JetAI (JTAI) Risk Analysis

The sale of shares of common stock in the public market or otherwise, particularly sales by our officers or directors, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that is deemed appropriate. Resales of shares of our common stock may cause the market price of shares of our common stock to drop significantly, even if our business is doing well. We have an effective Registration Statement on Form S-3 (File No. 333-281578 and File No. 333-292836) providing for the initial sale and issuance of our securities in an amount up to approximately $55.8 million. We also have an effective Registration Statement on Form S-3 (File No. 333-293011) providing for the initial sale and issuance of our securities in an amount up to $250 million. Given the substantial number of shares of common stock registered under these Registration Statements on Form S-3, the issuance of sales of our common stock or the sale of shares of our common stock by existing stockholders, or the perception of any such issuance or sale, could increase the volatility of the market price of shares of our common stock or result in a significant decline in the public trading price of shares of our common stock. Some of our existing stockholders have or may acquire their shares at a significant discount to the market price of shares of our common stock. This may create an incentive for such stockholders to sell shares of our common stock because such stockholders purchased the shares of our common stock at prices lower than the then-current trading price of shares of our common stock.

In order to raise additional capital, we may at any time (but subject to applicable limitations imposed under SEC rules or Nasdaq rules), offer, sell, and issue additional shares of our common stock (or other securities) under an effective Registration Statement on Form S-3 (File No. 333-289982 and/or File No. 333-293011). These sales may be made from time to time pursuant to the Equity Distribution Agreement with Maxim Group LLC dated November 21, 2025, as amended, or otherwise. If we raise capital through the issuance of equity securities, the percentage ownership of our existing stockholders may be reduced, and such existing shareholders may experience dilution in net book value per share. Any such newly-issued equity securities may also have rights, preferences or privileges senior to those of the holders of the common shares. If we raise additional funds through the incurrence of indebtedness, such indebtedness may involve restrictive covenants that impair our ability to pursue our growth strategy and other aspects of its business plan, expose us to greater interest rate risk and volatility, require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital and capital expenditures, increase our vulnerability to general adverse economic and industry conditions, place us at a competitive disadvantage compared to our competitors that have less debt, and limit our ability to borrow additional funds. In connection with any such future capital raising transactions, whether involving the issuance of equity securities or the incurrence of indebtedness, we may be required to accept terms that restrict our ability to raise additional capital for a period of time, which may limit or prevent us from raising capital at times when it would otherwise be opportunistic to do so.

Shares of our common stock are currently listed on Nasdaq under the symbol "JTAI". In order to continue listing our securities on Nasdaq, we must maintain certain financial, distribution and stock price levels. We cannot assure you that we will be able to continue to meet those listing requirements. On February 6, 2026, we received the Notice Letter from the Nasdaq Listing Qualifications Department of Nasdaq stating that we are not in compliance with Nasdaq Listing Rule 5450(a)(1), the Minimum Bid Price Requirement, as the minimum bid price of our common stock had been below $1.00 per share for 30 consecutive business days. The Notice Letter has no immediate effect on the listing or trading of our common stock. We have 180 calendar days, or until August 5, 2026, to regain compliance with the Minimum Bid Price Requirement. In the event we do not regain compliance with the Minimum Bid Price Requirement during the Initial Compliance Period, we may be eligible for an additional 180-calendar day compliance period if, at that time, we meet the continued listing requirement for the 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. At the 2025 annual meeting of stockholders, we received stockholder approval to effect a reverse stock split of our issued and outstanding shares of common stock at a ratio of up to 1-for-250. Should we not regain compliance with the Minimum Bid Price Requirement during the Initial Compliance Period or the Additional Compliance Period, if applicable, we expect to effect such a reverse stock split in a sufficient ratio so as to cause us to regain compliance with the Minimum Bid Price Requirement. Although we believe that we will be able to regain compliance with the Minimum Bid Price Requirement, there can be no assurance that we will be able to regain compliance with the Minimum Bid Price Requirement, satisfy the requirements necessary for eligibility for an Additional Compliance Period, or maintain compliance with any other listing requirements. Failure to meet the continued listing standards of Nasdaq may result in shares of our common stock being delisted from Nasdaq. If Nasdaq were to delist shares of our common stock from trading and we are unable to list shares of our common stock on another national securities exchange, we expect shares of our common stock could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including: - a limited availability of market quotations for shares of our common stock;   - reduced liquidity for shares of our common stock;   - a determination that our common stock qualifies as a "penny stock," requiring brokers trading in shares of our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for shares of our common stock;   - a limited amount of news and analyst coverage; and   - a decreased ability to issue additional securities or obtain additional financing in the future. The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as "covered securities." Since shares of our common stock are listed on Nasdaq, they qualify as a covered security. Although the states are preempted from regulating the sale of our securities, the federal statute allows the states to investigate companies if there is a suspicion of fraud. If there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on a securities exchange, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

Fluctuations in the price of shares of our 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 shares of our 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: - actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;   - failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;   - issuance of new or updated research or reports by securities analysts or changed recommendations for our industries in general;   - announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations, financings, or capital commitments;   - the volume of shares of our common stock available for public sale;   - operating and stock price performance of other companies that investors deem comparable to us;   - our ability to market new and enhanced products and technologies on a timely basis;   - changes in laws and regulations affecting our business;   - our ability to meet compliance requirements;   - commencement of, or involvement in, litigation involving us;   - changes in financial estimates and recommendations by securities analysts concerning us 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 shares of our common stock by our directors, executive officers, significant stockholders or the perception that such sales could occur;   - trading volume of shares of our common stock, including as a result of transactions we may execute pursuant to existing financing arrangements;   - 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 us could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Our Certificate of Incorporation and certain rules and regulations provide certain rights and powers to our board of directors that could contribute to the delay or prevention of an acquisition that we deem undesirable. These include, but are not limited to: - authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to shares of our common stock;   - limiting the liability of, and providing indemnification to, our directors and officers;   - limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;   - requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board;   - controlling the procedures for the conduct and scheduling of Board and stockholder meetings;   - providing an exclusive forum selection provision;   - providing our board of directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings;   - establishing a classified board of directors so that not all members of our board are elected at one time;   - limiting the determination of the number of directors on our Board and the filling of vacancies or newly created seats on the board to our Board then in office; and   - providing that directors may be removed by stockholders only for cause. Any of the foregoing provisions and terms that have the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of our securities, and could also affect the price that some investors are willing to pay for our securities. As permitted by our governing documents, in February 2026 the Company entered into a Rights Agreement with its transfer agent and our Board declared a dividend distribution of one right for each outstanding share of Common Stock. Each right, when and if it becomes exercisable, would allow the holder to purchase one one-thousandth of a share of the Company's Series C Junior Participating Preferred Stock. In the event of a takeover attempt, this preferred stock would give holders of the rights (other than the potential acquirer) the ability to acquire additional shares of common stock at a discount, leading to the dilution of the potential acquirer's stake. The distribution of the rights and the adoption of the corresponding Rights Agreement can have negative effects such as those described above.