LAS VEGAS - Jet.AI Inc. (NASDAQ: JTAI), a company specializing in private aviation and artificial intelligence, has announced a registered direct stock offering to certain institutional investors, selling around 15.6 million shares at $0.096 each. The transaction is expected to yield approximately $1.5 million in gross proceeds before fees and expenses, with a projected close date of October 21, 2024.
Maxim (NASDAQ:MXIM) Group LLC is serving as the exclusive placement agent for the offering, which is being conducted under a shelf registration statement previously declared effective by the SEC on September 9, 2024. Details of the offering will be available in a prospectus supplement to be filed with the SEC.
Jet.AI operates across two main segments: Software, with its B2C CharterGPT app and B2B Jet.AI Operator platform, and Aviation, offering jet aircraft fractions, jet card, on-fleet charter, management, and buyer’s brokerage services. The company, founded in 2018, is an official partner of the 2023 NHL Stanley Cup champions, the Las Vegas Golden Knights.
The forward-looking statements included in the company's press release indicate expectations for future performance and market presence, subject to risks and uncertainties that could impact actual results. These statements are not guarantees of future performance, and investors are cautioned not to place undue reliance on them.
The information reported is based on a press release statement from Jet.AI Inc.
In other recent news, Jet.AI Inc. has made significant strides in the private aviation and artificial intelligence sector. The company has announced enhancements to its AI-driven software products, CharterGPT and Reroute AI, to be introduced at the 2024 NBAA Business Aviation Convention & Exhibition. Jet.AI has also secured $2.4 million through a stock sale and increased its authorized shares of common stock to 200 million.
In addition, Jet.AI has entered into an agreement with Ionic Ventures, issuing 50 shares of its Series B Convertible Preferred Stock. The company has launched the beta release of the web version of its JetLeg.AI app and is preparing to unveil the second version of CharterGPT in Q4 2024. Jet.AI has also settled with Sunpeak Holdings Corporation, issuing equity in exchange for approximately $2.4 million in claims.
Jet.AI has secured a $280 million debt financing arrangement for the acquisition of Bombardier (OTC:BDRBF) Challenger 3500 aircraft, expected to commence deliveries in 2026. The company has made amendments to its corporate agreements and securities, affecting shareholder rights and the conversion price of its preferred stock. These are recent developments in Jet.AI's ongoing efforts to align its corporate strategies and investor relations.
InvestingPro Insights
The recent stock offering by Jet.AI Inc. (NASDAQ: JTAI) comes at a challenging time for the company, as reflected in its financial metrics and market performance. According to InvestingPro data, JTAI has experienced a significant revenue decline, with a 22.94% drop in the last twelve months as of Q2 2024. This contraction aligns with the company's need to raise additional capital through the announced stock offering.
InvestingPro Tips highlight that JTAI "suffers from weak gross profit margins," which is corroborated by the reported gross profit margin of -3.07% for the same period. This negative margin suggests the company is struggling to generate profit from its core business operations, potentially explaining the need for additional funding.
Another relevant InvestingPro Tip indicates that JTAI's "valuation implies a poor free cash flow yield." This insight, combined with the company's negative operating income of -$13.71 million, underscores the financial challenges Jet.AI faces and provides context for the timing of the stock offering.
It's worth noting that JTAI's stock has seen a dramatic decline, with a one-year price total return of -95.56% as of the latest data. This performance metric illustrates the significant headwinds the company has encountered, which may have contributed to the decision to pursue this registered direct offering.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. The platform currently lists several more tips that could provide valuable context for understanding JTAI's financial position and market outlook.
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