Jet.AI Inc.

Company Overview

Business Model: Jet.AI Inc. is undergoing a strategic transformation from a private aviation services company to a pure-play AI data center infrastructure company. Historically, the company operated fractional jet and charter jet programs, selling jet cards and fractional ownership interests in aircraft. It developed and launched the iOS app Jet Token in September 2019 for private jet travel arrangements and later introduced the AI-enhanced booking app CharterGPT in 2023. The Jet.AI Operator Platform, a business-to-business (B2B) software-as-a-service (SaaS) platform, was launched in 2023, offering Reroute AI for empty flight leg monetization and DynoFlight for carbon emissions tracking and offset credit purchasing. A specific by-the-seat booking tool was also developed for the Las Vegas Golden Knights professional ice hockey team and Great Western Air, LLC (DBA Cirrus Aviation Services, LLC) via 380 Software LLC, a joint venture. In late 2024, the agentic AI model "Ava" was launched for private jet bookings. The strategic pivot to AI data centers, initiated in 2025, is driven by significant growth in demand for high-performance computing infrastructure to support artificial intelligence workloads.

Market Position: In its legacy aviation business, Jet.AI Inc. operates in an "extraordinarily competitive" market, competing with established private jet charter and fractional companies such as NetJets, FlexJet, VistaGlobal, and WheelsUp, as well as commercial airlines. The company acknowledges competitive disadvantages due to its smaller aircraft fleet, regional focus, and comparatively fewer financial resources. In the emerging AI data center sector, Jet.AI Inc. faces "highly competitive and capital-intensive" dynamics, competing with hyperscale operators like Equinix, Digital Realty, and cloud service providers such as Amazon Web Services, Microsoft Azure, and Google Cloud. As a new entrant, Jet.AI Inc. is at a competitive disadvantage in terms of track record and scale but aims for differentiation through its joint venture structure with Consensus Core Technologies Inc., strategic site selection with access to substantial power and renewable energy, and a focus on purpose-built AI workload optimization.

Recent Strategic Developments:

• Strategic Pivot to AI Data Centers: During 2025, Jet.AI Inc. began executing a strategic transformation to become a pure-play AI data center infrastructure company.
• Proposed Sale of Aviation Business Assets: On February 13, 2025, Jet.AI Inc. entered into an Agreement and Plan of Merger and Reorganization with flyExclusive, Inc., which was amended on May 6, 2025, and February 11, 2026. This transaction, expected to close in Q1 or Q2 2026, involves distributing Jet.AI SpinCo, Inc. (containing the fractional and jet card business) to Jet.AI Inc. stockholders, followed by Merger Sub (a flyExclusive, Inc. subsidiary) merging with Jet.AI SpinCo, Inc. Jet.AI Inc. stockholders will receive shares of Class A common stock of flyExclusive, Inc. and retain their existing shares of Jet.AI Inc. Jet.AI Inc. will cease fractional and jet card operations but retain its software and intellectual property assets.
• AI Data Center Joint Ventures:
  • On June 26, 2025, Jet.AI Inc. entered into a Joint Venture Agreement with Consensus Core Technologies Inc. to develop data centers.
  • On July 2, 2025, Jet.AI Inc. contributed $300,000 to Convergence Compute LLC (the joint venture entity) for a 0.5% equity interest.
  • By November 7, 2025, Jet.AI Inc. contributed an additional $1.7 million, securing a 17.5% equity interest in the Midwest Project (Midwestern Canada) and an additional 0.5% equity interest in Convergence Compute LLC. Jet.AI Inc. plans to contribute up to an aggregate of $20 million across five tranches, potentially holding a 2.5% equity interest in Convergence Compute LLC and 17.5% in both the Midwest Project and Maritime Project (Maritime Canada).
• Planned Moapa, Nevada Data Center: On December 23, 2025, Jet.AI Inc. announced a planned joint venture for a 50-megawatt data center campus in Moapa, Clark County, Nevada, with an expected commitment of approximately $10 million over two years, allocating 70% of economic incentives to Jet.AI Inc.
• AI Infrastructure Acquisition Corp. Investment: In July 2025, Jet.AI Inc. made a capital contribution of approximately $2.7 million to AIIA Sponsor Ltd., the sponsor of AI Infrastructure Acquisition Corp. (NYSE: AIIA), acquiring an approximate 49.9% ownership interest. AI Infrastructure Acquisition Corp. completed its IPO on October 3, 2025, raising $138 million.
• Nasdaq Compliance: On February 6, 2026, Jet.AI Inc. received a notification of non-compliance with Nasdaq's Minimum Bid Price Requirement. Stockholders approved a reverse stock split of up to 1-for-250 at the 2025 annual meeting to address this.

Geographic Footprint: Jet.AI Inc.'s corporate headquarters are located in Las Vegas, Nevada. Historically, its aviation customer base and operations were primarily concentrated in the southwestern region of the United States, with its fleet based at Harry Reid International airport in Las Vegas, NV. All of the company's long-lived assets are located in the U.S., and revenue from private aviation services is substantially earned from flights throughout the U.S. The new strategic focus involves AI data center projects in Midwestern Canada, Maritime Canada, and a planned joint venture in Moapa, Clark County, Nevada.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: -3.3% (2025) vs. -6.9% (2024)
• Operating Margin: -109.7% (2025) vs. -89.6% (2024)
• Net Margin: 50.0% (2025) vs. -90.8% (2024)

Investment in Growth:

• R&D Expenditure: $0.24 million (2.7% of revenue)
• Capital Expenditures: $1.65 million (aircraft deposits)
• Strategic Investments: $2.66 million (Investment in AIIA Sponsor Ltd.), $0.77 million (Investment in joint venture Convergence Compute LLC)

Business Segment Analysis

Software App and Cirrus Charter

Financial Performance:

• Revenue: $4.8 million (-40.9% YoY)
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: Decreased due to the planned sale of the company's aviation assets to flyExclusive, Inc.

Product Portfolio:

• CharterGPT: AI-enhanced booking app for private jet charter.
• Ava: Agentic AI model for private jet bookings via call or text.
• Reroute AI: B2B software for FAA Part 135 operators to monetize empty flight legs.
• DynoFlight: Software API for aircraft operators to track emissions and purchase carbon offset credits.

Market Dynamics:

• CharterGPT is connected via API to Avinode, a major centralized database in private aviation.
• DynoFlight has a collaboration with FL3XX, a web and app-based aviation management platform, for integration.
• AI-powered features in CharterGPT and Ava include an Aircraft Recommendation Engine, intelligent customer service, and planned Predictive Destination Optimization, Predictive Departure Date, Predictive Departure Time, and Predictive Ground Transportation.

Sub-segment Breakdown:

• Software-related revenue (app-generated services): $3.0 million (-29.0% YoY)
• Revenue from chartering HondaJets by Cirrus Aviation Services: $1.8 million (-53.6% YoY), impacted by decreased chartering and reduced pilot availability due to the planned asset sale.

Jet Card and Fractional Programs

Financial Performance:

• Revenue: $1.1 million (-54.0% YoY)
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: Decreased due to the planned sale of the company's aviation assets to flyExclusive, Inc.

Product Portfolio:

• Fractional ownership program: Customers purchase an ownership share for guaranteed annual flight hours.
• Jet card program: Memberships provide a preset number of guaranteed private jet access hours over an agreement term.

Market Dynamics:

• Programs offer guaranteed capacity on demand, a key feature in private aviation, especially during "blackout dates."
• Dedicated fleet enables dynamic pricing for online customers.

Operational Metrics:

• Prepaid flight hours sold: 20 hours ($0.12 million) in 2025, down from 285 hours ($1.66 million) in 2024.
• Prepaid flight hours flown or forfeited: 168 hours ($0.95 million) in 2025, down from 348 hours ($2.08 million) in 2024.
• Deferred revenue (end of year): $0.26 million in 2025, down from $1.09 million in 2024.

Management and Other Services

Financial Performance:

• Revenue: $3.3 million (-7.9% YoY)
• Operating Margin: Not separately disclosed.
• Key Growth Drivers: Decreased due to reduced flying by the owners of the company's managed aircraft.

Product Portfolio:

• Aircraft management services: Provided to aircraft owners for a contractual fee, including maintenance coordination, flight crew, flight operations, and administrative services.
• Other revenue: $0.16 million in 2025.

Operational Metrics:

• Deferred revenue (end of year): $315 in 2025, up from $0 in 2024.

AI Data Centers

Financial Performance:

• Revenue: Not yet generating revenue from this segment.
• Operating Margin: Not applicable.
• Key Growth Drivers: Significant growth in demand for high-performance computing infrastructure to support artificial intelligence workloads.

Product Portfolio:

• Development of hyperscale data center campuses for AI infrastructure.

Market Dynamics:

• Focus on high-capacity, sustainable data infrastructure.
• Projects feature access to large-scale power infrastructure, including transmission lines, natural gas pipelines, and proximity to hydroelectric sources.

Sub-segment Breakdown:

• Midwest Project (Midwestern Canada): Joint venture developing a data center campus. Currently has 2 megawatts of capacity live, expected to reach 100 megawatts within 12 months. Located adjacent to a natural gas pipeline and connected to a 115 kV transmission line.
• Maritime Project (Maritime Canada): Joint venture developing a high-capacity data center campus. Benefits from immediate access to 40 megawatts of substation capacity, expected to scale to 100 megawatts in the near term, with long-term plans to exceed 1 gigawatt. Located alongside an established large-scale critical energy hub with access to substantial natural gas resources and adjacent to 10,000 acres earmarked for future green energy production.
• Moapa, Nevada Data Center: Planned joint venture for a 50-megawatt data center campus on approximately 20 acres, adjacent to a remediated coal plant with access to electric transmission, natural gas, fiber, water, and transportation infrastructure.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: The Board authorized a share repurchase program of up to $2 million through December 31, 2025. No shares were repurchased as of December 31, 2025.
• Dividend Payments: Jet.AI Inc. has never paid cash dividends on its common stock and currently intends to retain any future earnings to fund business growth.
• Dividend Yield: 0.0%

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $1.8 million
• Total Debt: $0 (no notes payable outstanding)
• Net Cash Position: $1.3 million (Cash and Equivalents less current operating lease liability)
• Debt Maturity Profile: Operating lease liability of $0.5 million due in 2026.

Cash Flow Generation (Year Ended December 31, 2025):

• Operating Cash Flow: $(8.2) million
• Free Cash Flow: Not explicitly calculated, but negative due to operating cash outflow and significant investing activities.

Operational Excellence

Production & Service Model: Jet.AI Inc.'s legacy aviation operations involved offering fractional ownership and jet card programs, as well as ad hoc charter services. The company's fleet of five aircraft (three HondaJet Elites, one Citation CJ4 Gen 2, and one Beechcraft Super King Air B300 (350I)) is managed, operated, and maintained by Cirrus Aviation Services. This arrangement allows Jet.AI Inc. to offer guaranteed capacity and dynamic pricing. Post-merger, the company will divest its fractional and jet card business, focusing on its software and intellectual property assets. The new AI data center business model involves developing and operating high-capacity, sustainable data infrastructure, primarily through joint ventures, to support AI workloads.

Supply Chain Architecture: Key Suppliers & Partners:

• Aircraft Management & Operations: Great Western Air, LLC (DBA Cirrus Aviation Services, LLC) - provides comprehensive management, operation, and maintenance services for Jet.AI Inc.'s aircraft, holding FAA, ARG/US Platinum, and Wyvern certifications.
• Aircraft Manufacturers: Honda Aircraft Company, LLC (for HondaJet Elites); Textron Aviation Inc. (for three Citation CJ3 aircraft on order, expected 2027).
• Booking Database: Avinode - major centralized database in private aviation, integrated with CharterGPT.
• Carbon Offset Platform: FL3XX - web and app-based aviation management platform, collaborating for DynoFlight integration.
• AI Data Center Joint Venture: Consensus Core Technologies Inc. - Vancouver-based provider of high-performance graphics processing unit infrastructure and AI cloud services, partner in data center development.

Facility Network:

• Corporate Headquarters: Leased office space in Las Vegas, Nevada.
• Manufacturing: Not applicable, as aircraft are purchased.
• Research & Development: Internal development team supplemented by freelance contractors, overseen by the Chief Technology Officer.
• Distribution (Aviation): Aircraft fleet is based at Harry Reid International airport in Las Vegas, NV, with potential relocation based on seasonal travel patterns.
• AI Data Centers: Joint venture developing campuses in Midwestern Canada and Maritime Canada. Planned joint venture for a campus in Moapa, Clark County, Nevada.

Operational Metrics:

• Aircraft Fleet: 5 aircraft (3 HondaJet Elites, 1 Citation CJ4 Gen 2, 1 King Air 350i).
• Aircraft Orders: 3 Citation CJ3 aircraft on order from Textron Aviation Inc., expected delivery in 2027.
• AI Data Center Capacity: Midwest Project has 2 megawatts live, targeting 100 megawatts within 12 months. Maritime Project expected to begin with 40 megawatts, scaling to over 1 gigawatt.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales (Aviation): Historically involved sales of fractional ownership and jet cards to high-net-worth individuals.
• Channel Partners (Aviation): Cirrus Aviation Services sells jet cards for its aircraft and makes its fleet available to Jet.AI Inc. customers.
• Digital Platforms (Aviation): CharterGPT (iOS and Android app) functions as a prospecting and quoting tool. Ava, an agentic AI model, facilitates private jet bookings via toll-free number and SMS, linking to the CharterGPT app.
• B2B Software: Jet.AI Operator Platform (Reroute AI, DynoFlight) offers SaaS products to aircraft owners and operators.

Customer Portfolio: Enterprise Customers:

• Strategic Partnerships: 380 Software LLC, a joint venture with Great Western Air, LLC (DBA Cirrus Aviation Services, LLC), provides a private jet by-the-seat booking tool for the Las Vegas Golden Knights professional ice hockey team.
• Customer Concentration: The anticipated AI data center business is expected to have significant customer concentration, with a large portion of revenue from a small number of customers.

Geographic Revenue Distribution:

• United States: Substantially all revenue from private aviation services is earned from flights throughout the U.S.
• Growth Markets: The AI data center strategy targets North America, with projects in Canada and a planned site in Nevada.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The private air travel industry is highly competitive, influenced by factors such as price, reliability, safety, regulations, professional reputation, aircraft availability, and service quality. It is also highly correlated with economic performance, making it susceptible to downturns. The AI data center infrastructure market is characterized by rapid growth in demand for high-performance computing, is capital-intensive, and subject to evolving technologies and market dynamics.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Aviation: NetJets, FlexJet, VistaGlobal (including JetSmarter powered by XO), SentientJet, WheelsUp, Nicholas Air, Executive Air Share, Plane Sense, One Sky Jets, StarJets, Jet Aviation, Luxury Aircraft Solutions. Also competes with legacy airlines and low-cost carriers.
• AI Data Centers: Equinix, Digital Realty, CyrusOne, QTS Realty Trust, AirTrunk, Switch, CoreSite, Compass Datacenters, Edgecore, and cloud service providers such as Amazon Web Services, Microsoft Azure, and Google Cloud.

Emerging Competitive Threats: New entrants and disruptive technologies in both aviation (e.g., alternative transportation) and AI data centers (e.g., new AI-focused infrastructure developers, private equity-backed platforms).

Competitive Response Strategy: Jet.AI Inc. aims to maintain competitive advantage in aviation through AI-driven automation and personalized customer experiences, and by maintaining a dedicated fleet for reliability. In the AI data center market, its strategy involves leveraging its joint venture structure with Consensus Core Technologies Inc., strategic site selection with access to substantial power and renewable energy, and a focus on purpose-built AI workload optimization.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Aviation Demand Decline: Demand for aviation services may decline due to factors beyond control, including air traffic congestion, fuel costs, pilot availability, natural disasters, security measures, regulatory changes, new taxes, terrorism, disease outbreaks, and economic downturns (inflation, interest rates, low consumer sentiment). Private air travel is considered a luxury item, making it sensitive to economic conditions.
• AI Data Center Sector Volatility: The AI data center sector is subject to rapid growth and volatility, significant capital requirements, dependence on rapidly changing underlying technologies, and market and political risks.
• Technology Disruption: Failure to anticipate or adapt to rapid technological innovations in the AI data center market and the broader AI landscape could render current and future capabilities obsolete.
• Customer Concentration: The anticipated AI data center business is expected to have significant customer concentration, increasing risks related to the financial condition of a limited number of customers.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Equipment Procurement: Supply chain and logistics issues (e.g., commodity inputs, semiconductor chip shortages, international shipping disruptions, geopolitical conflicts) may delay or increase the cost of equipment for AI data center infrastructure.
• Supplier Dependency: Reliance on third-party app developers, Cirrus Aviation Services for aircraft operations, and third-party operators for charter flights exposes the company to performance risks.
• Capacity Constraints: Delays or unexpected costs in the development of new data center properties (e.g., integration of equipment, electricity supply, design defects, funding, labor, permits, environmental constraints) could harm growth prospects. Information Systems: Operations are dependent on information systems, which are vulnerable to cyber-attacks, power outages, human error, and security breaches, potentially leading to reputational damage and financial losses. Intellectual Property: Inability to adequately protect intellectual property interests (trademarks, software code) or being found infringing on others' IP could adversely affect brand, competitiveness, and incur significant litigation costs. Personnel: Failure to attract and retain highly qualified management, technical, and other personnel could harm business growth and expansion.

Financial & Regulatory Risks

Market & Financial Risks:

• Insufficient Funds: Jet.AI Inc. has a history of operating losses and a significant accumulated deficit, raising substantial doubt about its ability to continue as a going concern. It depends on additional financing, which may not be available on favorable terms or at all, potentially leading to reduced operations or discontinuation of services.
• Stock Price Volatility: The company's stock price may be volatile due to various factors, including financial performance, market sentiment, and competitive activities. Regulatory & Compliance Risks:
• Aviation Regulations: Subject to extensive regulations by the U.S. Department of Transportation, FAA, TSA, CBP, EPA, and local airport authorities. Changes or non-compliance could adversely affect the business.
• AI Data Center Regulations: Current and prospective AI data center operations are subject to extensive federal, state, provincial, and local regulations concerning environmental impact, energy consumption, grid interconnection, land use, data privacy, and cybersecurity. The evolving regulatory landscape for AI could impose new compliance obligations and costs.
• Nasdaq Listing: Non-compliance with Nasdaq's Minimum Bid Price Requirement could lead to delisting, limiting market liquidity and access to future financing. Tax Strategy: Changes to applicable tax laws and regulations or exposure to additional income tax liabilities (especially with domestic/international expansion) could affect profitability. The ability to utilize net operating loss and tax credit carryforwards may be limited by Section 382.

Geopolitical & External Risks

Geopolitical Exposure: Changing political and geopolitical conditions, including international trade policies, tariffs, and trade restrictions, could adversely impact business, particularly for AI data center projects in Canada. Electricity Supply: Reliance on third-party utility providers for electricity supply to AI data centers makes operations vulnerable to outages, non-supply, or limitations due to political pressures, regulations, climate-related risks, severe weather, or equipment failure. Price fluctuations in wholesale and retail power markets could significantly increase operating costs.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Artificial Intelligence: Jet.AI Inc. is focused on developing and enhancing AI models and applications for both its legacy aviation services and its new AI data center infrastructure. This includes the AI-enhanced booking app CharterGPT, the agentic AI model Ava, Reroute AI for empty flight legs, and DynoFlight for carbon emissions tracking.
• AI Data Center Infrastructure: Investment in developing high-capacity, sustainable data infrastructure to support artificial intelligence workloads and high-performance computing.

Innovation Pipeline:

• CharterGPT Enhancements: Ongoing development of AI-powered features for CharterGPT, including Predictive Destination Optimization, Predictive Departure Date, Predictive Departure Time, and Predictive Ground Transportation, to offer a continually improving, unique, and personalized customer experience.
• Software Offerings: Continued development work on additional software offerings for the Jet.AI Operator Platform.
• AI Data Center Development: Development of hyperscale data center campuses in Canada and a planned campus in Nevada, designed for scalable and sustainable growth in the rapidly evolving AI compute market.

Intellectual Property Portfolio:

• Trademarks: Registered trademarks for Jet Token and Jet.AI.
• Domain Strategy: Owns jettoken.com and jet.ai.
• Software Code: Sole owner of the intellectual property rights in the software code underlying CharterGPT and the Jet.AI Operator Platform offerings.

Technology Partnerships:

• Avinode: CharterGPT is directly connected via API to Avinode, a major centralized database in private aviation, for accessing private aircraft inventory.
• FL3XX: Collaboration with FL3XX, a web and app-based aviation management platform, to integrate the DynoFlight carbon offset platform for FL3XX customers.
• Consensus Core Technologies Inc.: Strategic alliance for a joint venture (Convergence Compute LLC) to develop data centers, leveraging Consensus Core Technologies Inc.'s expertise in high-performance graphics processing unit infrastructure and AI cloud services.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: George Murnane, the current Interim Chief Financial Officer, is expected to transition to the Chief Executive Officer role once a permanent Chief Financial Officer is appointed.

Board Composition: The Board of Directors is comprised of seven directors and is divided into three classes with staggered three-year terms. The Board consists of a majority of independent directors, as defined by Nasdaq listing standards and SEC rules. Wrendon Timothy serves as the lead independent director. The Board has established an audit committee, a compensation committee, and a nominating and corporate governance committee.

Human Capital Strategy

Workforce Composition (as of March 6, 2026):

• Total Employees: 9 employees (7 full-time, 2 part-time).
• Skill Mix: Includes Executive Chairman and Interim Chief Executive Officer, Interim Chief Financial Officer, Chief Operating Officer, Chief Technology Officer, and Chief Marketing Officer.

Talent Management: Acquisition & Retention: Jet.AI Inc. believes its future success is highly dependent on its ability to attract and retain highly qualified management, technical, and other personnel. Employee Value Proposition:

• Compensation: Consists of base salary, bonus, and equity awards (stock options, performance share units).
• Fringe Benefits: A Fringe Benefit Perk Policy for full-time employees includes bi-weekly reimbursement for automotive costs, mobile phone costs, health club memberships (up to $100), and contributions to Health Savings Accounts (HSA) for High Deductible Health Plan participants. Employee achievement awards up to $1,600 are also provided.
• Retirement: Offers a tax-qualified Section 401(k) plan with a 100% company match up to 6% of the employee's salary.
• Perquisites: Directors and officers may use company aircraft for personal use under specific conditions, including payment of 2.0x the cost of fuel, oil, lubricants, and other variable expenses.

Diversity & Development: No specific information on diversity metrics or formal development programs was provided in the filing.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Aviation Emissions: The company's aviation operations are subject to EPA rules relating to greenhouse gas emissions from aircraft engines, effective January 1, 2028.
• Carbon Offsetting: DynoFlight software enables aircraft operators to track and estimate emissions and purchase carbon offset credits.
• AI Data Center Sustainability: The joint venture is developing "sustainable data infrastructure" for its data center campuses. Projects feature access to hydroelectric sources and are adjacent to land earmarked for future green energy production expansion.

Supply Chain Sustainability: No specific information on supply chain sustainability initiatives or responsible sourcing was provided in the filing.

Social Impact Initiatives: No specific information on community investment or product social impact was provided in the filing.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends (Aviation): The company's aircraft fleet may be relocated based on seasonal travel patterns. Approximately 30 calendar days per year are considered "blackout days" due to holidays and major sporting events, significantly impacting private aviation capacity.
• Economic Sensitivity (Aviation): Business jet travel is highly correlated with the performance of the economy. Economic downturns, characterized by high inflation, increasing interest rates, and low consumer sentiment, are likely to negatively impact the use of business jets, as private air travel is considered a luxury item.
• Industry Cycles (AI Data Centers): The AI data center market is experiencing rapid technological changes and evolving demand for high-performance computing, which could introduce cyclical patterns.

Planning & Forecasting: The company's planning for its aviation business includes considering "blackout dates" and maintaining a fleet to offer guaranteed capacity. For its new AI data center business, planning involves significant capital investments for development and expansion, subject to market conditions and technological advancements.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Aviation: Jet.AI Inc.'s aircraft operations are subject to extensive regulation by the U.S. Department of Transportation (economic issues, financial fitness, consumer protection), U.S. Federal Aviation Administration (flight operations, safety, airworthiness, certification), U.S. Transportation Security Administration (security measures), U.S. Customs and Border Protection (customs, immigration for international flights), U.S. Environmental Protection Agency (greenhouse gas emissions), and local airport authorities (safety, security, property rights).
• AI Data Centers: Current and prospective AI data center projects are subject to extensive federal, state, provincial, and local regulations. This includes environmental regulations (EPA in U.S., provincial agencies in Canada for air emissions, waste disposal, hazardous materials, water usage), energy regulations (Federal Energy Regulatory Commission, North American Electric Reliability Corporation standards, public utility commissions), and local building codes, zoning, land use, and permitting requirements.
• International Compliance: Canadian data center projects are subject to provincial environmental and energy regulators.

Trade & Export Controls: No specific information on trade or export control compliance requirements was provided in the filing beyond general risk factors.

Legal Proceedings: Jet.AI Inc. is not currently a party to any material legal proceedings.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: Jet.AI Inc. did not record a current or deferred income tax expense or benefit for the years ended December 31, 2025, and 2024, due to current and historical operating losses.
• Geographic Tax Planning: As a U.S. corporation, Jet.AI Inc. is subject to U.S. corporate income tax on its worldwide income and files tax returns in U.S. Federal and Nevada state jurisdictions.
• Tax Reform Impact: The company acknowledges that changes to U.S. federal, state, local, and non-U.S. tax laws could adversely affect its business and future profitability.

Net Operating Losses: As of December 31, 2025, Jet.AI Inc. had federal net operating loss (NOL) carryforwards of approximately $28.9 million, which have no expiration. A full valuation allowance has been established against these net deferred tax assets due to the company's history of cumulative net losses and the non-cash nature of recent gains. Utilization of these NOLs may be subject to limitations under Section 382 of the Internal Revenue Code due to potential ownership changes.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Jet.AI Inc. maintains a directors' and officers' insurance policy. For its aircraft operations, Cirrus Aviation Services provides insurance policies for the aircraft as part of its management services.
• Risk Transfer Mechanisms: The company's operating lease agreements for aircraft require a liquidity reserve of $500,000 pledged as security and a maintenance reserve of approximately $690,000 held by the lessor.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: The company's aviation operations experience seasonal travel patterns, influencing fleet relocation and creating "blackout days" (approximately 30 calendar days per year) where private aviation capacity is extremely difficult to secure without guaranteed access programs.
• Economic Sensitivity: Business jet travel is highly correlated with overall economic performance. Economic downturns, characterized by high inflation, increasing interest rates, and low consumer sentiment, are likely to negatively impact demand for private air travel, which is considered a luxury item.
• Industry Cycles: The AI data center market is characterized by rapid technological changes and evolving demand for high-performance computing, which could introduce its own cyclical patterns.

Planning & Forecasting: The company's planning for its aviation business incorporates seasonal demand and the impact of "blackout days" to ensure guaranteed capacity. For its new AI data center business, planning involves significant capital expenditures and development timelines, which are subject to evolving market conditions and technological advancements.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Aviation: Jet.AI Inc.'s aviation operations are subject to extensive regulation by various U.S. federal agencies, including the Department of Transportation (economic issues, financial fitness, consumer protection), Federal Aviation Administration (flight operations, safety, airworthiness, pilot certification, airspace management), Transportation Security Administration (passenger/baggage screening, cargo security), Customs and Border Protection (customs, immigration for international flights), and Environmental Protection Agency (greenhouse gas emissions). Local airport authorities also impose safety, security, and property-related regulations.
• AI Data Centers: The company's current and prospective AI data center projects are subject to extensive federal, state, provincial, and local regulations. This includes environmental regulations (e.g., EPA in the U.S., provincial agencies in Canada for air emissions, waste disposal, hazardous materials, water usage), energy regulations (e.g., Federal Energy Regulatory Commission for interstate electricity transmission, North American Electric Reliability Corporation standards for grid interconnection, public utility commission regulations for large power consumers), and local building codes, zoning ordinances, land use restrictions, and permitting requirements.
• International Compliance: Canadian data center projects are subject to provincial environmental and energy regulators in their respective jurisdictions.

Trade & Export Controls: No specific information on trade or export control compliance requirements was provided in the filing beyond general risk factors.

Legal Proceedings: Jet.AI Inc. is not currently a party to any material legal proceedings.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: Jet.AI Inc. did not record a current or deferred income tax expense or benefit for the years ended December 31, 2025, and 2024, due to current and historical operating losses.
• Geographic Tax Planning: As a U.S. corporation, Jet.AI Inc. is subject to U.S. corporate income tax on its worldwide income and files tax returns in the U.S. Federal jurisdiction and Nevada state jurisdiction.
• Tax Reform Impact: The company acknowledges that changes to U.S. federal, state, local, and non-U.S. tax laws, policies, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely, potentially affecting its business and future profitability.

Net Operating Losses: As of December 31, 2025, Jet.AI Inc. had federal net operating loss (NOL) carryforwards of approximately $28.9 million, which have no expiration. A full valuation allowance has been established against these net deferred tax assets due to the company's history of cumulative net losses and the non-cash nature of recent gains. Utilization of these NOLs may be subject to substantial annual limitations under Section 382 of the Internal Revenue Code and corresponding state laws due to past or future ownership changes.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Jet.AI Inc. maintains a directors' and officers' insurance policy. For its aircraft operations, Cirrus Aviation Services provides insurance policies for the aircraft as part of its management services.
• Risk Transfer Mechanisms: The company's operating lease agreements for aircraft require a liquidity reserve of $500,000 in a separate bank account pledged as security to the lessor, and a maintenance reserve of approximately $690,000 held by the lessor. These mechanisms are intended to mitigate financial risks associated with aircraft operations and maintenance.