JTAIZ Jet AI Inc

Jet.AI (the “Company”) (Nasdaq: JTAI), an innovative private aviation and artificial intelligence (“AI”) company, today announced financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 and Recent Operational Highlights

• Launched DynoFlight 2.0 platform, an advanced AI web-based solution for aviation carbon management
• Commenced and successfully completed exchange offer and consent solicitation relating to its outstanding warrants
• Announced AI-Powered Jet Card with Empty Leg Benefit, as a result of Reroute AI
• Announced non-recourse debt financing related to the proposed purchase of Bombardier Challenger 3500 aircraft
• Released the National Jet Card Program which offers all categories of private jet for service within the continental U.S., guaranteed rates, guaranteed availability, and a 48-hour call out

Second Quarter 2024 Financial Results

Revenues were $3.1 million, an increase of $0.3 million compared to the same period last year. The primary reason was due to additional service revenue arising from an additional management agreement for customer aircraft and increased chartering of the Company’s Citation CJ4.

Software App and Cirrus Charter revenue, the gross amount of charters booked through CharterGPT and Cirrus, was $1.6 million, a slight increase compared to the same period last year.

Management and Other Services revenue, which is comprised of revenues generated from managing and chartering our customer aircrafts, totaled $914,000 compared to $423,000 in the same period last year.

Jet Card and Fractional Programs revenue, which is generated from the sale and use of jet cards and service revenue related to ongoing utilization by the Company’s fractional customers, totaled $559,000 compared to $811,000 in the same period last year.

Cost of revenues totaled $3.5 million compared to $3.0 million in the same period last year. The increase is primarily due to an increase in Cirrus charter flight activity, costs related to the operation of aircraft and payments to Cirrus for their management.

Gross loss totaled approximately $417,000 compared to $201,000 in the same period last year. The increase was largely driven by reduced flights performed for the Company’s jet card customers without a corresponding reduction in fixed costs.

Operating expenses totaled $2.8 million compared to $2.2 million in the same period last year. The increase was primarily due to an increase in general and administrative expenses, research and development costs, offset by slightly lower sales and marketing expenses.

Operating loss was approximately $3.2 million compared to $2.4 million in the same period last year. The increase was primarily due to the increase in general and administrative expenses resulting from the increase in professional service expenses and wages following the Business Combination.

As of June 30, 2024, the Company had cash and cash equivalents of approximately $528,000 compared to $595,555 as of March 31, 2024.

Management Commentary“In the second quarter, we made significant progress in our anticipated fleet deal with Bombardier, as we announced a non-binding, non-recourse debt financing arrangement, alongside securing $16.5 million in financing from Ionic Ventures LLC,” said Founder and Executive Chairman Mike Winston. “Additionally, we successfully completed the warrant exchange offer, eliminating potentially dilutive warrant overhang and simplifying our capital structure.”

“We received an unsolicited bid for one of our HondaJets at a price that would imply a net economic benefit compared to its continued use in the fleet and so have entered into a contract to sell it as part of our gradual reorientation of the fleet toward the higher margin Challenger 3500 aircraft. We separately have made several advancements on our software business, including the implementation of Reroute AI for our Jet Card holders offering empty leg benefits, and the launch of our enhanced DynoFlight 2.0 platform, which integrates AI and synced fleet data with our partner, FL3XX. These two solutions, along with CharterGPT, continue to attract market interest. We remain cautiously optimistic and look forward to announcing further news on our proposed fleet deal.”

About Jet.AIJet.AI operates in two segments, Software and Aviation, respectively. The Software segment features the B2C CharterGPT app and the B2B Jet.AI Operator platform. The CharterGPT app uses natural language processing and machine learning to improve the private jet booking experience. The Jet.AI operator platform offers a suite of stand-alone software products to enable FAA Part 135 charter providers to add revenue, maximize efficiency, and reduce environmental impact. The Aviation segment features jet aircraft fractions, jet cards, on-fleet charter, management, and buyer’s brokerage. Jet.AI is an official partner of the Las Vegas Golden Knights, 2023 NHL Stanley Cup® champions. The Company was founded in 2018 and is based in Las Vegas, NV and San Francisco, CA.

Forward-Looking Statements

This press release contains certain statements that may be deemed to be “forward-looking statements” within the meaning of the federal securities laws, including the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, with respect to the products and services offered by Jet.AI and the markets in which it operates, and Jet.AI’s projected future results. Statements that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements relate to future events or our future performance or future financial condition. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our Company, our industry, our beliefs and our assumptions. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions or the negative of these terms or other similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties that could cause the actual results to differ materially from the expected results. As a result, caution must be exercised in relying on forward-looking statements, which speak only as of the date they were made. Factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found in the Company’s most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Readers are cautioned not to put undue reliance on forward-looking statements, and Jet.AI assumes no obligation and does not intend to update or revise these forward-looking statements, whether because of new information, future events, or otherwise, except as provided by law.

Jet.AI Investor Relations:Gateway Group, Inc. 949-574-3860Jet.AI@gateway-grp.com

JET.AI, INC.(FORMERLY JET TOKEN, INC.)CONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)
	June 30,				December 31,
	2024				2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	528,117			$	2,100,543
Accounts receivable	535,975				96,539
Other current assets	72,769				190,071
Prepaid offering costs	800,000				800,000
Total current assets	1,936,861				3,187,153
Property and equipment, net	6,329				7,604
Intangible assets, net	20,401				73,831
Right-of-use lease asset	1,312,332				1,572,489
Investment in joint venture	100,000				100,000
Deposits and other assets	798,211				798,111
Total assets	$	4,174,134			$	5,739,188
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$	1,515,201			$	1,656,965
Accrued liabilities	2,749,030				2,417,115
Deferred revenue	1,099,466				1,779,794
Operating lease liability	517,733				510,034
Note payable, net	-				321,843
Notes payable - related party, net	-				266,146
Total current liabilities	5,881,430				6,951,897
Lease liability, net of current portion	760,524				1,021,330
Redeemable preferred stock	1,702,000				1,702,000
Total liabilities	8,343,954				9,675,227
Commitments and contingencies (Note 2 and 5)	-				-
Stockholders' Deficit
Preferred Stock, 4,000,000 shares authorized, par value $0.0001, 0 issued and outstanding	-				-
Series B Convertible Preferred Stock, 5,000 shares authorized, par value $0.0001, 150 and 0 issued and outstanding	-				-
Common stock, 55,000,000 shares authorized, par value $0.0001, 14,755,144 and 9,754,364 issued and outstanding	1,475				975
Subscription receivable	(6,724		)		(6,724		)
Additional paid-in capital	41,557,422				35,342,098
Accumulated deficit	(45,721,993		)		(39,272,388		)
Total stockholders' deficit	(4,169,820		)		(3,936,039		)
Total liabilities and stockholders' deficit	$	4,174,134			$	5,739,188

JET.AI, INC.(FORMERLY JET TOKEN, INC.)CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2024				2023				2024				2023
Revenues	$	3,083,884			$	2,792,808			$	6,932,482			$	4,668,316
Cost of revenues	3,500,880				2,993,631				7,473,834				4,944,157
Gross loss	(416,996		)		(200,823		)		(541,352		)		(275,841		)
Operating Expenses:
General and administrative (including stock-based compensation of $1,201,728, $1,348,043, $2,401,046, and $2,755,087, respectively)	2,663,753				2,115,704				5,210,047				4,603,722
Sales and marketing	102,470				103,541				549,070				223,708
Research and development	37,396				28,636				69,942				64,955
Total operating expenses	2,803,619				2,247,881				5,829,059				4,892,385
Operating loss	(3,220,615		)		(2,448,704		)		(6,370,411		)		(5,168,226		)
Other expense (income):
Interest expense	-				-				79,314				-
Other income	(59		)		-				(120		)		-
Total other expense (income)	(59		)		-				79,194				-
Loss before provision for income taxes	(3,220,556		)		(2,448,704		)		(6,449,605		)		(5,168,226		)
Provision for income taxes	-				-				-				-
Net Loss	$	(3,220,556	)		$	(2,448,704	)		$	(6,449,605	)		$	(5,168,226	)
Less cumulative preferred stock dividends	29,727				-				59,455				-
Net Loss to common stockholders	$	(3,250,283	)		$	(2,448,704	)		$	(6,509,060	)		$	(5,168,226	)
Weighted average shares outstanding - basic and diluted	12,906,352				4,520,625				12,224,502				4,511,751
Net loss per share - basic and diluted	$	(0.25	)		$	(0.54	)		$	(0.53	)		$	(1.15	)
check - should be zero									-
Per BS									$	(6,449,605	)
Stock-based compensation	$	1,201,728			$	1,348,043			$	2,401,046			$	2,755,087

JET.AI, INC.(FORMERLY JET TOKEN, INC.)CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)
	Six Months Ended
	June 30,
	2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,449,605	)		$	(5,168,226	)
Adjustments to reconcile net loss to net cash used inoperating activities:
Amortization and depreciation	67,626				67,192
Amortization of debt discount	80,761				-
Stock-based compensation	2,401,046				2,755,087
Non-cash operating lease costs	260,157				252,686
Changes in operating assets and liabilities:
Accounts receivable	(439,436		)		-
Other current assets	117,302				171,876
Accounts payable	(141,764		)		254,773
Accrued liabilities	331,915				(173,160		)
Deferred revenue	(680,328		)		166,182
Operating lease liability	(253,107		)		(245,636		)
Net cash used in operating activities	(4,705,433		)		(1,919,226		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	-				(4,340		)
Purchase of intangible assets	(12,921		)		(17,174		)
Investment in joint venture	-				(100,000		)
Deposits and other assets	(100		)		(135		)
Net cash used in investing activities	(13,021		)		(121,649		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments - notes payable	(371,250		)		-
Repayments - related party notes payable	(297,500		)		-
Offering costs	(155,000		)		(436,969		)
Exercise of warrants	742,474				-
Proceeds from sale of Series B Preferred Stock	1,500,025				-
Proceeds from sale of Common Stock	1,727,279				1,588,695
Net cash provided by financing activities	3,146,028				1,151,726
Decrease in cash and cash equivalents	(1,572,426		)		(889,149		)
Cash and cash equivalents, beginning of period	2,100,543				1,527,391
Cash and cash equivalents, end of period	$	528,117			$	638,242
Supplemental disclosures of cash flow information:
Cash paid for interest	$	79,314			$	-
Cash paid for income taxes	$	-			$	-
Non cash financing activities:
Subscription receivable from sale of Common Stock	$	-			$	25,479