Jet.AI Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are with FY2022. Jet.AI completed its business combination and became a Nasdaq-listed Delaware corporation on August 10, 2023. The filing describes an early-stage private aviation and software business, with charter, jet-card, fractional ownership, aircraft management and developing AI-enabled SaaS offerings.
Financial performance and condition
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $12.21 million | $21.86 million |
| Gross profit (loss) | $(0.18) million | $2.06 million |
| Operating loss | $(12.51) million | $(7.74) million |
| Net loss | $(12.62) million | $(7.74) million |
| Net loss per share, basic and diluted | $(2.00) | $(1.75) |
| Net cash used in operating activities | $(3.78) million | $(0.10) million |
- Revenue fell 44% year over year, primarily because FY2022 included $17.2 million of aircraft sales; no aircraft sales were recorded in FY2023. FY2023 software-app and Cirrus charter revenue rose to $7.13 million from $2.00 million, while jet-card and fractional-program revenue increased to $2.85 million from $2.26 million.
- Gross margin was approximately negative 1.5% in FY2023, compared with positive 9.4% in FY2022. The filing says FY2022 gross profit excluding aircraft fractionalization was about $216,000.
- Operating expenses were $12.33 million, including $6.65 million of stock-based compensation. Management attributed higher losses principally to increased aircraft operating and subcharter costs, pilot wage and training pressures, and business-combination and public-company expenses.
- At year-end, cash and cash equivalents were $2.10 million, including $0.50 million of restricted cash. Current liabilities exceeded current assets by approximately $3.8 million. Deferred revenue was $1.78 million, generally representing prepaid services not yet flown or forfeited.
- Total assets were $5.74 million and total liabilities $9.68 million. The balance sheet reports a stockholders’ deficit of $3.94 million. Operating lease liabilities totaled $1.53 million; the company also had $1.70 million of redeemable preferred stock. Bridge notes had $625,000 aggregate principal at year-end and were repaid in March 2024 for approximately $683,000.
- Financing activities provided $4.55 million in cash in FY2023. Investing activities used $0.19 million. The filing reports a $39.3 million accumulated deficit.
Changes, outlook and material risks
- The August 2023 business combination was accounted for as a reverse recapitalization, with Jet Token treated as the accounting acquirer. FY2023 results therefore include a significant change in corporate and financing structure.
- Management expects operating losses to continue for at least the next 12 months. It plans to rely on operations, GEM share-purchase-agreement drawdowns and other financing, while acknowledging there is no assurance the funds will be available on acceptable terms. If financing is insufficient, it may reduce marketing, customer acquisition and software development and focus on existing customers.
- Management cited higher jet-card pricing, more charter activity through CharterGPT and Reroute AI, and prospective DynoFlight SaaS revenue as potential growth drivers. No specific financial guidance or quantified forecast is provided. A non-binding letter of intent for up to five Challenger 3500 aircraft remains conditional on debt financing and an operating plan with Cirrus; first delivery was anticipated in 2026 if completed.
- The auditor issued an unqualified opinion but included a going-concern paragraph, stating recurring losses and the accumulated deficit raise substantial doubt about the company’s ability to continue as a going concern. Management’s plans do not eliminate that uncertainty.
- Nasdaq notified the company in December 2023 that it did not meet Global Market continued-listing requirements, including the stockholders’ equity threshold. Nasdaq accepted a compliance plan and extended the deadline to May 29, 2024; delisting remained a risk. The filing also describes material potential dilution from GEM financing, warrant exercises and preferred-stock conversions, including market-price-based conversion terms in the March 2024 Ionic transaction.
- Other disclosed risks include limited operating history, ongoing cash needs, reliance on Cirrus and other third parties, intense competition, pilot availability and cost, aviation safety and regulation, fuel prices, seasonality, cybersecurity, and sensitivity of private-air travel demand to economic conditions.
- The company reported no material pending legal proceedings and no known cybersecurity threats that materially affected or were reasonably likely to materially affect it during the year. Management reported effective disclosure controls and internal control over financial reporting.
Important facts for investors to verify
- Current cash, restricted cash, working-capital needs and runway, including the timing and availability of GEM drawdowns and any Ionic warrant proceeds.
- Nasdaq listing status and the outcome of the compliance plan after the stated May 29, 2024 deadline.
- Outstanding share count and the potential dilution, conversion mechanics and resale registration status of GEM, warrants and preferred securities.
- The audited balance sheet reports stockholders’ deficit of $3,936,039, while another filing passage states $(3,963,039); confirm the correct figure. The filing also gives differing net-loss-to-common figures in its MD&A and financial statements; verify against the audited statements.
- Whether planned fleet expansion and new software offerings are financed, launched and generating revenue, and whether aircraft and charter activity can achieve positive gross margins.