UPDATED: Jet.AI Inc. Announces Reverse Stock Split

Rhea-AI Summary

Jet.AI (Nasdaq: JTAI) announced a 1-for-225 reverse stock split effective November 12, 2024. The stock will continue trading on Nasdaq under JTAI with a new CUSIP number 47714H308. This corporate action aims to regain compliance with Nasdaq's minimum bid price requirement and make additional shares available for future issuance. Every 225 shares will automatically convert to one share, maintaining the same par value. No fractional shares will be issued; affected stockholders will receive cash payments instead. Proportional adjustments will be made to equity awards, convertible preferred stock, and warrants.

Positive

• Potential to regain Nasdaq listing compliance
• Creates additional shares available for future issuance

Negative

• Significant 1-for-225 share consolidation indicates severe price decline
• Risk of continued non-compliance with Nasdaq requirements
• Potential shareholder dilution from future share issuance

Insights

Financial Analyst

This reverse stock split is a critical financial maneuver aimed at maintaining Nasdaq listing compliance. At 1-for-225, this is an unusually large ratio, suggesting significant pressure on the stock price. While technically not changing the company's market value, such extreme consolidation often signals underlying financial distress. The move will artificially boost the share price but also reduces float and potentially impacts liquidity. $8.6M market cap indicates a micro-cap company struggling with valuation challenges. Post-split price manipulation could lead to increased volatility and potential dilution risks through future share issuances, which the company explicitly mentions as an objective. Historical patterns show that aggressive reverse splits rarely solve fundamental business challenges and often precede further decline.

LAS VEGAS, NV, Nov. 11, 2024 (GLOBE NEWSWIRE) -- Jet.AI Inc. (Nasdaq: JTAI) (the “Company”), today announced that the Company has determined to effect a reverse stock split of its outstanding shares of common stock at a ratio of 1-for-225. The reverse stock split is expected to take effect before markets open on Tuesday, November 12, 2024. The Company’s common stock will continue to be traded on the Nasdaq Capital Market under the symbol JTAI and will begin trading on a split-adjusted basis when the market opens on Tuesday, November 12, 2024. The new CUSIP number for the Company’s common stock following the reverse stock split will be 47714H308.

The reverse stock split is intended to enable the Company to achieve several important corporate objectives, including enabling the Company to regain compliance with the minimum bid price requirement under Nasdaq’s continued listing criteria and making additional shares of common stock available for future issuance.

At the effective time of the reverse stock split, every 225 shares of the Company’s issued and outstanding common stock will be converted automatically into one issued and outstanding share of common stock without any change in the par value per share. Stockholders holding shares through a brokerage account will have their shares automatically adjusted to reflect the 1-for-225 reverse stock split. The reverse split will not result in any change in the par value per share or the total number of authorized shares of common stock.

The reverse stock split will affect all stockholders uniformly and will not alter any stockholder’s percentage interest in the Company’s equity, except to the extent that the reverse stock split would result in a stockholder owning a fractional share. No fractional shares will be issued in connection with the reverse stock split. Stockholders of record otherwise entitled to receive a fractional shares as a result of the reverse stock split will receive a cash payment in lieu of such fractional share. Proportional adjustments will be made to the number of shares of the Company’s common stock issuable upon exercise or conversion of the Company’s equity awards, convertible preferred stock and warrants, as well as the applicable exercise or conversion price. Stockholders with shares in brokerage accounts should direct any questions concerning the reverse stock split to their broker; all other stockholders may direct questions to the Company’s transfer agent, Continental Stock Transfer & Trust.

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 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 share ownership, 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, 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 federal securities laws, including the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. 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. Such forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” 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 subject to a number of risks and uncertainties (some of which are beyond our control) that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. Accordingly, readers should not place undue reliance on any forward-looking statements. These risks include risks relating to agreements with third parties; our ability to raise funding in the future, as needed, and the terms of such funding, including potential dilution caused thereby; our ability to continue as a going concern; our ability to maintain the listing of our common stock on Nasdaq; claims relating to alleged violations of intellectual property rights of others; the outcome of any current legal proceedings or future legal proceedings that may be instituted against us; unanticipated difficulties or expenditures relating to our business plan; and those risks detailed in the Company’s most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date, except as otherwise provided by law.

Investor Contact:

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

FAQ

What is the reverse stock split ratio announced by Jet.AI (JTAI)?

Jet.AI announced a 1-for-225 reverse stock split effective November 12, 2024.

Why is Jet.AI (JTAI) implementing a reverse stock split?

The reverse split aims to regain compliance with Nasdaq's minimum bid price requirement and make additional shares available for future issuance.

When will JTAI's reverse stock split take effect?

The reverse stock split will take effect before markets open on Tuesday, November 12, 2024.

What happens to fractional shares in JTAI's reverse split?

Stockholders entitled to fractional shares as a result of the reverse split will receive cash payments in lieu of these shares.