restrictions on our ability to put liens on our assets, including our interests in our subsidiaries,
nor will they restrict our ability to sell our assets. The unit agreements also will not provide for any events of default or remedies
upon the occurrence of any events of default.
Payments
and Notices.
In
making payments and giving notices with respect to our units, we will follow the procedures as described in the applicable prospectus
supplement.
FORMS
OF SECURITIES
General
Each
of the securities issued under this prospectus will be represented either by a certificate issued in definitive form to a particular
purchaser or by one or more global securities representing the entire issuance of securities. Unless the applicable prospectus supplement
provides otherwise, certificated securities in definitive form and global securities will be issued in registered form. Definitive securities
name you or your nominee as the owner of the security, and in order to transfer or exchange these securities or to receive payments other
than interest or other interim payments, you or your nominee must physically deliver the securities to the trustee, registrar, paying
agent or other agent, as applicable. Global securities name a depositary or its nominee as the owner of the debt securities, units or
warrants represented by these global securities. The depositary maintains a computerized system that will reflect each purchaser’s
beneficial ownership of the securities through an account maintained by the purchaser with its broker/dealer, bank, trust company or
other representative, as we explain more fully below.
Registered
Global (Book-Entry) Securities
We
may issue the securities in the form of one or more fully registered global securities that will be deposited with a depositary or its
nominee identified in the applicable prospectus supplement and registered in the name of that depositary or nominee. In those cases,
one or more registered global securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate
principal or face amount of the securities to be represented by registered global securities. Unless and until it is exchanged in whole
for securities in definitive registered form, a registered global security may not be transferred except as a whole by and among the
depositary for the registered global security, the nominees of the depositary or any successors of the depositary or those nominees.
If
not described below, any specific terms of the depositary arrangement with respect to any securities to be represented by a registered
global security will be described in the prospectus supplement relating to those securities. We anticipate that the following provisions
will apply to all depositary arrangements.
Ownership
of beneficial interests in a registered global security will be limited to persons, called participants, that have accounts with the
depositary or persons that may hold interests through participants. Upon the issuance of a registered global security, the depositary
will credit, on its book-entry registration and transfer system, the participants’ accounts with the respective principal or face
amounts of the securities beneficially owned by the participants. Any dealers, underwriters or agents participating in the distribution
of the securities will designate the accounts to be credited. Ownership of beneficial interests in a registered global security will
be shown on, and the transfer of ownership interests will be effected only through, records maintained by the depositary, with respect
to interests of participants, and on the records of participants, with respect to interests of persons holding through participants.
The laws of some states may require that some purchasers of securities take physical delivery of these securities in definitive form.
These laws may impair such purchasers’ abilities to own, transfer or pledge beneficial interests in registered global securities.
So
long as the depositary, or its nominee, is the registered owner of a registered global security, that depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the securities represented by the registered global security for all purposes
under the applicable indenture, unit agreement or warrant agreement. Except as described below, owners of beneficial interests in a registered
global security will not be entitled to have the securities represented by the registered global security registered in their names,
will not receive or be entitled to receive physical delivery of the securities in definitive form and will not be considered the owners
or holders of the securities under the applicable indenture, unit agreement or warrant agreement. Accordingly, each person owning a beneficial
interest in a registered global security must rely on the procedures of the depositary for that registered global security and, if that
person is not a participant, on the procedures of the participant through which the person owns its interest, to exercise any rights
of a holder under the applicable indenture, unit agreement or warrant agreement. We understand that under existing industry practices,
if we request any action of holders or if an owner of a beneficial interest in a registered global security desires to give or take any
action that a holder is entitled to give or take under the applicable indenture, unit agreement or warrant agreement, the depositary
for the registered global security would authorize the participants holding the relevant beneficial interests to give or take that action,
and the participants would authorize beneficial owners owning through them to give or take that action or would otherwise act upon the
instructions of beneficial owners holding through them.
Principal,
premium, if any, on and interest payments on debt securities, and any payments to holders with respect to warrants or units represented
by a registered global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee,
as the case may be, as the registered owner of the registered global security. None of us, the trustees, the warrant agents, the unit
agents or any other agent of ours, agent of the trustees or agent of the warrant agents or unit agents will have any responsibility or
liability for any aspect of the records relating to payments made on account of beneficial ownership interests in the registered global
security or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests.
We
expect that the depositary for any of the securities represented by a registered global security, upon receipt of any payment of principal,
premium, interest or other distribution of underlying securities or other property to holders on that registered global security, will
immediately credit participants’ accounts in amounts proportionate to their respective beneficial interests in that registered
global security as shown on the records of the depositary. We also expect that payments by participants to owners of beneficial interests
in a registered global security held through participants will be governed by standing customer instructions and customary practices,
as is now the case with the securities held for the accounts of customers or registered in “street name,” and will be the
responsibility of those participants.
If
the depositary for any of the securities represented by a registered global security is at any time unwilling or unable to continue as
depositary or ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and a successor depositary registered as a clearing agency under the Exchange Act is not appointed by us within
90 days, we will issue securities in definitive form in exchange for the registered global security that had been held by the depositary.
Any securities issued in definitive form in exchange for a registered global security will be registered in the name or names that the
depositary gives to the relevant trustee, warrant agent, unit agent or other relevant agent of ours or theirs. It is expected that the
depositary’s instructions will be based upon directions received by the depositary from participants with respect to ownership
of beneficial interests in the registered global security that had been held by the depositary.
PLAN
OF DISTRIBUTION
We
may sell the securities in any one or more of the following methods from time to time:
| ● | directly
to investors, directly to agents, or to investors through agents; |
| ● | through
underwriting syndicates led by one or more managing underwriters, or through one or more
underwriters acting alone, for resale to the public or investors; |
| ● | purchases
by a broker or dealer as principal and resale by such broker or dealer for its own account; |
| ● | through
a block trade (which may involve crosses) in which the broker or dealer so engaged will attempt
to sell the securities as agent but may position and resell a portion of the block as principal
to facilitate the transaction; |
| ● | ordinary
brokerage transactions and transactions in which the broker solicits purchasers; |
| ● | in
“at the market offerings,” within the meaning of Rule 415(a)(4) of the Securities
Act of 1933, as amended (the “Securities Act”), to or through a
market maker or into an existing trading market, on an exchange or otherwise; |
| ● | transactions
not involving market makers or established trading markets, including direct sales or privately
negotiated transactions; |
| ● | exchange
distributions and/or secondary distributions; |
| ● | by
delayed delivery contracts or by remarketing firms; |
| ● | transactions
in options, swaps or other derivatives that may or may not be listed on an exchange; or |
| ● | through
a combination of any such methods of sale. |
The
distribution of the securities may be effected from time to time in one or more transactions:
| ● | at
a fixed price or prices, which may be changed; |
| ● | at
market prices prevailing at the time of sale; |
| ● | at
prices related to such prevailing market prices; or |
Any
of the prices may represent a discount from the prevailing market prices.
Any
underwritten offering may be on a best efforts or a firm commitment basis. If underwriters are used in the sale, the securities acquired
by the underwriters will be for their own account. The underwriters may resell the securities in one or more transactions, including
without limitation negotiated transactions, at a fixed public offering price or at a varying price determined at the time of sale. The
obligations, if any, of the underwriter to purchase any securities will be subject to certain conditions. We may offer the securities
to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Subject to
certain conditions, the underwriters will be obligated to purchase all of the securities if any are purchased, other than securities
covered by any over-allotment option. Any public offering price and any discounts or concessions allowed, reallowed or paid to dealers
may be changed from time to time.
If
a dealer is used in an offering of securities, we may sell the securities to the dealer, as principal. The dealer may then resell the
securities to the public at varying prices to be determined by the dealer at the time of sale.
We
may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale
of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement
states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We
may also sell securities directly to one or more purchasers without using underwriters, dealers or agents.
We
may also make direct sales through subscription rights distributed to our stockholders on a pro rata basis, which may or may not be transferable.
In any distribution of subscription rights to stockholders, if all of the underlying securities are not subscribed for, we may then sell
the unsubscribed securities directly to third parties or may engage the services of one or more underwriters, dealers or agents, including
standby underwriters, to sell the unsubscribed securities to third parties.
From
time to time, we may offer securities directly to the public, with or without the involvement of agents, underwriters or dealers, and
may use the Internet or another electronic bidding or ordering system for the pricing and allocation of the securities. Such a system
may allow bidders to participate directly, through electronic access to an auction site, by submitting conditional offers to buy that
are subject to acceptance by us and may directly affect the price or other terms at which such securities are sold. Such a bidding or
ordering system may present to each bidder, on a real-time basis, relevant information to assist you in making a bid, such as the clearing
spread at which the offering would be sold, based on the bids submitted, and whether a bidder’s individual bids would be accepted,
pro-rated or rejected. Other pricing methods also may be used. Upon completion of such an auction process, securities will be allocated
based on prices bid, terms of bid or other factors. The final offering price at which securities would be sold and the allocation of
securities among bidders would be based in whole or in part on the results of the Internet bidding process or auction. Many variations
of the Internet auction or pricing and allocation systems are likely to be developed in the future, and we may use such systems in connection
with the sale of securities. The specific rules of such an auction would be distributed to potential bidders in an applicable prospectus
supplement. If an offering is made using such a bidding or ordering system you should review the auction rules, as described in the prospectus
supplement, for a more detailed description of the offering procedures.
In
the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the securities, for
whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through
dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution
of the securities may be deemed to be underwriters under the Securities Act and any discounts or commissions they receive from us and
any profit on the resale of securities they realize may be deemed to be underwriting discounts and commissions under the Securities Act.
The applicable prospectus supplement will, where applicable:
| ● | identify
any such underwriter or agent; |
| ● | describe
any compensation in the form of discounts, concessions, commissions or otherwise received
from us by each of such underwriter, dealer or agent and in the aggregate to all underwriters,
dealers and agents; |
| ● | identify
the purchase price and proceeds from such sale; |
| ● | identify
the amounts underwritten; |
| ● | identify
the nature of the underwriter’s obligation to take the securities; |
| ● | identify
any over-allotment option under which the underwriters may purchase additional securities
from us; and |
| ● | identify
any quotation systems or securities exchanges on which the securities may be quoted or listed. |
Unless
otherwise specified in the related prospectus supplement, each series of securities will be a new issue with no established trading market,
other than the common stock, which is listed on the Nasdaq Capital Market. Any common stock sold pursuant to a prospectus supplement
will be listed on the Nasdaq Capital Market, subject to applicable notices. We may elect to apply for quotation or listing of any other
class or series of our securities, on a quotation system or an exchange but we are not obligated to do so. It is possible that one or
more underwriters may make a market in a class or series of our securities, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. Therefore, no assurance can be given as to the liquidity of, or the trading
market for, any other class or series of our securities.
In
connection with an offering, an underwriter may purchase and sell securities in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters
of a greater number of securities than they are required to purchase in the offering. “Covered” short sales are sales made
in an amount not greater than the underwriters’ option to purchase additional securities, if any, from us in the offering. If the
underwriters have an over-allotment option to purchase additional securities from us, the underwriters may close out any covered short
position by either exercising their over-allotment option or purchasing securities in the open market. In determining the source of securities
to close out the covered short position, the underwriters may consider, among other things, the price of securities available for purchase
in the open market as compared to the price at which they may purchase securities through the over-allotment option. “Naked”
short sales are any sales in excess of such option or where the underwriters do not have an over-allotment option. The underwriters must
close out any naked short position by purchasing securities in the open market. A naked short position is more likely to be created if
the underwriters are concerned that there may be downward pressure on the price of the securities in the open market after pricing that
could adversely affect investors who purchase in the offering.
Accordingly,
to cover these short sales positions or to otherwise stabilize or maintain the price of the securities, the underwriters may bid for
or purchase securities in the open market and may impose penalty bids. If penalty bids are imposed, selling concessions allowed to syndicate
members or other broker-dealers participating in the offering are reclaimed if securities previously distributed in the offering are
repurchased, whether in connection with stabilization transactions or otherwise. The effect of these transactions may be to stabilize
or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. The impositions
of a penalty bid may also affect the price of the securities to the extent that it discourages resale of the securities. The magnitude
or effect of any stabilization or other transactions is uncertain. These transactions may be effected on the NYSE American or otherwise
and, if commenced, may be discontinued at any time.
We
do not make any representation or prediction as to the direction or magnitude of any effect that the transactions described above might
have on the price of the securities. In addition, we do not make any representation that underwriters will engage in such transactions
or that such transactions, once commenced, will not be discontinued without notice at any time.
Under
agreements into which we may enter, underwriters, dealers and agents who participate in the distribution of the securities may be entitled
to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or contribution from us to
payments which the underwriters, dealers or agents may be required to make.
Underwriters,
dealers and agents may engage in transactions with us or perform services for us in the ordinary course of business.
If
indicated in the applicable prospectus supplement, securities may also be offered or sold by a “remarketing firm” in connection
with a remarketing arrangement contemplated by the terms of the securities. Remarketing firms may act as principals for their own accounts
or as agents. The applicable prospectus supplement will identify any remarketing firm and the terms of its agreement, if any, with us.
It will also describe the remarketing firm’s compensation. Remarketing firms may be deemed to be underwriters in connection with
the remarketing of the securities.
If
indicated in the applicable prospectus supplement, we will authorize underwriters, dealers or other persons acting as our agents to solicit
offers by particular institutions to purchase securities from us at the public offering price set forth in such prospectus supplement
pursuant to delayed delivery contracts providing for payment and delivery on such future date or dates stated in such prospectus supplement.
Each delayed delivery contract will be for an amount no less than, and the aggregate principal amounts of securities sold under delayed
delivery contracts shall be not less nor more than, the respective amounts stated in the applicable prospectus supplement. Institutions
with which such delayed delivery contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and others, but will in all cases be subject to our approval. The
obligations of any purchaser under any such contract will be subject to the conditions that (1) the purchase of the securities shall
not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which the purchaser is subject,
and (2) if the securities are being sold to underwriters, we shall have sold to the underwriters the total principal amount of the securities
less the principal amount thereof covered by the delayed delivery contracts. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such delayed delivery contracts.
With
respect to the sale of any securities under this prospectus, the maximum compensation to be received by any member of the Financial Industry
Regulatory Authority, Inc. or independent broker or dealer is not expected to be greater than eight percent (8%).
To
comply with applicable state securities laws, the securities offered by this prospectus will be sold, if necessary, in such jurisdictions
only through registered or licensed brokers or dealers. In addition, securities may not be sold in some states unless they have been
registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available
and is complied with.
CERTAIN
PROVISIONS OF DELAWARE LAW AND OF OUR
CERTIFICATE
OF INCORPORATION AND BYLAWS
Anti-Takeover
Provisions of our Certificate of Incorporation and Bylaws
In
addition to the board of directors’ ability to issue shares of preferred stock, our Certificate of Incorporation and our Bylaws
contain other provisions that are intended to enhance the likelihood of continuity and stability in the composition of the board of directors
and which may have the effect of delaying, deferring or preventing a future takeover or change in control of our company unless such
takeover or change in control is approved by our board of directors. These provisions include our classified board of directors as discussed
above in “Description of Common Stock – Our Board of Directors” and advance notice procedures for stockholder proposals.
Classified
Board.
The
provision for a classified board could prevent a party who acquires control of a majority of our outstanding common stock from obtaining
control of the board until our second annual stockholders meeting following the date the acquirer obtains the controlling stock interest.
The classified board provision could have the effect of discouraging a potential acquirer from making a tender offer or otherwise attempting
to obtain control of us and could increase the likelihood that incumbent directors will retain their positions.
Size
of Board and Vacancies.
Our
Certificate of Incorporation provides that the total number of directors constituting our board of directors be fixed from time to time
exclusively by resolution adopted by a majority of the directors then in office, although less than a quorum (as defined in our Bylaws,
as amended), or by the sole remaining director. Subject to the special rights of the holders of any series of preferred stock to elect
directors, directors are elected at each annual meeting of stockholders by the vote of a majority of the shares present. Subject to the
special rights of the holders of any series of preferred stock, directors can only be removed for cause by the affirmative vote of the
holders of at least two-thirds of the voting power of the then-outstanding shares of the Company’s capital stock of the Corporation
entitled to vote generally in the election of directors voting together as a single class.
Elimination
of Stockholder Action by Written Consent.
Our
Certificate of Incorporation eliminates the right of our stockholders to act by written consent. Stockholder action must take place at
the annual or a special meeting of our stockholders.
Advance
Notice Procedures for Stockholder Proposals.
Our
Bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including
proposed nominations of persons for election to our board. Stockholders at our annual meeting may only consider proposals or nominations
specified in the notice of meeting or brought before the meeting by or at the direction of our board or by a stockholder who was a stockholder
of record on the record date for the meeting, who is entitled to vote at the meeting and who has given to our secretary timely written
notice, in proper form, of the stockholder’s intention to bring that business before the meeting. Although our Bylaws do not give
our board the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted
at a special or annual meeting, our Bylaws may have the effect of precluding the conduct of some business at a meeting if the proper
procedures are not followed or may discourage or defer a potential acquirer from conducting a solicitation of proxies to elect its own
slate of directors or otherwise attempting to obtain control of us.
Special
Meetings of Stockholders.
Our
Certificate of Incorporation provides that special meetings of our stockholders may only be called by the Chairperson of our Board, our
Chief Executive Officer or our Board acting pursuant to a resolution adopted by a majority of the directors then in office, and may not
be called by any other person or persons. Only the business stated in the notice for a special meeting will be considered at the special
meeting of stockholders.
Anti-Takeover
Effects of Delaware Law
Section
203.
We
are subject to the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”). Under Section
203, we would generally be prohibited from engaging in any business combination with any interested stockholder for a period of three
years following the time that the stockholder became an interested stockholder unless:
| ● | prior
to such time, 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 our voting stock outstanding at the time
the transaction commenced, excluding shares owned by persons who are directors and also officers,
and by employee stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a tender or exchange
offer; or |
| ● | at
or subsequent to such time, the business combination is approved by our board of directors
and authorized at an annual or special meeting of stockholders, and not by written consent,
by the affirmative vote of at least 66 and 2/3% of the outstanding voting stock that is not
owned by the interested stockholder. |
Under
Section 203, a “business combination” includes:
| ● | any
merger or consolidation involving the corporation and the interested stockholder; |
| ● | any
sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation
involving the interested stockholder; |
| ● | any
transaction that results in the issuance or transfer by the corporation of any stock of the
corporation to the interested stockholder, subject to limited 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 an 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 such entity or person.
No
Cumulative Voting.
Delaware
law prohibits cumulative voting for the election of a corporation’s directors unless the corporation’s certificate of incorporation
authorizes cumulative voting. Our Certificate of Incorporation does not provide for cumulative voting in the election of directors. Cumulative
voting would allow a minority stockholder to vote a portion or all of its shares for one or more candidates for seats on our board of
directors. Without cumulative voting, a minority stockholder will not be able to gain as many seats on our board of directors based on
the number of shares of our stock the stockholder holds as compared to the number of seats the stockholder would be able to gain if cumulative
voting were permitted. The absence of cumulative voting under our Certificate of Incorporation makes it more difficult for a minority
stockholder to gain a seat on our board of directors to influence our board’s decision regarding a takeover.
Amendments
to Our Governance Documents.
Delaware
law generally provides that the affirmative vote of a majority of the shares entitled to vote on a matter is required to amend a corporation’s
certificate of incorporation or bylaws, unless the corporation’s certificate of incorporation or bylaws requires a greater percentage.
Our
Bylaws permit our board of directors to adopt, amend or repeal our Bylaws with the approval of a majority of the directors then in office;
provided, however, that the amendment or repeal of Section 2.6 of our Bylaws requires the approval of at least two-thirds of the directors
then in office. The stockholders also have the power to adopt, amend or repeal our Bylaws; provided, however, that the affirmative vote
of the holders of at least two-thirds of the voting power of all of the then-outstanding shares of our capital stock entitled to vote
generally in the election of directors, voting together as a single class, is required to adopt, amend or repeal any provision of our
Bylaws; and provided, further, that if two-thirds of the directors then in office have approved such adoption, amendment or repeal of
any provisions of our Bylaws, then only the affirmative vote of the holders of at least a majority of the voting power of all of the
then-outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class,
will be required to adopt, amend or repeal any provision of our Bylaws.
Our
Certificate of Incorporation provides that, in addition to any vote of the holders of any class or series of our stock that may be required
by law or our Certificate of Incorporation or any Certificate of Designation, the affirmative vote of the holders of at least two-thirds
of the voting power of all of the then-outstanding shares of our capital stock entitled to vote generally in the election of directors,
voting together as a single class, will be required to amend or repeal or adopt any provision inconsistent with Sections 1.2 and 3.1
of Article IV, or Article V, Article VII, Article VIII, Article IX, Article X or Article XI (the “Specified Provisions”);
provided, further, that if two-thirds of the directors then in office have approved such amendment or repeal of, or any provision inconsistent
with, the Specified Provisions, then only the affirmative vote of the holders of at least a majority of the voting power of all of the
then-outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class,
will be required to amend or repeal, or adopt any provision inconsistent with, the Specified Provisions.
The
stockholder vote with respect to an amendment of our Certificate of Incorporation or Bylaws would be in addition to any separate class
vote that might in the future be required under the terms of any series of preferred stock that might be outstanding at the time such
a proposed amendment were submitted to stockholders.
Limitations
on Liability and Indemnification of Officers and Directors
Our
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.
Our
Bylaws provide that, to the fullest extent permitted by Delaware law, we will indemnify, and advance expenses to, a director or officer
in an action brought by reason of the fact that the director or officer is or was our director or officer, or is or was serving at our
request as a director or officer of any other entity, against all expenses, liability and loss reasonably incurred or suffered by such
person in connection therewith. Pursuant to our Bylaws, we may purchase and maintain insurance to protect the Company and any director,
officer, employee or agent of the Company or another corporation, partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the
DGCL.
To
the extent that indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed that, in the opinion of the SEC, such indemnification
is against public policy as expressed in the Securities Act and is therefore unenforceable. If a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company
in the successful defense of any action, suit or proceeding) is asserted by any of the Company’s directors, officers or controlling
persons in connection with the securities being registered, the Company will, unless in the opinion of counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by the Company is against
public policy as expressed in the Securities Act and will be governed by the final adjudication of that issue.
INFORMATION
INCORPORATED BY REFERENCE
The
SEC allows us to incorporate by reference the information and reports we file with it, which means that we can disclose important information
to you by referring you to these documents. Our SEC file number is 001-40725. The information incorporated by reference is an important
part of this prospectus, and information that we file later with the SEC will automatically update and supersede the information already
incorporated by reference. We are incorporating by reference the documents listed below, which we have already filed with the SEC, and
any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, except as to any portion of any
future report or document that is not deemed filed under such provisions, until we sell all of the securities:
| ● | Annual
Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April
1, 2024, as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on April 29, 2024,
and as amended by Amendment No. 2 on Form 10-K/A filed with the SEC on August 15, 2024; |
| ● | Quarterly
Report on Form 10-Q for the fiscal quarter ended March 31, 2024, filed with the SEC on May
15, 2024; |
| ● | Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 2024, filed with the SEC on August
14, 2024; |
| ● | Our
Current Reports on Form 8-K filed with the SEC on January 3, 2024, January 17, 2024, April 19, 2024, May 31, 2024, June 27, 2024, July 17, 2024, August 8, 2024, and August 23, 2024 (in each case, excluding
information furnished pursuant to Items 2.02 and 7.01 of Form 8-K); and |
| ● | The
description of the Company’s capital stock set forth in our Registration Statement
on Form S-4/A, filed with the SEC on July 11, 2024, in the section entitled “Description
of Securities.” |
Upon
written or oral request, we will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus
is delivered a copy of the documents incorporated by reference into this prospectus. You may request a copy of these filings, and any
exhibits we have specifically incorporated by reference as an exhibit in this prospectus, at no cost by writing or telephoning us at
the following address:
Jet.AI
Inc.
Attn:
Corporate Secretary
10845
Griffith Peak Dr.
Suite
200
Las
Vegas, NV 89135
(702)
747-4000
This
prospectus is part of a registration statement we filed with the SEC. We have incorporated exhibits into this registration statement.
You should read the exhibits carefully for provisions that may be important to you.
You
should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer
is not permitted. You should not assume that the information in this prospectus or in the documents incorporated by reference is accurate
as of any date other than the date on the front of this prospectus or those documents.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the information requirements of the Exchange Act, and in accordance with the Exchange Act, file annual, quarterly and
current reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC’s Public
Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may call the SEC at 1-800-SEC-0330 for further information on the operation
of the Public Reference Room. These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval
system, or EDGAR, via electronic means, including the SEC’s home page on the Internet (www.sec.gov).
We
have the authority to designate and issue more than one class or series of stock having various preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption. See “Description
of Preferred Stock” and “Description of Common Stock.” We will furnish a full statement of the relative rights and
preferences of each class or series of our stock which has been so designated and any restrictions on the ownership or transfer of our
stock to any stockholder upon request and without charge. Written requests for such copies should be directed to Jet.AI Inc, Attn: Corporate
Secretary, 10845 Griffith Peak Dr., Suite 200, Las Vegas, NV 89135. Our telephone number is (702) 747-4000. Our website is located at
www.Jet.AI. Information contained on our website is not incorporated by reference into this prospectus and, therefore, is not
part of this prospectus or any accompanying prospectus supplement.
EXPERTS
Hacker
Johnson & Smith PA, an independent registered public
accounting firm, has audited our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December
31, 2023 and December 31, 2022, as amended, as set forth in their report, which is incorporated by reference in this prospectus and elsewhere
in the registration statement. Our financial statements are incorporated by reference in reliance on Hacker
Johnson & Smith PA report, given on their authority as experts in accounting and auditing.
LEGAL
MATTERS
Certain
legal matters, including the legality of the securities offered, will be passed upon for us by Dykema Gossett PLLC.
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