JetAI Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
JTAI$0.91+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001493152-24-032244
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001493152-24-045235
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 150 previous paragraphs and 154 current paragraphs.
81 unchanged; 61 reworded; 11 added; 8 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 23 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Unless otherwise indicated, all information in this Quarterly Report on Form 10-Q gives effect to a 1-for-225 reverse stock split of our common stock that became effective on November 12, 2024, and all references to shares of common stock outstanding and per share amounts give effect to the reverse stock split.
Current report
In the third quarter of 2024, the Company operated three HondaJets, one King Air 390 and one CJ4 as compared to the three HondaJets and one CJ4 that it operated in the comparable 2023 period.
Current report
Gross (loss) profit
Current report
In the third quarter of 2024, the Company’s operating expenses decreased by approximately $1.6 million over the prior year comparable period due to an approximate $1.5 million decrease in general and administrative expenses, a $74,000 reduction in sales and marketing expenses and an $11,000 reduction in research and development costs. Excluding non-cash stock-based compensation of $1.3 million and $2.7 million in the third quarter of 2024 and 2023, respectively, general and administrative expenses declined by approximately $129,000 primarily due to a decrease in professional service expenses of $297,000 with a substantial portion of these expenses during the 2023 period related to the closing of the Business Combination in the third quarter of 2023, offset by an increase in Directors and Officers Insurance costs of $40,000 and increased wages of $170,000, primarily due to increased commissions compensation payable on software app revenue.
Current report
During the third quarter of 2024, the Company recognized approximately $56 in other income as compared to $24,000 in other expense due primarily to interest expense related to the Bridge Agreement as defined and discussed below.
Current report
Nine Months Ended September 30, 2024 and 2023
Current report
Gross (loss) profit
Current report
On September 24, 2024, the Company and Ionic entered into a letter agreement (the “Letter Agreement”) that set forth certain understandings and agreements among the Company and Ionic. Pursuant to the Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the transaction documents, related to certain actions and transactions identified in the Letter Agreement that the Company has undertaken or effected prior to the date of the Letter Agreement. As consideration for the waiver, the Company agreed to a release of Ionic and its affiliates and issued an additional 50 shares of Series B Preferred Stock to Ionic.
Current report
On October 10, 2024, the Company and Ionic entered into a second letter agreement (the “Second Letter Agreement”) that set forth certain understandings and agreements among the Company and Ionic. Pursuant to the Second Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the transaction documents, related to certain actions and transactions identified in the Second Letter Agreement. Such actions include the Company’s filing of an amendment to a registration statement on Form S-1 (File No. 333-281911) with the SEC and a registered direct offering. As consideration for the waiver, the Company agreed to change the Conversion Measurement Period (as defined in the Certificate of Designations) for the previously issued 200 shares of Series B Preferred Stock to begin on March 28, 2024 and to end in accordance with the Certificate of Designations.
Current report
Net cash used in operating activities for the nine months ended September 30, 2024 was $4.8 million compared to $2.7 million for the nine months ended September 30, 2023. The cash outflow from operating activities in the 2024 period primarily consisted of our net loss, net of non-cash charges of $4.2 million, a $0.4 million reduction in lease liability, which were offset by a $1.2 million increase in operating liabilities and a $41,000 reduction in accounts receivables and other current assets. The increase in operating liabilities was primarily driven by a $1.2 million increase in the Company’s accounts payable and accrued liabilities relating to the operation of the Company’s aircraft and a $0.6 million decrease in deferred jet card revenue relating to the sale of jet card hours not yet flown. The increase in net cash used in operating activities for the 2024 period was primarily driven by a $1.6 million increase in our net loss, net of non-cash charges resulting from the Company’s higher level of operations during the first nine months of 2024 as a result of operating a greater number of operational aircraft and startup expenses incurred during 2024 as well as the $0.5 million changes in operating assets and liabilities.
Current report
Subsequent to September 30, 2024 on October 31, 2024, the Company entered into and aircraft purchase agreement for the purchase of 3 Cessna Citation CJ4 aircraft (the “CJ4 Aircraft”). Under the aircraft purchase agreement, the Company may purchase from Textron specifically configured CJ4 Aircraft. Upon execution of the purchase agreement an initial deposit was paid for each aircraft, and three additional deposits are due on each aircraft and payable on defined intervals starting in November 2024 through August 2025. Upon delivery of the aircraft the remainder of the purchase price will become due and payable.
Removed paragraphs (8)
Previous report
In the second quarter of 2024, the Company operated 3 HondaJets, 1 CJ4 and, in addition to the CJ4, managed a King Air 350i.
Previous report
Gross loss
Previous report
In the second quarter of 2024, the Company’s operating expenses increased by approximately $556,000 over the prior year period primarily due to an approximate $548,000 increase in general and administrative expenses, $9,000 increase in research and development costs and slightly lower sales and marketing expenses. Excluding non-cash stock-based compensation of $1.2 million and $1.3 million in the second quarter of 2024 and 2023, respectively, general and administrative expenses rose by approximately $694,000 primarily due to an increase in professional service expenses of $364,000 resulting primarily from increased legal expenses of $319,000 relating to the Company’s SEC filings and transactions the Company pursued during the quarter and $41,000 in payments to our Board of Directors, as well as increased wages of $294,000, primarily due to increased headcount.
Previous report
During the second quarter of 2024, the Company recognized approximately $59 in interest income. There were no such other income or expenses in the second quarter of 2023.
Previous report
Six Months Ended June 30, 2024 and 2023
Previous report
Gross loss
Previous report
Net cash used in operating activities for the six months ended June 30, 2024 was approximately $4.7 million compared to approximately $1.9 million for the six months ended June 30, 2023 and was primarily driven by the increase in operating loss discussed above, as well as a $439,000 increase in accounts receivable, a $142,000 reduction in accounts payable, a $680,000 decrease in deferred revenue, partially offset by a $332,000 increase in accrued liabilities.
Previous report
In June 2022, the Company received an unsolicited offer for the outright purchase of one of its HondaJet Elite aircraft, which netted the Company approximately $1.2 million of proceeds over the leased cost. After internal financial and legal review, the Company determined that the sale of the aircraft would offer a net benefit to its stakeholders. The Company considered a number of factors in making this decision, including but not limited to: (1) the availability of replacement aircraft, (2) pilot availability, (3) the time to register the aircraft for commercial use, and (4) the risk-adjusted lifetime return on capital associated with operating the aircraft relative to the purchase price offered.
Reworded paragraphs (61)
Previous wording
The following discussion and analysis provides information which Jet.AI’s management believes is relevant to an assessment and understanding of its consolidated results of operations and financial condition. You should read the following discussion and analysis of Jet.AI’s financial condition and results of operations together with the historical unaudited consolidated financial statements as of June 30, 2024 and December 31, 2023, and the three and six months ended June 30, 2024 and 2023, and the related notes that are included elsewhere in this report.
Current wording
The following discussion and analysis provides information which Jet.AI’s management believes is relevant to an assessment and understanding of its consolidated results of operations and financial condition. You should read the following discussion and analysis of Jet.AI’s financial condition and results of operations together with the historical unaudited consolidated financial statements as of September 30, 2024 and December 31, 2023, and the three and nine months ended September 30, 2024 and 2023, and the related notes that are included elsewhere in this report.
Previous wording
Certain of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to plans and strategy for Jet.AI’s business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in “Item 1A – Risk Factors” in Jet.AI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, Jet.AI’s actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this report. We assume no obligation to update any of these forward-looking statements.
Current wording
Certain of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to plans and strategy for Jet.AI’s business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in “Item 1A – Risk Factors” in Jet.AI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, and factors identified in other subsequent reports filed with the SEC Jet.AI’s actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this report. We assume no obligation to update any of these forward-looking statements.
Previous wording
On August 10, 2023, Oxbridge Acquisition Corp. (“Oxbridge”) consummated a business combination pursuant to a Business Combination Agreement and Plan of Reorganization, as amended by Amendment No. 1 to the Business Combination Agreement, dated as of May 11, 2023 (the “Business Combination Agreement”) among Oxbridge, OXAC Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of Oxbridge (“First Merger Sub”), Summerlin Aviation LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Oxbridge (“Second Merger Sub”), and Jet Token Inc., a Delaware corporation (“Jet Token”). Pursuant to the Business Combination Agreement, Oxbridge redomiciled as a Delaware corporation and was immediately renamed Jet.AI Inc., and promptly thereafter, (i) First Merger Sub merged with and into Jet Token, with Jet Token surviving the merger as a wholly owned subsidiary of Jet.AI Inc., and (b) Jet Token merged with and into Second Merger Sub (each merger and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”).
Current wording
On August 10, 2023, Oxbridge Acquisition Corp. (“Oxbridge”) consummated a business combination pursuant to a Business Combination Agreement and Plan of Reorganization, as amended by Amendment No. 1 to the Business Combination Agreement, dated as of May 11, 2023 (the “Business Combination Agreement”) among Oxbridge, OXAC Merger Sub I, Inc., a direct, wholly owned subsidiary of Oxbridge (“First Merger Sub”), Summerlin Aviation LLC, a direct, wholly owned subsidiary of Oxbridge (“Second Merger Sub”), and Jet Token Inc., a Delaware corporation (“Jet Token”). Pursuant to the Business Combination Agreement, Oxbridge redomiciled as a Delaware corporation and was immediately renamed Jet.AI Inc., and promptly thereafter, (i) First Merger Sub merged with and into Jet Token, with Jet Token surviving the merger as a wholly owned subsidiary of Jet.AI Inc., and (b) Jet Token merged with and into Second Merger Sub (each merger and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”).
Previous wording
As a result of the Business Combination, Jet.AI has one class of common stock, listed on The Nasdaq Global Market (“Nasdaq”) under the ticker symbol “JTAI,” and two classes of warrants, the Redeemable Warrants and the Merger Consideration Warrants, listed on Nasdaq under the ticker symbols “JTAIW” and “JTAIZ,” respectively.
Current wording
As a result of the Business Combination, Jet.AI has one class of common stock, listed on The Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “JTAI,” and had two classes of warrants, the Redeemable Warrants and the Merger Consideration Warrants, that at the time of closing of the Business Combination were listed on Nasdaq under the ticker symbols “JTAIW” and “JTAIZ,” respectively.
Previous wording
Revenues for the second quarter of 2024 totaled approximately $3.1 million, a $0.3 million increase from $2.8 million during the comparable period in 2023, which consisted of $914,000 in services revenue from the management of customers’ aircraft, $657,000 in software-related revenue, $559,000 in Jet Card revenue for hours flown and other charges based on hours flown, and $954,000 in revenue from the chartering of our HondaJets by our operating partner Cirrus.
Current wording
Revenues for the third quarter of 2024 totaled $3.9 million, a $0.5 million increase from 2023’s third quarter revenues of $3.4 million, and were comprised of $977,000 in services revenue from the management of customers’ aircraft, $2.4 of revenues related to our software App Cirrus Charter program (being $1.1 million in software-related revenue and $1.3 million in revenue from the chartering of our HondaJets by our operating partner Cirrus), $547,000 in Jet Card revenue for hours flown and other charges based on hours flown, and $1.3 million in revenue from the chartering of our HondaJets by our operating partner Cirrus.
Previous wording
The primary reason for this increase in revenue was due to additional service revenue of $500,000 arising from an additional management agreement for customer aircraft in the second quarter of 2024 and increased chartering of the Company’s Citation CJ4, offset by a $253,000 reduction in software revenue due to seasonality and the resulting reduced flying by the Company’s Jet Card holders and ad hoc charter clients.
Current wording
The primary reason for this increase in revenue was due to additional service revenue of $977,000 in the 2024 period arising from the Company entering into an agreement to manage a second customer aircraft in the second quarter of 2024 and the resulting revenue thereafter.
Previous wording
The Company recognized $657,000 in revenue related to App-generated services and software revenues related to charter bookings made through its App in the second quarter of 2024, a decrease of $195,000 compared to the 2023 period and primarily reflected seasonality and a shift in Spring-related charters from April to March. This compares to software revenues totaling $852,000 in the 2023 period.
Current wording
The Company recognized $1.1 million in revenue related to App-generated Services and software revenues related to charter bookings made through its App in the third quarter of 2024, an increase of $300,000 and reflected additional brokerage staff, increased marketing and greater awareness of the Company. This compares to revenues totaling $798,000 in the 2023 period.
Previous wording
During the second quarter of 2024, the Company sold 55 prepaid flight hours under its jet card and fractional programs, amounting to $319,000, and recognized $616,000 of revenue for 87 flight hours flown or forfeited, as well as additional charges. These additional charges primarily represent charges for cost reimbursements such as a fuel component adjustment to adjust for changes in fuel prices relative to the jet card and fractional contracts’ base fuel price and reimbursement of federal excise taxes. Prepaid flight hours are recognized as revenue as the flight hours are used or forfeited. At June 30, 2024, the Company had recorded deferred revenue of $1.1 million on its consolidated balance sheets representing prepaid flight hours for which the related travel had not yet occurred.
Current wording
During the third quarter of 2024, the Company sold 110 prepaid flight hours under its jet card and fractional programs, amounting to $615,000, and recognized $547,000 of revenue for 85 flight hours flown or forfeited, as well as additional charges. These additional charges represent primarily charges for cost reimbursements such as a fuel component adjustment to adjust for changes in fuel prices relative to the jet card and fractional contracts’ base fuel price and reimbursement of federal excise taxes. Prepaid flight hours are recognized as revenue as the flight hours are used or forfeited. At September 30, 2024, the Company had recorded deferred revenue of $1.2 million on its consolidated balance sheet representing prepaid flight hours for which the related travel had not yet occurred.
Previous wording
In the second quarter of 2023, the Company sold 122 prepaid flight hours, amounting to $713,000, and recognized $709,000 of revenue for 113 flight hours flown or forfeited, as well as additional charges.
Current wording
In the third quarter of 2023, the Company sold 122 prepaid flight hours, amounting to $713,000, and recognized $709,000 of revenue for 113 flight hours flown or forfeited, as well as additional charges. At September 30, 2023, the Company had recorded deferred revenue of approximately $1.2 million.
Previous wording
The decrease in flight hours flown period over period is a direct result of a reduction in flying by the Company’s Jet Card holders during this period.
Current wording
The increase in flight hours flown period over period is a direct result of the increased number of the Company’s aircraft during the 2024 period when compared to the 2023 period.
Previous wording
The following table details the flight hours sold and flown or forfeited, as well as the associated deferred revenues and recognized revenues, respectively, and additional charges for the second quarter of 2024 and 2023:
Current wording
The following table details the flight hours sold and flown or forfeited, as well as the associated deferred revenues and recognized revenues, respectively, and additional charges for the third quarter of 2024 and 2023:
Previous wording
In addition to its software App and jet card revenues, the Company also generates revenue through the direct chartering of its HondaJet and Citation CJ4 aircraft by Cirrus. During the second quarter of 2024 this revenue amounted to approximately $954,000, an increase of $247,000, or 34.9% from the second quarter of 2023. The increased revenue was a direct result of increased availability and chartering of the managed Citation CJ4.
Current wording
In addition to its software App and jet card revenues, the Company also generates revenue through the direct chartering of its HondaJet aircraft by Cirrus. During the third quarter of 2024 this revenue amounted to approximately $1.1 million, an increase of $249,000, or 23.4% from the prior year period. The increased revenue was a direct result of the increased chartering of the Company’s HondaJet and CJ4 fleet, as well as increased software app bookings in the third quarter of 2024 as compared to the third quarter of 2023.
Previous wording
Our cost of revenue is comprised of payments to Cirrus Aviation for the maintenance and management of our fleet aircraft, commissions to Cirrus for their arranging for charters on our aircraft, aircraft lease expense, federal excise tax relating to jet card and third-party charters, and payments to third -party aircraft operators for both charter flights booked through our App, as well as the cost of subcharters for covering jet card flights when our HondaJets were unavailable. The management of our aircraft by Cirrus covers all our aircraft regardless of whether the aircraft are used for program flight hours or charter flights and includes expenses such as fuel, pilot wages and training costs, aircraft insurance, maintenance and other flight operational expenses.
Current wording
Our cost of revenue is comprised of payments to Cirrus for the maintenance and management of our fleet aircraft, commissions to Cirrus for their arranging for charters on our aircraft, aircraft lease expense, federal excise tax relating to jet card and third-party charters, and payments to third-party aircraft operators for both charter flights booked through our App, as well as the cost of subcharters for covering jet card flights when our HondaJets were unavailable. The management of our aircraft by Cirrus covers all our aircraft regardless of whether the aircraft are used for program flight hours or charter flights and includes expenses such as fuel, pilot wages and training costs, aircraft insurance, maintenance and other flight operational expenses.
Previous wording
As a result, the increased Cirrus charter flight activity, costs related to the operation of these aircraft and payments to Cirrus for their management increased $0.7 million from $1.6 million in the second quarter of 2023 to $2.3 million in the second quarter of 2024, and aircraft lease payments increased $31,000 from $346,000 in the second quarter of 2023 to $377,000 in 2024. The Company also incurred third-party charter costs of approximately $623,000 in the second quarter of 2024, a $380,000 decrease over 2023, reflecting the reduction in the number of App-generated charter bookings and a decrease in the number of subcharters required. Merchant fees and federal excise tax relating to charter flights of $249,000 in the second quarter of 2024 were a $157,000 increase as compared to $92,000 in the second quarter of 2023 as a result of increased charter activity.
Current wording
As a result of the increase in Cirrus charter flight activity, costs related to the operation of these aircraft and payments to Cirrus for their management increased $1.2 million from $1.4 million in the third quarter of 2023 to $2.6 million in 2024, and aircraft lease payments increased remained the same at $317,000 in the third quarter of 2023 and 2024. The Company also incurred third-party charter costs of approximately $0.9 million in the third quarter of 2024, a $0.5 million decrease over 2023, in order to fulfill a greater number of App-generated charter bookings, offset by a reduction in subcharters used for covering jet card flights when our HondaJets were unavailable. Merchant fees and federal excise tax relating to charter flights of $130,000 in the third quarter of 2024 were a $89,000 increase as compared to $41,000 in the third quarter of 2023.
Previous wording
In total, it cost $3.5 million to operate five aircraft in the second quarter of 2024, compared to $3.0 million to operate four aircraft in the second quarter of 2023.
Current wording
In total, it cost $3.9 million to operate these five aircraft in the third quarter of 2024, compared to $3.2 million to operate four aircraft in the third quarter of 2023.
Previous wording
The resulting gross loss totaled approximately $417,000 for the second quarter of 2024, compared to $201,000 for the second quarter of 2023. The gross loss in the second quarter of 2024 was largely driven by reduced flights performed for our jet card customers without a corresponding reduction in fixed costs.
Current wording
The resulting gross loss totaled approximately $14,000 for the third quarter of 2024, compared to a gross profit of $170,000 for the third quarter of 2023. The gross loss in the third quarter of 2024 was largely driven by reduced flights performed for our jet card customers without a corresponding reduction in fixed costs.
Previous wording
The Company’s sales and marketing expenses declined by about $2,000 to $102,000 in the second quarter of 2024 from $104,000 in the second quarter of 2023, as the Company continued its sales and marketing spending for its jet card inventory and charter app. These expenses are mainly linked to promoting the Company and its programs.
Current wording
The Company’s sales and marketing expenses decreased by $74,000 to $83,000 in the third quarter of 2024 from $157,000 in the third quarter of 2023. These expenses are mainly linked to promoting the Company and its programs.
Previous wording
Research and development expenses increased $9,000 to $37,000 in the second quarter of 2024 from $28,000 in the second quarter of 2023, due to continuing refinement of the App, as well as continued development work on additional software offerings.
Current wording
Research and development expenses declined $11,000 to $38,000 in the third quarter of 2024 from $49,000 in the third quarter of 2023, due to the reduced need to refine the App, offset by continued development work on additional software offerings.
Previous wording
As a result of all of the above, in the second quarter of 2024 the Company recognized an operating loss of approximately $3.2 million, which was an increase in loss of approximately $0.8 million. The increase in operating loss 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.
Current wording
As a result of all of the above, in the third quarter of 2024 the Company recognized an operating loss of approximately $2.9 million, which was a decrease in loss of approximately $1.4 million when compared to the prior year period. The decrease in operating loss was primarily due to the decrease in general and administrative expenses resulting from the decrease in non-cash stock-based compensation expense that resulted from the non-cash vesting of employee stock options as well as the decrease in professional costs incurred from the Business Combination.
Previous wording
Revenues for the first six months of 2024 totaled approximately $6.9 million, a $2.3 million increase from revenues of approximately $4.7 million during the 2023 period, primarily related to increases in Software App and Cirrus Charter revenue, as well as increased Management and Other Services revenue of $1.4 million and $0.9 million, respectively. Revenues in the 2024 period were comprised of $1.7 million in services revenue from the management of customers’ aircraft, $2.3 million in software-related revenue, $1.2 million in Jet Card revenue for hours flown and other charges based on hours flown and $1.6 million in revenue from the chartering of our HondaJets and Citation CJ4 by our operating partner Cirrus.
Current wording
Revenues for the first nine months of 2024 totaled $10.9 million, a $2.9 million increase from revenues of $8.0 during the comparable period in 2023. Revenues in the 2024 period were comprised of approximately $6.4 of revenues related to our software App and Cirrus charter services (comprised of approximately $3.4 million in software-related revenue and $2.9 million in revenue from the chartering of our HondaJets by our operating partner Cirrus), $2.7 million in services revenue from the management of customers’ aircraft, and $1.8 million in Jet Card revenue for hours flown and other charges based on hours flown.
Previous wording
The following table sets forth a breakout of revenue components by subcategory for the six months ended June 30, 2024 and 2023.
Current wording
The following table sets forth a breakout of revenue components by subcategory for the nine months ended September 30, 2024 and 2023.
Previous wording
The Company began recognizing revenue in September 2020 reflecting services and software revenues related to charter bookings made through its App and in the first six months of 2023, the Company recognized $1.3 million in revenue related to App-generated charter bookings. During the 2024 period these revenues totaled $2.3 million, a $1.0 million or 71.8% increase from 2023 reflecting additional brokerage staff, increased marketing and greater awareness of the Company.
Current wording
The Company began recording revenue in September 2020 reflecting services and software revenues related to charter bookings made through its App and in the first nine months of 2023, the Company recognized $2.2 million in revenue related to App-generated charter bookings. During 2024 these revenues totaled $3.4 million, a $1.2 million or 59.2% increase from 2023 reflecting additional brokerage staff, increased marketing and greater awareness of the Company.
Previous wording
The Company recognized $1.7 million in service revenue in the first six months of 2024, an increase of $0.9 million, relating to an agreement entered into during the fourth quarter of 2023 to manage a customer’s aircraft, as well as a second managed aircraft beginning in April 2024. There was $0.8 million in service revenues in the first six months of 2023.
Current wording
The Company recognized $2.7 million in service revenue in the first nine months of 2024, an increase of $1.2 million, relating to an agreement entered into during the fourth quarter of 2023 to manage a customer’s aircraft, as well as a second managed aircraft beginning in April 2024. There was $1.5 million in service revenues in the first nine months of 2023.
Previous wording
During the first six months of 2024, the Company sold 110 prepaid flight hours under its jet card and fractional programs, amounting to $0.7 million, and recognized $1.2 million of revenue for 182 flight hours flown or forfeited, as well as additional charges. These additional charges represent primarily charges for cost reimbursements such as a fuel component adjustment to adjust for changes in fuel prices relative to the jet card and fractional contracts’ base fuel price and reimbursement of federal excise taxes. Prepaid flight hours are recognized as revenue as the flight hours are used or forfeited. At June 30, 2024, the Company recorded deferred revenue of $1.1 million on its consolidated balance sheets, which represents prepaid flight hours for which the related travel had not yet occurred.
Current wording
During the first nine months of 2024, the Company sold 220 prepaid flight hours under its jet card and fractional programs, amounting to $1.3 million, and recognized $1.8 of revenue for 267 flight hours flown or forfeited, as well as additional charges. These additional charges represent primarily charges for cost reimbursements such as a fuel component adjustment to adjust for changes in fuel prices relative to the jet card and fractional contracts’ base fuel price and reimbursement of federal excise taxes. Prepaid flight hours are recognized as revenue as the flight hours are used or forfeited. At September 30, 2024, the Company recorded deferred revenue of $1.2 million on its consolidated balance sheet, which represents prepaid flight hours for which the related travel had not yet occurred.
Previous wording
In the first six months of 2023, we sold 261 prepaid flight hours amounting to approximately $1.4 million and recognized approximately $1.4 million of revenue for 210 flight hours flown or forfeited, as well as additional charges.
Current wording
In the first nine months of 2023, we sold 383 prepaid flight hours amounting to approximately $2.1 million and recognized approximately $2.1 million of revenue for 323 flight hours flown or forfeited, as well as additional charges. At September 30, 2023, the Company recorded deferred revenue of $1.2 million on its consolidated balance sheet.
Previous wording
The increase in flight hours flown is a direct result of the increased number of aircraft.
Current wording
The increase in flight hours flown is a direct result of the increased number of aircraft during the 2024 period versus the 2023 period.
Previous wording
The following table details the flight hours sold and flown or forfeited, as well as the associated deferred revenues and recognized revenues, respectively, and additional charges for the first six months of 2024 and 2023:
Current wording
The following table details the flight hours sold and flown or forfeited, as well as the associated deferred revenues and recognized revenues, respectively, and additional charges for the first nine months of 2024 and 2023:
Previous wording
During the first six months of 2024 revenue generated through the direct chartering of the Company’s HondaJet and Citation CJ4 aircraft by Cirrus amounted to approximately $1.6 million, an increase of $0.4 million, or 37.8% from the prior year. The increased revenue was a direct result of increased charter activity, both ad hoc and by Cirrus, as well as the addition of the managed Citation CJ4 and King Air 350i.
Current wording
During the first nine months of 2024 revenue generated through the direct chartering of the Company’s HondaJet aircraft by Cirrus amounted to approximately $2.9 million, an increase of $0.7 million, or 31.0% from the prior year. The increased revenue was a direct result of increased charter activity, both ad hoc and by Cirrus, as well as the addition of the managed Citation CJ4 and King Air 350i.
Previous wording
Our cost of revenue is comprised of payments to Cirrus for the maintenance and management of our fleet aircraft, commissions to Cirrus for their arranging for charters on our aircraft, aircraft lease expense, federal excise tax relating to jet card and second-party charters, and payments to second-party aircraft operators for both charter flights booked through our App, as well as the cost of subcharters for covering jet card flights when our HondaJets were unavailable. The management of our aircraft by Cirrus covers all our aircraft regardless of whether the aircraft are used for program flight hours or charters and includes expenses such as fuel, pilot wages and training costs, aircraft insurance, maintenance and other flight operational expenses.
Current wording
Our cost of revenue is comprised of payments to Cirrus for the maintenance and management of our fleet aircraft, commissions to Cirrus for their arranging for charters on our aircraft, aircraft lease expense, federal excise tax relating to jet card and third-party charters, and payments to third-party aircraft operators for both charter flights booked through our App, as well as the cost of subcharters for covering jet card flights when our HondaJets were unavailable. The management of our aircraft by Cirrus covers all our aircraft regardless of whether the aircraft are used for program flight hours or charters and includes expenses such as fuel, pilot wages and training costs, aircraft insurance, maintenance and other flight operational expenses.
Previous wording
As a result of the increased ad hoc and Cirrus charter flight activity, as well as the startup expenses relating to the introduction of the King Air 350i managed aircraft to its fleet, operating expenses related to the operation of the Company’s aircraft and payments to Cirrus for their management increased $1.6 million from $2.8 million in the first six months of 2023 to $4.4 million in 2024 and aircraft lease payments increased $151,000 from $544,000 in 2023 to $695,000 in the first six months of 2024. The Company also incurred third-party charter costs of approximately $2.0 million in the first six months of 2024, a $0.5 million increase over 2023, in order to fulfill a greater number of App-generated charter bookings, as well as subcharters used for covering jet card flights when our HondaJets were unavailable. Federal excise tax and merchant fees relating to charter flights increased $250,000 in the first six months of 2024 to $409,000 from $159,000 in 2023.
Current wording
As a result of the increased fleet and the increase in jet card and Cirrus charter flight activity, as well as the startup expenses relating to the introduction of the King Air 350i managed aircraft to its fleet, operating expenses related to the operation of the Company’s aircraft and payments to Cirrus for their management increased $3.6 million from $3.3 million in the first nine months of 2023 to $6.9 million in the 2024 year period and aircraft lease payments increased $43,000 from $967,000 in 2023 to $1.0 million in the first nine months of 2024. The Company also incurred third-party charter costs of approximately $3.0 million in the first nine months of 2024, a $559,000 decrease over 2023, as a result of a reduced need for subcharters used for covering jet card flights when our HondaJets were unavailable. Federal excise tax and merchant fees relating to charter flights increased $242,000 in the first nine months of 2024 to $541,000 from $299,000 in 2023.
Previous wording
In total, it cost $7.5 million to operate the Company’s 6 aircraft in the first six months of 2024, compared to $4.9 million during the 2023 period for 5 aircraft.
Current wording
In total, excluding aircraft sales costs and as disclosed above, it cost $11.4 million to operate the Company’s 5 aircraft in the first nine months of 2024, compared to $8.1 million in 2023 for 4 aircraft.
Previous wording
The resulting gross loss totaled $541,000 for the first six months of 2024, compared to $276,000 for the 2023 period. The increased gross loss in these operations was a result of increased maintenance costs, together with lower utilization on our HondaJets.
Current wording
The resulting gross loss totaled $555,000 for the first nine months of 2024, compared to $105,000 for the 2023 year period. The increased gross loss in these operations was a result of increased maintenance costs, together with lower utilization on our HondaJets.
Previous wording
In the first six months of 2024, the Company’s operating expenses increased $0.9 million due to a $0.6 million increase in general and administrative expenses, $325,000 in higher sales and marketing expenses, and $5,000 in higher research and development costs. Excluding non-cash stock-based compensation of $2.4 million and $2.8 million in the first six months of 2024 and 2023, respectively, general and administrative expenses rose by approximately $1.0 million primarily due to due to an increase in professional service expenses of $280,000 related to our software development and legal expenses relating to the Company’s SEC filings and various transactions the Company closed or pursued, $117,000 in payments to our Board of Directors and increased wages of $450,000, primarily due to increased commissions compensation payable on charter sales, as well as a greater number of software developers in 2024.
Current wording
In the first nine months of 2024, the Company’s operating expenses decreased $632,000 due to a $878,000 decrease in general and administrative expenses and $6,000 in lower research and development costs, offset by $252,000 in higher sales and marketing expenses. Excluding non-cash stock-based compensation of $3.7 million and $5.4 million in the first nine months of 2024 and 2023, respectively, general and administrative expenses rose by approximately $0.8 million primarily due to due to increased wages of $632,000, primarily due to increased commissions compensation payable on charter sales, as well as a greater number of software developers in 2024.
Previous wording
The Company’s sales and marketing expenses increased by about $325,000 to $549,000 in the first six months of 2024 from $224,000 in 2023, as it reaccelerated its sales and marketing spending for software and jet card sales. These expenses are mainly linked to promoting the Company and its programs.
Current wording
The Company’s sales and marketing expenses increased by about $252,000 to $632,000 in the first nine months of 2024 from $380,000 in 2023, as it reaccelerated its sales and marketing spending upon aircraft delivery and the associated increase in marketable jet card inventory. These expenses are mainly linked to promoting the Company and its programs.
Previous wording
Research and development expenses increased approximately $5,000 to $70,000 in the first six months of 2024 from $65,000 in the comparable 2023 period, due to continuing refinement of the App, as well as some initial development work on additional software offerings.
Current wording
Research and development expenses declined $6,000 to $108,000 in the first nine months of 2024 from $114,000 in 2023, due to the reduced need to refine the App, offset by continued development work on additional software offerings.
Previous wording
As a result of all of the above, in the first six months of 2024 the Company recognized an operating loss of approximately $6.4 million, which was an increase in loss of nearly $1.2 million compared to the comparable 2023 period. The increase was primarily due to reduced gross profits of $0.3 million, as well as a $0.6 million increase in general and administrative expenses.
Current wording
As a result of all of the above, in the first nine months of 2024 the Company recognized an operating loss of approximately $9.3 million, which was a decrease in loss of $182,000 compared to the 2023 year period. The decrease was primarily due to reduced general and administrative expenses of $878,000, offset by an increase in the Company’s gross loss of $549,000.
Previous wording
During the first six months of 2024, the Company recognized approximately $79,000 in other expense due primarily to interest expense related to the Company’s Bridge Agreement, compared to no other income or expense recorded for the first six months of 2023.
Current wording
During the first nine months of 2024, the Company recognized approximately $79,000 in other expense due primarily to interest expense related to the Bridge Agreement, compared to $24,000 recorded for the first nine months of 2023.
Previous wording
As of June 30, 2024, the Company’s cash and equivalents were $528,117, including $500,000 of restricted cash under its aircraft leasing arrangements, as described below. As of June 30, 2024, current liabilities exceeded current assets by approximately $3.9 million, of which $1.1 million in liabilities represents deferred revenue that would be recorded as revenue once the flight hours are flown or forfeited.
Current wording
As of September 30, 2024, the Company’s cash and equivalents were $311,883. As of September 30, 2024, current liabilities exceeded current assets by approximately $4.8 million, of which $1.2 million in liabilities represents deferred revenue that would be recorded as revenue once the flight hours are flown or forfeited.
Previous wording
During the six month period ended June 30, 2024, the Company raised (1) approximately $1,727,000 in funds from the issuance of 3,200,000 shares of common stock under the Share Purchase Agreement discussed below, as well as $1,500,000 related to the sale of 150 shares of preferred stock, and (2) approximately $742,000 from Jet.AI Warrant exercises.
Current wording
During the nine month period ended September 30, 2024, the Company raised (1) approximately $1,727,000 in funds from the issuance of 14,222 shares of common stock under the Share Purchase Agreement discussed below, as well as $1,500,000 related to the sale of 150 shares of Series B Preferred Stock, and (2) approximately $742,000 from Jet.AI Warrant exercises.
Previous wording
The Company also incurred negative cash flows from operating activities and significant losses from operations in the past as reflected in its accumulated deficit of approximately $45.7 million as of June 30, 2024. While we expect to drive revenue and operating profit growth from aircraft acquisitions, higher average hourly pricing of jet cards, increased charter activity through CharterGPT and Reroute AI and SaaS revenues from DynoFlight, we expect to continue to incur operating losses to a greater or lesser extent for at least the next 12 months, depending on the timing and success of these initiatives. To bridge the gap, we intend to rely on funds available from share issuances under the Share Purchase Agreement and amounts received upon an exercise of the Ionic Warrant (as defined below), if any, to meet our funding obligations. Additional funding under the Share Purchase Agreement may be limited contractually and the Ionic Warrant may not be exercised by the holder. Furthermore, issuances of additional shares of common stock under the Share Purchase Agreement or upon conversion of the Series B Preferred Stock outstanding and underlying the Ionic Warrant may negatively impact the Company’s stock price and ability to raise additional funds. We will likely require additional capital resources to grow our business. In the absence of external financing the Company is prepared to cut its cash utilization by ceasing marketing and customer acquisition, suspending software development, streamlining operations, and servicing only existing customers. Such a reduction would allow the Company to continue to operate for a year or more by management’s estimate. During that time the Company would plan to arrange new financing and to then resume expansion.
Current wording
The Company also incurred negative cash flows from operating activities and significant losses from operations in the past as reflected in its accumulated deficit of approximately $49.1 million as of September 30, 2024. While we expect to drive revenue and operating profit growth from aircraft acquisitions, higher average hourly pricing of jet cards, increased charter activity through CharterGPT and Reroute AI and SaaS revenues from DynoFlight, we expect to continue to incur operating losses to a greater or lesser extent for at least the next 12 months, depending on the timing and success of these initiatives. To bridge the gap, we intend to rely on funds available from share issuances under the Share Purchase Agreement, amounts received upon an exercise of the Ionic Warrant (as defined below), if any, and other potential sales of our equity and debt securities to meet our funding obligations. Additional funding under the Share Purchase Agreement may be limited contractually and the Ionic Warrant may not be exercised by the holder in full or substantial part. Furthermore, issuances of additional shares of common stock under the Share Purchase Agreement, upon conversion of the Series B Preferred Stock outstanding and underlying the Ionic Warrant and other sales of equity securities we have made after September 30, 2024 may negatively impact the Company’s stock price and ability to raise additional funds. We will likely require additional capital resources to grow our business. In the absence of external financing the Company is prepared to cut its cash utilization by ceasing marketing and customer acquisition, suspending software development, streamlining operations, and servicing only existing customers. Such a reduction would allow the Company to continue to operate for a year or more by management’s estimate. During that time the Company would plan to arrange new financing and to then resume expansion.
Showing the first 40 of 61 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The Company recognized $960,000 in service revenue in the third quarter of 2024, an increase of $186,000, relating to an agreement entered into during the fourth quarter of 2023 to manage a customer’s aircraft, as well as a second managed aircraft beginning in April 2024. There was $775,000 in service revenues in the third quarter of 2023.