Jet.AI (JTAI) risk factors, FY2024 10-K

Risks Related to the Company’s Business

1. 01The Company is an early-stage company with a limited operating history
2. 02The Company may not be able to successfully implement its growth strategies
3. 03The Company’s operating results are expected to be difficult to predict based on a number of factors that also will affect its long-term performance
4. 04The Company’s business is primarily focused on certain targeted geographic regions, making it vulnerable to risks associated with having geographically concentrated operations
5. 05The Company may not have enough capital as needed and may be required to raise more capital and the terms of subsequent financings may adversely impact your investment
6. 06The Company’s business and reputation rely on, and will continue to rely on, third parties
7. 07The Company relies on third parties maintaining open marketplaces to distribute its mobile and web applications
8. 08The Company may be unable to adequately protect its intellectual property interests or may be found infringing on the intellectual property interests of others
9. 09A delay or failure to identify and devise, invest in and implement certain important technology, business, and other initiatives could have a material impact on the Company’s business, financial condition and results of operations
10. 10The Company is dependent on its information systems which may be vulnerable to cyber-attacks or other events
11. 11Because the Company’s software could be used to collect and store personal information, privacy concerns in the territories in which the Company operates could result in additional costs and liabilities to the Company or inhibit sales of its software
12. 12The Company may not accurately anticipate how quickly it may use its funds and whether these funds are sufficient to bring the business to profitability
13. 13Jet.AI is subject to risks related to taxation in the United States
14. 14Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect Jet.AI’s business and future profitability
15. 15Jet.AI’s ability to utilize its net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations
16. 16Jet.AI’s sole material asset is its direct and indirect interests in its subsidiaries and, accordingly, Jet.AI is dependent upon distributions from its subsidiaries to pay taxes and cover its corporate and other overhead expenses and pay dividends, if any, on the Jet.AI common stock

Risks Related to the Company’s Charter Business Operating Environment

1. 17Demand for the Company’s services may decline due to factors beyond its control
2. 18Demand for private jet charters may be negatively impacted by factors affecting air travel generally, such as adverse weather conditions, an outbreak of a contagious disease and other natural events, terrorism and increased security screening requirements
3. 19The Company faces a high level of competition with numerous market participants with greater financial resources and operating experience
4. 20There can be no assurance that the Company’s competitors will not be successful in capturing a share of our present or potential customer base. The materialization of any of these risks could adversely affect the Company’s business, financial condition and results of operations
5. 21The operation of aircraft is subject to various risks, and failure to maintain an acceptable safety record may have an adverse impact on our ability to obtain and retain customers
6. 22The supply of pilots to the airline industry is limited and may negatively affect the Company’s operations and financial condition. Increases in labor costs may adversely affect the Company’s business, results of operations and financial condition
7. 23Pilot attrition may negatively affect the Company’s operations and financial condition
8. 24The Company is exposed to operational disruptions due to maintenance
9. 25Significant increases in fuel costs could have a material adverse effect on the Company’s business, financial condition and results of operations
10. 26If efforts to continue to build a strong brand identity and improve member satisfaction and loyalty are not successful, the Company may not be able to attract or retain members, and its operating results may be adversely affected
11. 27Any failure to offer high-quality customer support may harm the Company’s relationships with its customers and could adversely affect the Company’s reputation, brand, business, financial condition and results of operations
12. 28The demand for the Company’s services is subject to seasonal fluctuations
13. 29Changes in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results of operations
14. 30The Company’s failure to attract and retain highly qualified personnel in the future could harm its business

Risks Relating to the flyExclusive Transactions and Jet.AI after the Closing of the Transactions

1. 31The proposed Transactions with flyExclusive may not be completed on the terms or timeline currently contemplated, or at all
2. 32Jet.AI may not achieve some or all of the expected benefits of the Transactions, and the Transactions may adversely impact Jet.AI’s business
3. 33Particularly after the Transactions Jet.AI’s success will be dependent on its ability to successfully develop new services, platforms and solutions that utilize AI and enhance or compliment its existing services, platforms and solutions, and market acceptance of these offerings
4. 34The Transactions could give rise to disputes or other unfavorable effects, which could materially and adversely affect Jet.AI’s business, financial position or results of operations

Risks Relating to Ownership of Jet.AI Securities

1. 35The Company has never paid cash dividends on its capital stock, and Jet.AI does not anticipate paying dividends in the foreseeable future
2. 36The Company’s stock price may be volatile, and you may not be able to sell shares at or above the price at which you purchase shares
3. 37Anti-takeover provisions contained in the Company’s Certificate of Incorporation and applicable laws could impair a takeover attempt
4. 38If we fail to comply with the continued listing requirements of Nasdaq, we would face possible delisting, which would result in a limited public market for our shares, limit our ability to access existing liquidity facilities and make obtaining future financing more difficult for us
5. 39The issuances of additional shares of Jet.AI common stock under the Share Purchase Agreement and the GEM Warrant may result in dilution of future Jet.AI stockholders and have a negative impact on the market price of Jet.AI common stock
6. 40Certain existing stockholders purchased our securities at a price below the current trading price of such securities, and may experience a positive rate of return based on the current trading price
7. 41Sales of Jet.AI common stock, or the perception of such sales, by us or our significant stockholders in the public market or otherwise could cause the market price for Jet.AI common stock to decline
8. 42The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies