Jet.AI Announces Pricing of $2.4 Million Registered Direct Offering

Rhea-AI Summary

Jet.AI Inc. (NASDAQ: JTAI), a private aviation and AI company, has announced a registered direct offering of approximately 26.6 million shares of common stock at $0.09 per share. The offering is expected to generate gross proceeds of $2.4 million before deducting fees and expenses. The closing is anticipated around October 11, 2024, subject to customary conditions.

Maxim Group is serving as the exclusive placement agent. The offering is made pursuant to an effective shelf registration statement. Jet.AI operates in Software and Aviation segments, offering the CharterGPT app, Jet.AI Operator platform, and various aviation services. The company, founded in 2018, is based in Las Vegas and San Francisco.

Positive

• Secured $2.4 million in gross proceeds through a registered direct offering
• Offering made under an effective shelf registration statement, indicating regulatory compliance
• Engagement of Maxim Group as exclusive placement agent, potentially enhancing credibility of the offering

Negative

• Significant dilution for existing shareholders with 26.6 million new shares being issued
• Low share price of $0.09 per share may indicate financial distress or market concerns
• Additional expenses related to the offering will reduce the net proceeds available to the company

Insights

Financial Analyst

Jet.AI's $2.4 million registered direct offering is a significant capital raise for a company with a market cap of only $2.76 million. This offering will nearly double the company's available capital, but at a steep cost. The offering price of $0.09 per share represents a substantial discount to the current market price, indicating significant dilution for existing shareholders.

The company is issuing approximately 26.6 million new shares, which will dramatically increase the total share count and likely put downward pressure on the stock price. While the additional capital could help fund operations and growth initiatives, the dilutive effect and the low offering price suggest the company may be struggling to attract investment on more favorable terms.

Investors should closely monitor how Jet.AI utilizes this capital and whether it can translate into meaningful revenue growth or operational improvements in its Software and Aviation segments. The involvement of Maxim Group as the placement agent lends some credibility to the offering, but the terms remain challenging for existing shareholders.

Tech Expert

Jet.AI's dual focus on AI-driven software and traditional aviation services presents an intriguing business model. The CharterGPT app, leveraging natural language processing and machine learning, could potentially disrupt the private jet booking experience. Similarly, the Jet.AI Operator platform aims to optimize operations for charter providers, addressing efficiency and environmental concerns.

However, the company's need for significant capital infusion at this stage raises questions about the current adoption and monetization of these technologies. The aviation industry is notoriously capital-intensive and Jet.AI's ability to balance software innovation with the operational demands of aircraft management and chartering will be crucial.

The success of this offering and subsequent performance will largely depend on Jet.AI's ability to demonstrate tangible benefits of its AI technologies in real-world aviation applications. Investors should look for metrics on user adoption, cost savings for operators and any competitive advantages gained through the company's tech offerings in future reports.

LAS VEGAS, Oct. 10, 2024 (GLOBE NEWSWIRE) -- Jet.AI Inc. (“Jet.AI” or the “Company”) (NASDAQ: JTAI), an innovative private aviation and artificial intelligence company, today announced that it has entered into a securities purchase agreement with certain institutional investors to purchase approximately 26.6 million shares of common stock in a registered direct offering at a purchase price of $0.09 per share. The gross proceeds to the Company from the registered direct offering are estimated to be approximately $2.4 million before deducting the placement agent’s fees and other estimated offering expenses payable by the Company. The offering is expected to close on or about October 11, 2024, subject to the satisfaction of customary closing conditions.

Maxim Group LLC is acting as the exclusive placement agent for the offering.

The shares of common stock are being offered pursuant to a shelf registration statement on Form S-3 (File No. 333-281578), which was declared effective by the United States Securities and Exchange Commission ("SEC") on September 9, 2024.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction. A prospectus supplement relating to the shares of common stock will be filed by the Company with the SEC. When available, copies of the prospectus supplement relating to the registered direct offering, together with the accompanying prospectus, can be obtained at the SEC's website at www.sec.gov or from Maxim Group LLC, 300 Park Avenue, New York, NY 10022, at (212) 895-3745.

About Jet.AI

Jet.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 standalone 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 card, 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, Nevada and San Francisco, California.

Safe Harbor Statement

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, Registration Statements, and subsequent reports filed by the Company with the Securities and Exchange Commission, as such factors may be updated from time to time in the Company’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. 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.

New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this press release may not occur, and actual results could differ materially and adversely from those anticipated.

Readers are cautioned not to put undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, 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.

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

FAQ

What is the price per share for Jet.AI's (JTAI) registered direct offering announced on October 10, 2024?

Jet.AI (JTAI) announced a registered direct offering at a purchase price of $0.09 per share.

How many shares of common stock is Jet.AI (JTAI) offering in its October 2024 registered direct offering?

Jet.AI (JTAI) is offering approximately 26.6 million shares of common stock in this registered direct offering.

What are the expected gross proceeds from Jet.AI's (JTAI) October 2024 registered direct offering?

The expected gross proceeds from Jet.AI's (JTAI) registered direct offering are approximately $2.4 million before deducting fees and expenses.

When is the expected closing date for Jet.AI's (JTAI) October 2024 registered direct offering?

The offering is expected to close on or about October 11, 2024, subject to customary closing conditions.