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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington,
D.C. 20549

 FORM

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

 THE
SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended December 31, 2024

 Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

 THE
SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from ________ to ________

 Commission
file number: 001-40725

Inc.

 (Exact
Name of Registrant As Specified In Its Charter)

 Delaware

 93-2971741

 State
 or other jurisdiction

 of incorporation or organization

 (I.R.S.
 Employer

 No.)

 10845
 Griffith Peak Dr.

 Suite

 Las
 Vegas, NV

 89135

 (Address
 of Principal Executive Offices)

 (ZIP
 Code)

 (702) 747-4000

 (Registrant's
telephone number, including area code)

registered under Section 12(b) of the Act:

 Title
 of each class

 Trading
 Symbol(s)

 Name
 of each exchange on which registered

 Common
 stock, par value $0.0001 per share

 JTAI

 The Nasdaq Stock Market LLC

registered under Section 12(g) of the Act: None

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 Yes
 No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 Yes
 No

by check mark whether the registrant has (1) filed reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.

 Yes
 No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).

 Yes
 No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller
reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 Emerging
 growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The
aggregate market value of the voting and non-voting common equity held by non-affiliates was $ 1,837,368 as of the last business day of
the registrant's most recently completed second fiscal quarter.

 As
of March 12, 2025, there were 2,187,001 shares of the Company's common stock, par value $ 0.0001, issued and outstanding.

 TABLE
OF CONTENTS

 Page

 Cautionary Note Regarding Forward-Looking Statements

 ii

 Market and Industry Data

 ii

 Summary of Risk Factors

 iii

 Item

 Business

 Item
 1A

 Risk Factors

 Item
 1B

 Unresolved Staff Comments

 Item
 1C

 Cybersecurity

 Item

 Properties

 Item

 Legal Proceedings

 Item

 Mine Safety Disclosures

 Item

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item

 [Reserved]

 Item

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A

 Quantitative and Qualitative Disclosures About Market Risk

 Item

 Financial Statements and Supplementary Data

 Item

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A

 Controls and Procedures

 Item
 9B

 Other Information

 Item
 9C

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item

 Directors, Executive Officers and Corporate Governance

 Item

 Executive Compensation

 Item

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item

 Certain Relationships and Related Transactions, and Director Independence

 Item

 Principal Accountant Fees and Services

 Item

 Exhibits and Financial Statement Schedules

 Item

 Form 10-K Summary

 Signatures

 Index to Consolidated Financial Statements

 i

 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 This
Annual Report on Form 10-K (this "Report") contains forward-looking statements, within the meaning of the Private Securities
Litigation Reform Act of 1995, that involve risks and uncertainties. We have based these forward-looking statements on our current expectations
and projections about future events. All statements, other than statements of present or historical fact included in this Report, regarding
our future financial performance and our strategy, expansion plans, market opportunity, future operations, future operating results,
estimated revenues, losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may," "should," "could," "would,"
"will," "expect," "plan," "anticipate," "intend," "believe,"
"estimate," "continue," "project" or the negative of such terms or other similar expressions, but
the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are subject to known
and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking
statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which
are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Report. We caution
you that the forward-looking statements contained herein are subject to numerous risks and uncertainties, most of which are difficult
to predict and many of which are beyond our control.

 Therefore,
actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements
due to numerous factors discussed from time to time in this Report, including the risks described under " Item 1A Risk Factors,"
and " Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations " of this Report
and in other documents which we file with the Securities and Exchange Commission ("SEC"). In addition, such statements could
be affected by risks and uncertainties related to:

 the
 ability to implement business plans, forecasts, and other expectations and identify and realize additional opportunities;

 our
 history of operating losses, and our results of operations and financial condition;

 our
 ability to attain the significant amount of additional financing we need to fund our operations and expansion plans on favorable
 terms or at all, and the availability of future financing;

 our
 ability to complete the proposed merger and related transactions described under " Item 1 Business – Recent Events
 – Potential Sale of Aviation Business Assets ", or to identify and execute upon another strategic transaction or alternative
 to maximize value for our stakeholders;

 our
 ability to realize the anticipated benefits of the proposed merger and related transactions;

 costs
 related to being a public company;

 limited
 liquidity and trading of our securities;

 the
 outcome of any legal proceedings;

 the
 ability to maintain the listing of our securities on the Nasdaq Stock Market LLC ("Nasdaq") or any other national securities
 exchange;

 that
 the price of our securities may be volatile due to a variety of factors, including changes in the competitive and highly regulated
 industry in which we operate, variations in operating performance across competitors, changes in laws and regulations affecting our
 business and any changes in our capital structure;

 the
 risks related to our ability to identify and execute on outside sources of funding necessary to fund our operations and business
 plan, and the potential dilution that our stockholders may be subject to;

 the
 risk of downturns in the aviation industry;

 a
 changing regulatory landscape in the highly competitive aviation industry;

 our
 ability to attract and retain highly qualified personnel, including our officers, directors, and key employees;

 data
 security breaches, cyber attacks, or other network outages;

 our
 ability to adequately protect our intellectual property interests;

 our
 reliance on third parties;

 risks
 associated with the overall economy, including interest rate volatility and the potential for recession; and

 other
 risks and uncertainties set forth under the section of this Report entitled " Item 1A Risk Factors."

 Should
one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results
may vary in material respects from those expressed or implied by these forward-looking statements. Forward-looking statements speak only
as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation
and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise,
except as required by applicable law.

 MARKET
AND INDUSTRY DATA

 Some
of the market and industry data contained in this Report are based on independent industry publications or other publicly available information.
We believe this information is reliable as of the applicable date of its publication, however, we have not independently verified and
cannot assure you as to the accuracy or completeness of this information. As a result, you should be aware that the market and industry
data contained herein, and our beliefs and estimates based on such data, may not be reliable.

 ii

 SUMMARY
OF RISK FACTORS

 Our
business is subject to a number of risks of which you should be aware. These risks are discussed more fully in the "Risk Factors"
section of this Report. These risks include, but are not limited to, the following:

 The
 Company is an early-stage company with a limited operating history.

 The
 Company may not be able to successfully implement its growth strategies.

 The
 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.

 The
 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.

 The
 Company's business and reputation rely on, and will continue to rely on, third parties.

 The
 Company may be unable to adequately protect its intellectual property interests or may be found infringing on the intellectual property
 interests of others.

 A
 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.

 The
 Company is dependent on its information systems which may be vulnerable to cyber-attacks or other events.

 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.

 The
 Company may not have enough funds to sustain the business until it becomes profitable and may not be able to obtain additional capital
 when desired, on favorable terms or at all.

 is subject to risks related to taxation in the United States.

 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.

 Demand
 for the Company's services may decline due to factors beyond its control.

 The
 Company faces a high level of competition with numerous market participants with greater financial resources and operating experience.

 Aviation
 businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions;
 air traffic control inefficiencies; natural disasters; adverse weather conditions, such as hurricanes or blizzards; increased and
 changing security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; or the outbreak
 of disease; any of which could have a material adverse effect on the Company's business, results of operations and financial
 condition.

 The
 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.

 The
 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.

 The
 Company is exposed to operational disruptions due to maintenance.

 Significant
 increases in fuel costs could have a material adverse effect on the Company's business, financial condition and results of
 operations.

 If
 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.

 Any
 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.

 in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results
 of operations.

 The
 Company's failure to attract and retain highly qualified personnel in the future could harm its business.

 The
 proposed Transactions with flyExclusive may not be completed on the terms or timeline currently contemplated, or at all.

 In
 the proposed Transactions with flyExclusive Jet. AI will divest substantially all of its fractional and jet card business and related
 assets, together with associated working capital and thereafter adopt a business strategy that focuses on expanding its AI operations.
 Any or all of these decisions if incorrect may have a material adverse effect on the results of Jet. AI's operations, financial
 position and cash flows, and pose further risks to the successful operation of Jet. AI's business over the short and long-term.

 The
 AI sector in which Jet. AI expects to primarily focus after the Transactions is subject to significant risks, including rapid growth
 and volatility, capital requirements, dependence on rapidly changing underling technologies, market and political risks and uncertainties
 and extreme competition. Jet. AI cannot guarantee that it will be able to anticipate or overcome any or all of these risks and uncertainties,
 especially as a small company operating in an environment that includes many large, well-capitalized competitors with substantially
 more resources.

 Particularly
 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.

 The
 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.

 If
 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.

 Stockholders
 may experience dilution of their ownership interest due to the issuance of additional shares of common stock upon the conversion
 of the Series B Preferred Stock, especially since the Series B Preferred Stock has fluctuating conversion rates that are set at a
 discount to market prices of our shares of common stock during the period immediately following conversion.

 The
 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.

 Certain
 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.

 Sales
 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.

 The
 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.

 iii

 PART
I

 Item
1 Business

 Explanatory
Note

 On
August 10, 2023, we consummated a "Business Combination" pursuant to the Business Combination Agreement and Plan of Reorganization,
dated February 24, 2023, as amended by Amendment No. 1 to the Business Combination Agreement, dated as of May 11, 2023. In connection
with the Business Combination, we changed our name from "Oxbridge Acquisition Corp." to "Jet. AI Inc."

 Unless
otherwise noted in this Report, "Jet. AI," "the Company," "we," "us," "our"
and similar terms refer to (a) Oxbridge Acquisition Corp. prior to the closing of the Business Combination and (b) Jet. AI Inc. after
giving effect to the closing of the Business Combination. See " Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations – Business Combination. "

 Overview

 Our
business strategy combines concepts from fractional jet and charter jet programs with innovations in artificial intelligence, also referred
to herein as "AI."

 We
formed our company on June 4, 2018. We developed and, in September 2019, launched our booking platform represented by our iOS app JetToken
(the "App"), which originally functioned as a prospecting and quoting platform to arrange private jet travel with third party
carriers. Following our acquisition of HondaJet HA-420 aircraft (the "HondaJet Elites"), we began selling jet cards and fractional
ownership interests in our aircraft. In 2023 and 2024, we launched two AI-enhanced booking apps called CharterGPT and Ava, respectively,
as more fully discussed under " Our Software Platforms " and " Strategy – Artificial Intelligence "
below.

 Beginning
in 2023, we launched our Jet. AI Operator Platform to provide a B2B software platform for SaaS products. Currently we offer the following
SaaS software to aircraft owners and operators generally:

 Reroute
 AI: recycles aircraft waiting to return to base into prospective new charter bookings to destinations within specific distances.

 DynoFlight:
 enables aircraft operators to estimate aircraft emissions then purchase carbon removal credits via our DynoFlight API.

 We
have also established a specific version of a private jet by-the-seat booking tool for the Las Vegas Golden Knights and Great Western
Air, LLC (DBA Cirrus Aviation Services, LLC) ("Cirrus") via 380 Software LLC. 380 Software LLC is a by-the-seat charter joint
venture between us and Cirrus.

 Our
strategy historically has involved expanding our fleet of aircraft with larger aircraft capable of traveling longer distances, developing
a national jet card program based on third party aircraft, further enhancing the AI functionality of CharterGPT, and expanding upon our
B2B software offerings. Our strategy currently involves further enhancing the AI functionality of Ava and CharterGPT, and expanding upon
Reroute AI and DynoFlight.

 Recent
Events

 Nasdaq
Compliance

 Our
common stock is currently listed on The Nasdaq Capital Market under the symbol "JTAI". On December 1, 2023, the Company received
a notification letter (the "Initial Notice Letter") from the Listing Qualifications Staff of Nasdaq notifying the Company
that its amount of stockholders' equity had fallen below the $10 million required minimum for continued listing on The Nasdaq Global
Market set forth in Nasdaq Listing Rule 5450(b)(1)(A) (the "Minimum Stockholders' Equity Requirement"). The Company's
stockholders' deficit as of December 31, 2023 was $(3,963,039). The Initial Notice Letter also noted that as of September 30, 2023,
the Company did not meet The Nasdaq Global Market alternative listing criteria for the "Market Value" standard or the "Total
Assets / Total Revenues" standard.

 On
April 14, 2024, the Company received an additional notification letter from Nasdaq (the "Second Notice Letter") stating that
the Company was not in compliance with Nasdaq Listing Rule 5450(a)(1), as the minimum bid price of the Company's common stock had
been below $1.00 per share for 30 consecutive business days (the "Minimum Bid Price Requirement"). The Company had 180 calendar
days, or until October 14, 2024, to regain compliance with the Minimum Bid Price Requirement. Although the Company did not regain compliance
with the Minimum Bid Price Requirement by October 14, 2024, it was eligible for an additional 180-calendar day compliance period because
it elected to transfer to The Nasdaq Capital Market.

 On
May 30, 2024, the Company received an additional notification letter from Nasdaq (the "Third Notice Letter") stating that
the Company had not regained compliance with the Minimum Stockholders' Equity Requirement for continued listing discussed in the
Initial Notice Letter, which it was required to meet by May 29, 2024 pursuant to its compliance plan. As directed in the Third Notice
Letter, the Company timely requested a hearing before the Nasdaq Hearings Panel to appeal the delisting notice. The Company's hearing
request stayed the suspension of trading on the Company's securities, and the Company's securities continued to trade on
Nasdaq. On August 14, 2024, in connection with the implementation of the Company's compliance plan, the Nasdaq Hearings Panel granted
the Company's request to transfer the Company's securities from The Nasdaq Global Market to The Nasdaq Capital Market effective
as of August 16, 2024. Further the Nasdaq Hearings Panel granted the Company's request to have until November 26, 2024 to demonstrate
compliance with its previously submitted plan.

 The
Company effected a reverse stock split of its issued and outstanding shares of common stock at a ratio of 225-for-1 on November 12, 2024
to, in part, cause the Company to regain compliance with the Minimum Bid Price Requirement. As a result of that reverse stock split and
other transactions that occurred during 2024, on November 26, 2024, the Company received a letter from Nasdaq stating that the Company
regained compliance with both the Minimum Stockholders' Equity Requirement and the Minimum Bid Price Requirement. However, pursuant
to Nasdaq Listing Rule 5815(d)(4)(B), the Company is subject to a Mandatory Panel Monitor for a period of one year from November 26,
2024. If, within that one-year monitoring period, Nasdaq finds the Company again out of compliance with the Minimum Stockholders'
Equity Requirement, which was the subject of the exception, notwithstanding Nasdaq Listing Rule 5810(c)(2), the Company would not be
permitted to provide Nasdaq with a plan of compliance with respect to that deficiency and Nasdaq would not be permitted to grant additional
time for the Company to regain compliance with respect to that deficiency, nor would the Company be afforded an applicable cure or compliance
period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, Nasdaq would issue a Delist Determination Letter and the Company would have
an opportunity to request a new hearing with the initial Nasdaq Hearings Panel or a newly convened panel if the initial panel were unavailable.
The Company would have the opportunity to respond/present to the Nasdaq Hearings Panel as provided by Nasdaq Listing Rule 5815(d)(4)(C).
The Company's securities could at that time be delisted from Nasdaq.

 Although
the Company believes it will be able to maintain compliance with Nasdaq's continued listing requirements, there can be no assurance
that the Company will be able to maintain compliance with all such requirements.

 Reverse
Stock Split

 On
November 12, 2024, the Company effected a reverse stock split of the Company's issued and outstanding shares of common stock at
a ratio of 225-for-1. On the effective date, every 225 shares of common stock issued and outstanding were combined into one issued share
of common stock. In addition, the aggregate number of equity-based awards that remain available to be granted under the Company's
equity compensation plans was decreased proportionately and proportionate adjustments were made to the per share exercise price and the
number of shares issuable upon the exercise of outstanding stock options, as applicable, as well as to the number of shares that would
be owned upon vesting and settlement of restricted stock units and other equity-based awards, as applicable. Similar proportionate adjustments
were also made to the outstanding GEM Warrant. No fractional shares were issued as a result of the reverse stock split and any fractional
shares resulting from the reverse stock split were rounded down to the nearest number of whole shares so that we issued cash in lieu
of any fractional shares that such stockholder would have received as a result of the reverse stock split. In accordance with ASC 260-10-55-12,
the Company has adjusted the number of shares, per-share computations and the computations of basic and diluted EPS retroactively for
all periods presented in the consolidated financial statements and related notes.

 Potential
Sale of Aviation Business Assets

 On
February 13, 2025, the Company, entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement")
with flyExclusive, Inc. ("flyExclusive"), FlyX Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of flyExclusive
("Merger Sub"), and Jet. AI SpinCo, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("SpinCo").
Pursuant to the Merger Agreement, (i) as a condition to closing on the Merger Agreement, the Company will distribute all of the shares
of SpinCo, on a pro rata basis, to the Company's stockholders (the "Distribution"), (ii) Merger Sub will merge with
and into SpinCo (the "Merger" and, together with the Distribution and all other transactions contemplated under the Merger
Agreement, the "Transactions") with SpinCo surviving the Merger as a wholly owned subsidiary of flyExclusive and (iii) as
consideration for the Merger, the Company's existing stockholders will have the right to receive shares of Class A common stock
of flyExclusive. Additionally, the Company's stockholders will continue to own and hold their existing shares of the Company's
common stock as of closing of the Merger.

 In
connection with executing the Merger Agreement, the Company, SpinCo, and flyExclusive entered into a Separation and Distribution Agreement
(the "Separation and Distribution Agreement") pursuant to which the Company will transfer the business, operations, services
and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and jet card
business (the "Separation"). Upon the terms and subject to the conditions set forth in the Separation and Distribution Agreement,
the Company will consummate the Distribution. As such, the Company will no longer operate a fractional or jet card business as of consummation
of the Distribution. There will be no change expected to the Company's board of directors or executive officers as a result of
the Merger, Separation, Distribution, or other Transactions.

 After
the Transactions Jet. AI will continue to operate and retain its software and intellectual property assets, but will cease to hold its
aircraft fractional, jet card and management assets and expects to pursue additional business opportunities in the artificial intelligence
(AI) sector utilizing its remaining assets to enhance those business operations and model. The Transactions are subject to shareholder
approval and are expected to close during the second quarter of 2025.

 Our
Aircraft Operations

 In
July 2021, we leased a HondaJet aircraft under a short-term lease arrangement, which terminated in February 2022, to accelerate our aircraft
operations and sales of jet card memberships. We previously acquired four HondaJet Elite aircraft under our 2020 purchase agreement with
Honda Aircraft Company, LLC ("Honda Aircraft Company"), discussed under " Our Aircraft " below, all four
of which have been sold, but three of which remain part of our fleet, as discussed below, with three of the four aircraft having been
delivered in 2022. Cirrus is managing, operating, and maintaining our aircraft and has a growing team of pilots that have been specially
trained on the HondaJet at the Flight Safety facility on the Honda Aircraft Company campus in Greensboro, NC. Cirrus has additionally
developed a safety co-pilot training program in coordination with the FAA and a local flight training academy for licensed pilots already
skilled with the Garmin 1000 avionics suite.

 We
offer the following programs for our HondaJet Elite aircraft:

 Fractional
 ownership program: This program provides potential owners the ability to purchase a share in a jet at a fraction of the cost of acquiring
 an entire aircraft. Each 1/5 share guarantees 75 occupied hours of usage per year with 24 hours of notice. The fractional ownership
 program consists of a down payment, one or more progress payments, a payment on delivery, a monthly management fee and an hourly
 usage fee. As part of the aircraft purchase agreement, the buyer enters into an aircraft management agreement which lasts three years
 and, at the end of the contract period, the aircraft is typically sold, and the owners are given their pro-rata share of the sale
 proceeds. The three-year term is not renewable. Our current contracts do not contemplate the re-fractioning of the aircraft to other
 buyers at the end of the term, but rather a whole aircraft sale to a single buyer. Monthly management fees are in general subject
 to an annual CPI-W based step-up. CPI-W is a measure of cost inflation commonly used in long term aviation service contracts with
 OEMs and engine manufacturers.

 Jet
 card program: A membership in our jet card program generally includes 10, 25 or 50 occupied hours of usage per year with 24 hours
 of notice. Members generally pay 100% upfront and then fly for a fixed hourly rate over the next twelve months. Those who require
 guaranteed availability may pay a membership fee for an additional charge. Jet card program members may interchange as a set ratio
 per aircraft onto any one of twenty jets operated by our partner, Cirrus.

 In
addition to servicing members, fractional owners and third-party charter clients, our HondaJet Elites are available to address unexpected
cancellations or delays on brokered charters. Unlike most of our brokerage competitors, as well as many business jet management companies
which require owner approval before their aircraft can be used for third party charter, we believe maintaining a fleet of readily available
aircraft to back fill third party charter services provides more reliability and is an attractive selling point for potential clients.

 In
2022, we entered into agreements with Cirrus under which we will sell jet cards for Cirrus's aircraft, for a commission for sales
and client management services, and we make Cirrus's aircraft available to our customers for charter bookings at preferred rates
and with certain service guarantees. As a result, our jet card members and charter customers have access to twenty of Cirrus's
aircraft in the light, mid, super-mid, heavy, and ultra-long-range categories, comprising the following aircraft: CJ3+, CJ4, Lear 45XR,
Citation XLS+, Lear 60, Hawker 900XP, Challenger 300, Challenger 604, Falcon 900EX, Challenger 850, Gulfstream V and Gulfstream G550.

 In
the fourth quarter of 2022, we launched the Onboard Program to allow aircraft owners to contribute their aircraft to the Company's
charter and jet card inventory. The Onboard Program requires one month FAA conformity of aircraft onto the Cirrus Part 135 certificate,
a one-week pilot recertification course for charter operation and execution of a limited management agreement. We currently have one
Cessna Citation Jet CJ4 aircraft ("Citation CJ4 Gen 2") and one Beechcraft Super King Air B300 (350I) aircraft ("King
Air 350i") managed pursuant to our OnBoard Program.

 The
above description of our aircraft operations assumes that the Company's current operations will remain the same. However, if the
Company consummates the proposed Transactions pursuant to the Merger Agreement with flyExclusive, the Company will transfer the business,
operations, services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional
and jet card business.

 Our
Software Platforms

 Our
Booking Platform – CharterGPT

 Our
booking platform displays a variety of options across private aircraft types in addition to the pricing of our own aircraft, with a range
of prices drawn from a list of thousands of aircraft for hire. We offer users the ability to request a jet and to simultaneously task
us with seeking a lower-cost otherwise superior alternative. Our App (or CharterGPT) is directly connected via our application programming
interface (API) to Avinode, the major centralized database in private aviation. Through Avinode we can electronically and automatically
correspond with operators of private jets who have posted their aircraft for hire. We envision a time when CharterGPT draws upon resources
other than Avinode for private aircraft inventory, in particular we contemplate a connection between the inventory found in Reroute AI
and CharterGPT.

 The
CharterGPT app, which we released in the iOS and Android stores in 2023 to replace the charter booking function of our Jet Token App,
automates certain of these manual steps involved in charter bookings, and we believe this automation will enable us to scale charter
activity with fewer persons than would be normally required. In particular, CharterGPT is designed to do the following: (1) intake travel
requirements in natural language and then interact with customers to provide substantive replies and actionable suggestions with quality
indistinguishable from an experienced charter professional; (2) power the content behind outbound calls to smaller charter operators
to confirm electronic indications of interest communicated via the Avinode centralized booking database of private aircraft; (3) reconcile
the natural language terms in a third party jet operator contract with the terms and conditions in the contract the customer signs with
us (4) verify that payment for the charter has cleared.

 Our
Booking Platform –Ava

 In
late 2024 we announced the launch of our cutting-edge agentic AI model, "Ava," that books private jets. Through Ava, customers
can now conveniently book private jets by calling or texting a toll-free number where the AI provides real-time aircraft availability,
transparent pricing, and expert guidance to help users select the perfect jet for their intended journey. For those who prefer texting,
Ava enables full conversational experience via SMS, responding to inquiries, sharing details, and providing a direct link to the CharterGPT
app for seamless trip management. The AI is intended to ensure every customer receives a personalized and efficient experience, whether
they're seasoned flyers or first-time travelers.

Operator Platform

provides and continues to develop a B2B software platform for a suite of SaaS products termed "Jet. AI Operator Platform"
which currently consists of:

 Reroute
AI

 In
2024 we launched Reroute AI. Reroute AI software is web based and enables FAA Part 135 operators to earn revenue on otherwise empty flight
legs. When prompted with basic travel itinerary information such as city pair and date of travel, Reroute AI searches its database of
empty flight legs and proposes novel combinations of those legs that meet these constraints it has been given. Its database of empty
flight legs comes from API integrations with certain other databases and a ChatGPT enhanced scrape of publicly available empty leg lists
published by Part 135 operators. An operator may upload its own aircraft tail numbers and empty leg list if for any reason one or both
have not already been uploaded into the system. Jet. AI generates revenue from Reroute AI when an operator wishes to book an itinerary
proposed by the software that involves the use of aircraft outside that operator's fleet. In that instance, Jet. AI acts as broker
to the operator using Reroute AI's proposed itinerary and a human in the loop to negotiate the new pricing and new routing of the
third party operator's aircraft.

 DynoFlight

 DynoFlight
is a software API that we launched at the end of 2023. It enables aircraft operators to track and estimate emissions and then purchase
carbon offset credits. DynoFlight offers small to medium sized operators a way to begin tracking and offsetting their carbon credits
with advances estimation techniques, compliant practices, and quality credits at prices usually only accessible to operators working
at a much larger scale that are buying in bulk. In February, 2024, the Company announced a collaboration with FL3XX, a web and app-based
aviation management platform, to introduce the DynoFlight carbon offset platform to FL3XX customers. We believe the DynoFlight API may
offer an advantage even to large organizations that wish to manage working capital more efficiently (i.e. pay as they fly instead of
buying in bulk). We are currently in the process of integrating the DynoFlight API with the FL3XX systems. We believe that, once the
DynoFlight API has been integrated with FL3XX and future customers, it will generate monthly and usage-based revenues with modest operating
costs limited to server administration and maintenance of the code base.

 FlightClub
– Cirrus Specific

 The
Flight Club API is designed to enable FAA Part 135 operators to function simultaneously under FAA Part 380 which permits sale of private
jet service by the seat instead of by whole aircraft. The Flight Club software integrates front end ticketing and payment collection
with the flight management systems of an FAA Part 135 operator. It automates the process of filing forms for each flight with DOT and
conforms with DOT escrow requirements around ticketing and movement of customer funds. Our initial use case of the Flight Club is through
380 Software LLC, a 50% owned subsidiary founded in co-operation with our operating partner and 50% owner of 380 Software LLC, Cirrus.
The Company retains all rights to the technology powering 380 Software LLC and has granted 380 Software LLC a perpetual non-transferrable
license. This initial implementation of the Flight Club permits the owners of Cirrus-managed aircraft to fly on one another's planes
at a significantly reduced cost when those planes are otherwise flying empty. The operating costs of these flights are typically borne
by the previous charter customer who is typically obliged to pay not only the cost of an outbound leg but also the cost of the return
leg. The charter customer is typically obliged to pay the cost of the return because the sale of the empty return is an inherently low
probability event based on historical industry experience.

 We
are currently focused on our partnership with the Las Vegas Golden Knights and on integrating with their systems to generate seat sales.
Once we learn more from the Cirrus and Las Vegas Golden Knight partnerships we will decide whether to expand the availability of Flight
Club.

 AI
Data Centers

 With
our announcement of the potential sale of aviation business assets, we also announced our entry into the AI infrastructure space and
have signed a letter of intent for our first 50-megawatt project as part of a new one-hundred-and-twenty-acre campus that will allow
room for the phased construction of a full gigawatt of capacity in the years ahead. In addition, for the first project we've retained
a dynamic company founded by professional data center builders, with experience in our market, to assist with planning and execution
while we deepen our own internal capabilities.

 Strategy

Operations

 Having
successfully executed the HondaJet Elite four aircraft fleet deal and further having sold through all four aircraft, three of which remain
part of our fleet, as discussed below, we plan to gradually expand our fleet with larger light jet and super-mid-size aircraft and the
help of our operating partner, Cirrus. Cirrus manages a fleet of 30 jets in Las Vegas, where we are headquartered. In October 2024, the
Company entered into an aircraft purchase agreement with Textron Aviation Inc. ("Textron"), for the purchase of three Citation
CJ4 Gen 2 aircraft. The aircraft are expected to be delivered in the second, third and fourth quarters of 2026, respectively. Upon delivery,
the jets would, in turn, be managed by Cirrus and listed on their Part 135 certificate. Customers would be expected to make a down payment
and progress payments, consistent with fractional industry norms.

 Given
the timeframe prior to delivery the company may consider independent development of Part 135 operations, subject to management's
internal return on capital targets and, depending on the level of scale, the prospective benefits of enhanced operational control on
customer service.

all major manufacturers of larger cabin aircraft such as Gulfstream, Falcon, Bombardier, Embraer, and Textron each have one to three
year waiting lists, many of our fractional competitors can only pre-sell, and remain otherwise unable to offer the related service. Our
strategy is to allow customers, in advance of delivery, to fly on Cirrus's managed aircraft. In return the customer would pay a
monthly management fee (MMF) and an occupied hourly fee (OHF) at rates substantially similar to those for their Citation CJ4 Gen 2. We
believe this "buy and fly" approach may resonate with market participants who may appreciate the convenience of a fractional
program without the extraordinarily long wait.

 Conventional
wisdom in private aviation has been that a very light jet FAA Part 135 operation presents financial challenges because the lower hourly
rate of a very light jet leaves little margin to pay a second pilot and remain profitable. Thanks to our partnership with Cirrus, we
have sought to address this concern by having a type rated pilot in command with at least 1,500 hours in jets, 1,000 of which must have
been in the HondaJet specifically, fly alongside a co-pilot who has been through an FAA approved ground school developed by Cirrus and
Chennault Flying Service. This "safety co-pilot" is permitted to operate the aircraft in the unlikely event the pilot in
command is incapacitated or otherwise unable to act. The HondaJet, which has been designated by the FAA for single pilot operation, integrates
the Garmin 3000 flight system and by law does not require a second pilot to fly. This safety co-pilot program brings trained pilots who
are already schooled in either the Garmin 1000 or Garmin 3000 flight system, gives them additional training on the HondaJet and Garmin
300 system, and then allows them to develop their skills alongside a mentor. Importantly, the presence of this safety co-pilot is regarded
by our insurer as sufficient to maintain our present level of premium. The safety pilot does not require a full wage because of their
status as a trainee and the professional value they gain from accruing jet flight hours. This lower cost of labor helps the company overcome
the traditional costs of paying a second pilot and helps bring a stream of prospective pilot in command candidates. Some safety pilots
are newer to aviation while others have had many years of flight training and thousands of hours of flight time on civilian (or military)
jet or turboprop aircraft. We believe that the comparatively low cost of entry of the HondaJet and the proven capabilities of the Challenger
3500 are attractive to new and seasoned traveler alike, particularly given our ability to offer interchange between the two aircraft
and onto any one of twenty of the thirty aircraft managed by Cirrus. In addition, while some customers have shorter mission profiles
and lower passenger loads better suited to the HondaJet others have longer mission profiles with higher passenger loads – and so
the HondaJet and the Citation CJ4 Gen 2 (plus Cirrus's fleet) again make an excellent combination in our view. We have taken a
gradual approach to fleet expansion given the capital-intensive nature of aviation and our view that customers should bear the risk (and
related tax reward) of owning and maintaining airplanes.

 The
above description of our aircraft operations strategy assumes that the Company's current operations will remain the same. However,
if the Company consummates the proposed Transactions pursuant to the Merger Agreement with flyExclusive, the Company will transfer the
business, operations, services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate
a fractional and jet card business.

 Artificial
Intelligence

 We
operate an app in the iOS and Android stores. The app functions as a prospecting and quoting tool for those interested in chartering
a private jet. In 2023, we released an enhanced booking app called CharterGPT to automate much of the manual labor in charter bookings
for all of the steps between a customer's firm indication of interest and their arrival at ultimate destination. In late 2024 we
followed up with our agentic AI model, Ava. We believe this automation will enable us to scale charter activity with fewer persons than
would be normally required. In particular, CharterGPT is designed to do the following: (1) intake travel requirements in natural language
and then interact with customers to provide substantive replies and actionable suggestions with quality indistinguishable from an experienced
charter professional; (2) power the content behind outbound calls to smaller charter operators to confirm electronic indications of interest
communicated via the Avinode centralized booking database of private aircraft; (3) reconcile the natural language terms in a third party
jet operator contract with the terms and conditions in the contract the customer signs with us; and (4) verify that payment for the charter
has cleared.

 In
addition, in 2024, we incorporated the following AI-powered features to offer a continually improving unique and personalized experience
to customers:

Recommendation Engine: This feature provides customers greater transparency and understanding of the characteristics of charter relevant
to their trips, making it easier for them to make an informed decision. The recommendation engine analyzes a list of available jets based
on the travelers request, and considers factors such as budget, preferred aircraft size, age of aircraft, distance of the trip compared
with non-stop/range capability, number of passengers, ages and weights of passengers and their respective bags compared with cargo capacity,
basic take-off weight limitations, operator safety audit (Argus/Wyvern), cabin amenities such as a fully enclosed lavatory, WiFi availability
and years since last interior refurbishment.

 Customer
service: This feature provides intelligent customer service by using natural language processing and machine learning algorithms
to understand and respond to initial booking requests. Untrained call center staff and brittle chat bots characterize much of the customer
facing experience today in the US. With the advent of AI, we believe that even for high ticket items, consumers will come to expect a
natural language interface trained on terabytes of data that relate specifically to their respective purchases.

 Charter
brokerage is labor intensive, and most customers are highly price sensitive. We believe these two factors explain why no charter broker
has acquired more than 3-5% of the 500,000 brokered flights that land each year in North America. The back end of the App is expected
to provide three features that may address the labor intensity (and hence scalability) of our charter brokerage business. First, each
charter operator has its own form of legal contract for carriage and that contract must be reconciled with the terms found in the charter
brokers' agreement with the passenger. Our AI is expected to perform this reconciliation automatically, improving the speed to
close with the client and reducing labor costs. Second, many charter operators do not initially respond to electronic requests delivered
through the Avinode charter database that powers our app. Our generative chat AI is expected to perform outbound voice calls to prompt
aircraft operators to respond to quotes we have requested via the web interface to their Avinode account. Third, we expect to develop
our AI to integrate with Schedero (an Avinode based scheduling application) to generate a trip sheet for a given charter and then to
further integrate with Stripe to invoice and confirm payment via credit card, wire, or ACH.

 In
addition, we are developing the following AI-powered features to incorporate into the AI functionality of CharterGPT:

 Predictive
Destination Optimization: CharterGPT uses historical traffic patterns and traveler preferences, and is expected to make use of information
such as airport closures, fuel prices, and landing fees to then recommend which private airport to select when a traveler's destination
address is serviced by multiple airstrips. For example, Los Angeles is serviced by Los Angeles International Airport (LAX), Van Nuys
Airport (KVNY), Burbank Bob Hope Airport (KBUR), and John Wayne Airport (KSNA). Landing at an airport farther from one's ultimate
destination may save time if doing so enables faster ground transportation.

 Predictive
Departure Date: CharterGPT analyzes historical pricing data and forward-looking event data related to a given itinerary to predict
the best date to book a flight to obtain the lowest price for their desired charter itinerary. Although approximately thirty-five blackout
days a year are widely understood to absorb most domestic private aviation capacity, a variety of lesser appreciated grey-out days centered
around key sporting events or entirely new happenings can affect both regional and national pricing.

 Predictive
Departure Time: CharterGPT recommends optimal departure times based on both historical and live weather conditions, air traffic,
and other factors, to help customers more reliably arrive at their destination on time.

 Predictive
Ground Transportation: CharterGPT recommends ground transportation. For example, some airports run out of rental cars at certain
times each year because of an annual conference or other recurring special event. Some of our competitors have taken steps to remedy
the shortage at some airports by positioning in their own vehicles for customer use.

 Sales
and Marketing

 Our
marketing and advertising efforts are focused on high-net-worth individuals. We have observed that many first-time private flyers came
to market beginning in 2020 in an effort to avoid commercial travel and thereby curtail their prospective exposure to COVID-19. We intend
to continue to expand our marketing and advertising through the following channels: online marketing, television advertising and event
marketing. Paid social media and search engine advertising drive our online marketing. In the past we have launched 15 and 30 second
advertising spots that are targeted at high-net-worth individuals and corporate executives through several channels, including CNBC,
Fox Business, and The Golf Channel, as well as online through Facebook and Linked-In. We intend to expand social media and event marketing
in particular, provided those meet our internal return targets. With respect to event marketing, we intend to have a presence at sporting
events, business jet industry gatherings and company hosted aircraft static displays.

 Market
Opportunity

 Over
the past 30 years, the market for private jet travel has transformed significantly. First the model of full aircraft ownership transformed
into fractional ownership with companies such as NetJets and FlexJet. This was followed by operators offering jet cards and on-demand
service through their fleet of aircraft. The latest iteration of private jet travel provides even more flexibility by providing an on-demand
service to travelers while leveraging the flight availability of one or more third party carriers. The result of this transformation
is a highly segmented industry with numerous market participants offering varying levels of ownership.

 We
believe that by combining the private jet on-demand model with commercial airline flight availability and prospectively the underutilized
flight hours of private jet operators, our company will be positioned to provide optimum flexibility and cost efficiency for our clients.

 Our

 The
Company's aircraft fleet consists of five aircraft – three HondaJet Elites, one Citation CJ4 Gen 2 aircraft and one King
Air 350i aircraft. The Company acquired the three HondaJet Elites pursuant to a purchase agreement with Honda Aircraft Company for a
multi-aircraft deal for four HondaJet Elites. One of the HondaJet Elites in our current fleet was sold and is now leased by the Company
from Western Finance Company. The other two HondaJet Elites in our current fleet were purchased and subsequently financed through the
sale of all fractional interests in each of these aircraft. Both of those HondaJet Elites are now operated by the Company. We also acquired
a fourth HondaJet Elite pursuant to the purchase agreement with Honda Aircraft Company, but we sold this aircraft in June 2022, after
we determined, based on our internal financial and legal review, that the sale of the aircraft would offer a net benefit to our stakeholders.
That fourth HondaJet Elite is not operated by the Company. The fourth and fifth aircraft in our current fleet - the Citation CJ4 Gen
2 aircraft and King Air 350i aircraft - are wholly owned by one of our customers who committed his aircraft to us via our Onboard Program
for management and charter pursuant to our limited management agreement. Under the terms of our management agreement, which has a term
of one year that automatically renews unless otherwise terminated by either party upon 30 days prior notice, the customer pays us a monthly
management fee for services, including aircraft management services, flight crew services, such as pilot hiring, flight operations services,
aircraft maintenance management and other administrative services.

 Many
believe that the HondaJet Elite aircraft are ideally suited for trips under 3 hours carrying 2-4 passengers plus two pilots. We believe
the HondaJet Elite aircraft is one of the most spacious and cost-efficient light jets on the market with ample baggage and interior room
(including an enclosed lavatory). The wing mounted engines allow for a tranquil, spacious interior. Engines on the wings mean less weight
on the tail and more room in the cabin.

 As
discussed in " Business – Strategy – Aircraft Operations " above we have executed a fleet purchase agreement
to acquire three Citation CJ4 Gen 2 aircraft from Textron Aviation, consisting of three firm orders. We are now actively pre-selling
fractional interests in these aircraft. Upon delivery, the jets would in turn be managed by Cirrus and listed on their Part 135 certificate.
Customers would be expected to make a down payment and progress payments, consistent with fractional industry norms.

 We
currently base our fleet at Harry Reid International airport in Las Vegas, NV, a top ten private jet destination and may relocate the
fleet based on seasonal travel patterns and the travel patterns of our membership.

 Based
on our experience, and in light of many of our competitors restricting charters on certain "blackout dates," we estimate
that thirty calendar days per year (due to holidays, major sporting events, etc.) it is extremely difficult to fly private without the
guaranteed access provided by a jet membership program such as ours. The ability to safely offer guaranteed capacity, on demand, is one
of the most important features one can deliver in private aviation. Also, our aircraft give us the ability to attract online visitors
with dynamically priced offers.

 We
have entered into several Executive Aircraft Management and Charter Services Agreements with Cirrus. Under these agreements, Cirrus provides
management services to us with respect to the marketing, operation, maintenance and administration of our aircraft. Specifically, following
the initial set-up services, Cirrus provides Flight Crew Services, including selection, training, employment and management of the pilots
necessary for operating the Company's Aircraft; Flight Operation Services, including flight scheduling, following and support services;
Aircraft Maintenance Services, including maintenance of the Aircraft and/or management of maintenance of the Aircraft performed by third
parties, related maintenance support functions and the administration of the Aircraft's log books, manuals, data, records, reports
and subscriptions; Administrative Services, including budgeting, accounting and reporting services; Facility Services, including providing
and/or arranging for aircraft hangar and support facilities at the Aircraft's Operating Base and other locations at which the Aircraft
may be situated from time to time; and Insurance Services, including providing insurance policies for the Aircraft.

 Cirrus
is the largest private jet charter company based in Las Vegas. The Cirrus team has been managing and operating aircraft – commercially
and privately – for more than 40 years. In addition, Cirrus is:

 FAA
 Eligible On-Demand Approved

 ARG/US
 Platinum Rated

 Wyvern
 Recommended

 Cirrus
maintains, services and operates our aircraft on our behalf and in compliance with all applicable FAA regulations and certification requirements.
Cirrus has the capability to provide substitute aircraft at competitive rates in periods of excess demand for our aircraft.

 The
above description of our aircraft assumes that the Company's current operations will remain the same. However, if the Company consummates
the proposed Transactions pursuant to the Merger Agreement with flyExclusive, the Company will transfer the business, operations, services
and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and jet card
business.

 Competition

 The
private air travel industry is extraordinarily competitive. We will compete against private jet charter and fractional jet companies.
Established private jet brokerage and fractional companies include but are not limited to, NetJets, FlexJet, VistaGlobal (including JetSmarter
powered by XO), SentientJet, Wheels Up, JetSuite, Flight Options, Nicholas Air, Jet Alliance, Executive Air Share, Plane Sense, One Sky
Jets, StarJets, Jet Aviation, Volato and Luxury Aircraft Solutions. All compete for passengers with a variety of pricing plans, aircraft
types, blackout periods, booking terms, flyer programs and other products and services, including seating, food, entertainment and other
on-board amenities.

 Both
the private jet charter companies and the legacy airlines and low-cost carriers have numerous competitive advantages that enable them
to attract both business and leisure travelers. Our competitors may have corporate travel contracts that direct large numbers of employees
to fly with a preferred carrier. The enormous route networks operated by our competitors, combined with their marketing and partnership
relationships with regional airlines and international alliance partner carriers, allow them to generate increased passenger traffic
from domestic and international cities. Our access to smaller aircraft fleet networks and lack of connecting traffic and marketing alliances
puts us at a competitive disadvantage, particularly with respect to our appeal to higher-fare business travelers.

 The
fractional private jet companies and the legacy airlines and low-cost carriers each operate larger fleets of aircraft and have greater
financial resources, which would permit them to add service in response to our entry into new markets. Due to our relatively small size,
we are more susceptible to fare wars or other competitive activities, which could prevent us from attaining the level of traffic or maintaining
the level of sales required to sustain profitable operations.

 In
2018 and 2019, respectively, VistaJet acquired XOJET and JetSmarter, combining its heavy jet subscription-based service targeting multinational
corporations and ultra-high net worth individuals with XOJET's super-midsize jet on demand service and JetSmarter's digital
booking platform for business aviation. In addition, during 2020, Wheels Up acquired Delta Private Jets as well as Gama Aviation, a business
jet services company and in 2021 Vista Jet acquired a number of smaller players as well as Apollo Jets. Increased consolidation in our
industry could further intensify the competitive environment we face.

 The
above description of our competition assumes that the Company's current operations will remain the same. However, if the Company
consummates the proposed Transactions pursuant to the Merger Agreement with flyExclusive, the Company will transfer the business, operations,
services and activities of the Company's fractional and jet card business to SpinCo and will no longer operate a fractional and
jet card business.

 Intellectual
Property

 We
registered a trademark on our brand name, Jet Token, and our logo, with the United States Patent and Trademark Office. We have also purchased
the domain names, jettoken.com and jet.ai, operating our website under those domains. We have an application pending with the United
States Patent and Trademark Office for Jet. AI. We are the sole owner of the intellectual property rights in and to the software code
underlying our App, CharterGPT and the software code underlying our Jet. AI Operator Platform offerings.

 Employees

 As
of March 15, 2025 we have 8 full-time employees, including our Executive Chairman and Interim Chief Executive Officer, our Interim Chief
Financial Officer, our Chief Operating Officer, our Chief Technology Officer and our Chief Marketing Officer.

 Regulation

 Regulations
Applicable to the Ownership and Operation of Our Aircraft

 Once
we have leased our aircraft, Cirrus, which maintains and manages our aircraft, is subject to a high degree of regulation that affects
our business, including regulations governing aviation activity, safety standards and environmental standards.

 U.S.
Department of Transportation ("DOT")

 The
DOT primarily regulates economic issues affecting air transportation such as the air carrier's financial and management fitness,
insurance, consumer protection and competitive practices. The DOT has the authority to investigate and bring proceedings to enforce its
regulations and may assess civil penalties, revoke operating authority, and seek criminal sanctions. Our operating as an air charter
carrier is regulated and certificated by the DOT. The DOT authorizes the carrier to engage in on-demand air transportation within the
United States, its territories, and possessions. The DOT can suspend or revoke that authority for cause, essentially stopping all operations.

 Federal
Aviation Administration ("FAA")

 The
FAA primarily regulates flight operations, in particular matters affecting air safety, such as airworthiness requirements for aircraft
and pilot, mechanic, dispatcher and flight attendant certification. The FAA regulates:

 aircraft
 and associated equipment (and all aircraft are subject to ongoing airworthiness standards),

 maintenance
 and repair facility certification,

 certification
 and regulation of pilots and cabin crew, and

 management
 of airspace.

 In
order to engage in air transportation for hire, each air carrier is required to obtain an FAA operating certificate authorizing the airline
to operate using specified equipment in specified types of air service. In the case of our leased aircraft, it is a Part 135 license.
The FAA has the authority to modify, suspend temporarily or revoke permanently the authority to provide air transportation for failure
to comply with FAA regulations. The FAA can assess civil penalties for such failures or institute proceedings for the imposition and
collection of monetary fines for the violation of certain FAA regulations. The FAA can revoke authority to provide air transportation
on an emergency basis, without notice and hearing, where significant safety issues are involved. The FAA monitors compliance with maintenance,
flight operations and safety regulations, maintains onsite representatives and performs inspections of a carrier's aircraft, employees
and records.

 The
FAA also has the authority to issue maintenance/airworthiness directives and other mandatory orders relating to aircraft and engines,
fire retardant and smoke detection devices, collision and windshear avoidance systems, navigational equipment, noise abatement and the
mandatory removal and replacement of aircraft parts that have failed or may fail in the future. FAA enforcement authority over aircraft
includes the power to ground aircraft or limit their usage.

 Transportation
Security Administration ("TSA")

 The
TSA is responsible for oversight of passenger and baggage screening, cargo security measures, airport security, assessment and distribution
of intelligence and security research and development. Air carriers are subject to TSA mandates and oversight in connection with screening
passenger identities and screening baggage. TSA regulations governing passenger identification, which we will apply at the time of the
Company purchase as well as at the time of travel, requires all passengers to provide identification using a valid verifying identity
document. In addition, all passengers must provide their full name, date of birth, and gender, which is screened against the travel ban
watch list in effect at the time of initial screening and at the time of travel.

 All
air carriers are also subject to certain provisions of the Communications Act of 1934 because of their extensive use of radio and other
communication facilities and are required to obtain an aeronautical radio license from the Federal Communications Commission, or the
FCC.

 Available
Information

 We
file annual reports, quarterly reports, current reports, proxy statements and other information with the SEC. Our SEC filings are available
to the public through the "Investor Relations" portion of our website as soon as practicable after we have electronically
filed such material with, or furnished it to, the SEC. In addition, the SEC maintains a website that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

 Our
internet address is www.jet.ai. The information on our website is not, and shall not be deemed to be, part of this Report or incorporated
into any other filings we make with the SEC, except as shall be expressly set forth by specific reference in any such filings. All website
addresses in this report are intended to be inactive textual references only.

 Item
1A Risk Factors

 Investing
in our securities involves a high degree of risk. Our business, financial condition or results of operations could be harmed by any of
these risks. The risks and uncertainties described below are not the only ones we face. Additional risks not currently known to us or
other factors not perceived by us to present significant risks to our business at this time also may impair our business operations.

 Risks
Related to the Company's Business

 The
Company is an early-stage company with a limited operating history.

 The
Company's predecessor operating company Jet Token, Inc. was formed on June 4, 2018. Accordingly, the Company has a limited history
upon which an investor can evaluate its performance and future prospects. The Company has a short history and a limited number of aircraft
and related customers. The Company's current and proposed operations are subject to all business risks associated with newer enterprises.
These include likely fluctuations in operating results as the Company reacts to developments in its markets, difficulty in managing its
growth and the entry of competitors into the market. The Company has incurred net losses to date and anticipates continuing net losses
for the foreseeable future. The Company cannot assure you that it will be profitable in the foreseeable future or generate sufficient
profits to pay dividends. If the Company does achieve profitability, the Company cannot be certain that it will be able to sustain or
increase such profitability. The Company has not consistently generated positive cash flow from operations, and it cannot be certain
that it will be able to generate positive cash flow from operations in the future. To achieve and sustain profitability, the Company
must accomplish numerous objectives, including broadening and stabilizing its sources of revenue and increasing the number of paying
members to its service. Accomplishing these objectives may require significant capital investments. The Company cannot be assured that
it will be able to achieve these objectives.

 The
Company may not be able to successfully implement its growth strategies.

 The
Company's growth strategies include, among other things, expanding its addressable market by opening up private aviation to non-members
through our marketplace, expanding into new domestic markets, pursuing new opportunities in the AI sector, and developing adjacent (or
complimentary) businesses. The Company faces numerous challenges in implementing its growth strategies, including its ability to execute
on market, business, product/service and geographic expansions. The Company's strategies for growth are dependent on, among other
things, its ability to expand existing products and service offerings and launch new products and service offerings. Although the Company
devotes significant financial and other resources to the expansion of its products and service offerings, its efforts may not be commercially
successful or achieve the desired results. The Company's financial results and its ability to maintain or improve its competitive
position will depend on its ability to effectively gauge the direction of its key marketplaces and successfully identify, develop, market
and sell new or improved products and services in these changing marketplaces. The Company's inability to successfully implement
its growth strategies could have a material adverse effect on its business, financial condition and results of operations and any assumptions
underlying estimates of expected cost savings or expected revenues may be inaccurate.

 The
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.

 The
Company expects its operating results to fluctuate significantly in the future based on a variety of factors, many of which are outside
its control and difficult to predict. As a result, period-to-period comparisons of the Company's operating results may not be a
good indicator of its future or long-term performance. The following factors may affect the Company from period-to-period and may affect
its long-term performance:

 the
 Company may fail to successfully execute its business, marketing and other strategies;

 the
 Company's ability to grow complementary products and service offerings may be limited, which could negatively impact its growth
 rate and financial performance;

 the
 Company may be unable to attract new customers and/or retain existing customers;

 the
 Company will require additional capital to finance strategic investments and operations, pursue business objectives and respond to
 business opportunities, challenges or unforeseen circumstances, and the Company cannot be sure that additional financing will be
 available;

 the
 Company's historical growth rates may not be reflective of its future growth;

 the
 Company's business and operating results may be significantly impacted by general economic conditions, the health of the U.S.
 aviation industry and risks associated with its aviation assets;

 litigation
 or investigations involving the Company could result in material settlements, fines or penalties and may adversely affect the Company's
 business, financial condition and results of operations;

 existing
 or new adverse regulations or interpretations thereof applicable to the Company's industry may restrict its ability to expand
 or to operate its business as intended and may expose the Company to fines and other penalties;

 the
 occurrence of geopolitical events such as war, terrorism, civil unrest, political instability, environmental or climatic factors,
 natural disaster, pandemic or epidemic outbreak, public health crisis and general economic conditions may have an adverse effect
 on the Company's business;

 some
 of the Company's potential losses may not be covered by insurance, and the Company may be unable to obtain or maintain adequate
 insurance coverage; and

 the
 Company is potentially subject to taxation-related risks in multiple jurisdictions, and changes in tax laws could have a material
 adverse effect on its business, cash flow, results of operations or financial condition.

 The
Company's business is primarily focused on certain targeted geographic regions, making it vulnerable to risks associated with having
geographically concentrated operations.

customer base is primarily concentrated in certain geographic regions of the United States. As a result, Jet. AI's business, financial
condition and results of operations are susceptible to regional economic downturns and other regional factors, including state regulations
and budget constraints and severe weather conditions, catastrophic events or other disruptions. As Jet. AI seeks to expand in its existing
markets, opportunities for growth within these regions will become more limited and the geographic concentration of the Company's
business may increase.

 The
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.

 The
Company anticipates needing access to credit in order to support its working capital requirements as it grows. Interest rates are rising,
and it is a difficult environment for obtaining credit on favorable terms. If the Company cannot obtain credit when needed, the Company
may issue debt or equity securities to raise funds, modify its growth plans, or take some other action. Interest on debt securities could
increase costs and negatively impact operating results and convertible debt securities could result in diluting your interest in the
Company. If the Company is unable to find additional capital on favorable terms, then it is possible that it will choose to cease its
sales activity. In that case, the only asset remaining to generate a return on your investment could be the Company's intellectual
property. Even if the Company is not forced to cease its sales activity, the unavailability of capital could result in the Company performing
below expectations, which could adversely impact the value of your investment.

 The
Company's business and reputation rely on, and will continue to rely on, third parties.

 The
Company has relied on a third-party app developer to develop the initial versions of its App and the Company may continue to rely on
third parties for future development of portions of any new or revised App. In place of a third-party app developer, the Company relies
both on internal development and freelance contractors supervised by the Company's Chief Technology Officer. The Company intends
to continue to build its internal development team and to gradually decrease its reliance on external contractors for app development.
If there were delays or complications in the further development of the App, this might result in difficulties that include but are not
limited to the following:

 Increased
 Development Costs: Extended development timelines can result in higher costs associated with personnel, software licenses, hardware,
 and other development resources. Delays may require additional investments to address technical issues, hire more personnel, or acquire
 additional technology or expertise to expedite the development process. These increased costs may negatively impact our financial
 performance and profitability.

 Missed
 Time-to-Market Opportunities: Delays in app development may cause us to miss strategic market windows, limiting our ability to capture
 early adopters and gain a competitive advantage. Competitors may seize the opportunity to launch similar apps, potentially eroding
 our market share and diminishing our growth prospects. Our ability to generate revenue and establish a strong market presence may
 be compromised as a result.

 Customer
 Dissatisfaction and Loss of Trust: If delays or complications prolong the release of new versions of our App, it may lead to customer
 frustration and disappointment. Use of the App may diminish, and users may turn to alternative solutions or competitors. Customer
 dissatisfaction can harm our reputation and brand image, resulting in a loss of trust and reducing customer loyalty and engagement
 with our products and services.

 Negative
 Impact on Revenue and Financial Performance: A delay in launching revisions of our App or other software products may impact our
 revenue projections, financial forecasts, and investment plans. The inability to generate expected revenue streams can adversely
 affect our cash flow, profitability, and ability to meet financial obligations or raise additional capital. Our valuation and attractiveness
 to investors may also be negatively impacted.

 Opportunity
 Costs and Competitive Disadvantage: Time spent on addressing delays and complications diverts management's attention and resources
 away from other strategic initiatives or product developments. We may miss out on potential partnership opportunities, market expansions,
 or product enhancements, resulting in missed revenue and growth opportunities. Competitors may gain a competitive advantage over
 us.

 Loss
 of Investor Confidence: Extended delays or ongoing complications may erode investor confidence in our ability to execute our business
 plan successfully. Investors may question our management's capability, resulting in reduced investor interest, difficulty in
 raising funds, and a potential decline in our stock price. The loss of investor confidence can have broader implications for our
 overall financial stability and long-term viability.

 The
Company also relies heavily on its existing operating partner, Cirrus, to maintain and operate the Company's leased aircraft for
charter services and the Company will rely on third party operators when its clients book flights through its platform with those operators.
Both the Company and Cirrus actively book charter onto the Company aircraft. Cirrus books charter via its 24-hour charter department
and the Company books charter via its App. The failure of these third parties to perform these roles properly may result in damage to
the Company's reputation, loss of clients, potential litigation and other costs. The Company may also experience delays, defects,
errors, or other problems with their work that could have an adverse effect on its results and its ability to achieve profitability.

 The
Company relies on third-party Internet, mobile, and other products and services to deliver its mobile and web applications and flight
management system offerings to customers, and any disruption of, or interference with, the Company's use of those services could
adversely affect its business, financial condition, results of operations, and customers.

 The
Company's platform's continuing and uninterrupted performance is critical to its success. That platform is dependent on the
performance and reliability of Internet, mobile, and other infrastructure services that are not under the Company's control. While
the Company has engaged reputable vendors to provide these products or services, the Company does not have control over the operations
of the facilities or systems used by its third-party providers. These facilities and systems may be vulnerable to damage or interruption
from natural disasters, cybersecurity attacks, human error, terrorist attacks, power outages, pandemics, and similar events or acts of
misconduct. In addition, any changes in one of the Company's third-party service provider's service levels may adversely
affect the Company's ability to meet the requirements of its customers. While the Company believes it has implemented reasonable
backup and disaster recovery plans, the Company has experienced, and expects that in the future it will experience, interruptions, delays
and outages in service and availability from time to time due to a variety of factors, including infrastructure changes, human or software
errors, website hosting disruptions, capacity constraints, or external factors beyond the Company's control. Sustained or repeated
system failures would reduce the attractiveness of the Company's offerings and could disrupt the Company's customers'
businesses. It may become increasingly difficult to maintain and improve our performance, especially during peak usage times, as the
Company expands its products and service offerings. Any negative publicity or user dissatisfaction arising from these disruptions could
harm the Company's reputation and brand, may adversely affect the usage of the Company's offerings, and could harm the Company's
business, financial condition and results of operation.

 The
Company relies on third parties maintaining open marketplaces to distribute its mobile and web applications.

 The
success of the Company's App relies in part on third parties maintaining open marketplaces, including the Apple App Store and Google
Play, which make our App available for download. The Company cannot be assured that the marketplaces through which it distributes its
App will maintain their current structures or that such marketplaces will not charge the Company fees to list its App for download.

 The
Company may be unable to adequately protect its intellectual property interests or may be found infringing on the intellectual property
interests of others.

 The
Company's intellectual property may include trademarks, domain names, website, mobile and web applications, software (including
our proprietary algorithms and data analytics engines), copyrights, trade secrets, and inventions (whether or not patentable). The Company
believes that its intellectual property plays an important role in protecting its brand and the competitiveness of its business. If the
Company does not adequately protect its intellectual property, its brand and reputation may be adversely affected and its ability to
compete effectively may be impaired.

 The
Company protects its intellectual property through a combination of trademarks, domain names and other measures. The Company has registered
its trademarks and domain names that it currently uses in the United States. The Company's efforts may not be sufficient or effective.
Further, the Company may be unable to prevent competitors from acquiring trademarks or domain names that are similar to or diminish the
value of its intellectual property. In addition, it may be possible for other parties to copy or reverse engineer the Company's
applications or other technology offerings. Moreover, the Company's proprietary algorithms, data analytics engines, or other software
or trade secrets may be compromised by third parties or the Company's employees, which could cause the Company to lose any competitive
advantage it may have from them.

 In
addition, the Company's business is subject to the risk of third parties infringing its intellectual property. The Company may
not always be successful in securing protection for, or identifying or stopping infringements of, its intellectual property and it may
need to resort to litigation in the future to enforce its rights in this regard. Any such litigation could result in significant costs
and a diversion of resources. Further, such enforcement efforts may result in a ruling that the Company's intellectual property
rights are unenforceable.

 Moreover,
companies in the aviation and technology industries are frequently subject to litigation based on allegations of intellectual property
infringement, misappropriation, or other violations. As the Company expands and raises its profile, the likelihood of intellectual property
claims being asserted against it grows. Further, the Company may acquire or introduce new technology offerings, which may increase the
Company's exposure to patent and other intellectual property claims. Any intellectual property claims asserted against the Company,
whether or not having any merit, could be time-consuming and expensive to settle or litigate. If the Company is unsuccessful in defending
such a claim, it may be required to pay substantial damages or could be subject to an injunction or agree to a settlement that may prevent
it from using its intellectual property or making its offerings available to customers. Some intellectual property claims may require
the Company to seek a license to continue its operations, and those licenses may not be available on commercially reasonable terms or
may significantly increase the Company's operating expenses. If the Company is unable to procure a license, it may be required
to develop non-infringing technological alternatives, which could require significant time and expense. Any of these events could adversely
affect the Company's business, financial condition, or operations.

 A
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.

 In
order to operate its business, achieve its goals, and remain competitive, the Company continuously seeks to identify and devise, invest
in, implement and pursue technology, business and other important initiatives, such as those relating to aircraft fleet structuring,
business processes, information technology, initiatives seeking to ensure high quality service experience, and others.

 The
Company's business and the aircraft the Company operates are characterized by changing technology, introductions and enhancements
of models of aircraft and services and shifting customer demands, including technology preferences. The Company's future growth
and financial performance will depend in part upon its ability to develop, market and integrate new services and to accommodate the latest
technological advances and customer preferences. In addition, the introduction of new technologies or services that compete with the
Company's product and services could result in its revenues decreasing over time. If the Company is unable to upgrade its operations
or fleet with the latest technological advances in a timely manner, or at all, its business, financial condition and results of operations
could suffer.

 The
Company is dependent on its information systems which may be vulnerable to cyber-attacks or other events.

 The
Company's operations are dependent on its information systems and the information collected, processed, stored, and handled by
these systems. The Company relies heavily on its computer systems to manage its client account balances, booking, pricing, processing
and other processes. The Company receives, retains and transmits certain confidential information, including personally identifiable
information that its clients provide. In addition, for these operations, the Company depends in part on the secure transmission of confidential
information over public networks to charter operators. The Company's information systems are subject to damage or interruption
from power outages, facility damage, computer and telecommunications failures, computer viruses, security breaches, including credit
card or personally identifiable information breaches, coordinated cyber-attacks, vandalism, catastrophic events and human error. If the
Company's platform is hacked, these funds could be at risk of being stolen which would damage the Company's reputation and
likely its business. Any significant disruption or cyber-attacks on the Company's information systems, particularly those involving
confidential information being accessed, obtained, damaged, or used by unauthorized or improper persons, could harm the Company's
reputation and expose it to regulatory or legal actions and adversely affect its business and its financial results.

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.

 The
regulatory framework for privacy issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Many
government bodies and agencies have adopted or are considering adopting laws and regulations regarding the collection, use, storage and
disclosure of personal information and breach notification procedures. The Company is also required to comply with laws, rules and regulations
relating to data security. Interpretation of these laws, rules and regulations and their application to the Company's software
and services in applicable jurisdictions is ongoing and cannot be fully determined at this time.

 In
the United States, these include rules and regulations promulgated under the authority of the Federal Trade Commission, the Electronic
Communications Privacy Act, the Computer Fraud and Abuse Act, the California Consumer Privacy Act of 2018 (the "CCPA") and
other state and federal laws relating to privacy and data security. By way of example, the CCPA requires covered businesses to provide
new disclosures to California residents, provide them new ways to opt-out of certain disclosures of personal information, and allows
for a new cause of action for data breaches. It includes a framework that includes potential statutory damages and private rights of
action. There is some uncertainty as to how the CCPA, and similar privacy laws emerging in other states, could impact the Company's
business as it depends on how such laws will be interpreted. As the Company expands its operations, compliance with privacy laws may
increase its operating costs.

 The
Company may not have enough funds to sustain the business until it becomes profitable and may not be able to obtain additional capital
when desired, on favorable terms or at all.

 The
Company may not accurately anticipate how quickly it may use its funds and whether these funds are sufficient to bring the business to
profitability.

 The
industry, products and markets in which Jet. AI focuses are markets that make Jet. AI's prospects difficult to evaluate and enter
these industry sectors and thereafter remain competitive, Jet. AI expects to be required to make continued investments in equipment, facilities
and technology. Jet. AI expects that substantial capital will be required to pursue certain business opportunities in sectors that are
complimentary to AI focused business operations, and to also continue technology and product development, and to fund working capital
for anticipated growth. If Jet. AI does not generate sufficient cash flow from operations or otherwise have the capital resources to meet
its future capital needs, we may need additional financing to implement our business strategy.

expects that it will need to raise additional capital in the future to fund more rapid expansion, respond to competitive pressures, potentially
acquire complementary assets, businesses or technologies or take advantage of unanticipated opportunities, and it may seek to do so through
public or private financing, strategic relationships or other arrangements. The ability of Jet. AI to secure any required financing will
depend in part upon prevailing capital market conditions and business success. There can be no assurance that Jet. AI will be successful
in its efforts to secure any additional financing on terms satisfactory to management or at all. Even if such funding is available, Jet. AI
cannot predict the size of future issues of common shares or securities convertible into common shares or the effect, if any, that future
issues and sales of common shares will have on the price of Jet. AI's common shares.

 If
Jet. AI raises additional capital through the issuance of equity securities, the percentage ownership of Jet. AI's existing shareholders
may be reduced, and such existing shareholders may experience additional dilution in net book value per share. Any such newly-issued
equity securities may also have rights, preferences or privileges senior to those of the holders of the common shares. If additional
funds are raised through the incurrence of indebtedness, such indebtedness may involve restrictive covenants that impair the ability
of Jet. AI to pursue its growth strategy and other aspects of its business plan, expose Jet. AI to greater interest rate risk and volatility,
require Jet. AI to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, thereby reducing the
availability of its cash flow to fund working capital and capital expenditures, increase Jet. AI's vulnerability to general adverse
economic and industry conditions, place Jet. AI at a competitive disadvantage compared to its competitors that have less debt, and limit
Jet. AI's ability to borrow additional funds. In connection with any such future capital raising transactions, whether involving
the issuance of equity securities or the incurrence of indebtedness, Jet. AI may be required to accept terms that restrict its ability
to raise additional capital for a period of time, which may limit or prevent Jet. AI from raising capital at times when it would otherwise
be opportunistic to do so.

is subject to risks related to taxation in the United States.

 Significant
judgments based on interpretations of existing tax laws or regulations are required in determining Jet. AI's provision for income
taxes. Jet. AI's effective income tax rate could be adversely affected by various factors, including, but not limited to, changes
in the mix of earnings in tax jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities,
changes in existing tax policies, laws, regulations or rates, changes in the level of non-deductible expenses (including share-based
compensation), changes in the location of Jet. AI's operations, changes in Jet. AI's future levels of research and development
spending, mergers and acquisitions or the results of examinations by various tax authorities. Although Jet. AI believes its tax estimates
are reasonable, if the IRS or any other taxing authority disagrees with the positions taken on its tax returns, Jet. AI could have additional
tax liability, including interest and penalties. If material, payment of such additional amounts upon final adjudication of any disputes
could have a material impact on our results of operations and financial position.

to applicable tax laws and regulations or exposure to additional income tax liabilities could affect Jet. AI's business and future
profitability.

is a U.S. corporation and thus subject to U.S. corporate income tax on its worldwide income. Further, since Jet. AI's operations
and customers are located throughout the United States, Jet. AI is subject to various U.S. state and local taxes. 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 to Jet. AI and may have an adverse effect on its business and future profitability.

 For
example, several tax proposals have been set forth that would, if enacted, make significant changes to U.S. tax laws. Such proposals
include an increase in the U.S. income tax rate applicable to corporations (such as Jet. AI) from 21% to 28%. Congress may consider, and
could include, some or all of these proposals in connection with tax reform that may be undertaken. It is unclear whether these or similar
changes will be enacted and, if enacted, how soon any such changes could take effect. The passage of any legislation as a result of these
proposals and other similar changes in U.S. federal income tax laws could adversely affect Jet. AI's business and future profitability.

 In
the event that Jet. AI's business expands domestically or internationally, including to jurisdictions in which tax laws may not
be favorable, its obligations may change or fluctuate, become significantly more complex or become subject to greater risk of examination
by taxing authorities, any of which could adversely affect Jet. AI's after-tax profitability and financial results.

 In
the event that Jet. AI's business expands domestically or internationally, its effective tax rates may fluctuate widely in the future.
Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under U.S. GAAP,
changes in deferred tax assets and liabilities, or changes in tax laws. Factors that could materially affect Jet. AI's future effective
tax rates include, but are not limited to: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards
or practices, (c) changes in the composition of operating income by tax jurisdiction and (d) pre-tax operating results of Jet. AI's
business.

 Additionally,
Jet. AI may be subject to significant income, withholding, and other tax obligations in the United States and may become subject to taxation
in numerous additional U.S. state and local and non-U.S. jurisdictions with respect to income, operations and subsidiaries related to
those jurisdictions. Jet. AI's after-tax profitability and financial results could be subject to volatility or be affected by numerous
factors, including (a) the availability of tax deductions, credits, exemptions, refunds and other benefits to reduce tax liabilities,
(b) changes in the valuation of deferred tax assets and liabilities, if any, (c) the expected timing and amount of the release of any
tax valuation allowances, (d) the tax treatment of stock-based compensation, (e) changes in the relative amount of earnings subject to
tax in the various jurisdictions, (f) the potential business expansion into, or otherwise becoming subject to tax in, additional jurisdictions,
(g) changes to existing intercompany structure (and any costs related thereto) and business operations, (h) the extent of intercompany
transactions and the extent to which taxing authorities in relevant jurisdictions respect those intercompany transactions, and (i) the
ability to structure business operations in an efficient and competitive manner. Outcomes from audits or examinations by taxing authorities
could have an adverse effect on Jet. AI's after-tax profitability and financial condition. Additionally, the IRS and several foreign
tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and
the use of intangibles. Tax authorities could disagree with Jet. AI's intercompany charges, cross-jurisdictional transfer pricing
or other matters and assess additional taxes. If Jet. AI does not prevail in any such disagreements, Jet. AI's profitability may
be affected.

after-tax profitability and financial results may also be adversely affected by changes in relevant tax laws and tax rates, treaties,
regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive
effect.

ability to utilize its net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations.

 In
general, under Section 382 of the Code, a corporation that undergoes an "ownership change" is subject to limitations on its
ability to use its pre-change net operating loss carryforwards ("NOLs") to offset future taxable income. The limitations
apply if a corporation undergoes an "ownership change," which is generally defined as a greater than 50 percentage point
change (by value) in its equity ownership by certain stockholders over a three year period. If the Company has experienced an ownership
change at any time since its incorporation, Jet. AI may be subject to limitations on its ability to utilize its existing NOLs and other
tax attributes to offset taxable income or tax liability. In addition, future changes in Jet. AI's stock ownership, which may be
outside of Jet. AI's control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit Jet. AI's
use of accumulated state tax attributes. As a result, even if Jet. AI earns net taxable income in the future, its ability to use its pre-change
NOL carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could
potentially result in increased future income tax liability to Jet. AI.

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.

is a holding company and it has no material assets other than its direct and indirect equity interests in its subsidiaries. Jet. AI has
no independent means of generating revenue. To the extent Jet. AI's subsidiaries have available cash, Jet. AI will cause its subsidiaries
to make distributions of cash to pay taxes, cover Jet. AI's corporate and other overhead expenses and pay dividends, if any, on
the common stock. To the extent that Jet. AI needs funds and its subsidiaries fail to generate sufficient cash flow to distribute funds
to Jet. AI or are restricted from making such distributions or payments under applicable law or regulation or under the terms of their
financing arrangements, or are otherwise unable to provide such funds, Jet. AI's liquidity and financial condition could be materially
adversely affected.

 Risks
Related to the Company's Charter Business Operating Environment

 Demand
for the Company's services may decline due to factors beyond its control.

 Demand
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.

 In
particular, the recurrence of a pandemic, whether COVID-19 or otherwise, may result in a decline in air travel. Additionally, the reimposition
of travel restrictions and other measures intended to contain the spread of any such virus may contribute to a decline in demand for
air travel. If travel remains in a general decline for a significant period of time, the Company may be unable to compete with more established
operators and may not be able to achieve profitability in the medium term or at all.

 More
broadly, business jet travel is highly correlated to the performance of the economy, and an economic downturn, such as the current economic
environment, which has been adversely affected by high rates of inflation, increasing interest rates, and low consumer sentiment, is
likely to have a direct impact on the use of business jets. The Company's customers may consider private air travel through its
products and services to be a luxury item, especially when compared to commercial air travel. As a result, any economic downturn which
has an adverse effect on the Company's customers' spending habits could cause them to travel less frequently and, to the
extent they travel, to travel using commercial air carriers or other means considered to be more economical than the Company's
products and services. For example, beginning in 2008 and in connection with weakened macroeconomic conditions, the corporate and executive
jet aviation industry, and companies that utilize corporate jets, experienced intensified political and media scrutiny.

 Any
of these factors that cause the demand for private jet travel to decline may also result in delays that could reduce the attractiveness
of private air charter travel versus other means of transportation, particularly for shorter distance travel, which represents our primary
market currently. Delays also frustrate passengers, affecting the Company's reputation and potentially reducing fleet utilization
and charter bookings as a result of flight cancellations and increase costs. The Company may experience decreased demand, as well as
a loss of reputation, in the event of an accident involving one of its aircraft or an aircraft booked through our platform or any actual
or alleged misuse of its platform or aircraft by customers in violation of law. Demand for the Company's product and services may
also decline due to actions that increase the cost of private air charter travel versus other forms of transportation, particularly efforts
aimed at addressing climate change such as carbon tax initiatives or other actions. Any of the foregoing circumstances or events which
reduced the demand for private jet charters could negatively impact the Company's ability to establish its business and achieve
profitability.

 The
Company faces a high level of competition with numerous market participants with greater financial resources and operating experience.

 The
private air travel industry is extraordinarily competitive. Factors that affect competition in this industry include price, reliability,
safety, regulations, professional reputation, aircraft availability, equipment and quality, consistency and ease of service, willingness
and ability to serve specific airports or regions, and investment requirements. The Company competes against private jet charter and
fractional jet companies as well as business jet charter companies. Both the private jet charter companies and the business jet charter
companies have numerous competitive advantages that enable them to attract customers. Jet. AI's access to a smaller aircraft fleet
and regional focus puts it at a competitive disadvantage, particularly with respect to its appeal to business travelers who want to travel
overseas.

 The
fractional private jet companies and many of the business jet charter companies have access to larger fleets of aircraft and have greater
financial resources, which would permit them to more effectively service customers. Due to the Company's relatively small size,
it is more susceptible to their competitive activities, which could prevent the Company from attaining the level of sales required to
sustain profitable operations.

 Recent
consolidation in the industry, such as VistaJet's acquisitions of XOJET and JetSmarter and Wheels Up's acquisition of Delta
Private Jets as well as Gama Aviation, a business jet services company, and increased consolidation in the future could further intensify
the competitive environment the Company faces.

 There
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.

 Aviation
businesses are often affected by factors beyond their control including: air traffic congestion at airports; airport slot restrictions;
air traffic control inefficiencies; natural disasters; adverse weather conditions, such as hurricanes or blizzards; increased and changing
security measures; changing regulatory and governmental requirements; new or changing travel-related taxes; or the outbreak of disease;
any of which could have a material adverse effect on the Company's business, results of operations and financial condition.

 Like
other aviation companies, the Company's business is affected by factors beyond its control, including air traffic congestion at
airports, airport slot restrictions, air traffic control inefficiencies, natural disasters, adverse weather conditions, increased and
changing security measures, changing regulatory and governmental requirements, new or changing travel-related taxes, or the outbreak
of disease. Factors that cause flight delays frustrate passengers and increase operating costs and decrease revenues, which in turn could
adversely affect profitability. In the United States, the federal government singularly controls all U.S. airspace, and aviation operators
are completely dependent on the FAA to operate that airspace in a safe, efficient and affordable manner. The air traffic control system,
which is operated by the FAA, faces challenges in managing the growing demand for U.S. air travel. U.S. air-traffic controllers often
rely on outdated technologies that routinely overwhelm the system and compel aviation operators to fly inefficient, indirect routes resulting
in delays and increased operational cost. In addition, there are currently proposals before Congress that could potentially lead to the
privatization of the United States' air traffic control system, which could adversely affect the Company's business.

 Adverse
weather conditions and natural disasters, such as hurricanes, winter snowstorms or earthquakes, can cause flight cancellations or significant
delays. Cancellations or delays due to adverse weather conditions or natural disasters, air traffic control problems or inefficiencies,
breaches in security or other factors may affect the Company to a greater degree than its competitors who may be able to recover more
quickly from these events, and therefore could have a material adverse effect on the Company's business, results of operations
and financial condition to a greater degree than other air carriers. Any general reduction in passenger traffic could have a material
adverse effect on the Company's business, results of operations and financial condition.

 The
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.

 The
operation of aircraft is subject to various risks, including catastrophic disasters, crashes, mechanical failures and collisions, which
may result in loss of life, personal injury and/or damage to property and equipment. The Company may experience accidents in the future.
These risks could endanger the safety of its customers, personnel, third parties, equipment, cargo and other property (both the Company's
and that of third parties), as well as the environment. If any of these events were to occur, the Company could experience loss of revenue,
termination of customer contracts, higher insurance rates, litigation, regulatory investigations and enforcement actions (including potential
grounding of the Company's fleet and suspension or revocation of its operating authorities) and damage to its reputation and customer
relationships. In addition, to the extent an accident occurs with an aircraft the Company operates or charters, the Company could be
held liable for resulting damages, which may involve claims from injured passengers and survivors of deceased passengers. There can be
no assurance that the amount of the Company's insurance coverage available in the event of such losses would be adequate to cover
such losses, or that the Company would not be forced to bear substantial losses from such events, regardless of its insurance coverage.

 Moreover,
any aircraft accident or incident, even if fully insured, and whether involving the Company or other private aircraft operators, could
create a public perception that the Company is less safe or reliable than other private aircraft operators, which could cause customers
to lose confidence and switch to other private aircraft operators or other means of transportation. In addition, any aircraft accident
or incident, whether involving the Company or other private aircraft operators, could also affect the public's view of industry
safety, which may reduce the amount of trust by customers.

 The
Company incurs considerable costs through the monthly management fee paid to Cirrus to maintain the quality of its (i) safety program,
(ii) training programs and (iii) fleet of aircraft. The Company cannot guarantee that these costs will not increase. Likewise, the Company
cannot guarantee that its efforts will provide an adequate level of safety or an acceptable safety record. If the Company is unable to
maintain an acceptable safety record, the Company may not be able to retain existing customers or attract new customers, which could
have a material adverse effect on its business, financial condition and results of operations.

 The
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.

 The
pilots that fly aircraft on behalf of the Company are subject to stringent pilot qualification and crew member flight training standards,
which among other things require minimum flight time for pilots and mandate strict rules to minimize pilot fatigue. The existence of
such requirements effectively limits the supply of qualified pilot candidates and increases pilot salaries and related labor costs. A
shortage of pilots would require the Company to further increase its labor costs, which would result in a material reduction in its earnings.
Such requirements also impact pilot scheduling, work hours and the number of pilots required for the Company's operations.

 In
addition, the Company's operations and financial condition may be negatively impacted if pilots are not able to be trained in a
timely manner. Due to an industry-wide shortage of qualified pilots, driven by the flight hours requirements under the FAA qualification
standards and attrition resulting from the hiring needs of other industry participants, pilot training timelines have significantly increased
and stressed the availability of flight simulators, instructors and related training equipment. As a result, the training of pilots may
not be accomplished in a cost-efficient manner or in a manner timely enough to support the Company's operational needs.

 Pilot
attrition may negatively affect the Company's operations and financial condition.

 In
recent years, the Company has observed significant volatility in pilot attrition as a result of pilot wage and bonus increases at other
industry participants and the growth of cargo, low-cost and ultra-low-cost airlines. If attrition rates are higher than the availability
of replacement pilots, the Company's operations and financial results could be materially and adversely affected.

 The
Company is exposed to operational disruptions due to maintenance.

 The
Company's fleet requires regular maintenance work, which may cause operational disruption. The inability to perform timely maintenance
and repairs can result in the Company's aircraft being underutilized which could have an adverse impact on its business, financial
condition and results of operations. On occasion, airframe manufacturers and/or regulatory authorities require mandatory or recommended
modifications to be made across a particular fleet which may mean having to ground a particular type of aircraft. This may cause operational
disruption to and impose significant costs on the Company. Moreover, as the Company's aircraft base increases, maintenance costs
could potentially increase.

 Significant
increases in fuel costs could have a material adverse effect on the Company's business, financial condition and results of operations.

 Fuel
is essential to the operation of the Company's aircraft and to the Company's ability to carry out its transport services.
Fuel costs are a key component of the Company's operating expenses. A significant increase in fuel costs may negatively impact
the Company's revenue, margins, operating expenses and results of operations. While the Company may be able to pass increases in
fuel costs on to its customers, increased fuel surcharges may affect the Company's revenue and retention if a prolonged period
of high fuel costs occurs. To the extent there is a significant increase in fuel costs that affects the amount the Company's customers
choose to fly, it may have a material adverse effect on the Company's business, financial condition and results of operations.

 If
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.

 The
Company must continue to build and maintain strong brand identity for its products and services, which have expanded over time. The Company
believes that strong brand identity will continue to be important in attracting members. If the Company's efforts to promote and
maintain its brand are not successful, the Company's operating results and our ability to attract members and other customers may
be adversely affected. From time to time, the Company's members and other customers may express dissatisfaction with its products
and service offerings, in part due to factors that could be outside of the Company's control, such as the timing and availability
of aircraft and service interruptions driven by prevailing political, regulatory, or natural conditions. To the extent dissatisfaction
with the Company's products and services is widespread or not adequately addressed, the Company's brand may be adversely
impacted and its ability to attract and retain members may be adversely affected. With respect to the Company's planned expansion
into additional markets, the Company will also need to establish its brand and to the extent it is not successful, the Company's
business in new markets would be adversely impacted.

 Any
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.

 Through
the Company's marketing, advertising, and communications with its customers, the Company sets the tone for its brand as aspirational
but also within reach. The Company's strives to create high levels of customer satisfaction through the experience provided by
its team and representatives. The ease and reliability of its offerings, including its ability to provide high-quality customer support,
helps the Company attract and retain customers. The Company's ability to provide effective and timely support is largely dependent
on its ability to attract and retain skilled employees who can support the Company's customers and are sufficiently knowledgeable
about the Company's product and services. As the Company continues to grow its business and improve its platform, it will face
challenges related to providing quality support at an increased scale. Any failure to provide efficient customer support, or a market
perception that the Company does not maintain high-quality support, could adversely affect the Company's reputation, brand, business,
financial condition and results of operations.

 The
demand for the Company's services is subject to seasonal fluctuations.

 Demand
for the Company's services will fluctuate over the course of the year and is higher in the summer season and during holiday periods.
During periods of higher demand, the Company's ability to provide agreed upon levels of service to its customers may deteriorate,
which could have a negative impact on the Company's reputation and its ability to succeed.

in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results
of operations.

 We
are subject to laws and regulations enacted by national, regional and local governments. The Company's business is subject to significant
regulation by the FAA, the TSA as well as "know your customer" obligations and other laws and regulations. The laws and regulations
concerning the selling of the Company's product or services may change and if they do then the selling of the Company's product
or service may no longer be possible or profitable. In addition, we are required to comply with certain SEC and other legal requirements.
Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations
and their interpretation and application may also change from time to time and those changes could have a material adverse effect on
our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted
and applied, could have a material adverse effect on our business and our results of operations.

 The
Company's failure to attract and retain highly qualified personnel in the future could harm its business.

 The
Company believes that its future success will depend in large part on its ability to retain or attract highly qualified management, technical
and other personnel. The Company may not be successful in retaining key personnel or in attracting other highly qualified personnel.
If the Company is unable to retain or attract significant numbers of qualified management and other personnel, the Company may not be
able to grow and expand its business.

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

 The
proposed Transactions with flyExclusive may not be completed on the terms or timeline currently contemplated, or at all.

 The
consummation of the Transactions is subject to numerous conditions, including (1) the effectiveness of the registration statement
on Form S-4 filed by flyExclusive with the SEC in connection with the Transactions, (2) the approval by Jet. AI's stockholders of
the Transactions, and (3) other customary closing conditions and there can be no assurance that the Transactions will be consummated.
If the Transactions are not completed for any reason, the price of Jet. AI's common stock may decline to the extent that the market
price of Jet. AI's common stock reflects or previously reflected positive market assumptions that the Transactions would be completed,
and the related benefits would be realized. In addition, Jet. AI has expended and will continue to expend significant management time
and resources and have incurred and will continue to incur significant expenses due to legal, advisory, printing and financial services
fees related to the Transactions. These expenses must be paid regardless of whether the Transactions are consummated.

 In
the proposed Transactions with flyExclusive Jet. AI will divest substantially all of its fractional and jet card business and related
assets, together with associated working capital and thereafter adopt a business strategy that focuses on expanding its AI operations.
Any or all of these decisions if incorrect may have a material adverse effect on the results of Jet. AI's operations, financial
position and cash flows, and pose further risks to the successful operation of Jet. AI's business over the short and long-term.

 There
are substantial risks associated with divesting a portion of our legacy assets and operations in the proposed Transactions with flyExclusive
and thereafter focusing primarily upon on opportunities in the AI sector, including the loss of working capital and the loss of revenue
associated with divesting our aviation centric assets. After the Transactions, Jet. AI management expects the company to focus on opportunities
in the AI sector, or that are complimentary to that sector, and leverage Jet. AI's remaining assets in that process. While Jet. AI
management has experience in the software development and artificial intelligence sectors (including from its existing booking platform
and iOS Apps (such as CharterGPT)) there is no guarantee that Jet. AI's chosen strategy will be successful. Further, Jet. AI's
business operations after the Transactions will be significantly dependent on its ability to further penetrate the AI sector and identify
and execute upon business opportunities that are complimentary to that sector, and the future market acceptance and sale of its existing
or new AI focused applications, and implementing its business model, which, in some cases are neither fully developed nor in qualification
stages. There can be no assurance that Jet. AI will be successful in addressing these or any other significant risks it may encounter
after the divestment of certain assets to flyExclusive or the expansion of its AI focused strategy.

 The
AI sector in which Jet. AI expects to primarily focus after the Transactions is subject to significant risks, including rapid growth and
volatility, capital requirements, dependence on rapidly changing underling technologies, market and political risks and uncertainties
and extreme competition. Jet. AI cannot guarantee that it will be able to anticipate or overcome any or all of these risks and uncertainties,
especially as a small company operating in an environment that includes many large, well-capitalized competitors with substantially more
resources.

 Developing
and then commercializing AI focused technologies, services and products is subject to significant barriers to entry and operational fluctuations.
In order to become and then remain competitive, Jet. AI will incur substantial costs associated with research and development, qualification,
prototype production capacity and sales and marketing activities in connection with its products and services. Jet. AI may also need to
acquire new assets, or enter new agreements, to facilitate its entry into certain opportunities in the greater AI sector. In addition,
the rapidly changing industry, the length of time between developing and introducing a product to market, frequent changing customer
(or market driven) specifications for apps and products, customer cancellations of products and general down cycles in the industry,
among other things, make our future prospects difficult to evaluate. As a result of these factors, it is possible that we may not (i)
generate sufficient positive cash flow from operations; (ii) raise funds through the issuance of equity, equity-linked or convertible
debt securities; or (iii) otherwise have sufficient capital resources to meet our future capital or liquidity needs. There are no guarantees
Jet. AI will be able to generate additional financial resources beyond its existing balances.

may not achieve some or all of the expected benefits of the Transactions, and the Transactions may adversely impact Jet. AI's business.

may not realize the strategic, financial, operational or other benefits from the Transactions it hopes to achieve. Jet. AI is seeking
to divest certain assets and operations that have historically operated at a net loss, and thereafter primarily focus on the AI sector
while leveraging its remaining intellectual property and software assets and expertise. Jet. AI cannot predict with certainty if or when
anticipated benefits from the Transactions will occur or the extent to which they will be achieved. Following the completion of the Transactions
Jet. AI's operational and financial profile will change, and it will face new risks. Following the completion of the Transactions,
Jet. AI will initially be a smaller and less-diversified company compared to Jet. AI prior to the Transactions, and, may be more vulnerable
to changing market conditions. The business opportunities that Jet. AI expects to pursue will likely require it to identify and execute
on additional sources of liquidity and are in industries or business sectors where Jet. AI faces barriers to entry and competition. While
Jet. AI believes that the Transactions will allow Jet. AI to focus on business opportunities that it can more readily scale and capitalize
on, and, will help position Jet. AI to capitalize on its remaining assets and pursue other business opportunities in high growth industries,
Jet. AI cannot assure you that following the Transactions it will be able to successfully identify any such opportunities or effect and
capitalize on those business opportunities.

 Particularly
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.

 Although
Jet. AI will retain various of its software and intellectual property assets after the Transactions and continue to offer its existing
apps that utilize AI, the software and AI industries are characterized by rapid technological change, evolving industry standards, changing
customer preferences, new product and service introductions and the emergence of new developers and vendors with lean cost and flexible
cost models. Jet. AI's future success will depend on its ability to successfully develop services, platforms and solutions that
utilize AI that build upon or differ from its legacy aircraft fractional, jet card and management operations and keep pace with changes
in Jet. AI's addressable markets, and the acceptance of these services, platforms and solutions by existing and target customers.
Jet. AI cannot guarantee that it will be successful in developing new applications, services, platforms and solutions, addressing evolving
technologies on a timely or cost-effective basis or, if these services, platforms and solutions are developed, that Jet. AI will be successful
in the marketplace. Jet. AI also cannot guarantee that it will be able to compete effectively with new developers or vendors offering
lean cost and flexible cost models, or that products, services or technologies developed by others will not render our services, platforms
and solutions non-competitive or obsolete. Jet. AI's failure to address these developments could have a material adverse effect
on our business, results of operations and financial condition.

 The
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.

 After
the Transactions Jet. AI will have decreased working capital and will have divested certain of its revenue producing assets and operations.
However, Jet. AI will continue to own and operate certain other of its legacy assets and continue to have operational expenses and overhead
(including the costs and expenses associated with being a publicly reporting company with a class of securities listed on Nasdaq), of
both a nonrecurring and a recurring nature, and certain of these expenses and costs are related to arrangements made between Jet. AI and
certain of its existing vendors and strategic partners. Disputes with third parties could also arise out of these transactions, and Jet. AI
could experience unfavorable reactions to any separation from employees, financing partners or other interested parties. These increased
expenses, changes to operations, disputes with third parties or other effects could materially and adversely affect Jet. AI's business,
financial position or results of operations.

 Risks
Relating to Ownership of Jet. AI Securities

 The
Company has never paid cash dividends on its capital stock, and Jet. AI does not anticipate paying dividends in the foreseeable future.

 The
Company has never paid cash dividends on its capital stock and currently intends to retain any future earnings to fund the growth of
its business, other than mandatory dividend payments on its preferred stock, subject to Delaware law. Any determination to pay dividends
in the future will be at the discretion of the board of directors and will depend on Jet. AI's financial condition, operating results,
capital requirements, general business conditions and other factors that the board of directors may deem relevant. As a result, capital
appreciation, if any, of Jet. AI's common stock will be the sole source of gain for the foreseeable future.

 The
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.

 Fluctuations
in the price of the common stock could contribute to the loss of all or part of your investment. If an active market for our securities
develops and continues, the trading price of common stock could be volatile and subject to wide fluctuations in response to various factors,
some of which are beyond our control.

 Factors
affecting the trading price of our common stock may include:

 the
 realization of any of the risk factors presented in this Report;

 actual
 or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar
 to Jet. AI;

 failure
 to meet or exceed financial estimates and projections of the investment community or that Jet. AI provides to the public;

 issuance
 of new or updated research or reports by securities analysts or changed recommendations for the industry in general;

 announcements
 of significant acquisitions, strategic partnerships, joint ventures, collaborations, financings, or capital commitments;

 the
 volume of shares of common stock available for public sale;

 operating
 and stock price performance of other companies that investors deem comparable to Jet. AI;

 ability to market new and enhanced products and technologies on a timely basis;

 changes
 in laws and regulations affecting Jet. AI's business;

 ability to meet compliance requirements;

 commencement
 of, or involvement in, litigation involving Jet. AI;

 changes
 in financial estimates and recommendations by securities analysts concerning Jet. AI or the market in general;

 the
 timing and magnitude of investments in the growth of the business;

 actual
 or anticipated changes in laws and regulations;

 additions
 or departures of key management or other personnel;

 increased
 labor costs;

 disputes
 or other developments related to intellectual property or other proprietary rights, including litigation;

 the
 ability to market new and enhanced solutions on a timely basis;

 sales
 of substantial amounts of the Jet. AI common stock by Jet. AI's directors, executive officers, significant stockholders or the
 perception that such sales could occur, including as a result of transactions under the Share Purchase Agreement and the Forward
 Purchase Agreement;

 trading
 volume of our common stock, including as a result of transactions under the Share Purchase Agreement and the Forward Purchase Agreement;

 changes
 in capital structure, including future issuances of securities or the incurrence of debt and the terms thereof; and

 general
 economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of
 war or terrorism.

 Broad
market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock
market in general and Nasdaq have experienced price and volume fluctuations that have often been unrelated or disproportionate to the
operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities,
may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors
perceive to be similar to Jet. AI could depress our stock price regardless of our business, prospects, financial conditions or results
of operations. A decline in the market price of Jet. AI's securities also could adversely affect its ability to issue additional
securities and its ability to obtain additional financing in the future.

 Anti-takeover
provisions contained in the Company's Certificate of Incorporation and applicable laws could impair a takeover attempt.

 The
Company's Certificate of Incorporation afford certain rights and powers to the board of directors that could contribute to the
delay or prevention of an acquisition that it deems undesirable. Any of the foregoing provisions and terms that have the effect of delaying
or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of our securities,
and could also affect the price that some investors are willing to pay for our securities.

 If
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.

 Our
common stock is currently listed on The Nasdaq Capital Market under the symbol "JTAI". On December 1, 2023, the Company received
a notification letter (the "Letter") from the Nasdaq Listing Qualifications Staff of Nasdaq notifying the Company that its
amount of stockholders' equity has fallen below the $10 million required minimum for continued listing on The Nasdaq Global Market
set forth in Nasdaq Listing Rule 5450(b)(1)(A). The Company's stockholders' equity as of December 31, 2024 was $6,512,460.
The Letter also noted that as of September 30, 2023, the Company does not meet The Nasdaq Global Market alternative listing criteria
for the Market Value standard or the Total Assets / Total Revenues standard. The Letter further noted that the Company may consider applying
to transfer the Company's securities to The Nasdaq Capital Market (the "Capital Market"), which would require the Company
to, among other things, meet the Capital Market's continued listing requirements, and later in 2024 the Company received various
notices from Nasdaq that the Company was in not in compliance with certain listing standards, including Nasdaq's minimum stockholders'
equity requirement and its minimum bid price requirement. As a result of a reverse-stock split effected in November 2024 and other financing
transactions that occurred during fiscal 2024, on November 26, 2024, the Company received a letter from Nasdaq stating that the Company
regained compliance with both the Minimum Stockholders' Equity Requirement and the Minimum Bid Price Requirement. However, pursuant
to Nasdaq Listing Rule 5815(d)(4)(B), the Company is subject to a Mandatory Panel Monitor until November 26, 2025. If, within that time
period Nasdaq finds the Company again out of compliance with the Nasdaq listing rules related to stockholders' equity the Company
would not be permitted to provide Nasdaq with a plan of compliance with respect to that deficiency and Nasdaq would not be permitted
to grant additional time for the Company to regain compliance with respect to that deficiency, nor would the Company be afforded an applicable
cure or compliance period pursuant to Nasdaq Listing Rule 5810(c)(3). Instead, Nasdaq would issue a Delist Determination Letter and the
Company would have an opportunity to request a new hearing with the initial Panel or a newly convened Hearings Panel if the initial Panel
were unavailable. The Company would have the opportunity to respond/present to the Hearings Panel as provided by Nasdaq listing rules.
The Company's securities could at that time be delisted from Nasdaq.

 In
order to continue listing its securities on Nasdaq, the Company is required to maintain certain financial, distribution and stock price
levels. We cannot assure you that the Company will be able to continue to meet those listing requirements. If Nasdaq were to delist the
Company's Common Stock from trading on its exchange and the Company is not able to list its securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material
adverse consequences, including:

 a
 limited availability of market quotations for our securities;

 reduced
 liquidity for our securities;

 a
 determination that the Common Stock is a "penny stock" which will require brokers trading in Common Stock to adhere to
 more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 a
 limited amount of news and analyst coverage; and

 a
 decreased ability to issue additional securities or obtain additional financing in the future.

 The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as "covered securities." Since the Company's Common Stock is listed
on Nasdaq, it is a covered security. Although the states are preempted from regulating the sale of its securities, the federal statute
does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then
the states can regulate or bar the sale of covered securities in a particular case. Further, if the Company was no longer listed on a
securities exchange, its securities would not be covered securities and it would be subject to regulation in each state in which it offers
its securities.

 Stockholders
may experience dilution of their ownership interest due to the issuance of additional shares of common stock upon the conversion of the
Series B Preferred Stock, especially since the Series B Preferred Stock has fluctuating conversion rates that are set at a discount to
market prices of our shares of common stock during the period immediately following conversion.

 Starting
in October 2024, and through the date of this Report, 400 shares of Series B preferred Stock have been converted in full. Those conversions,
in total, resulted in the issuance of 835,261 shares of common stock (as adjusted to give effect to the reverse stock split). Additional
conversions of Series B Preferred Stock could result in material dilution to existing stockholders of the Company. Because the conversion
price is based upon the trading prices of our shares at the time of conversion, the number of shares into which the Series B Preferred
Stock may be converted may increase without an upper bound. If the trading prices of our shares are low when the conversion price of
the convertible debt is determined, we would be required to issue a greater number of shares to the converting holder, which could cause
substantial dilution to our stockholders. In addition, if any or all of the holders Series B Preferred Stock convert and then sell our
common stock, this could result in an imbalance of supply and demand for our common stock and reduce our stock price significantly. The
further our stock price declines, the further the adjustment of the conversion price will fall and the greater the number of shares we
will have to issue upon conversion, resulting in further dilution to our stockholders. Because a market price-based conversion formula
can lead to dramatic stock price reductions and corresponding negative effects on both a company and its stockholders, convertible security
financings with market price-based conversion ratios have colloquially been called "floorless," "toxic," and
"death spiral," convertibles.

 The
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.

 The
proceeds from the Business Combination, Forward Purchase Agreement and our existing cash and cash equivalents may not be sufficient to
meet our working capital needs and we may draw on the Share Purchase Agreement to meet our cash needs. Further, our estimates may prove
to be inaccurate, and we could spend our capital resources faster than we currently expect. Changing circumstances, some of which may
be beyond our control, could also cause us to spend capital significantly faster than we currently anticipate, and we may need to seek
additional funding sooner than planned. To the extent this occurs, it could impose significant dilution on the Company's stockholders.

 In
addition to shares to be sold to GEM upon a drawdown, the Share Purchase Agreement entitled GEM to receive (i) payment of a commitment
fee of $800,000, which the Company elected to pay in shares of common stock and (ii) the GEM Warrant. The shares issuable pursuant to
the GEM Warrant were calculated on a fully diluted basis as of the closing of the Business Combination. The GEM Warrant grants it the
right to purchase up to 9,686 shares of common stock of the Company on a fully diluted basis.

the average closing price of Jet. AI's common stock for the 10 trading days following the first anniversary of the date of listing
was less than 90% of the then current exercise price of the GEM Warrant, the exercise price of the GEM Warrant was adjusted to 110% of
our then current trading price. Accordingly, the warrant exercise price was reduced to $14.12 per share as of December 31, 2024.

 The
issuances of common stock pursuant to the GEM Warrant and the Share Purchase Agreement would result in dilution of future Jet. AI stockholders
and could have a negative impact on the market price of common stock and Jet. AI's ability to obtain additional financing. See " Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources
– Overview – Share Purchase Agreement " for a description of the GEM Warrant.

 Certain
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.

 Given
the relatively lower purchase prices that some of our stockholders paid to acquire some of their securities compared to the current trading
price of our shares of common stock, these stockholders in some instances may earn a positive rate of return on their investment, which
may be a significant positive rate of return, depending on the market price of our shares of common stock at the time that such stockholders
choose to sell their shares of common stock.

 Such
stockholders may be incentivized to sell their securities at prices below the prevailing trading price because the prices at which they
acquired their shares may be lower than prevailing market prices and/or the prices at which public investors purchased our securities
in the open market, and therefore such stockholders may generate positive rates of return on their investment that would not be available
to public stockholders that acquired their securities at higher prices.

 Public
stockholders may not be able to experience the same positive rates of return on securities they purchase due to the low price at which
some of our stockholders acquired shares of our common stock or the prices at which GEM may receive shares at the time of a drawdown
under the Share Purchase Agreement.

 Sales
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.

 The
sale of shares of common stock in the public market or otherwise, particularly sales by our officers or directors, or the perception
that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that
these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that
is deemed appropriate. Resales of common stock may cause the market price of our securities to drop significantly, even if our business
is doing well.

 We
have an effective registration statement covering the resale of up to 1,270,000 shares of common stock held by, or available upon exercise
of warrants or other convertible securities by, certain of our stockholders, as well as the issuance by us of shares of common stock
upon exercise of our outstanding warrants. Given the substantial number of shares of common stock registered for potential resale by
these stockholders, the sale of shares by them, or the perception in the market that they intend to sell shares, could increase the volatility
of the market price of our common stock or result in a significant decline in the public trading price of our common stock. Many of these
stockholders have or may acquire their shares at a significant discount to the market price of our common stock. This will create an
incentive for such stockholders to sell shares of our common stock because they purchased the shares at prices lower than the then-current
trading price.

 The
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.

 We
qualify as an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act.
As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not
emerging growth companies, including (a) the exemption from the auditor attestation requirements with respect to internal control over
financial reporting under Section 404 of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden
parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements. As a result, our shareholders may not have access to certain information they deem important. We will remain an emerging
growth company until the earliest of (a) the last day of the fiscal year (i) following August 16, 2026, the fifth anniversary of the
date of the first sale of common equity securities of the Company in a registered offering under the Securities Act, (ii) in which we
have total annual gross revenue of at least $1.235 billion (as adjusted for inflation pursuant to SEC rules from time to time) or (iii)
in which we are deemed to be a large accelerated filer, which means the market value of our the shares of common stock that are held
by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have
issued more than $1.0 billion in non-convertible debt during the prior three year period.

 In
addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with
new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company.
An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply
to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the
requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected not to opt
out of such extended transition period, which means that when a standard is issued or revised and it has different application dates
for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither
an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.

 We
cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find
our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may
be more volatile.

 Item
1B Unresolved Staff Comments

 None.

 Item
1C Cybersecurity

 We
have developed and implemented cybersecurity risk management processes intended to protect the confidentiality, integrity, and availability
of our critical systems and information. While everyone at our company plays a part in managing cybersecurity risks, primary cybersecurity
oversight responsibility is shared by our board of directors and senior management.

 Our
cybersecurity risk management program includes the following strategies for managing cybersecurity risks effectively:

 Risk
 Assessment Processes: We conduct regular risk assessments to proactively identify potential cybersecurity threats and vulnerabilities.
 These assessments involve thorough evaluations of our IT infrastructure, data systems, and processes to pinpoint areas of weakness;

 Proactive
 Security Measures: In addition to risk assessments, we employ proactive security measures to enhance our cyber defenses. These
 measures include the continuous monitoring of network activity, the implementation of access controls and encryption protocols, and
 the deployment of intrusion detection systems to swiftly detect and respond to any suspicious activities.

 Framework
 for Identifying and Mitigating Threats: We follow a structured framework for identifying and mitigating cybersecurity threats,
 which outlines procedures for threat detection, incident response, and risk mitigation.

 Employee
 Training and Awareness Programs: We provide training to our management and employees designed to equip employees with the knowledge
 and skills necessary to identify and respond to cybersecurity risks, tailored based on the persons' roles within our organization.

 Technology
 and External Consultants: We use external consultants or other third-party experts and service providers, where considered appropriate,
 to assess, test, or otherwise assist with aspects of our cybersecurity controls.

 Over
the past fiscal year, we have no t identified risks from known cybersecurity threats that have materially affected or are reasonably likely
to materially affect us, including our operations, business strategy, operating results, or financial condition. We will continue to
monitor and assess our cybersecurity risk management program as well as invest in and seek to improve such systems and processes as appropriate.
If we were to experience a material cybersecurity incident in the future, such incident may have a material adverse effect on our reputation,
as well as our operations, business strategy, operating results, and financial condition.

 Board
Governance

 Our
 board of directors oversees our risk management, including our information technology and cybersecurity policies, procedures, and risk
assessments. Our management reports to our board of directors on information security matters as necessary, regarding any significant
cybersecurity incidents, as well as any incidents with lesser impact potential.

 One
of the key functions of our board of directors is informed oversight of our various processes for managing risk. An overall review of
risk is inherent in our board of directors ongoing consideration of our long-term strategies, transactions and other matters presented
to and discussed by the board of directors. This includes a discussion of the likelihood and potential magnitude of various risks, including
cybersecurity risks, and any actions management has taken to limit, monitor or control those risks.

 Item
2 Properties

 We
lease space for our corporate headquarters in Las Vegas, Nevada and a satellite office in San Francisco, consisting of office space and
the use of shared conference facilities. We believe these leased offices are in satisfactory condition and are suitable for the conduct
of our business.

 Item
3 Legal Proceedings

 The
Company is not party to any material legal proceedings, although from time to time it may become involved in ordinary routine litigation
incidental to its business. There were no such proceedings pending during the period covered by this Report.

 Item
4 Mine Safety Disclosures

 Not
applicable.

 PART
II

 Item
5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Market
Information

 We
have one class of common stock, listed on the Nasdaq Capital Market under the ticker symbol "JTAI". The transfer agent and
registrar for our common stock is Continental Stock Transfer & Trust Company.

 Shareholders

 As
of March 12, 2025, we had 3,760 holders of record of our common stock. The actual number of stockholders is greater than this number
of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other
nominees.

 Dividend
Policy

 The
Company has never paid cash dividends on its capital stock and currently intends to retain any future earnings to fund the growth of
its business. Any determination to pay dividends in the future will be at the discretion of the board of directors and will depend on
Jet. AI's financial condition, operating results, capital requirements, general business conditions and other factors that the board
of directors may deem relevant.

 Recent
Sales of Unregistered Securities

 Set
forth below is information regarding securities issued by the registrant since January 1, 2024 that were not registered under the Securities
Act of 1933, as amended (the "Securities Act"). Also included is the consideration received by the registrant for such securities
and information relating to the section of the Securities Act, or rule of the SEC, under which exemption from registration was claimed
that were not previously disclosed or reported in our Annual Report on Form-K for the year ended December 31, 2023 or a subsequent Quarterly
Report on Form 10-Q or Current Report on Form 8-K. Adjustments to stock issuance accounts for the reverse split of 225-for-1 common shares
effective November 12, 2024, all fractional share amounts after split down upwardly to next whole share; price per share adjusted based
on the 225-for-1 reverse split of common shares effected in November 2024.

 1.

 From
 October 2024 through the date of this Report, the Company issued 1,500 shares of Series B Preferred Stock from the full exercise
 of the Ionic Warrant for gross proceeds of $15.0 million before deducting offering costs of $280,000. During the year ended December
 31, 2024, the Company issued 293,137 shares of common stock for the conversion of 350 shares of Series B Preferred Stock. The securities
 were offered and sold in reliance on the exemptions from registration contained in Section 4(a)(2) of the Securities Act and Rule
 506(b) of Regulation D promulgated thereunder.

 In
each transaction in which we relied on Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder,
we did not engage in any general solicitation or advertising, and we offered the securities to a limited number of persons with whom
we had pre-existing relationships. We exercised reasonable care to ensure that the purchasers of securities were not underwriters within
the meaning of the Securities Act, including making reasonable inquiry prior to accepting any subscription, making written disclosure
regarding the restricted nature of the securities, and placing a legend on the certificates representing the shares. Further, stop-transfer
restrictions were placed with our transfer agent and a restrictive legend was placed on the certificate in connection with these offerings.
In addition, sales in the transactions exempt under Rule 506(b) were made exclusively to what the Company reasonably believed were accredited
investors as defined in Rule 501 of the Securities Act. The recipients of securities in each of these transactions acquired the securities
for investment purposes only and not with a view to or for sale in connection with any distribution thereof.

Authorized for Issuance Under Equity Compensation Plans

 The
following table sets forth information, as of December 31, 2024, regarding awards issued under our Omnibus Incentive Plan:

 Plan Category

 Number of securities
 to be issued
 upon
 exercise of
 outstanding options

 Weighted-average
 exercise price
 of
 outstanding options

 Number of securities
 remaining
 available
 for future issuance
 under equity
 compensation plans

 Equity compensation plans approved by security holders

 Omnibus Incentive Plans

 22,668

 $
 998.26

 Equity compensation plans not approved by security holders

 —

 —

 —

 Total

 22,668

 $
 998.26

 Item
6 [Reserved]

 Item
7 Management's Discussion and Analysis of Financial Condition and Results of Operations

 The
following discussion and analysis provide 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 audited annual consolidated financial statements as of and
for the years ended December 31, 2024 and 2023, and the related notes that are included elsewhere in this Report.

 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," 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.

 Percentage
amounts included in this Report have not in all cases been calculated on the basis of such rounded figures, but on the basis of such
amounts prior to rounding. For this reason, percentage amounts in this Report may vary from those obtained by performing the same calculations
using the figures in the consolidated financial statements included elsewhere in this Report. Certain other amounts that appear in this
Report may not sum due to rounding.

 Unless
otherwise indicated, all information in this Annual on Form 10-K gives effect to a 225-for-1 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.

 Overview

Inc., a Delaware corporation ("Jet. AI", "Company", "we" or "us"), was founded in 2018
by Michael Winston, its Executive Chairman. The Company, directly and indirectly through its subsidiaries, has been principally involved
in (i) the sale of fractional and whole interests in aircraft, (ii) the sale of jet cards, which enable holders to use certain of the
Company's and other's aircraft at agreed-upon rates, (iii) the operation of a proprietary booking platform, which functions
as a prospecting and quoting platform to arrange private jet travel with third party carriers as well as via the Company's leased
and managed aircraft, (iv) direct chartering of its HondaJet Elite aircraft by Cirrus, (v) aircraft brokerage and (vi) service revenue
from the monthly management and hourly operation of customer aircraft.

 Currently
we offer the following SaaS software to aircraft owners and operators generally:

 Reroute
 AI: recycles aircraft waiting to embark to their next revenue flight into prospective new charter bookings to destinations within
 specific operational parameters.

 DynoFlight:
 enables aircraft operators to estimate aircraft emissions then purchase carbon removal credits via our DynoFlight application
 programming interface API.

 Business
Combination

 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").

 As
a result of the Business Combination:

 the
 then issued and outstanding Class A ordinary shares of Oxbridge were converted, on a one-for-one basis, into shares of common stock
 of Jet. AI Inc.,

 the
 then issued and outstanding Class B ordinary share of Oxbridge were converted, on a one-for-one basis, into shares of common stock
 of Jet. AI Inc.,

 the
 then issued and outstanding Oxbridge warrants were converted into an equal number of warrants, each exercisable for one share of
 common stock ("Jet. AI Warrants"),

 the
 then issued and outstanding Oxbridge Units were converted into an equal number of Jet. AI Units, each consisting of one share of common
 stock and one Jet. AI Warrant,

 the
 outstanding shares of Jet Token common stock, including all shares of Jet Token preferred stock that converted into shares of Jet
 Token common stock, were cancelled and converted into the right to receive the number of shares of Common Stock and the number of
 warrants ("Merger Consideration Warrants") based on the respective exchange rations set forth in the Business Combination
 Agreement,

 all
 outstanding Jet Token options for its common stock, whether or not exercisable and whether or not vested, were converted into options
 to purchase Common Stock based on the applicable exchange ratio determined in accordance with the Business Combination Agreement,

 all
 outstanding Jet Token warrants were converted into warrants to acquire the number of shares of common stock and Merger Consideration
 Warrants based on the applicable exchange ratio set forth in the Business Combination Agreement, and

 the
 outstanding Jet Token restricted stock unit awards were converted into Jet. AI restricted stock unit awards based on the applicable
 exchange ratio determined in accordance with the Business Combination Agreement.

 Following
the Business Combination, Jet. AI's common stock was listed on Nasdaq under the ticker symbol "JTAI".

 The
Business Combination was accounted for as a reverse recapitalization in accordance with GAAP, whereby Oxbridge is treated as the acquired
company and Jet Token is treated as the acquirer (the "Reverse Recapitalization"). Accordingly, for accounting purposes,
the Reverse Recapitalization was treated as the equivalent of Jet Token issuing stock for the net assets of Oxbridge, accompanied by
a recapitalization. The net assets of Oxbridge were stated at historical cost, with no goodwill or other intangible assets recorded.

 The
consolidated assets, liabilities, and results of operations prior to the Reverse Recapitalization are those of Jet Token. The shares
and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based
on shares reflecting the exchange ratio established in the Business Combination.

 Results
of Operations

 The
following table sets forth our results of operations for the periods indicated:

 For the Year Ended
 December 31,

 2024

 2023

 Revenues

 $
 14,022,628

 $
 12,214,556

 Cost of revenues

 14,987,245

 12,393,089

 Gross loss

 (964,617
)

 (178,533
)

 Operating Expenses:

 General and administrative (including stock-based compensation of $4,287,236
 and $6,645,891, respectively)

 10,752,048

 11,597,173

 Sales and marketing

 687,785

 573,881

 Research and development

 162,152

 160,858

 Total operating expenses

 11,601,985

 12,331,912

 Operating loss

 (12,566,602
)

 (12,510,445
)

 Other expense (income):

 Interest expense

 167,054

 103,615

 Other income

 (221
)

 (116
)

 Total other expense

 166,833

 103,499

 Loss before provision for income taxes

 (12,733,435
)

 (12,613,944
)

 Provision for income taxes

 —

 2,464

 Net Loss

 $
 (12,733,435
)

 $
 (12,616,408
)

 Less deemed dividend from warrant exchange offer

 (540,255
)

 —

 Less cumulative preferred stock dividends

 (109,303
)

 (46,587
)

 Net Loss to common stockholders

 $
 (13,382,993
)

 $
 (12,662,995
)

 Weighted average shares outstanding - basic and diluted

 279,201

 28,119

 Net loss per share - basic and diluted

 $
 (47.93
)

 $
 (450.34
)

 Revenues

 Revenues
for 2024 totaled $14.0 million, a $1.8 million increase from revenues of $12.2 during the comparable period for 2023. Revenues in 2024
were comprised of approximately $8.1 of revenues related to our software App and Cirrus charter services (comprised of approximately
$4.2 million in software-related revenue and $3.9 million in revenue from the chartering of our HondaJet Elites by our operating partner
Cirrus), $3.6 million in services revenue from the management of customers' aircraft, and $2.3 million in Jet Card revenue for
hours flown and other charges based on hours flown.

 The
following table sets forth a breakout of revenue components by subcategory for the years ended December 31, 2024 and 2023.

 Year Ended

 December 31,

 2024

 2023

 Software App and Cirrus Charter

 $
 8,128,997

 $
 7,125,230

 Jet Card and Fractional Programs

 2,288,036

 2,847,533

 Management and Other Services

 3,605,595

 2,241,793

 $
 14,022,628

 $
 12,214,556

 The
Company began recording revenue in September 2020 reflecting services and software revenues related to charter bookings made through
its App and in 2023, the Company recognized $3.9 million in revenue related to App-generated charter bookings. During 2024 these revenues
totaled $4.2 million, a $247,000 or 6.3% increase from 2023 reflecting increased marketing, including the introduction to the agentic
model Ava, and greater awareness of the Company.

 The
Company recognized $3.6 million in service revenue in 2024, an increase of $1.4 million compared to 2023, 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 $2.2 million in service revenues in 2023.

2024, the Company sold 285 prepaid flight hours under its jet card and fractional programs, amounting to $1.7 million, and recognized
$2.1 of revenue for 348 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 December 31, 2024, the Company recorded deferred revenue of $1.1 million on its consolidated
balance sheet, which represents prepaid flight hours for which the related travel had not yet occurred.

 In
2023, we sold 534 prepaid flight hours amounting to approximately $3.0 million and recognized approximately $2.8 million of revenue for
436 flight hours flown or forfeited, as well as additional charges. At December 31, 2023, the Company recorded deferred revenue of $1.5
million on its consolidated balance sheet.

 The
decrease in flight hours flown is a direct result of the Company's efforts to increase Jet Card pricing which resulted in a 6.1%
increase in flight hour revenue per flight hour during the 2024 period versus the 2023 period.

 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 year ended December 31, 2024 and 2023:

 For the year ended December 31,

 2024

 2023

 Deferred revenue at the beginning of the year (1)

 $
 1,779,794

 $
 933,361

 Prepaid flight hours sold

 $
 1,662,250

 $
 3,045,769

 Total Flight Hours

 Prepaid flight hours flown

 $
 2,080,371

 $
 2,456,354

 Total flight hours

 Additional charges

 $
 207,665

 $
 391,179

 Total flight hour revenue

 $
 2,288,036

 $
 2,847,533

 Deferred revenue at the end of the year (2)

 $
 1,319,746

 $
 1,779,794

 (1)

 revenue at December 31, 2023 and 2022 also includes $268,818 and $11,800, respectively, with respect to customer prepayments
 associated with software app transactions.

 (2)

 revenue at December 31, 2024 and 2023 also includes $212,278 and $268,818, respectively, with respect to customer prepayments associated
 with software app transactions and $16,233 and $0, respectively, with respect to the management of aircraft.

2024 revenue generated through the direct chartering of the Company's HondaJet Elite aircraft by Cirrus amounted to approximately
$3.9 million, an increase of $0.8 million, or 23.8% 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 Gen 2.

 Cost
of revenues

 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 HondaJet Elites 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.

 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 $2.2 million from $7.1 million in 2023 to $9.3 million in the 2024 year
period and aircraft lease payments increased $162,000 from $1.2 million in 2023 to $1.4 million in 2024. The Company also incurred third-party
charter costs of approximately $3.7 million in 2024, a $91,000 decrease over 2023, as a result of a reduced need for subcharters used
for covering jet card flights when our HondaJet Elites were unavailable. Federal excise tax and merchant fees relating to charter flights
increased $333,000 in 2024 to $637,000 from $304,000 in 2023 reflecting increased software revenue.

 In
total as disclosed above, it cost $10.7 million to operate the Company's five aircraft in 2024, compared to $8.3 million in 2023
for four aircraft.

 Gross
loss

 The
resulting gross loss totaled $965,000 for 2024, compared to $178,000 for the 2023 fiscal year period. The increased gross loss in these
operations was a result of increased maintenance costs, together with lower utilization on our HondaJet Elites.

 Total
Operating Expenses

 In
2024, the Company's operating expenses decreased $730,000 due to a $845,000 decrease in general and administrative expenses, offset
by $114,000 in higher sales and marketing expenses. Excluding non-cash stock-based compensation of $4.3 million and $6.6 million in 2024
and 2023, respectively, general and administrative expenses rose by approximately $1.5 million primarily due to (1) increased wages of
$749,000, primarily due to increased commissions compensation payable on charter sales, as well as a greater number of software developers
in 2024, (2) increased directors' and officers' insurance of $181,000 and (3) increased professional services expenses resulting
from higher legal expenses and a full year of board of directors expenses.

 The
Company's sales and marketing expenses increased by about $114,000 to $688,000 in 2024 from $574,000 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.

 Research
and development expenses increased $1,000 to $162,000 in 2024 from $161,000 in 2023.

 Operating
Loss

 As
a result of all of the above, in 2024 the Company recognized an operating loss of approximately $12.6 million, which was a increase in
operating loss of $56,000 compared to the 2023 fiscal year period. The increase was primarily due to an increase in the Company's
gross operating loss of $965,000, offset by reduced general and administrative expenses of $845,000.

 Other
Expense (Income)

2024, the Company recognized approximately $167,000 in other expense due primarily to interest expense related to the Bridge Agreement
(defined below), compared to $103,000 recorded for 2023.

 Net
Loss to Common Stockholders

 After
deducting cumulative preferred stock dividends of approximately $109,000 in 2024, which have been accruing since the August 2023 issuance
date of the Company's Series A Convertible Preferred Stock (the "Series A Preferred Shares") and Series A-1 Convertible
Preferred Stock (the "Series A-1 Preferred Shares"), and a $540,000 deemed dividend from the Company's warrant exchange
offer, net loss to common stockholders increased by $720,000.

 Liquidity
and Capital Resources

 Overview

 As
of December 31, 2024, the Company's cash and equivalents were $5.9 million. As of December 31, 2024, current assets exceeded current
liabilities by approximately $2.7 million, of which $1.3 million in liabilities represents deferred revenue that would be recorded as
revenue once the flight hours are flown or forfeited.

the year ended December 31, 2024, the Company raised (1) approximately $11,850,000 in funds from the issuance of 976,378 shares of common
stock under the Share Purchase Agreement discussed below, as well as under certain of the Company's registration statements, including
(a) approximately $5,400,000 from the Company's completed at-the-market offering, (b) approximately $2,400,000 from the Company's
registered direct offering that was completed on October 11, 2024, and (c) approximately $1,500,000 from the Company's registered
direct offering that was completed on October 21, 2024, (2) $1,500,000 related to the sale of 150 shares of Series B Preferred Stock,
(3) approximately $4,000,000 related to the exercise of the Ionic Warrant for the issuance of 400 shares of Series B Preferred Stock,
and (3) approximately $742,000 from Jet. AI Warrant exercises.

 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 $52.5 million as of December 31, 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, Ava 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 made after December 31, 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.

 Ionic
Transaction

 General

 On
March 28, 2024, Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") and a number of
other transaction documents described below for a private placement with Ionic Ventures, LLC ("Ionic"), which closed on March
29, 2024 (the "Closing Date"), which we collectively refer to as the "Ionic Transaction." Under the Securities
Purchase Agreement, the Company issued to Ionic (a) 150 shares of the Company's Series B Convertible Preferred Stock, par value
$0.0001 per share (the "Series B Preferred Stock"), which are convertible into shares of the Company's common stock,
(b) a warrant to purchase up to 1,500 shares of Series B Preferred Stock (the "Ionic Warrant"), at an exercise price of $10,000
per share, and (c) 1,111 shares of the Company's common stock.

 The
Company received gross proceeds of approximately $1.5 million, not including customary placement fees and reimbursement of certain payables
to Maxim as placement agent and other expenses payable by the Company in connection with the Ionic Transaction. This amount excludes
the proceeds from the exercise of the Ionic Warrant.

 Series
B Preferred Stock

 On
March 28, 2024, we filed a Certificate of Designation of the Series B Convertible Preferred Stock with the Secretary of State of the
State of Delaware, which provides for the issuance of up to 5,000 shares of the Company's Series B Preferred Stock (the "Certificate
of Designations"). The Series B Preferred Stock ranks pari passu with the Series A Preferred Shares and Series A-1 Preferred
Shares and senior to all other capital stock of the Company.

 Each
share of Series B Preferred Stock converts into a number of shares of our Common Stock, subject to certain limitations, including a beneficial
ownership limitation of 4.99% (calculated in accordance with the rules promulgated under Section 13(d) of the Securities Exchange Act
of 1934, as amended ("Exchange Act")), which can be adjusted to a beneficial ownership limitation of 9.99% upon 61 days prior
written notice by Ionic. From time to time Ionic may convert Series B Preferred Stock into Common Stock which it may liquidate and thereafter
receive additional shares of Common Stock pursuant to subsequent conversions of its Series B Preferred Stock. Although the beneficial
ownership limitation imposes a legally binding limitation on the Selling Stockholder's beneficial ownership at any point in time,
it does not prohibit the Selling Stockholder from, over time, receiving shares of Common Stock upon separate conversions of its shares
of Series B Preferred Stock that, in the aggregate and over a period of time, exceed the beneficial ownership limitation.

 Subject
to the limitations set forth in the preceding paragraph and provided there is an effective registration statement covering Ionic's
potential resale of common stock underlying the Series B Preferred Stock, shares of Series B Preferred Stock will automatically convert
into shares of common stock on or prior to the tenth trading day after the issuance date of such shares of Series B Preferred Stock.
The number of shares of common stock issuable upon conversion of a share of Series B Preferred Stock is calculated by dividing the conversion
amount per share of Series B Preferred Stock by the then conversion price. The conversion amount is equal to the stated value of the
shares of Series B Preferred Stock, which is $10,000, plus any additional amounts and late charges calculated in accordance with the
Certificate of Designations. The conversion price is equal to the lower of (i) $2.50, or (ii) 90% (or, in the case of a delisting, 80%)
of the lowest daily volume weighted average price of our common stock over a period beginning on the trading day after we deliver shares
of common stock upon such conversion to Ionic and ending on the trading day on which the aggregate dollar trading volume of our common
stock exceeds seven times the applicable conversion amount, subject to a five trading day minimum period for such calculation, and subject
to certain adjustments.

 If
certain defined "triggering events" defined in the Certificate of Designations occur, such as a breach of the registration
rights agreement entered into with Ionic on March 29, 2024 (the "Registration Rights Agreement"), suspension of trading,
or our failure to convert the Series B Preferred Stock into common stock when a conversion right is exercised, then we may be required
to redeem the Series B Preferred Stock for cash at 110% of the stated value.

 Other
Transaction Documents and Subsequent Agreements

 The
Ionic Warrant exercise price was initially set at $10,000 per share of Series B Preferred Stock, subject to adjustment for certain events,
such as a stock split, issuance of additional shares as a dividend or otherwise. As of the date of this Report, Ionic has fully exercised
the Ionic Warrant for a total of 1,500 shares of Series B Preferred Stock, resulting in gross proceeds to the Company of $15.0 million.

to the Securities Purchase Agreement, the Company agreed to submit to its stockholders a proposal to approve the issuance of shares of
common stock issuable upon exercise of the shares of Series B Preferred Stock in accordance with Nasdaq Stock Market Rules at a special
meeting of stockholders at the earliest practicable date after the date of the Securities Purchase Agreement, but in no event later than
ninety (90) days after the Closing Date. At its annual meeting of stockholders, which took place on September 24, 2024, the Company sought
stockholder approval for the potential issuance of shares of Common Stock pursuant to Ionic Transaction in an amount that, upon issuance,
could result in the issuance of shares of Common Stock in an amount in excess of 19.99% of the Company's outstanding shares of
Common Stock at a price less than the "minimum price" as defined by and in accordance with Nasdaq Listing Rule 5635(d). The
Company's stockholders approved such potential issuance at the annual meeting. The Securities Purchase Agreement obligates the
Company to reserve no less than 200% of the maximum number of shares of Common Stock issuable upon conversion of the Series B Preferred
Stock outstanding, using an alternate conversion method (the "Required Reserve Amount"). The Company and Ionic initially
agreed that the Required Reserve Amount is 200,000 shares of Common Stock. In order to meet that obligation, the Company sought stockholder
approval to amend its certificate of incorporation to increase the number of authorized shares of Common Stock to 200,000,000 at its
annual meeting of stockholders. The Company received such approval on September 24, 2024.

 Additionally,
on March 29, 2024, the Company entered into the Registration Rights Agreement with Ionic, which, among other things, provides that the
Company would register the resale of the 1,111 shares of Common Stock and the shares of Common Stock issuable upon conversion of the
Series B Preferred Stock, including the Series B Preferred Stock issuable upon exercise of the Warrant. The Company was required to prepare
and file a registration statement with the SEC no later than 30 days following the filing of the Company's Annual Report on Form
10-K (the "Form 10-K"), but in no event later than May 15, 2024 (the "Filing Deadline"), and to use its commercially
reasonable efforts to have the registration statement and any amendment declared effective no later than the earlier of the (a) 60th
calendar day following the filing of the Form 10-K (or, if such registration statement is subject to a full review by the SEC, the 100th
calendar day after such filing) and (b) 2nd business day after the date the Company is notified (orally or in writing, whichever is earlier)
by the SEC that such registration statement will not be reviewed or will not be subject to further review (the "Effectiveness Deadline").
The Company timely filed a registration statement on Form S-1 by the prescribed Deadline, however, because this registration statement
was not declared effective by the SEC by the Effectiveness Deadline, the Company was obligated pay to Ionic a $100,000 Effectiveness
Fee. On September 3, 2024 the Company issued to Ionic 444 Effectiveness Shares in lieu of paying the Effectiveness Fee in cash.

 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.

 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.

 Registration
Statements

to the Registration Rights Agreement, we filed a Registration Statement on Form S-1 (File No. 333-279385), which was originally filed
with the SEC on May 13, 2024, and as amended (the "First Registration Statement"), that registered the offer and resale of
133,778 shares of Common Stock (as adjusted to reflect the subsequent reverse stock split) by Ionic and was declared effective by the
SEC on July 24, 2024. On November 13, 2024, Ionic notified the Company that it had sold all shares of Common Stock that were registered
under the First Registration Statement.

 Since
the number of shares of Common Stock available under the First Registration Statement was insufficient to cover all of the shares of
Common Stock issuable to Ionic, we were required to file at least one additional registration statement. Accordingly, on November 13,
2024, we filed a Registration Statement on Form S-3 (File No. 333-283207) with the SEC (as amended, the "Second Registration Statement"),
which registered the offer and resale of 600,000 shares of Common Stock by Ionic and was declared effective by the SEC on December 27,
2024. On February 20, 2025, Ionic notified the Company that it had sold all shares of Common Stock that were registered under the Second
Registration Statement.

 Since
the number of shares of Common Stock available under the First Registration Statement and the Second Registration Statement were, in
the aggregate, insufficient to cover all of the shares of Common Stock issuable to Ionic, we were required to file at least one additional
registration statement. Accordingly, on January 24, 2025, we filed another Registration Statement on Form S-3 (File No. 333-284504) with
the SEC (as amended, the "Third Registration Statement"), to register an additional 1,270,000 shares of Common Stock for
offer and resale by Ionic.

 Conversions
of Series B Preferred Stock; Warrant Exercises

 Starting
in October 2024, and through the date of this Report, Ionic has converted in full the 150 shares of Series B Preferred Stock issued to
it at the initial closing, the 50 additional shares of Series B Preferred Stock issued to it in connection with the Letter Agreement,
and 200 shares of Series B Preferred Stock issued to it pursuant to partial exercises of the Ionic Warrant. Those conversions, in total,
resulted in the issuance of 835,261 shares of Common Stock (as adjusted to give effect to the reverse stock split).

 On
October 28, 2024 Ionic partially exercised the Ionic Warrant, for 150 additional shares of Series B Preferred Stock, resulting in total
proceeds to the Company of $1.5 million. Additionally, on November 14, 2024 Ionic partially exercised the Ionic Warrant, for 250 additional
shares of Series B Preferred Stock, resulting in total proceeds to the Company of $2.5 million and on January 23, 2025 Ionic partially
exercised the Ionic Warrant, for 250 additional shares of Series B Preferred Stock, resulting in total proceeds to the Company of $2.5
million. Finally, on February 27, 2025, Ionic exercised the remainder of the Ionic Warrant, for 850 additional shares of Series B Preferred
Stock, resulting in total proceeds to the Company of $8.5 million.

 As
of the date of this Report: (i) Ionic has sold 93,067 shares of Common Stock pursuant to Rule 144 under the Securities Act, 133,778 shares
of common stock under the First Registration Statement, and 600,000 shares of Common Stock under the Second Registration Statement; and
(ii) Ionic holds 1,300 shares of Series B Preferred Stock.

 Adjustment
to Beneficial Ownership Limitation

 On
February 14, 2025, Ionic delivered a notice to the Company that it has elected to increase the beneficial ownership limitation to 9.99%.
The adjusted beneficial ownership limitation will not take effect until April 16, 2025. All prior issuances were, and all issuances until
April 16, 2025 will continue to be, subject to the 4.99% beneficial ownership limitation.

 Share
Purchase Agreement

 The
Company has access to an aggregate of up to $40 million from the Share Purchase Agreement, dated as of August 4, 2022, with GEM Yield
LLC SCS and GEM Yield Bahamas Limited (together with GEM Yield LLC SCS, "GEM"), less drawdowns of $2,550,024 to date. In
consideration for GEM's services under the Share Purchase Agreement, the Company paid GEM a commitment fee equal to $800,000 in
shares of common stock. Upon the Company's issuance of shares in connection with any drawdown purchase made by GEM, the Company
was required to pay GEM a portion of such commitment fee in an amount equal to 2% of the amount purchased in such drawdown; provided
that the full $800,000 commitment fee was due on or before the first anniversary of the closing of the Business Combination. In October
2024, the Company issued 58,447 shares of common stock to satisfy in full the outstanding commitment fee payable discussed in Note 5
and 44,225 shares of common stock under the Share Purchase Agreement with GEM for total consideration of $2.5 million.

 GEM
is not obligated to purchase shares under the Share Purchase Agreement if any purchase of shares would result in GEM and its affiliates
beneficially owning, directly or indirectly, at the time of the proposed issuance, more than 9.99% of the number of issued and outstanding
shares of common stock as of the date of such proposed issuance. GEM may waive the restriction under the Share Purchase Agreement by
providing the Company with sixty-one (61) days' notice that the Purchaser would like to waive the restriction with regard to any
or all shares issuable pursuant to the Share Purchase Agreement.

 On
August 10, 2023, the Company issued GEM a warrant (as subsequently amended, the "GEM Warrant") granting it the right to purchase
up to 6% of the outstanding common stock of the Company on a fully diluted basis as of the date of listing. The GEM Warrant has a term
of three years. The GEM Warrant included an adjustment mechanism, whereby the exercise price is subject to adjustment from time to time.
Pursuant to the Warrant, on the first anniversary following the Public Listing Date as defined in the GEM Warrant (the "Adjustment
Date"), if all or any portion of the GEM Warrant remains unexercised and the average closing price of the Company's common
stock for the 10 trading days following the Adjustment Date is less than 90% of the then current exercise price of the warrant (the "Baseline
Price"), then the exercise price of the unexercised Warrant Shares that remain exercisable pursuant to the Warrant shall be adjusted
to 110% of the Baseline Price. Accordingly, the warrant exercise price was reduced to $14.12 per share as of December 31, 2024. The warrant
may be exercised by payment of the per share amount in cash or through a cashless exercise.

 The
GEM Warrant provides that GEM can elect to limit the exercisability of the GEM Warrant such that it is not exercisable to the extent
that, after giving effect to the exercise, GEM and its affiliates, to the Company's actual knowledge, would beneficially own in
excess of 4.99% of the Company's common stock outstanding immediately after giving effect to such exercise. GEM has made this election,
which makes funds available under the Share Purchase Agreement in excess of this 4.99% ownership limit up to the 9.99% ownership restriction
in the Share Purchase Agreement. GEM may revoke this election by providing written notice, which revocation will not be effective until
the sixty-first (61st) day thereafter.

 Bridge
Agreement

 On
September 11, 2023, the Company entered into a binding term sheet ("Bridge Agreement") with eight investors to provide the
Company $500,000 of short-term bridge financing pending its receipt of funds from its other existing financing arrangements.

 As
of December 31, 2023, the Bridge Agreement provided for the issuance of Notes, in an aggregate principal amount of $625,000, reflecting
a 20% original issue discount. The Notes bore interest at 5% per annum and matured on March 11, 2024. The Company was required to redeem
the Notes with 100% of the proceeds of any equity or debt financing at a redemption premium of 110% of the principal amount of the Notes.
In March 2024, the Company fully repaid the Bridge Agreement in the amount of approximately $683,000, representing principal, redemption
premium and interest.

 Other
Equity Issuances and Settlement Arrangements

 Maxim
Payment and Settlement Agreement

 On
August 10, 2023, the Company entered into a settlement agreement ("Maxim Settlement Agreement") with Maxim Group LLC, the
underwriter for the Company's initial public offering ("Maxim"). Pursuant to the Maxim Settlement Agreement, the Company
issued to Maxim Partners (a) 1,200 shares of common stock to settle the payment obligations of the Company under the underwriting agreement
dated on or about August 11, 2021, by and between the Company and Maxim and (b) 1,127 Series A Preferred Shares in an amount equal in
value to $1,127,000. The Series A Preferred Shares accrue a dividend at the rate of 8% per annum (which increases to 18% if the Company
fails to meet certain obligations under the terms thereof), payable quarterly and, at the Company's option, in shares of common
stock. The Series A Preferred Shares are convertible into 501 shares of common stock. The Company also issued 511 shares of common stock
to Maxim Partners on August 16, 2021 to meet a payment obligation under the underwriting agreement in connection with Oxbridge's
IPO, representing a value of $2,025 per share reflecting an allocation of the $2,250 per Unit IPO price. The above issued and issuable
shares of common stock are subject to a registration rights agreement.

 The
Company may, subject to certain conditions, redeem the outstanding Series A Preferred Shares in cash at the $1,000 original issue price,
subject to adjustment, plus accrued and unpaid dividends. The Company was required to redeem all the outstanding Series A Preferred Shares
on August 10, 2024, which was automatically extended by an additional three (3) month period because the Company has not closed upon
one or more equity financings that, in total, result in gross proceeds to the Company of $10.0 million or greater. If the Company raises
equity capital, 15% of the net proceeds will be used to redeem the Series A Preferred Shares if requested by the holder.

 In
July 2024, the Company and Maxim entered into an amendment to the Maxim Settlement Agreement and agreed to, among other things, amend
the definition of the "Series A Conversion Price" for the Series A Preferred Shares and certain restrictions with respect
to shares of Company common stock Maxim may acquire upon the conversion of its shares of Series A Preferred Shares.

the year ended December 31, 2024, the Company issued 10,167 shares of Common Stock upon the conversion of 551 Series A Preferred Shares.
In November 2024, the Company redeemed in full all of the remaining 576 Series A Preferred Shares for an aggregate redemption price of
$663,740, which included cumulative unpaid preferred stock dividends totaling $87,740. As a result of this redemption there are no Series
A Preferred Shares issued and outstanding as of December 31, 2024.

 Warrants

 On
various dates at the end of December 2023 and through early 2024, we entered a number of separate warrant exchange agreements with various
unaffiliated second-party warrant holders with respect to warrants to purchase an aggregate of 6,605 shares of our common stock (the
"Exchanged Warrants"). Pursuant to these warrant exchange agreements, the Company issued an aggregate of 6,605 shares of
common stock to those warrant holders in exchange for the surrender and cancellation of the Exchanged Warrants.

 In
December 2023 and January 2024, holders of an aggregate of 400 and 287 public warrants, respectively, were exercised for an equal number
of shares of our common stock, generating net proceeds to us of $1,777,475.

 Cash
Flows

 As
of December 31, 2024, the Company's cash and equivalents were approximately $5.9 million, including approximately $500,000 of restricted
cash under its aircraft leasing arrangements described below.

 The
following table summarizes our cash flows for the years ended December 31, 2024 and 2023:

 For the year ended December 31,

 2024

 2023

 Net cash used in operating activities

 $
 (8,225,594
)

 $
 (3,783,473
)

 Net cash used in by investing activities

 (2,409,372
)

 $
 (190,998

 Net cash provided by financing activities

 14,407,050

 $
 4,547,623

 Increase in cash and cash equivalents

 $
 3,772,084

 $
 573,152

 Cash
Flow from Operating Activities

 Net
cash used in operating activities for the year ended December 31, 2024 was $8.2 million compared to $3.8 million for the year ended December
31, 2023. The cash outflow from operating activities in the 2024 period primarily consisted of our net loss, net of non-cash charges
of $4.9 million, a $0.5 million reduction in lease liability and a $295,000 increase in accounts receivables and other current assets,
which were offset by a $183,000 decrease in operating liabilities. The decrease in operating liabilities was primarily driven by a $0.5
million decrease in deferred jet card revenue relating to the sale of jet card hours not yet flown and a $0.5 million decrease in the
Company's operating lease liability, offset by an $0.8 million increase in the Company's accounts payable and accrued liabilities
relating to the operation of the Company's aircraft. The increase in net cash used in operating activities for the 2024 period
was primarily driven by a $116,000 increase in our net loss, net of non-cash charges resulting from the Company's higher level
of operations during 2024 as a result of operating a greater number of operational aircraft and startup expenses incurred during 2024
as well as the $0.4 million change in operating assets and liabilities.

 Cash
Flow from Investing Activities

 Net
cash used in investing activities for the year ended December 31, 2024 was $2.4 million as compared to $191,000 in the 2023 year period,
primarily relating to $2.4 million in aircraft deposits made to Textron in 2024 and the Company's 2023 investment in 380 Software
LLC, a 50/50 joint venture subsidiary with Cirrus.

 Cash
Flow from Financing Activities

 Net
cash provided by financing activities for the year ended December 31, 2024 was $14.4 million. Cash provided by financing activities was
primarily driven by warrant exercises and proceeds from the sale of common stock under the Share Purchase Agreement, sale of preferred
stock, partially offset repayments of notes payable of $0.7 million, redemption costs of $1.2 million for the Company's Series
A Preferred Shares and Series A-1 Preferred Shares and offering costs of $1.9 million.

Financing Arrangements

 In
November 2021 and April 2022, the Company entered into two separate five-year leasing arrangements for the acquisition of two of its
HondaJet Elite aircraft. At any time during their term, the Company has the option to purchase either aircraft from the lessor at the
aircraft's fair market value at that time. The leasing arrangements also require the Company to hold a combined liquidity reserve
of $500,000 in a separate bank account pledged as security to the lessor, which the Company records as restricted cash on its balance
sheet, as well as a maintenance reserve of approximately $690,000 for each leased aircraft, which is held by the lessor in the event
the lessor determines that the relevant aircraft is not being maintained in accordance with the lease requirements or to prevent deterioration
of the aircraft. Events of default under the leasing arrangements include, among other things, failure to make the monthly payments (with
a 10-day cure period), default on other indebtedness, breaches of covenants related to insurance and maintenance requirements, change
of control or merger, insolvency and a material adverse change in the Company's business, operations or financial condition. Please
see Note 5 to the Company's financial statements for the year ended December 31, 2024 for a further description of these leasing
arrangements.

 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.

 Critical
Accounting Estimates

 Going
Concern and Management Plans

 The
Company has limited operating history and has incurred losses from operations since its inception. These matters raise concern about
the Company's ability to continue as a going concern.

 The
Company began ramping up its revenue-generating activities during the second half of the year ended December 31, 2022 and those activities
continued into 2024. During the next twelve months, the Company intends to fund its operations with funds from its operations, and drawdowns
under the Share Purchase Agreement, as well as proceeds from other financing arrangements. The Company also has the ability to reduce
cash burn to preserve capital. There are no assurances, however, that management will be able to raise capital on terms acceptable to
the Company. If the Company is unable to obtain sufficient amounts of additional capital, the Company may be required to reduce the near-term
scope of its planned development and operations, which could delay implementation of the Company's business plan and harm its business,
financial condition and operating results. The consolidated balance sheets do not include any adjustments that might result from these
uncertainties.

 Basis
of Presentation for the Business Combination

 The
Business Combination was accounted for as a reverse recapitalization in accordance with GAAP, whereby Oxbridge is treated as the acquired
company and Jet Token is treated as the acquirer (the "Reverse Recapitalization"). Accordingly, for accounting purposes,
the Reverse Recapitalization was treated as the equivalent of Jet Token issuing stock for the net assets of Oxbridge, accompanied by
a recapitalization. The net assets of Oxbridge were stated at historical cost, with no goodwill or other intangible assets recorded.

 Jet
Token has been determined to be the accounting acquirer in the Business Combination based on the following predominate factors:

 Jet
 Token's existing stockholders have the greatest voting interest in the combined entity;

 Jet
 Token existing stockholders have the ability to nominate a majority of the initial members of the combined entity board;

 Jet
 Token's senior management is the senior management of the combined entity;

 Jet
 Token is the larger entity based on historical operating activity and has the larger employee base; and

 The
 post-combination company has assumed a Jet Token branded name: "Jet. AI Inc."

 Use
of Estimates

 The
preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant
judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that
existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term
due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

 Material
estimates that are particularly susceptible to significant change in the near-term relate to the fair value of options granted. Although
considerable variability is likely to be inherent in these estimates, management believes that the amounts provided are reasonable.

Recognition

 In
applying the guidance of ASC 606, the Company determines revenue recognition through the following steps:

 of the contract, or contracts, with a customer;

 of the performance obligations in the contract;

 Determination
 of the transaction price;

 Allocation
 of the transaction price to the performance obligations in the contract; and

 Recognition
 of revenue when, or as, a performance obligation is satisfied.

is derived from a variety of sources including, but not limited to, (i) fractional/whole aircraft sales, (ii) fractional ownership and
jet card programs, (iii) ad hoc charter through the Jet Token App (replaced by CharterGPT) and (iv) aircraft management.

 Under
the fractional ownership program, a customer purchases an ownership share in a jet which guarantees the customer access to the jet for
a preset number of hours per year. The fractional ownership program consists of a down payment, one or more progress payments, a payment
on delivery, a monthly management fee and an occupied hourly fee based on usage. Revenues from the sale of fractional or whole interests
in an aircraft are recognized at the time title to the aircraft is transferred to the purchasers, which generally occurs upon delivery
or ownership transfer.

 The
jet card program provides the customer with a preset number of hours of guaranteed private jet access over the agreement term (generally
a year) without the larger hourly or capital commitment of purchasing an ownership share. The jet card program consists of a fixed hourly
rate for flight hours typically paid 100% up front.

is recognized upon transfer of control of the Company's promised services, which generally occurs upon the flight hours being used.
Any unused hours for the fractional jet and jet card programs are forfeited at the end of the contract term and are thus immediately
recognized as revenue at that time.

revenue is an obligation to transfer services to a customer for which the Company has already received consideration. Upon receipt of
a prepayment from a customer for all or a portion of the transaction price, the Company initially recognizes a contract liability. The
contract liability is settled, and revenue is recognized when the Company satisfies its performance obligation to the customer at a future
date.

 The
Company also generates revenues from individual ad hoc charter bookings processed through the Company's booking app, whereby the
Company will source, negotiate, and arrange travel on a charter basis for a customer based on pre-selected options and pricing provided
by the Company to the customer through the app. In addition, Cirrus markets charter on the Company's aircraft for the Company's
benefit.

 The
Company utilizes certificated independent third-party air carriers in the performance of a portion of flights. The Company evaluates
whether there is a promise to transfer services to the customer, as the principal, or to arrange for services to be provided by another
party, as the agent, using a control model. The nature of the flight services the Company provides to members is similar regardless of
which third-party air carrier is involved. The Company directs third-party air carriers to provide an aircraft to a member or customer.
Based on evaluation of the control model, it was determined that the Company acts as the principal rather than the agent within all revenue
arrangements. Owner charter revenue is recognized for flights where the owner of a managed aircraft sets the price for the trip. The
Company records owner charter revenue at the time of flight on a net basis for the margin we receive to operate the aircraft. If the
Company has primary responsibility to fulfill the obligation, then the revenue and the associated costs are reported on a gross basis
in the consolidated statements of operations.

 Flights

 Flights
and flight-related services, along with the related costs of the flights, are earned and recognized as revenue at the point in time in
which the service is provided. For round-trip flights, revenue is recognized upon arrival at the destination for each flight segment.

 Fractional
and jet card members pay a fixed quoted amount for flights based on a contractual capped hourly rate. Ad hoc charter customers primarily
pay a fixed rate for flights. In addition, flight costs are paid by members through the purchase of dollar-denominated prepaid blocks
of flight hours ("Prepaid Blocks"), and other incidental costs such as catering and ground transportation are billed monthly
as incurred. Prepaid Blocks are deferred and recognized as revenue when the member completes a flight segment.

Management

 The
Company manages aircraft for owners in exchange for a contractual fee. Revenue associated with the management of aircraft also includes
the recovery of owner-incurred expenses including maintenance coordination, cabin crew and pilots, as well as recharging of certain incurred
aircraft operating costs and expenses such as maintenance, fuel, landing fees, parking and other related operating costs. The Company
passes the recovery and recharge costs back to owners at either cost or a predetermined margin.

management-related revenue contains two types of performance obligations. One performance obligation is to provide management services
over the contract period. Revenue earned from management services is recognized over the contractual term, on a monthly basis. The second
performance obligation is the cost to operate and maintain the aircraft, which is recognized as revenue at the point in time such services
are completed.

Sales

 The
Company acquires aircraft from vendors and various other second-party sellers in the private aviation industry. The Company's classifies
the purchase as aircraft inventory on the consolidated balance sheets. Aircraft inventory is valued at the lower of cost or net realizable
value. Sales are recorded on a gross basis within revenues and cost of revenue in the consolidated statements of operations.

 Pass-Through
Costs

 In
applying the guidance of ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in
an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine
revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following
five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine
the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue
when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable
that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.
At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services
promised within each contract and determines those that are distinct performance obligations. The Company then assesses whether it is
acting as an agent or a principal for each identified performance obligation and includes revenue within the transaction price for second-party
costs when the Company determines that it is acting as the principal

 Cost
of Sales

 The
cost of sales expenses includes costs incurred in providing air transportation services, such as chartering second-party aircraft, aircraft
lease expenses, pilot training and wages, aircraft fuel, aircraft maintenance, and other aircraft operating expenses.

 1.

 Chartering
 Third-Party Aircraft: The cost of chartering second-party aircraft is recorded as a part of the cost of sales expense. These
 expenses include the fees paid to second-party operators for providing aircraft services on behalf of the company. Expenses are recognized
 in the income statement in the period when the service is rendered and are reported on an accrual basis.

 2.

 Lease Expenses: Aircraft lease expenses include the cost of leasing aircraft for the company's operations. The lease expenses
 are recognized as an operating expense in the income statement over the lease term on a straight-line basis.

 3.

 Pilot
 Training and Wages: Pilot training costs are expensed as incurred and are included in the cost of sales expenses. This encompasses
 expenses related to initial pilot training, recurrent training, and any additional required training programs. Pilot wages, including
 salaries, bonuses, and benefits, are also recognized as a part of the cost of sales expenses and are reported on an accrual basis.

 4.

 Fuel: The cost of aircraft fuel is recognized as an expense in the cost of sales category based on the actual consumption during
 flight operations. Fuel costs are recorded in the income statement in the period when the fuel is consumed and are reported on an
 accrual basis.

 5.

 Maintenance: Aircraft maintenance expenses include both routine and non-routine maintenance. Routine maintenance costs are expensed
 as incurred and are recorded as a part of the cost of sales expense. Non-routine maintenance expenses, such as major repairs and
 overhauls, are capitalized and amortized over their expected useful life. The amortization expense is included in the cost of sales
 expense and is recognized in the income statement on a straight-line basis over the asset's useful life.

 6.

 Other
 Aircraft Operating Expenses: Other aircraft operating expenses include costs such as insurance, landing fees, navigation charges,
 and catering services. These expenses are recognized in the income statement as a part of the cost of sales expenses in the period
 when they are incurred and are reported on an accrual basis.

 Stock-Based
Compensation

 The
Company accounts for stock awards under ASC 718, Compensation–Stock Compensation. Under ASC 718, stock-based compensation
cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee's
requisite vesting period or over the nonemployee's period of providing goods or services. The fair value of each stock option or
warrant award is estimated on the date of grant using the Black-Scholes option valuation model.

 Trend
Information

 The
Company's business and operations are sensitive to general business and economic conditions in the U.S. and worldwide along with
local, state, federal and foreign governmental policy decisions. A host of factors beyond Jet. AI's control could cause fluctuations
in these conditions. Adverse conditions may include but are not limited to: changes in the airline industry, fuel and operating costs,
changes to corporate governance best practices for executive flying, general demand for private jet travel, regulations on carbon emissions
from aviation and market acceptance of the Company's business model. These adverse conditions could affect the Company's
financial condition and the results of operations.

 Item
7A Quantitative and Qualitative Disclosures About Market Risk

 The
Company is not required to provide the information required by this Item as it is a "smaller reporting company," as defined
in Rule 229.10(f)(1).

 Item
8 Financial Statements and Supplementary Data

 See
Index to Consolidated Financial Statements on Page 73.

 Item
9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 None.

 Item
9A Controls and Procedures

 Evaluation
of Disclosure Controls and Procedures

 Disclosure
controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated
to our management, including our Interim Chief Executive Officer and Interim Chief Financial Officer, to allow timely decisions regarding
required disclosure.

 As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our Interim Chief Executive Officer and Interim Chief Financial Officer carried
out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2024.
Based on that evaluation, our Interim Chief Executive Officer and our Interim Chief Financial Officer have concluded that our disclosure
controls and procedures were effective as of the end of the periods covered by this Report.

 Management's
Annual Report on Internal Control Over Financial Reporting

 Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act, under the supervision of our Audit Committee. Our internal control over financial reporting is
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those
systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 Under
the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated
the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the framework in Internal Control
- Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment
and those criteria, management believes that we maintained effective internal control over financial reporting as of December 31, 2024.

 As
a non-accelerated filer, our independent registered public accounting firm is not required to issue an attestation report on our internal
control over financial reporting.

in Internal Control over Financial Reporting

 There
were no changes in our internal control over financial reporting that occurred during the year ended on December 31, 2024 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 Item
9B Other Information

 In
connection with the Company entering into the Merger Agreement with flyExclusive, and an accommodation made by Ionic related to the
Company's entry into such agreement, for conversions of the Series B Preferred Stock effected on a go-forward basis the
parties agreed to an update to the Conversion Price (as defined in the Certificate of Designations) so that it will be the lower of
(i) $2.50 or (ii) 90% (or, in the case of a delisting, 80%) of the lowest daily volume weighted average price of the Company's
Common Stock, subject to certain adjustments, as further described above under " Item 7 Management's Discussion and
Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Overview – Ionic
Transaction ". Accordingly, the Company filed an amendment to the Certificate of Designations with the Delaware Secretary of State in February 2025, the terms of which the parties intend to be effective upon
delivery by Ionic of the first conversion notice it delivers to the Company pursuant to the terms of the Certificate of Designations after
the filing date of the amendment. As of the date of this Report Ionic has not delivered a conversion notice to the Company since the filing
of the amendment with the Delaware Secretary of State.

 Item
9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Not
applicable.

 PART
III

 Item
10 Directors, Executive Officers and Corporate Governance

 The
following is a list of our directors and executive officers.

 Name

 Age

 Position

 Michael
 D. Winston, CFA

 Executive
 Chairman and Interim Chief Executive Officer, Director

 George
 Murnane

 Interim
 Chief Financial Officer, Director

 William
 Yankus (1)(3)

 Wrendon
 Timothy (1)(2)(3)

 Patrick
 McNulty

 Chief
 Operating Officer

 Lt.
 Col. Ran David (2)

 Donald
 Jeffrey Woods (3)

 Ehud
 Talmor (1)(2)

 (1)

 Member
 of the audit committee.

 (2)

 Member
 of the compensation committee.

 (3)

 Member
 of the nominating and corporate governance committee.

 Effective
upon the closing of the Business Combination, Michael D. Winston was appointed to serve as Jet. AI's Executive Chairman and as Jet. AI's
interim Chief Executive Officer ("CEO") and George Murnane was appointed to serve as Jet. AI's interim Chief Financial
Officer ("CFO") until Jet. AI completes its ongoing search for a long-term CFO, at which point Mr. Winston will step down
from his role as interim CEO and Mr. Murnane will transition from Jet. AI's interim CFO to its CEO.

 Executive
Officers

 Michael
D. Winston, CFA founded Jet. AI in 2018 and has served as its Executive Chairman since its founding. Upon completion of the Business
Combination, he began serving as Interim Chief Executive Officer until such time as the Company hires a permanent Chief Financial Officer.
Mr. Winston began his career in 1999 with Credit Suisse First Boston Corporation and later worked as a portfolio manager at Millennium
Partners LP. In 2012, Mr. Winston formed the Sutton View group of companies, an alternative asset management platform where he advised
one of the largest academic endowments in the world. Mr. Winston received an MBA in Finance and Real Estate from Columbia Business School
in 2005, and a BA in Economics from Cornell University in 1999. While at Cornell he studied for a year at the London School of Economics
and at age 18 won a $1 million prize from IBM for his first startup company. Mr. Winston is a CFA Charterholder, and a member of the
Economic Club of New York.

 George
Murnane has served as Jet. AI's Chief Executive Officer since September 2019. Upon completion of the Business Combination, he
was named Interim Chief Financial Officer until such time as the Company hires a permanent Chief Financial Officer, at which time he
will again assume the role of Chief Executive Officer. Mr. Murnane has over 20 years of senior executive experience, including 14 years
as a Chief Operating Officer and/or Chief Financial Officer in the air transportation and aircraft industry, including as Chief Executive
Officer for ImperialJet S.a.l from 2013 to 2019, Chief Operating Officer and Acting Chief Financial Officer of VistaJet Holdings, S.A.
in 2008, Chief Financial Officer of Mesa Air Group from 2002 to 2007, Chief Operating Officer and Chief Financial Officer of North-South
Airways from 2000 to 2002, Executive Vice President, Chief Operating Officer and Chief Financial Officer of International Airline Support
Group from 1996 to 2002 and Executive Vice President and Chief Operating Officer of Atlas Air, Inc. from 1995 to 1996. From 2009 until
he joined Jet Token, Mr. Murnane was a managing partner of Barlow Partners, a consulting services firm providing operational and financial
management, merger and acquisition, financing and restructuring expertise to industrial and financial companies. Mr. Murnane received
an MBA from The Wharton School of the University of Pennsylvania and a BA in Economics from the University of Pennsylvania in 1980.

 Patrick McNulty has served as Jet. AI's
Chief Operating Officer since June 2021. Prior to joining Jet Token, Mr. McNulty was employed by Honda Aircraft Company starting in 2013
and served in various roles, including as a manager of Sales Operations and Business Development with Honda Aircraft Company. While with
Honda Aircraft Company, Mr. McNulty led the development of a robust sales engineering team and was instrumental in product development
and market analysis for the manufacturer. Prior to Honda Aircraft Company, Mr. McNulty worked in the aircraft engine division of Rolls-Royce
North America and at light jet manufacturer Eclipse Aviation. Mr. McNulty is a graduate of the Embry-Riddle Aeronautical University (BS
Aerospace Engineering, MBA Aviation).

 Non-Employee Directors

 Wrendon Timothy served as Oxbridge's
Chief Financial Officer, Treasurer, Secretary and director since April 2021 until the completion of the Business Combination. He has served
as a director, chief financial officer and corporate secretary of Oxbridge Re Holdings Limited (NASDAQ: OXBR), a Cayman Islands based
NASDAQ-listed reinsurance holding company. He has served in the positions of chief financial officer and corporate secretary since August
2013 and as a director since November 2021. In his role, he has provided financial and accounting consulting services with a focus on
technical and SEC reporting, compliance, internal auditing, corporate governance, mergers & acquisitions analysis, risk management,
and CFO and controller services. Mr. Timothy also serves as an executive and director of Oxbridge Reinsurance Limited and Oxbridge Re
NS, the wholly-owned licensed reinsurance subsidiaries of Oxbridge Re Holdings Limited. Mr. Timothy also serves as a director of Oxbridge's
Sponsor, OAC Sponsor Ltd, and as a director of SurancePlus Inc., a British Virgin Islands wholly-owned Web3 subsidiary of Oxbridge Re
Holdings Limited.

 Mr. Timothy started his financial career at PricewaterhouseCoopers
(Trinidad) in 2004 as an Associate in their assurance division, performing external and internal audit work, and tax-related services.
Throughout his career progression and transitions through KPMG Trinidad and PricewaterhouseCoopers (Cayman Islands), Mr. Timothy has successfully
delivered services across both the public and private sectors, spanning insurance and reinsurance, banking, hedge funds, trusts, investment
management, manufacturing, beverage, construction, glass, healthcare, retail, construction, marketing, restaurant, software, sports, and
tourism industries. Mr. Timothy management roles allowed him to be heavily involved in the planning, budgeting, and leadership of engagement
teams, serving as a liaison for senior client management, and advising on technical accounting matters. Mr. Timothy is a Fellow of the
Association of Chartered Certified Accountants (ACCA), a Fellow Chartered Corporate Secretary and also holds a Postgraduate Diploma in
Business Administration and a Master of Business Administration, with Distinction (with a Specialism in Finance (with Distinction), from
Heriot Watt University in Edinburg, Scotland. Mr. Timothy holds directorship and leadership roles with a number of privately-held companies,
and also serves on various not-for-profit organizations, including his governance role as Chairman of Audit & Risk Committee of The
Utility Regulation & Competition Office of the Cayman Islands, and Audit Committee Chairman of the Cayman Islands Conference of SDA.
Mr. Timothy is an active Fellow Member of the ACCA, an active member of the Cayman Islands Institute of Professional Accountants (CIIPA),
an active Fellow Member of the Chartered Governance Institute (formerly the Institute of Chartered Secretaries and Administrators) and
a member of the Cayman Islands Directors Association.

 William L. Yankus served as one of
Oxbridge Acquisition Corp.'s independent directors since August 2021. Mr. Yankus is an experienced investment banking specialist with a
demonstrated history of working in the insurance industry. Since July 2015, Mr. Yankus has served as Founder and Principal of
Pheasant Hill Advisors, LLC, a New York based advisor firm that provides various research, advisory, private equity capital raising
and M&A services primarily to the insurance industry and insurance industry investors. Since March 2016, Mr. Yankus has served
on the board of directors of Kingstone Companies, Inc. (NASDAQ: KINS), a New York based NASDAQ-listed property and casualty
insurance company. He has also served as the Chairman of Kingstone's Compensation Committee since April 2017, and as the
Chairman of Kingstone's Investment Committee since February 2020. Mr. Yankus is also a Senior Advisor at Independent Insurance
Analysts LLC, which provides investment analysis, credit research and investment banking services related to the life insurance
industry.

 From September 2011 to June 2015, Mr. Yankus served
as Managing Director for Sterne Agee, one of the oldest privately owned financial services firm in the USA. Sterne Agee offered wealth
management and investment services to a diverse client base and custodies nearly $26 billion in client assets. Prior to Sterne Agee, Mr.
Yankus also held executive and leadership roles with other reputable financial services and investment banking firms, including serving
as Head of Insurance Research at Macquarie Group from December 2009 to November 2010, Managing Director-Insurance Research for Fox-Pitt,
Kelton from May 1993 to November 2009, and Vice President, Insurance Research at Conning & Company from June 1985 to Apr 1993. He
completed the CFA program in 1989 and passed the CT uniform CPA exam in 1984. He received his B.A. degree in Economics and Accounting
from The College of the Holy Cross.

 Ehud Talmor (Maj. IAF Ret.) is a decorated,
retired, senior officer from the Israeli Air Force with over twenty-five years of experience in all aspects of air combat and aircraft
logistics. He began his career in 1995 as a fighter pilot and later, flight instructor. He subsequently took on a variety of supervisory
roles, including F-16 deputy squadron commander. In 2007, he joined the Acquisitions Department of the Israeli Ministry of Defense and
later held the position of Project Manager for three separate Air Force jet acquisition projects. The jet acquisition projects were: (1)
the Beechcraft T-6II, (2) the Leonardo M-346, and (3) the Lockheed Martin F-35A. In addition to serving as Project Manager for the F-35
program, Mr. Talmor was also the Israeli Air Force's Chief Instructor for the F-35. Mr. Talmor graduated from I.D.C. Herzliya with
a B.A. in Psychology.

 Lt. Col. Ran David (IAF) is a decorated combat
pilot in the Israeli Air Force. He has served as a deputy squadron commander and spent ten years as a flight instructor. One of Lt. Col
David's primary responsibilities has been to train, test and approve new IAF fighter pilots. Lt. Col David is a graduate of the
USAF Air Command and Staff College and the University of Haifa.

 Jeff Woods is currently the Co-Founder and
Chief Product Officer of Puzl LLC, a company using artificial intelligence to transform retail. He also currently serves as President
and Board Member of Woods Supermarket, Inc., a mid-sized family-owned chain of supermarkets operating across Missouri, which has been
serving its communities for over 75 years. Prior to these roles, from 2011 to 2019, Mr. Woods served in roles of Vice President of Marketing
Strategy and Chief Product Strategist with SAP SE (NYSE: SAP) in London and New York. From 2001 to 2011, Mr. Woods served as Vice President
of Enterprise Applications Research at Gartner Inc (NYSE: IT) where he was the global lead for enterprise applications. Prior to this,
Mr. Woods built and sold his own logistics company. Mr. Woods is a graduate of Cornell University in Applied Economics and holds an MBA
from Columbia Business School.

 Family Relationships

 There are no familial relationships among the Jet. AI
directors and executive officers.

 Board Composition

 The Board is comprised of seven directors and is divided
into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then
expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Jet. AI's
directors are among the three classes as follows:

 the Class I directors are Lt. Col. Ran David and Jeffrey Woods and their terms will expire at the 2027 annual meeting of stockholders;

 the Class II directors are William Yankus and Wrendon Timothy and their terms will expire at the 2025 annual meeting of stockholders; and

 the Class III directors are Michael Winston, George Murnane and Ehud Talmor and their terms will expire at the 2026 annual meeting of stockholders.

 Directors in a particular class are elected for three-year
terms at the annual meeting of stockholders in the year in which their terms expire. As a result, only one class of directors is elected
at each annual meeting of Jet. AI stockholders, with the other classes continuing for the remainder of their respective three-year terms.
Each director's term continues until the election and qualification of his or her successor, or the earlier of his or her death,
resignation or removal. This classification of the Board may have the effect of delaying or preventing changes in Jet. AI's control
or management.

 The Company's Certificate of Incorporation and
Bylaws provide that only the Board can fill vacant directorships, including newly-created seats. Any additional directorships resulting
from an increase in the authorized number of directors would be distributed pro rata among the three classes so that, as nearly as possible,
each class would consist of one-third of the authorized number of directors. The Certificate of Incorporation and Bylaws also provide
that Jet. AI's directors may only be removed for cause and by the affirmative vote of the holders of at least two-thirds of the voting
power of the then-outstanding shares entitled to vote in the election of directors, voting together as a single class.

 Director Independence

 The Board determined that each of the directors serving
on the Board, other than Michael Winston and George Murnane, qualifies as an independent director, as defined under the listing rules
of Nasdaq, and the Board consists of a majority of "independent directors," as defined under the applicable rules of the SEC
and Nasdaq relating to director independence requirements. In addition, Jet. AI is subject to certain rules of the SEC and Nasdaq relating
to the membership, qualifications and operations of the audit committee, as discussed below.

 Board Leadership Structure

 The Board does not have a policy requiring the positions
of the Chairperson of the board of directors and Chief Executive Officer to be separate or held by the same individual. The members of
the Board believe that this determination should be based on circumstances existing from time to time, based on criteria that are in Jet. AI's
best interests and the best interests of its stockholders, including the composition, skills and experience of the board and its members,
specific challenges faced by Jet. AI or the industry in which it operates and governance efficiency. The Board adopted Corporate Governance
Guidelines, which provide for the appointment of a lead independent director at any time when the Chairperson is not independent. Wrendon
Timothy serves as the lead independent director.

 Board Committees

 The Board has established an audit committee, a compensation
committee and a nominating and corporate governance committee, each of which have the composition and responsibilities described below.
The Board and its committees set schedules for meeting throughout the year and can also hold special meetings and act by written consent
from time to time, as appropriate. The Board delegates various responsibilities and authority to its committees and the committees regularly
report on their activities and actions to the full board of directors. Members serve on these committees until their resignation or until
otherwise determined by the Board. The Board may establish other committees to facilitate the management of the Company's business
as it deems necessary or appropriate from time to time.

 Each committee of the Board operates under a written
charter approved by the Board. Copies of each charter are posted on the Investor Relations section of Jet. AI's website at investors.jet.ai.
The inclusion of the Company's website address or the reference to Jet. AI's website in this Report does not include or incorporate
by reference the information on the Company's website into this Report.

 Audit Committee

 Jet. AI's audit committee is comprised of Wrendon
Timothy, William Yankus and Ehud Talmor, with Mr. Timothy serving as audit committee chairperson. The Board determined that Messrs. Timothy,
Yankus and Talmor each meet the requirements for independence and financial literacy under the current Nasdaq listing standards and SEC
rules and regulations, including Rule 10A-3. In addition, the Board determined that each of Messrs. Timothy and Yankus is an "audit
committee financial expert" within the meaning of Item 407(d) of Regulation S-K promulgated under the Securities Act. This designation
does not impose any duties, obligations or liabilities that are greater than are generally imposed on members of the audit committee and
the Board. The audit committee is responsible for, among other things:

 selecting a qualified firm to serve as the independent registered public accounting firm to audit Jet. AI's financial statements;

 helping to ensure the independence and overseeing the performance of the independent registered public accounting firm;

 reviewing and discussing the results of the audit with the independent registered public accounting firm and reviewing, with management and that firm, Jet. AI's interim and year-end operating results;

 reviewing Jet. AI's financial statements and critical accounting policies and estimates;

 reviewing the adequacy and effectiveness of Jet. AI's internal controls;

 developing procedures for employees to submit concerns anonymously about questionable accounting, internal accounting controls or audit matters;

 overseeing Jet. AI's policies on risk assessment and risk management;

 overseeing compliance with Jet. AI's code of business conduct and ethics;

 reviewing related party transactions; and

 approving or, as permitted, pre-approving all audit and all permissible non-audit services (other than de minimis non-audit services) to be performed by the independent registered public accounting firm.

 The audit committee operates under a written charter,
which satisfies the applicable rules of the SEC and the listing standards of Nasdaq, and which is available on Jet. AI's website.
All audit services to be provided to Jet. AI and all permissible non-audit services, other than de minimis non-audit services, to be provided
to Jet. AI by Jet. AI's independent registered public accounting firm will be approved in advance by the audit committee.

 Compensation Committee

 Jet. AI's compensation committee is comprised
of Lt. Col. Ran David, Wrendon Timothy and Ehud Talmor, and Mr. Talmor is the chairperson of the compensation committee. The Board determined
that each member of the compensation committee meets the requirements for independence under the current Nasdaq listing standards and
SEC rules and regulations. Each member of the committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange
Act. The compensation committee is responsible for, among other things:

 reviewing, approving and determining, or making recommendations to the Board regarding, the compensation of Jet. AI's executive officers, including the Chief Executive Officer;

 making recommendations regarding non-employee director compensation to the full Board;

 administering Jet. AI's equity compensation plans and agreements with Jet. AI executive officers;

 reviewing, approving and administering incentive compensation and equity compensation plans; and

 reviewing and approving Jet. AI's overall compensation philosophy.

 The compensation committee operates under a written
charter, which satisfies the applicable rules of the SEC and Nasdaq listing standards, and is available on Jet. AI's website.

 Nominating and Corporate Governance Committee

 The nominating and corporate governance committee
is comprised of William Yankus, Wrendon Timothy and Jeff Woods, and Mr. Woods is the chairperson of the nominating and corporate governance
committee. The Board determined that each member of the nominating and corporate governance committee meets the requirements for independence
under the current Nasdaq listing standards and SEC rules and regulations. The nominating and corporate governance committee is responsible
for, among other things:

 identifying, evaluating and selecting, or making recommendations to the Board regarding nominees for election to the Board and its committees;

 considering and making recommendations to the Board regarding the composition of the Board and its committees;

 developing and making recommendations to the Board regarding corporate governance guidelines and matters;

 overseeing Jet. AI's corporate governance practices;

 overseeing the evaluation and the performance of the Board and individual directors; and

 contributing to succession planning.

 The nominating and corporate governance committee
operates under a written charter, which satisfies the applicable rules of the SEC and Nasdaq listing standards and is available on Jet. AI's
website.

 Code of Business Conduct and Ethics

 The Board adopted a Code of Business Conduct and Ethics
that applies to all of Jet. AI's directors, officers and employees, including Jet. AI's principal executive officer, principal
financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Business Conduct and
Ethics is available on the Corporate Governance section of Jet. AI's website at
In addition, Jet. AI has posted on the Corporate Governance section of Jet. AI's website all disclosures that are required by law
or the listing standards of Nasdaq concerning any amendments to, or waivers from, any provision of the Code of Business Conduct and Ethics.

 Compensation Committee Interlocks and Insider Participation

 None of the members of the Jet. AI compensation committee
is or has been at any time one of Jet. AI's officers or employees. None of Jet. AI's executive officers currently serve, or
in the past fiscal year has served, as a member of the board of directors or compensation committee (or other board of directors committee
performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has or has
had one or more executive officers serving as a member of the Board or compensation committee.

 Limitation on Liability and Indemnification of Directors
and Officers

 The Certificate of Incorporation limits Jet. AI's
directors' liability to the fullest extent permitted under the DGCL. The DGCL provides that directors of a corporation will not
be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability:

 for any transaction from which the director derives an improper personal benefit;

 for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

 for any unlawful payment of dividends or redemption of shares; or

 for any breach of a director's duty of loyalty to the corporation or its stockholders.

 If the DGCL is amended to authorize corporate action
further eliminating or limiting the personal liability of directors, then the liability of Jet. AI's directors will be eliminated
or limited to the fullest extent permitted by the DGCL, as so amended.

 Delaware law and the Bylaws provide that Jet. AI will,
in certain situations, indemnify Jet. AI's directors and officers and may indemnify other employees and other agents, to the fullest
extent permitted by law. Any indemnified person is also entitled, subject to certain limitations, to advancement, direct payment or reimbursement
of reasonable expenses (including attorneys' fees and disbursements) in advance of the final disposition of the proceeding.

 In addition, Jet. AI has entered into separate indemnification
agreements with Jet. AI's directors and officers. These agreements, among other things, require Jet. AI to indemnify its directors
and officers for certain expenses, including attorneys' fees, judgments, fines and settlement amounts incurred by a director or
officer in any action or proceeding arising out of their services as one of Jet. AI's directors or officers or any other company
or enterprise to which the person provides services at Jet. AI's request.

 Jet. AI also maintains a directors' and officers'
insurance policy pursuant to which Jet. AI's directors and officers are insured against liability for actions taken in their capacities
as directors and officers. We believe these provisions in the Certificate of Incorporation and Bylaws, and these indemnification agreements
are necessary to attract and retain qualified persons as directors and officers.

 Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or control persons, in the opinion of the SEC, such indemnification is
against public policy as expressed in the Securities Act and is therefore unenforceable.

 Section 16(a) Reports

 Section 16(a) of the Exchange
Act requires the Company's directors and executive officers, persons who beneficially own more than 10% of a registered class of
the Company's equity securities, and certain other persons to file reports of ownership and changes in ownership on Forms 3, 4 and
5 with the SEC, and to furnish the Company with copies of the forms. Based on its review of the forms filed with the SEC, or representations
from reporting persons, the Company believes that during the fiscal year ended December 31, 2024 all of its directors, executive officers,
and greater than 10% beneficial owners filed such reports in a timely manner, except as reported below.

 Michael Winston, our Executive
Chairman and Interim Chief Executive Officer, filed a Statement of Changes in Beneficial Ownership report on Form 4 on August 19, 2024
reporting the receipt of shares of common stock in exchange for warrants. That Form 4 was filed after its prescribed due date.

 George Murnane, our Interim
Chief Financial Officer, filed a Statement of Changes in Beneficial Ownership report on Form 4 on August 20, 2024 reporting the receipt
of shares of common stock in exchange for warrants. That Form 4 was filed after its prescribed due date.

 Patrick McNulty, our Chief
Operating Officer, filed a Statement of Changes in Beneficial Ownership report on Form 4 on September 9, 2024 reporting the receipt of
shares of common stock in exchange for warrants. That Form 4 was filed after its prescribed due date.

 Each of Mr. Winston, Mr.
Murnane and Mr. McNulty did not file a Statement of Changes in Beneficial Ownership report on Form 4 reporting grants of options to purchase
1,778, 267 and 400 shares of our common stock, respectively, on or about September 24, 2024, for services rendered to the Company.

 Each of our non-employee directors, Mr. Timothy, Mr.
Yankus, Mr. Talmor, Mr. David and Mr. Woods, did not file a Statement of Changes in Beneficial Ownership report on Form 4 reporting individual
grants of 97 restricted stock awards each, on or about September 24, 2024, for services rendered to the Company.

 Insider Trading Policy

 The Board has not yet adopted an insider trading policies
and procedures governing the purchase, sale, and/or other dispositions of the registrant's securities by directors, officers and
employees, of the Company or by the Company itself due to other pressing matters fully occupying the resources of a small management team.
The Company expects to adopt such a policy before June 30, 2025.

 Item 11 Executive Compensation

 Jet. AI is considered a smaller reporting company and
an "emerging growth company" within the meaning of the JOBS Act and has opted to comply with the executive compensation disclosure
rules applicable to such companies. These rules provide for reduced compensation disclosure for the principal executive officer and the
two most highly compensated executive officers other than the principal executive officer (the "named executive officers").
This section provides an overview of our executive compensation programs, including a narrative description of the material factors necessary
to understand the information disclosed in the summary compensation table below. In order to provide a fuller understanding of the compensation
arrangements with our executive officers, the Company has presented full year 2024 and 2023 information, including compensation paid by
Jet Token prior to the completion of the Business Combination.

 For fiscal year 2024 and 2023, the named executive
officers were:

 Michael Winston, Executive Chairman and Interim Chief Executive Officer of Jet. AI Inc. following the Business Combination (Founder and Executive Chairman and Treasurer of Jet Token);

 George Murnane, Interim Chief Financial Officer of Jet. AI Inc. following the Business Combination (Chief Executive Officer and President of Jet Token); and

 Patrick McNulty, Chief Operating Officer of Jet. AI Inc. following the Business Combination (Chief Operating Officer of Jet Token).

 Jet. AI believes its compensation programs should promote
the success of the Company and align executive incentives with the long-term interests of its stockholders. Jet. AI's compensation
programs reflect its startup origins and consist primarily of salary, bonus and equity awards. As Jet. AI's needs evolve, it intends
to continue to evaluate its philosophy and compensation programs as circumstances require.

 Summary Compensation Table

 The following table provides information concerning
compensation awarded to, earned by, and paid to each of the named executive officers for services rendered to Jet. AI and Jet Token in
all capacities during the years ended December 31, 2024 and 2023, respectively:

 Name and Principal Position

 Year

 Salary ($)

 Bonus / Commission ($)

 Option

 Awards (1) ($)

 All Other Compensation

 ($) (12)

 Total

 ($)

 Michael D. Winston

 2024

 $
 357,606

 $

 $
 32,760

 $
 46,632

 $
 536,998

 Founder and Executive Chairman; Treasurer

 2023

 $
 281,606

 $

 $
 —

 $
 52,814

 $
 434,420

 2024

 $
 232,212

 $

 $
 4,914

 $
 58,008

 $
 395,134

 Chief Executive Officer, Chief Financial Officer and President

 2023

 $
 234,615

 $

 $
 359,745

 $
 63,720

 $
 758,080

 Patrick McNulty

 2024

 $
 185,769

 $
 47,732

 $
 7,371

 $
 45,192

 $
 286,064

 Chief Operating Officer

 2023

 $
 172,933

 $
 18,106

 $
 205,035

 $
 40,886

 $
 436,960

 (1) The amounts in this column do not represent amounts
the named executive officers received or are entitled to receive. Rather, the reported amounts represent the aggregate grant date
fair value of option awards granted to each named executive officer, computed in accordance with FASB ASC Topic 718, as further described
in Note 2 of the notes to our Consolidated Financial Statements included in this Annual Report, which contains a discussion of all assumptions
made by us in determining the grant date fair value of our equity awards. The reported amounts do not reflect the risk the option awards
may be forfeited in certain circumstances and, for awards that are subject to performance conditions, the risk there is no payout because
the performance conditions are not met.

 (2) The reported amounts of all other compensation
for 2024 include the following items:

 Name

 Contributions to Qualified Defined Contribution Plan (a)

 Fringe Benefits (b)

 Health and Disability

 Benefits (c)

 Michael D. Winston

 $
 14,015

 $
 8,640

 $
 23,977

 $
 12,569

 $
 20,016

 $
 25,423

 Patrick McNulty

 $
 —

 $
 7,200

 $
 37,992

 (a)

 Represents Jet. AI's contributions to the
 Jet. AI 401(k) Retirement Plan, a broad-based tax qualified defined contribution plan, based on the same fixed and matching contribution
 formula applicable to all participants in this plan.

 (b)

 Represents amounts paid directly to the named executive officer for
 certain fringe benefits including:

 Bi-weekly reimbursement for automotive costs (up to $600);

 Bi-weekly reimbursement for mobile phone costs (up to $150);

 Bi-weekly reimbursement for health club (up to $100);

 For employees that opt for the High Deductible Health Plan offered
 by our healthcare provider, a $1,500 annual tax-free contribution to an HSA by the company on the employee's behalf; and

 Employee achievement awards - up to $1,600 of non-taxable tangible
 personal property each year, other than cash, cash equivalent or gift card Employee achievement awards (up to $1,600).

 (c)

 Represents amounts paid by the Company towards
 the named executive officer's health, dental and vision insurance, health savings account and life insurance expenses.

 Narrative Disclosure to Summary Compensation Table

 For 2024, the compensation program for Jet. AI's
named executive officers consisted of base salary, bonus and equity awards.

 Compensation Arrangements following the Business
Combination

 A condition to Jet Token's obligation to close
the Business Combination was that the Company enter into new or amended employment agreements or arrangements with Michael Winston, George
Murnane and Patrick McNulty, effective as of the Closing. The terms of those employment agreements and arrangements are disclosed below.

 Michael Winston

 On August 8, 2023, Michael Winston entered into an
employment offer letter with Jet. AI to serve as the Company's Executive Chairman and as the chief executive officer of the Company
until a chief financial officer is appointed by the Company to replace Mr. Murnane, who will serve as chief financial officer during this
interim period until he becomes the chief executive officer of the Company. Pursuant to the offer letter, Mr. Winston is entitled to receive
a base salary of $385,000.00 and will be eligible to participate in the Company's performance bonus program, which is expected to
be established by June 30, 2025. Mr. Winston is entitled to participate in the Company's commission plan for new customer sales
and renewal customers and sales of aircraft. Mr. Winston will be eligible for a special cash bonus of $1,500,000 upon a Change of Control
(as defined in the offer letter). Pursuant to the offer letter, if Mr. Winston's employment is terminated without "Cause"
or for "Good Reason" (as such terms are defined in the offer letter), Mr. Winston will be entitled to severance in the amount
equal to three times his then current base salary, less all applicable withholdings and deductions, paid over a 12 month period, conditioned
upon Mr. Winston delivering a general release of claims in favor of the Company within 30 days following his termination date.

 On August 10, 2023, Mr. Murnane, entered into an amended
and restated employment offer letter with Jet. AI to serve as the chief financial officer of the Company until a replacement chief financial
officer is appointed by the Company, at which point he will become the chief executive officer of the Company. Pursuant to the employment
offer letter, Mr. Murnane is entitled to receive a base salary of $250,000 and will be eligible to participate in the Company's
performance bonus program. Mr. Winston is entitled to participate in the Company's commission plan for new customer sales and renewal
customers and sales of aircraft. Mr. Murnane will be eligible for a special cash bonus of $1,500,000 upon a Change of Control (as defined
in the offer letter). Pursuant to the offer letter, if Mr. Murnane's employment is terminated without "Cause" or for
"Good Reason" (as such terms are defined in the offer letter), Mr. Murnane will be entitled to severance in the amount equal
to one times his then current base salary, less all applicable withholdings and deductions, paid over a 12 month period, conditioned upon
Mr. Murnane delivering a general release of claims in favor of the Company within 30 days following his termination date.

 Patrick McNulty

 On July 11, 2023, Patrick McNulty entered into an
amended and restated employment offer letter with Jet. AI to serve as the Company's Chief Operating Officer. Pursuant to the offer
letter, Mr. McNulty is entitled to receive a base salary of $200,000.00 and will be eligible to participate in the Company's performance
bonus program, which is expected to be established by June 30, 2025. Mr. McNulty is entitled to participate in the Company's commission
plan for new customer sales and renewal customers and sales of aircraft.

 The foregoing descriptions of Mr. Winston's,
Mr. Murnane's and Mr. McNulty's offer letters are qualified in their entirety by the full text of such agreements, copies
of which are filed as Exhibits 10.4, 10.3 and 10.5, respectively, to this Report and incorporated herein by reference.

 2023 and 2024 Equity Awards

 In 2023, following the Business Combination, Mr. Murnane
received options to purchase 150,000 shares of our common stock, par value $0.0001 per share ("Common Stock") under the 2023
Jet. AI Inc. Omnibus Incentive Plan (as amended, the "Omnibus Incentive Plan") adopted in connection with the Business Combination,
described below, and Mr. McNulty received options to purchase 50,000 shares of Common Stock under the Omnibus Incentive Plan. During 2024,
Mr. Winston, Mr. Murnane and Mr. McNulty received options to purchase 1778, 267 and 400 shares of our Common Stock, respectively.

 Benefits and Perquisites

 Prior to the Business Combination Jet Token provided,
benefits to the named executive officers on the same basis as provided to all of its employees, including health, dental and vision insurance;
health savings account; life insurance; and a tax-qualified Section 401(k) plan for which the company matched 100% of contributions up
to 6% of the employee's salary.

 Following the Business Combination, the Company adopted
a Fringe Benefit Perk Policy for all full-time employees. This Policy provides for the following fringe benefits:

 Bi-weekly reimbursement for automotive costs (up to $600);

 Bi-weekly reimbursement for mobile phone costs (up to $150);

 Bi-weekly reimbursement for health club (up to $100);

 For employees that opt for the High Deductible Health Plan offered by our healthcare provider, a $1,500 annual tax-free contribution to an HSA by the company on the employee's behalf; and

 Employee achievement awards - up to $1,600 of non-taxable tangible personal property each year, other than cash, cash equivalent or gift card Employee achievement awards (up to $1,600).

 The Company also provides a tax-qualified Section
401(k) plan to its employees for which the Company matches 100% of contributions up to 6% of the employee's salary. In addition,
directors and officers may make personal use of company aircraft provided (1) the aircraft and its crew cannot reasonably be utilized
for profit during the time required to safely execute a proposed flight, (2) the aircraft and its pilots are not moved out of geographical
position so as to impair the company's ability to utilize it (or them) for profit thereafter, (3) ample aircraft and crew are available
at the time of departure to service customers, (4) a customary charter trip sheet is generated for the flight and retained electronically
for not less than 12 months, (5) at least one officer and one director must both review and approve the trip sheet, and (6) the value
of the charter flight for an aircraft in that category is independently quoted and retained with the trip sheet. If these conditions are
met, the relevant employee is responsible for paying:

 2.0x the cost of fuel, oil, lubricants, and other additives.

 Travel expenses of the crew, including food, lodging, and ground transportation.

 Hangar and tie-down costs away from the aircraft's base of operation.

 Insurance obtained for the specific flight.

 Landing fees, airport taxes, and similar assessments.

 Customs, foreign permit, and similar fees directly related to the flight.

 In-flight food and beverages.

 Passenger ground transportation.

 Flight planning and weather contract services.

 The contributions made on behalf of the named executive
officers for fiscal years 2023 and 2024 are disclosed above in the notes to the Summary Compensation Table.

 Jet Token Compensation Arrangements prior to
the Business Combination

 Prior to the Business Combination, Jet Token did not
have any formal compensation arrangements with its Founder and Executive Chairman, Mr. Winston. Rather, Mr. Winston, as its sole board
member, determined the compensation to be paid to him from time to time in consultation with Jet Token's Chief Executive Officer
and President, Mr. Murnane.

 Base Salary

 In 2024, each of Mr. Murnane and Mr. McNulty received
an annual base salary from Jet Token to compensate them for services rendered to the Company. Prior to the Business Combination, the base
salaries of Mr. McNulty and Mr. Murnane were $175,000 and $250,000, respectively, and following the Business Combination were $200,000
and $250,000. The actual base salary received by each named executive officer is set forth above in the Summary Compensation Table in
the column titled "Salary." Prior to the Business Combination, Jet Token did not have any formal compensation arrangements
with its Founder and Executive Chairman, Mr. Winston. Rather, Mr. Winston, as its sole board member, determined the compensation to be
paid to him from time to time in consultation with Jet Token's Chief Executive Officer and President, Mr. Murnane.

 Cash Bonus

 Each of Mr. Murnane's and Mr. McNulty's
Jet Token employment arrangement provided that the named executive officer would be eligible to earn a discretionary annual bonus subject
to achievement of certain goals (including revenue and profitability targets) as determined by the board of directors of Jet Token ("Jet
Token Board"). In 2024 and 2023, Mr. Winston, Mr. Murnane and Mr. McNulty were eligible to earn annual cash bonuses based on their
performance, as determined by the Jet Token Board, in its discretion.

 The actual annual cash bonuses awarded to each of
the named executive officers for fiscal 2024 and fiscal 2023 performance are set forth above in the Summary Compensation Table in the
column titled "Bonus."

 Potential Payments on Termination
or Change in Control of Jet Token

 Mr. Murnane was entitled to a special cash bonus of
$1.5 million paid at the effective date of a change of control transaction provided he was still employed by the Company at the time of
the closing. The Business Combination did not constitute a change of control under Mr. Murnane's employment agreement.

 Outstanding Equity Awards at Fiscal Year-End Table

 The following table provides information regarding
each outstanding option award or unvested stock award held by Messrs. Winston, Murnane and McNulty as of December 31, 2024.

 Option Awards

 Name

 Number of

 Underlying

 Unexercised

 Options
(#)

 Exercisable

 Number of

 Underlying

 Unexercised

 Options
(#)

 Unexercisable

 Option

 Exercise

 Price
($)

 Option

 Expiration

 Date

 Michael Winston

 $
 1,133

 $
 24.345

 9/24/34

 $
 -

 $
 186.75

 9/23/29

 $
 -

 $
 186.75

 9/23/29

 1,727

 $

 $
 938.25

 12/31/30

 1,649

 $
 51,575

 $

 7/30/31

 $

 $

 3/16/32

 $

 $
 562.50

 9/22/33

 (1)

 24.345

 9/24/34

 Patrick McNulty

 $
 -

 $

 8/2/31

 $
 -

 $

 7/1/31

 $
 -

 $

 7/1/31

 $
 -

 $

 10/31/31

 $
 -

 $

 1/5/32

 $
 -

 $

 3/1/32

 $
 -

 $

 8/31/32

 $
 -

 $

 9/30/32

 $

 $
 562.50

 9/22/33

 (1)

 24.345

 9/24/34

 (1)

 These option grants were made pursuant to the Omnibus Incentive Plan, which was initially was approved by the Oxbridge board of directors on July 10, 2023, and by the Oxbridge stockholders in connection with the approval of the Business Combination on August 7, 2023. The Omnibus Incentive Plan became effective as of August 10, 2023, upon the completion of the Business Combination and is described below under "– The Omnibus Incentive Plan."

 In addition, on December 26, 2023, the Board approved,
at the recommendation of the compensation committee and subject to stockholder approval of an amendment to the Omnibus Incentive Plan
at the Company's 2024 annual meeting, the grant of incentive stock options to Mr. Murnane, exercisable for 60,000 shares of Common
Stock, and to Mr. McNulty, exercisable for 90,000 shares of Common Stock. The amendment was approved at, and these options were granted
following, the 2024 annual meeting. The options vest 1/3 each year beginning December 26, 2024 at an exercise price equal to the fair
market value of the Common Stock on the date of grant, and expiring on the 10 th anniversary of the grant date.

 Equity Grant Timing

 The Board does not determine the timing or terms of
equity awards, including stock options or similar awards whose exercise price is related to the market value of our common stock, in connection
with the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant
positive or negative earnings announcement, and we do not time the public release of such information based on stock option grant dates.
During fiscal year 2024, there were no equity awards granted to any of our named executive officers within either four business days before
or one business day after the filing of our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and any Current Report on
Form 8-K that contained any material nonpublic information.

 The Omnibus Incentive Plan

 In connection with the Business Combination, the Company
adopted the Omnibus Incentive Plan. At the 2024 annual meeting of stockholders the Company's stockholders approved the Amended and
Restated 2023 Jet. AI Inc. Omnibus Incentive Plan that established a fixed number of shares of Common Stock that may be issued under the
plan and to eliminate an evergreen provision. The Omnibus Incentive Plan provides for the grant of equity awards to employees, outside
directors, and consultants, including the direct award or sale of shares, stock options, and restricted stock units to purchase shares.
The Omnibus Incentive Plan is a continuation of the 2018 Plan and 2021 Plan, which were assumed from Jet Token and amended, restated and
re-named into the form of the Omnibus Incentive Plan effective as of the consummation of the Business Combination. As of December 31,
20234, subject to adjustment and annual increases (as described under "– Stock Subject to the Omnibus Incentive Plan "
below), the maximum number of shares of Common Stock available for issuance under the Omnibus Incentive Plan is 10,933 shares (on a post-split
basis).

 Summary

 The following is a summary of the principal features
of the Omnibus Incentive Plan. The summary is qualified in its entirety by reference to the full text of the Omnibus Incentive Plan, which
is filed as Exhibit 10.1 to this Report and is incorporated by reference herein.

 Purpose

 The purpose of the Omnibus Incentive Plan is to advance
the interests of Jet. AI and its stockholders by enabling Jet. AI and its subsidiaries and affiliates to attract and retain qualified individuals
to perform services, by providing incentive compensation for such individuals in a form that is linked to the growth and profitability
of Jet. AI and increases in stockholder value, and by providing opportunities for equity participation that align the interests of recipients
with those of its stockholders.

 Administration

 The board of directors of Jet. AI administers the Omnibus
Incentive Plan. The board has the authority under the Omnibus Incentive Plan to delegate plan administration to a committee of the board
or a subcommittee thereof. The board of directors of Jet. AI or the committee of the board to which administration of the Omnibus Incentive
Plan has been delegated is referred to in this Report as the Committee. Subject to certain limitations, the Committee will have broad
authority under the terms of the Omnibus Incentive Plan to take certain actions under the plan.

 To the extent permitted by applicable law and subject
to certain limitations as provided in the Omnibus Incentive Plan, the Committee may delegate to one or more of its members or to one or
more officers of Jet. AI such administrative duties or powers under the Omnibus Incentive Plan, as it may deem advisable.

 No Re-pricing

 The Committee may not, without prior approval of the
stockholders of Jet. AI, effect any re-pricing of any previously granted "underwater" option or SAR by: (i) amending or modifying
the terms of the option or SAR to lower the exercise price or grant price; (ii) canceling the underwater option or SAR in exchange for
(A) cash; (B) replacement options or SARs having a lower exercise price or grant price; or (C) other awards; or (iii) repurchasing the
underwater options or SARs and granting new awards under the Omnibus Incentive Plan. An option or SAR will be deemed to be "underwater"
at any time when the fair market value of Common Stock of Jet. AI is less than the exercise price of the option or the grant price of the
SAR.

 Stock Subject to the Omnibus Incentive Plan

 Subject to adjustment (as described below), the maximum
number of shares of Common Stock available for issuance under the Omnibus Incentive Plan is 394,329 shares, with an annual increase on
the first day of each calendar year beginning on January 1, 2024 and ending on January 1, 2033 equal to: (A) such amount of shares of
Common Stock such that the total number of shares available for issuance under this Plan, plus the total number of shares reserved for
issuance under outstanding Jet Token Options and Jet Token RSU Awards (as such terms are defined in the Business Combination Agreement)
assumed in is equal to ten percent (10%) of the total number of shares then issued and outstanding as of the last day of the prior fiscal
year; and (B) such smaller number of shares of Common Stock as may be determined by the Board.

 Shares that are issued under the Omnibus Incentive
Plan or that are subject to outstanding awards will be applied to reduce the maximum number of shares remaining available for issuance
under the Omnibus Incentive Plan only to the extent they are used; provided, however, that the full number of shares subject to a stock-settled
SAR or other stock-based award will be counted against the shares authorized for issuance under the Omnibus Incentive Plan, regardless
of the number of shares actually issued upon settlement of such SAR or other stock-based award. Any shares withheld to satisfy tax withholding
obligations on awards issued under the Omnibus Incentive Plan, any shares withheld to pay the exercise price or grant price of awards
under the Omnibus Incentive Plan and any shares not issued or delivered as a result of the "net exercise" of an outstanding
option or settlement of a SAR in shares will not be counted against the shares authorized for issuance under the Omnibus Incentive Plan
and will be available again for grant under the Omnibus Incentive Plan. Shares subject to awards settled in cash will again be available
for issuance pursuant to awards granted under the Omnibus Incentive Plan. Any shares related to awards granted under the Omnibus Incentive
Plan that terminate by expiration, forfeiture, cancellation or otherwise without the issuance of the shares will be available again for
grant under the Omnibus Incentive Plan. Any shares repurchased by Jet. AI on the open market using the proceeds from the exercise of an
award will not increase the number of shares available for future grant of awards. To the extent permitted by applicable law, shares issued
in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by Jet. AI or a subsidiary
or otherwise will not be counted against shares available for issuance pursuant to the Omnibus Incentive Plan. The shares available for
issuance under the Omnibus Incentive Plan may be authorized and unissued shares or treasury shares.

 Adjustments

 In the event of any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary
dividend (including a spin off) or other similar change in the corporate structure or shares of Common Stock of Jet. AI, the Committee
will make the appropriate adjustment or substitution. These adjustments or substitutions may be to the number and kind of securities and
property that may be available for issuance under the Omnibus Incentive Plan. In order to prevent dilution or enlargement of the rights
of participants, the Committee may also adjust the number, kind, and exercise price or grant price of securities or other property subject
to outstanding awards.

 Eligible Participants

 Awards may be granted to employees, non-employee directors
and consultants of Jet. AI or any of its subsidiaries. A "consultant" for purposes of the Omnibus Incentive Plan is one who
renders services to Jet. AI or its subsidiaries that are not in connection with the offer and sale of its securities in a capital raising
transaction and do not directly or indirectly promote or maintain a market for its securities.

 Types of Awards

 The Omnibus Incentive Plan permits Jet. AI to grant
non-statutory and incentive stock options, stock appreciation rights ("SARs"), restricted stock awards, restricted stock units,
deferred stock units, performance awards, non-employee director awards and other stock-based awards. Awards may be granted either alone
or in addition to or in tandem with any other type of award.

 Stock Options

 Stock options entitle the holder to purchase a specified
number of shares of Common Stock of Jet. AI at a specified price, which is called the exercise price, subject to the terms and conditions
of the stock option grant. The Omnibus Incentive Plan permits the grant of both non-statutory and incentive stock options. Incentive stock
options may be granted solely to eligible employees of Jet. AI or its subsidiaries. Each stock option granted under the Omnibus Incentive
Plan must be evidenced by an award agreement that specifies the exercise price, the term, the number of shares underlying the stock option,
the vesting and any other conditions. The exercise price of each stock option granted under the Omnibus Incentive Plan must be at least
100% of the fair market value of a share of Common Stock of Jet. AI as of the date the award is granted to a participant. Fair market value
under the Omnibus Incentive Plan means, unless otherwise determined by the Committee, the closing sale price of Common Stock of Jet. AI,
as reported on Nasdaq, on the grant date. The Committee will fix the terms and conditions of each stock option, subject to certain restrictions,
such as a ten-year maximum term.

 Stock Appreciation Rights

 A SAR is a right granted to receive payment of cash,
stock, or a combination of both equal to the difference between the fair market value of shares of our Common Stock and the grant price
of such shares. Each SAR granted must be evidenced by an award agreement that specifies the grant price, the term, and such other provisions
as the board may determine. The grant price of a SAR must be at least 100% of the fair market value of our Common Stock on the date of
grant. The board fixes the term of each SAR, but SARs granted under the Omnibus Incentive Plan will not be exercisable more than 10 years
after the date the SAR is granted.

 Restricted Stock Awards, Restricted
Stock Units and Deferred Stock Units

 Restricted stock awards, restricted stock units, or
RSUs, and/or deferred stock units, or DSUs, may be granted under the Omnibus Incentive Plan. A restricted stock award is an award of Common
Stock of Jet. AI that is subject to restrictions on transfer and risk of forfeiture upon certain events, typically including termination
of service. RSUs are similar to restricted stock awards except that no shares are actually awarded to the participant on the grant date.
DSUs permit the holder to receive shares of Common Stock or the equivalent value in cash or other property at a future time as determined
by the board. The Committee will determine, and set forth in an award agreement, the period of restriction, the number of shares of restricted
stock awards or the number of RSUs or DSUs granted, and other such conditions or restrictions.

 Performance Awards

 Performance awards, in the form of cash, shares of
Common Stock of Jet. AI, other awards or a combination of both, may be granted under the Omnibus Incentive Plan in such amounts and upon
such terms as the Committee may determine. The Committee shall determine, and set forth in an award agreement, the amount of cash and/or
number of shares or other awards, the performance goals, the performance periods and other terms and conditions. The extent to which the
participant achieves his or her performance goals during the applicable performance period will determine the amount of cash and/or number
of shares or other awards earned by the participant. The Committee retains discretion to adjust performance awards either upward or downward,
either on a formula or discretionary basis or any combination, as the Committee determines.

 Non-Employee Director Awards;
Limit on Non-Employee Director Compensation

 The Committee at any time and from time-to-time may
approve resolutions providing for the automatic or other grant to non-employee directors of awards. Such awards may be granted singly,
in combination, or in tandem, and may be granted pursuant to such terms, conditions and limitations as the Committee may establish in
its sole discretion consistent with the provisions of the Omnibus Incentive Plan. The Committee may permit non-employee directors to elect
to receive all or any portion of their annual retainers, meeting fees or other fees in restricted stock, RSUs, DSUs or other stock-based
awards in lieu of cash. Under the Omnibus Incentive Plan the sum of any cash compensation, or other compensation, and the value (determined
as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor
thereto) of awards granted to a non-employee director as compensation for services as a non-employee director during any fiscal year of
the Company may not exceed $750,000 (increased to $800,000 with respect to any Non-Employee Director serving as Chairman of the Board
or Lead Independent Director).

 Other Stock-Based Awards

 Consistent with the terms of the plan, other stock-based
awards may be granted to participants in such amounts and upon such terms as the Committee may determine.

 Dividend Equivalents

 With the exception of stock options, SARs, and unvested
performance awards, awards under the Omnibus Incentive Plan may, in the Committee's discretion, earn dividend equivalents with respect
to the cash or stock dividends or other distributions that would have been paid on the shares of Common Stock of Jet. AI covered by such
award had such shares been issued and outstanding on the dividend payment date. However, no dividends may be paid on awards until they
are vested. Such dividend equivalents will be converted to cash or additional shares of Common Stock of Jet. AI by such formula and at
such time and subject to such limitations as determined by the Committee.

 Termination of Employment or Other Service

 The Omnibus Incentive Plan provides for certain default
rules in the event of a termination of a participant's employment or other service. These default rules may be modified in an award
agreement or an individual agreement between Jet. AI and a participant. If a participant's employment or other service with Jet. AI
is terminated for cause, then all outstanding awards held by such participant will be terminated and forfeited. In the event a participant's
employment or other service with Jet. AI is terminated by reason of death, disability or retirement, then:

 All outstanding stock options (excluding non-employee director options in the case of retirement) and SARs held by the participant will, to the extent exercisable, remain exercisable for a period of one year after such termination, but not later than the date the stock options or SARs expire;

 All outstanding stock options and SARs that are not exercisable and all outstanding restricted stock will be terminated and forfeited; and

 All outstanding unvested RSUs, performance awards and other stock-based awards held by the participant will terminate and be forfeited. However, with respect to any awards that vest based on the achievement of performance goals, if a participant's employment or other service with Jet. AI or any subsidiary is terminated prior to the end of the performance period of such award, but after the conclusion of a portion of the performance period (but in no event less than one year), the Committee may, in its sole discretion, cause shares to be delivered or payment made with respect to the participant's award, but only if otherwise earned for the entire performance period and only with respect to the portion of the applicable performance period completed at the date of such event, with proration based on the number of months or years that the participant was employed or performed services during the performance period.

 In the event a participant's employment or other
service with Jet. AI is terminated by reason other than for cause, death, disability or retirement, then:

 All outstanding stock options (including non-employee director options) and SARs held by the participant that then are exercisable will remain exercisable for three months after the date of such termination, but will not be exercisable later than the date the stock options or SARs expire;

 All outstanding restricted stock will be terminated and forfeited; and

 All outstanding unvested RSUs, performance awards and other stock-based awards will be terminated and forfeited. However, with respect to any awards that vest based on the achievement of performance goals, if a participant's employment or other service with Jet. AI or any subsidiary is terminated prior to the end of the performance period of such award, but after the conclusion of a portion of the performance period (but in no event less than one year), the Committee may, in its sole discretion, cause shares to be delivered or payment made with respect to the participant's award, but only if otherwise earned for the entire performance period and only with respect to the portion of the applicable performance period completed at the date of such event, with proration based on the number of months or years that the participant was employed or performed services during the performance period.

 Modification of Rights upon Termination

 Upon a participant's termination of employment
or other service with Jet. AI or any subsidiary, the Committee may, in its sole discretion (which may be exercised at any time on or after
the grant date, including following such termination) cause stock options or SARs (or any part thereof) held by such participant as of
the effective date of such termination to terminate, become or continue to become exercisable or remain exercisable following such termination
of employment or service, and restricted stock, RSUs, DSUs, performance awards, non-employee director awards and other stock-based awards
held by such participant as of the effective date of such termination to terminate, vest or become free of restrictions and conditions
to payment, as the case may be, following such termination of employment or service, in each case in the manner determined by the Committee;
provided, however, that no stock option or SAR may remain exercisable beyond its expiration date any such action by the Committee adversely
affecting any outstanding award will not be effective without the consent of the affected participant, except to the extent the Committee
is authorized by the Omnibus Incentive Plan to take such action.

 Forfeiture and Recoupment

 If a participant is determined by the Committee to
have taken any action while providing services to Jet. AI or within one year after termination of such services, that would constitute
"cause" or an "adverse action," as such terms are defined in the Omnibus Incentive Plan, all rights of the participant
under the Omnibus Incentive Plan and any agreements evidencing an award then held by the participant will terminate and be forfeited.
The Committee has the authority to rescind the exercise, vesting, issuance or payment in respect of any awards of the participant that
were exercised, vested, issued or paid, and require the participant to pay to Jet. AI, within 10 days of receipt of notice, any amount
received or the amount gained as a result of any such rescinded exercise, vesting, issuance or payment. Jet. AI may defer the exercise
of any stock option or SAR for up to six months after receipt of notice of exercise in order for the Board to determine whether "cause"
or "adverse action" exists. Jet. AI is entitled to withhold and deduct future wages or make other arrangements to collect any
amount due.

 In addition, if Jet. AI is required to prepare an accounting
restatement due to material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws,
then any participant who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002
will reimburse Jet. AI for the amount of any award received by such individual under the Omnibus Incentive Plan during the 12 month period
following the first public issuance or filing with the SEC, as the case may be, of the financial document embodying such financial reporting
requirement. Jet. AI also may seek to recover any award made as required by the provisions of the Dodd-Frank Wall Street Reform and Consumer
Protection Act or any other clawback, forfeiture or recoupment provision required by applicable law or under the requirements of any stock
exchange or market upon which Common Stock of Jet. AI is then listed or traded or any policy adopted by Jet. AI.

 Effect of Change in Control

 Generally, a change in control will mean:

 The acquisition, other than from Jet. AI, by any individual, entity or group of beneficial ownership of 50% or more of the then outstanding shares of Common Stock of Jet. AI;

 The consummation of a reorganization, merger or consolidation of Jet. AI with respect to which all or substantially all of the individuals or entities who were the beneficial owners of Common Stock of Jet. AI immediately prior to the transaction do not, following the transaction, beneficially own more than 50% of the outstanding shares of Common Stock and voting securities of the corporation resulting from the transaction; or

 A complete liquidation or dissolution of Jet. AI or the sale or other disposition of all or substantially all of the assets of Jet. AI.

 Subject to the terms of the applicable award agreement
or an individual agreement between Jet. AI and a participant, upon a change in control, the Committee may, in its discretion, determine
whether some or all outstanding options and SARs shall become exercisable in full or in part, whether the restriction period and performance
period applicable to some or all outstanding restricted stock awards and RSUs shall lapse in full or in part and whether the performance
measures applicable to some or all outstanding awards shall be deemed to be satisfied. The Committee may further require that shares of
stock of the corporation resulting from such a change in control, or a parent corporation thereof, be substituted for some or all of the
shares of Common Stock of Jet. AI subject to an outstanding award and that any outstanding awards, in whole or in part, be surrendered
to Jet. AI by the holder, to be immediately cancelled by Jet. AI, in exchange for a cash payment, shares of capital stock of the corporation
resulting from or succeeding Jet. AI or a combination of both cash and such shares of stock.

 Governing Law; Mandatory Jurisdiction

 Except to the extent as provided in the Omnibus Incentive
Plan, the validity, construction, interpretation, administration and effect of the Omnibus Incentive Plan and any rules, regulations and
actions relating to the Omnibus Incentive Plan will be governed by and construed exclusively in accordance with the laws of the State
of Delaware, notwithstanding the conflicts of laws principles of any jurisdictions. Unless otherwise expressly provided in an applicable
award agreement, Jet. AI and recipients of an award under the Omnibus Incentive Plan irrevocably submit to the jurisdiction and venue of
the Federal or State courts of the State of Delaware relative to any and all disputes, issues and/or claims that may arise out of or relate
to the Omnibus Incentive Plan or any related award agreement, with such jurisdiction and venue selected by and at the sole discretion
of Jet. AI.

 Term, Termination and Amendment

 Unless sooner terminated by the Board, the Omnibus
Incentive Plan will terminate at midnight on the day before the ten year anniversary of its effective date. No award will be granted after
termination of the Omnibus Incentive Plan, but awards outstanding upon termination of the Omnibus Incentive Plan will remain outstanding
in accordance with their applicable terms and conditions and the terms and conditions of the Omnibus Incentive Plan.

 Subject to certain exceptions, the Board has the authority
to suspend or terminate the Omnibus Incentive Plan or terminate any outstanding award agreement and the Board has the authority to amend
the Omnibus Incentive Plan or amend or modify the terms of any outstanding award at any time and from time to time. No amendments to the
Omnibus Incentive Plan will be effective without approval of Jet. AI's stockholders if: (a) stockholder approval of the amendment
is then required pursuant to Section 422 of the Code, the rules of the primary stock exchange on which Common Stock of Jet. AI is then
traded, applicable U.S. state and federal laws or regulations and the applicable laws of any foreign country or jurisdiction where awards
are, or will be, granted under the Omnibus Incentive Plan; or (b) such amendment would: (i) modify the re-pricing provisions of the Omnibus
Incentive Plan; (ii) increase the aggregate number of shares of Common Stock of Jet. AI issued or issuable under the Omnibus Incentive
Plan; or (iii) reduce the minimum exercise price or grant price as set forth in the Omnibus Incentive Plan. No termination, suspension
or amendment of the Omnibus Incentive Plan or an award agreement shall adversely affect any award previously granted under the Omnibus
Incentive Plan without the written consent of the participant holding such award.

 Jet Token Prior Option Plans

 General. On June 4, 2018, Jet Token's
board of directors adopted the Jet Token Inc. 2018 Stock Option and Grant Plan (the "2018 Plan"). The 2018 Plan provided for
the grant of equity awards to employees, and consultants, to purchase shares of Jet Token's common stock. As of December 31, 2020,
up to 3,434 shares of its common stock could be issued pursuant to awards granted under the 2018 Plan. During the year ended December
31, 2021, the 2018 Plan was amended three times to increase the total number of shares reserved for issuance thereunder. As of December
31, 2024 and 2023, the total number of shares reserved for issuance under the 2018 Plan was 10,301 shares. The 2018 Plan is administered
by Jet Token's board of directors.

 In August 2021, Jet Token's board of directors
adopted the Jet Token Inc. 2021 Stock Plan (the "2021 Plan"). The 2021 plan provided for the grant of equity awards to employees,
outside directors, and consultants, including the direct award or sale of shares, stock options, and restricted stock units to purchase
shares. As of December 31, 2021, up to 688 shares of non-voting common stock may be issued pursuant to awards granted under the 2021 Plan.
During the year ended December 31, 2022, the 2021 Plan was amended to increase the number of shares of non-voting common stock authorized
under the 2021 Plan to 2,063. In the event that shares of non-voting common stock subject to outstanding options or other securities under
the Jet Token's 2018 Stock Open and Grant Plan expire or become exercisable in accordance with their terms, such shares shall be
automatically transferred to the 2021 Plan and added to the number of shares then available for issuance under the 2021 Plan.

 Plan Administration. The Jet Token Board administered
the Jet Token Option Plan. The compensation committee of the Board currently administers the Jet Token Option Plan following the Closing
Date.

 Types of Awards. The Jet Token Option Plan
provides for the grant of incentive Jet Token Options, non-statutory Jet Token Options, Jet Token Restricted Stock, restricted stock units
and stock appreciation rights.

 Stock Options. The Jet Token Board has the
discretion to grant incentive or non-statutory Jet Token Options under the Jet Token Option Plan, provided that incentive Jet Token Options
may only be granted to employees. The exercise price per share applicable to such Jet Token Options must generally be equal to at least
the fair market value per share of Jet Token Common Stock on the date of grant. Subject to the provisions of the Jet Token Option Plan,
the Jet Token Board has the discretion to determine the remaining terms of the Jet Token Options (e.g., vesting). After the termination
of a participant's service, the participant may only exercise his or her Jet Token Option, to the extent vested, for a specified
period of time stated in his or her option agreement. Generally, if termination is due to death or disability, the Jet Token Option will
remain exercisable for 18 months and 12 months following the termination of service, respectively. In all other cases except for a termination
for cause, the Jet Token Option will generally remain exercisable for three months following the termination of service. In the event
of a termination for cause, the Jet Token Option will immediately terminate. However, in no event may a Jet Token Option be exercised
later than the expiration of its maximum term.

 Restricted Stock. The Jet Token Board has the
discretion to grant Jet Token Restricted Stock under the Jet Token Option Plan. Jet Token Restricted Stock are generally shares of Jet
Token Common Stock that are issued or sold to a participant pursuant to the Jet Token Option Plan and subject to repurchase by Jet Token
under certain circumstances and that are fully vested at grant or that will vest in accordance with terms and conditions established by
the Jet Token Board, in its sole discretion. The Jet Token Board has the discretion to determine the number of shares that the participant
may receive or purchase, the price to be paid (if any), and the time by which the participant must accept the shares/offer.

 Restricted Stock Units. The Jet Token Board
has the discretion to grant restricted stock units under the Jet Token Option Plan. Each restricted stock unit is a bookkeeping entry
representing an amount equal to the fair market value of one share of Jet Token Common Stock. The Jet Token Board, in its discretion,
determines whether restricted stock units should be granted, the total units granted and/or the vesting terms applicable to such units.
Participants holding restricted stock units will hold no voting rights by virtue of such restricted stock units. The Jet Token Board may,
in its sole discretion, award dividend equivalents in connection with the grant of restricted stock units. Restricted stock units may
be settled in cash, shares of Jet Token Common Stock, as applicable, or any combination thereof or in any other form of consideration,
as determined by the Jet Token Board, in its sole discretion.

 Stock Appreciation Rights. The Jet Token Board
has the discretion to grant stock appreciation rights under the Jet Token Option Plan and to determine the terms and conditions of each
stock appreciation right, except that the exercise price for each stock appreciation right cannot be less than 100% of the fair market
value of the underlying shares of Jet Token Common Stock on the date of grant. Upon exercise of a stock appreciation right, a participant
will receive payment from Jet Token in an amount determined by multiplying the difference between the fair market value of a share on
the date of exercise over the exercise price by the number of shares with respect to which the stock appreciation right is exercised.
Stock appreciation rights may be paid in cash, shares of Jet Token Common Stock, or any combination thereof, or in any other form of consideration,
as determined by the Jet Token Board in its discretion. Stock appreciation rights are exercisable at the times and on the terms established
by the Jet Token Board, in its discretion.

 Non-transferability of Awards. Unless the Jet
Token Board provides otherwise, awards granted under the Jet Token Option Plan are generally not transferable.

 Certain Adjustments. In the event of certain
corporate events or changes in Jet Token's capitalization, to prevent diminution or enlargement of the benefits or potential benefits
available under the Jet Token Option Plan, the Jet Token Board will make adjustments to one or more of the number, kind and class of securities
that may be delivered under the Jet Token Option Plan and/or the number, kind, class and price of securities covered by each outstanding
award.

 Dissolution or liquidation. In the event of
Jet Token's dissolution or liquidation, each outstanding award will terminate immediately prior to the consummation of such action,
unless otherwise determined by the Jet Token Board.

 Change in Control. The Jet Token Option Plan
provides that in the event of a change in control, unless otherwise provided in the applicable award agreement or as determined by the
Jet Token Board at the time of grant, outstanding awards will be assumed, canceled if not exercised/settled or cashed out in lieu of exercise
as determined by the Jet Token Board.

 Amendment or Termination. The Jet Token Board
may amend or terminate the Jet Token Option Plan at any time, provided such action does not impair the rights or obligations of any participant
without his or her consent. In addition, stockholder approval must be obtained to the extent necessary and desirable to comply with applicable
laws.

 Director Compensation

 Neither Mr. Winston nor Mr. Murnane receives additional
compensation for service on our Board.

 Non-Employee Director Compensation Arrangements

 Following the Business Combination, the compensation
committee recommended, and the Board approved, a Non-Employee Director Compensation Policy (the "Policy"). The Policy has
been designed to attract and retain high quality non-employee directors by providing competitive compensation and aligning their interests
with the interests of our stockholders through equity awards. This Policy provides for an annual cash retainer to each eligible non-employee
director of $50,000. In addition, each of the following is entitled to an additional annual retainer in the following amounts:

 Lead
 Independent Director: $25,000

 Audit
 Committee Chair: $15,000

 Compensation
 Committee Chair: $10,000

 Nominating
 and Corporate Governance Committee Chair: $6,250

 Under the Non-Employee Director Compensation Policy,
as amended, the non-executive directors of the Company are also entitled to receive the equity compensation under the Omnibus Incentive
Plan, subject to approval of an amendment to the Omnibus Incentive Plan by stockholders at the 2025 annual meeting, At the close of business
on the date of each annual meeting of stockholders, each person who is then a non-employee director, will automatically receive a restricted
stock unit ("RSU") award having a value of $25,000 and a restricted stock grant of $25,000. Each annual RSU and annual restricted
stock grant will vest on the date of the following year's annual meeting (or the date immediately preceding the date of the following
year's annual meeting if the non-employee director's service as a director ends at such meeting as a result of the director's
failure to be re-elected or the director not standing for re-election. The vesting of each annual RSU and annual restricted stock grant
is subject to the non-employee director's continuous service on the applicable vesting date of each such awards.

 For each non-employee director who remains in continuous
service with the Company until immediately prior to the closing of a Change in Control (as defined in the Omnibus Incentive Plan), such
non-employee director's then-outstanding annual RSU and annual restricted stock grant will become fully vested immediately prior
to the closing of such Change in Control. The grants will be eligible for deferred settlement in accordance with such deferral program
as may be established by the Company and approved by the Board.

 The Company began paying cash compensation to non-employee
directors following the Business Combination in accordance with the terms of the Non-Employee Director Compensation Policy. The table
below describes the compensation earned by the non-employee directors during fiscal 2024.

 Name

 Fees Earned

 or Paid in

 Cash

 Stock

 Awards (1)

 All Other

 Compensation

 Total

 Ehud Talmor (2)

 $
 52,000

 $

 —

 $
 87,000

 Wrendon Timothy (3)

 $
 82,000

 $

 —

 $
 117,000

 William Yankus

 $
 42,000

 $

 —

 $
 77,000

 Lt. Col. Ran David

 $
 42,000

 $

 —

 $
 77,000

 Donald Jeffrey Woods (4)

 $
 48,250

 $

 —

 $
 83,250

 (1)

 Amounts in the table reflect equity grants granted in 2024 and recommended by the compensation committee and approved by the Board in January 2025 and as contemplated by the Policy to each of the directors. These grants, which have not been made and are subject to stockholder approval of an amendment to the Omnibus Incentive Plan, equal 1,029 RSUs to each such director, representing the then value of $25,000, and a grant of 1,029 restricted stock to each such director, representing the then value of $25,000. Each of these grants will be made, and will fully vest, on the date of the Company's 2025 annual meeting, assuming stockholders approve the amendment to the Omnibus Incentive. If either Mr. Timothy or Mr. Yankus is not elected as a Class II director at the 2025 annual meeting, these equity grants will be deemed made, and will vest, on the date immediately preceding the 2025 annual meeting. There are no other awards outstanding or anticipated to be granted to directors for services rendered in 2024.

 (2)

 Mr. Talmor is chairperson of the compensation committee.

 (3)

 Mr. Timothy is the lead independent director and chairperson of the audit committee.

 (4)

 Mr. Woods is chairperson of the nominating and corporate governance committee.

 Under the Non-Employee Director Compensation Policy,
the Company will also reimburse each non-employee director for any ordinary and reasonable out-of-pocket expenses actually incurred by
such director in connection with in-person attendance at and participation in Board and committee meetings; provided, that such director
timely submits to us appropriate documentation substantiating such expenses in accordance with our travel and expense policy as in effect
from time to time.

 Item 12 Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters

 The following table sets forth information regarding
the beneficial ownership of shares of Common Stock as of March 12, 2025, by:

 each
 person who is, or is expected to be, the beneficial owner of more than 5% of the outstanding shares of Common Stock upon the Closing
 of the Business Combination;

 each
 of the Company's executive officers and directors; and

 all
 of the Company's executive officers and directors as a group upon the Closing.

 Beneficial ownership is determined according to the
rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared
voting or investment power over that security, including options and restricted stock units that are currently exercisable or vested or
that will become exercisable or vest within 60 days. This table is based upon information supplied by officers, directors and principal
stockholders and Schedules 13G or 13D filed with the SEC. Unless otherwise indicated in the footnotes to this table and subject to community
property laws where applicable, the Company believes that all persons named in the table have sole voting and investment power with respect
to all shares of Common Stock beneficially owned by them. The beneficial ownership percentages set forth in the table below are based
on 2,187,001 shares of Common Stock issued and outstanding as of March 12, 2025 and other than as noted below.

 Name and Address of Beneficial Owner (1)

 Number of

 % of Common

 Stock

 Outstanding

 Directors and Executive Officers:

 Michael D. Winston, CFA (2)

 30,529

 1.4
 %

 George Murnane (3)

 5,707

 0.3
 %

 William L. Yankus (4)

 0.0
 %

 Wrendon Timothy (5)

 1,206

 0.1
 %

 Patrick McNulty (6)

 0.0
 %

 Lt. Col. Ran David (7)

 0.0
 %

 Jeffrey Woods (8)

 0.0
 %

 Ehud Talmor (9)

 0.0
 %

 All Directors and Executive Officers as a group (8 individuals)

 40,067

 1.8
 %

 Five Percent Holders:

 Ionic Ventures, LLC (10)

 242,730

 9.99
 %

 (1)

 Unless otherwise indicated, the business address of each of the directors and executive officers of the Company is c/o Jet. AI Inc., 10845 Griffith Peak Drive, Suite 200, Las Vegas, NV 89135.

 (2)

 Includes 29,740 shares of Common Stock, and 789 shares of Common Stock issuable upon the exercise of vesting options within 60 days of March 11, 2025.

 (3)

 Comprised of 5,707 shares of common stock issuable upon the exercise of vesting options within 60 days of March 11, 2025.

 (4)

 Comprised of shares of common stock.

 (5)

 Comprised of shares of common stock.

 (6)

 Comprised of 820 shares of common stock issuable upon the exercise of vesting options within 60 days of March 11, 2025.

 (7)

 Includes 97 shares of Common Stock, and 777 shares of Common Stock issuable upon the exercise of vesting options within 60 days of March 11, 2025.

 (8)

 Comprised of shares of common stock.

 (9)

 Includes 97 shares of Common Stock, and 640 shares of Common Stock issuable upon the exercise of vesting options within 60 days of March 11, 2025.

 (10)

 Consists of an aggregate of up to 242,730 shares of Common Stock issuable upon conversion of shares of Series B Preferred Stock within 60 days of March 11, 2025. Keith Coulston and Brendan O'Neil, each as managers of Ionic Management, LLC, the manager of Ionic Ventures, LLC, have shared power to vote and/or dispose of the Shares beneficially owned by Ionic Ventures, LLC. Mr. Coulston and Mr. O'Neil each disclaim beneficial ownership of the Company's securities reported herein except to the extent of their pecuniary interest therein. The principal business address for Ionic Ventures, LLC is 3053 Fillmore St, Suite 256, San Francisco, CA 94123.

 Item 13 Certain Relationships and Related Transactions,
and Director Independence

 In addition to the compensation arrangements with
directors and executive officers described under Item 10 and Item 11, the following is a description of each transaction since January
1, 2023 and each currently proposed transaction in which:

 we have been or are to be a participant;

 the amount involved exceeds or will exceed the lesser of (i) $120,000 and (ii) 1% of the average of our total assets as of December 31, 2024 and 2023; and

 any of our directors, executive officers or beneficial holders of more than 5% of our capital stock, or any immediate family member of, or person sharing the household with, any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest.

 Related Party Transactions in Connection with and
Subsequent to the Business Combination

 Maxim Payment and Settlement Agreement

 On August 10, 2023, the Company entered into a settlement
agreement ("Maxim Settlement Agreement") with Maxim Group LLC, the underwriter for the Company's initial public offering
("Maxim"). Pursuant to the Maxim Settlement Agreement, the Company issued to Maxim Partners in a private placement pursuant
to an exemption from registration under, (a) 1,200 shares of Jet. AI Common Stock to Maxim Partners
to settle the payment obligations of the Company under the underwriting agreement dated on or about August 11, 2021, by and between the
Company and Maxim and (b) 1,127 Series A Preferred Shares to Maxim Partners, which shares of Jet. AI Common
Stock are subject to a Registration Rights Agreement. The Company also issued 1,127 Series A Preferred Shares in an amount equal
in value to $1,127,000. The Series A Preferred Shares accrue interest at the rate of 8% per annum
(which increases to 18% if the Company fails to meet certain obligations under the terms thereof), payable quarterly and, at the Company's
option, in shares of the Company's common stock. The Series A Preferred Shares are convertible
into 501 shares of common stock. The Company also issued 511 shares of common stock to Maxim Partners on August 16, 2021, in a private
placement exempt from registration under Section 4(a)(2) of the Securities Act, to meet a payment obligation under the underwriting agreement
in connection with Oxbridge's IPO, representing a value of $2,025 per share reflecting an allocation of the $2,250 per Unit IPO
price. The above issued and issuable shares of common stock shares are subject to a registration rights agreement.

 The Company may, subject to certain conditions, redeem
the outstanding Series A Preferred Shares in cash at the $1,000 original issue price, subject to adjustment, plus accrued and unpaid dividends.
The Company is required to redeem all the outstanding Series A Preferred Shares are subject to mandatory
redemption on August 10, 2024, which will was automatically extended by an additional three
(3) months period as the Company has not as of such date did
not complete one or more equity financings prior to such date that, in total, result in gross
proceeds to the Company of $10.0 million or greater. If the Company raises equity capital, 15% of the net proceeds must
be used to redeem the Series A Preferred Shares if requested by the holder.

 In July 2024,
the Company and Maxim entered into an amendment to the Maxim Settlement Agreement and agreed to, among other things, amend the definition
of the "Series A Conversion Price" for the Series A Preferred Shares and certain restrictions with respect to shares of Company
common stock Maxim may acquire upon the conversion of its shares of Series Preferred Stock. During the year ended December 31, 2024, the
Company issued 10,167 shares of Common Stock for the conversion of 551 Series A Preferred Shares.

 Sponsor Settlement Agreement

 On August 10, 2023, the Company entered into settlement
agreement ("Sponsor Settlement Agreement") with Jet Token, Oxbridge, and OAC Sponsor Ltd.
(the "Sponsor"). Pursuant to the Sponsor Settlement Agreement, the Company issued, in
a private placement exempt from registration under Section 4(a)(2) of the Securities Act, 575 Series A-1 575
shares of the Company's Series A-1 Preferred Shares to settle the payment obligations of the Company under a promissory note
in the principal amount of $575,000 dated November 14, 2022 in favor of Sponsor. The Series A-1 Preferred Shares accrue interest at the
rate of 5% per annum (which increases to 18% if the Company fails to meet certain obligations under the terms thereof), payable quarterly
in cash. The Series A-1 Preferred Shares are convertible into 57,500 shares of Common Stock. The shares
of common stock issuable upon conversion of the Series A-1 Preferred Shares were
subject to a registration rights agreement between the Company and Sponsor.

 The Company may, subject to certain conditions, redeem
the outstanding Series A-1 Preferred Shares in cash at the $1,000 original issue price, subject to adjustment, plus accrued and unpaid
dividends. The Company is required to redeem all the outstanding Series A-1 Preferred Shares on August 10, 2024, which
was automatically extended by an additional three (3) months period as
the Company has not as of such date did not complete one or more equity financings prior
to such date that, in total, result in gross proceeds to the Company of $10.0 million or greater. If the Company raises equity
capital, 15% of the net proceeds is to be used to redeem the Series A-1 Preferred Shares if requested
by the holder.

 The foregoing description of the Sponsor Settlement
Agreement and registration rights agreement is qualified in its entirety by the full text of such agreements, copies of which are filed
as Exhibit 10.22 and Exhibit 10.23, respectively, to this Report, and are incorporated herein by reference. The terms of the Series A-1
Preferred Shares are set forth in the Designation of the Series A-1 Convertible Preferred Stock filed as Exhibit 3.3 to this Report, and
are incorporated herein by reference.

 In August 2024, Sponsor agreed to
waive certain notice and redemption rights in favor of Sponsor pursuant to terms of the Series A-1 Preferred Shares held by Sponsor related
to equity financings conducted by the Company in consideration of $100,000 which was paid in October 2024.

 In October 2024, the Company redeemed
in full all of the previously issued and outstanding Series A-1 Preferred Shares by paying the holder the requisite per share redemption
price together with all accrued but unpaid dividends on such shares. As a result of this redemption there are no Series A-1 Preferred
Shares issued and outstanding.

 Bridge Agreement

 On September 11, 2023, the
Company entered into a binding term sheet ("Bridge Agreement") with eight investors to provide the Company $500,000 of short-term
bridge financing pending its receipt of funds from its other existing financing arrangements. During the month of September, the Company
engaged in discussions with numerous third parties to secure short-term bridge funding but was not offered terms it found acceptable.
Rather, certain related parties of the Company and other parties agreed to provide the Company with this financing on substantially better
material terms than it had received from unaffiliated third parties.

 The Bridge Agreement was
entered into with, and funding was provided by, Michael Winston, the Executive Chairman of the Board and Interim Chief Executive Officer,
Wrendon Timothy, a member of the Board and all three Committees of the Board, William Yankus, a member of the Board and two of its Committees,
and Oxbridge RE Holdings Limited, a then significant stockholder of the Company for which Mr. Timothy serves as a director and officer,
as well as the four other investors named in the Bridge Agreement.

 Given Mr. Winston's
dual role as a participant in the negotiations with third parties and his participation in the bridge financing itself, for avoidance
of doubt, he waived any right to receive accrued interest on the principal amount of his Note, as well as any redemption premium or any
increase in the principal amount of his Note in connection with an event of default (the "Waiver"). The Company's Audit
Committee pursuant to its Certificate of Incorporation, and the full Board, including a majority of disinterested directors, unanimously
approved the Agreement, in each case finding that the Agreement was in the best interests of the Company and its stockholders.

 As of December 31, 2023,
the Bridge Agreement provided for the issuance of Notes, in an aggregate principal amount of $625,000, reflecting a 20% original issue
discount. The Notes bore interest at 5% per annum and matured on March 11, 2024. The Company was required to redeem the Notes with 100%
of the proceeds of any equity or debt financing at a redemption premium of 110% of the principal amount of the Notes. In March 2024, the
Company fully repaid the Bridge Agreement in the amount of approximately $683,000, representing principal, redemption premium and interest.

 Maxim Advisory Agreement

 On January 5, 2024, the Company entered into an agreement
(the "Agreement") pursuant to which it retained Maxim as a financial advisor and investment banker to provide general financial
advisory and investment banking services. In connection with this Agreement, Maxim may provide certain or all of the following services:

 assist management of the Company and advise the Company with respect to its strategic planning process and business plans including an analysis of markets, positioning, financial models, organizational structure, potential strategic alliances, capital requirements and NASDAQ listing requirements;

 advise the Company on matters relating to its capitalization;

 assist management of the Company with the preparation of the Company's marketing materials and investor presentations;

 assist the Company in broadening its stockholder base including non-deal road show activity;

 assist the Company with strategic introductions;

 work closely with the Company's management team to develop a set of long and short-term goals with special focus on enhancing corporate and stockholder value. This will include assisting the Company in determining key business actions, including assistance with strategic partnership discussions and review of financing requirements, intended to help enhance stockholder value and exposure to the investment community;

 advise the Company on potential financing alternatives, including facilitation and negotiation of any financial or structural aspects of such alternatives; and

 provide such other financial advisory and investment banking services upon which the parties may mutually agree.

 As consideration for Maxim's services
pursuant to the Agreement, the Company paid Maxim a fee in cash totaling $75,000. In addition to payment to Maxim of the
compensation, the Company agreed to reimburse Maxim for all reasonable expenses (including, without limitation, fees and
disbursements of counsel and all travel and other out-of-pocket expenses) incurred by Maxim in connection with its engagement. Such
expenses will not exceed $2,500 without prior authorization of the Company.

 The Company has also agreed to indemnify and hold
harmless Maxim, and each of its present and former affiliated entities, managers, members, officers, employees, legal counsel, agents
and controlling persons (within the meaning of the federal securities laws), and the officers, directors, partners, stockholders, members,
managers, employees, legal counsel, agents and controlling persons of any of them, from and against any and all losses, claims, damages,
obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, and any and all actions, suits, proceedings
and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise (including, without limitation, the costs, expenses and disbursements, as and when incurred,
of investigating, preparing, pursing or defending any such action, suit, proceeding or investigation), directly or indirectly caused by,
relating to, based upon, arising out of, or in connection with, Maxim's acting for the Company, including, without limitation, any
act or omission by Maxim in connection with its acceptance of or the performance or non-performance of its obligations under the Agreement,
any breach by the Company of any representation, warranty, covenant or agreement contained in any instrument, document or agreement relating
thereto, including any agency agreement, or the enforcement by Maxim of its rights under the Agreement, except to the extent that any
such losses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily
and directly from the gross negligence or willful misconduct of the person seeking indemnification under the Agreement. The Company also
agreed that no indemnified person will have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company
for or in connection with the engagement of Maxim by the Company or for any other reason, except to the extent that any such liability
is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly
from such indemnified person's gross negligence or willful misconduct.

 Either Maxim or the Company may terminate this Agreement
at any time with thirty (30) days' prior written notice to the other party after the six (6) month anniversary of this Agreement
(the effective date of such termination, the "Termination Date"). The Agreement may be earlier terminated by the Company only
for Cause (as defined below). Furthermore, in the event, in the course of due diligence performed by Maxim, Maxim deems it necessary to
terminate the engagement, Maxim may do so at any time upon immediate written notice. " Cause " means gross negligence,
willful misconduct or an uncured material breach of this Agreement by Maxim of which the Company has provided Maxim with reasonable notice
and opportunity to cure. Certain provisions in the agreement, primarily compensation, expenses reimbursement and indemnification survive
termination of the agreement.

 Maxim Placement Agency Agreement

 As previously disclosed, on March 28, 2024, the Company
entered into a Securities Purchase Agreement (the Securities Purchase Agreement") with Ionic Ventures, LLC ("Ionic")
for a private placement, which closed on March 29, 2024. In connection with the transactions under the Securities Purchase Agreement,
the Company entered into a placement agency agreement (the "Placement Agency Agreement") with Maxim. Pursuant to the terms
of the Placement Agency Agreement, the Company must pay Maxim a cash fee equal to 7% of the aggregate gross proceeds raised under the
Securities Purchase Agreement and reimburse Maxim, directly upon the initial closing under the Securities Purchase Agreement for all travel
and other documented out-of-pocket expenses incurred by Maxim, including the reasonable fees, costs and disbursements of its legal counsel,
in an amount not to exceed an aggregate of $15,000. The Company paid Maxim a total of $120,000 out of the gross proceeds it received on
March 29, 2024. Because the Company issued additional securities to Ionic as contemplated by the Securities Purchase Agreement, the Company
paid Maxim cash fees of $1,050,000.

 The Company also granted Maxim a right of first refusal
to act as sole agent or sole managing underwriter and sole book runner for any and all future public and private equity and public debt
offerings of the Company, or any successor to or any subsidiary of the Company for a period until the earlier of (i) December 31, 2024
and (ii) redemption and/or conversion in full of all Series A Preferred Shares of the Company beneficially owned by Maxim. The Company
also agreed to indemnify Maxim and its affiliates, directors, officers, employees and controlling persons against all losses, claims,
damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to or arising
out of its activities pursuant to the Placement Agency Agreement.

 Maxim Engagement Letter

 On December 4, 2024, the Company entered into an engagement
letter (the "Maxim Engagement Letter") with Maxim Group LLC. ("Maxim"), pursuant to which the Company engaged
Maxim to serve as its exclusive financial advisor with respect to one or more potential business combinations involving the Company for
a period of seven months. Pursuant to the Maxim Engagement Letter, the Company agreed to pay Maxim a non-refundable stock fee of 25,000
shares (the "Retainer") which were issued upon execution of the engagement letter. The shares were recorded to General and
Administrative expenses as stock-based compensation based on the fair value of the shares of $95,000.

 If the Company consummates a Transaction with a Potential
Buyer, then Maxim shall receive a fee (the "Success Fee") of $500,000 upon the closing of the Transaction. In the event that
the Company enters into an agreement with respect to a Transaction during the term of this Agreement that is subsequently terminated,
and the Company becomes entitled to a break-up, termination, topping, expense reimbursement or similar fee or payment (including any judgment
for damages or amount in settlement of any dispute as a result of such termination, or any profit on any stock acquired from, or stock
option granted by, any party to such transaction), a fee (the "Break-up Fee") equal 25% of all such amounts, payable promptly
upon receipt of such amounts by the Company. In addition to the Retainer, Success Fee and Break-up Fee payable pursuant to the Maxim Engagement
Letter, and regardless of whether any Transaction is proposed or consummated, the Company shall reimburse Maxim for all reasonable travel,
food, lodging and other out-of-pocket expenses incurred in connection with the services performed by Maxim pursuant to Maxim Engagement
Letter promptly after submission of such properly evidenced expenses to the Company.

 Oxbridge Related Party Transactions

 Administrative Services Agreement

 Commencing on the effective date of the Company's
IPO, Oxbridge agreed to pay its Sponsor a total of up to $10,000 per month for office space, utilities, secretarial and administrative
support. Upon completion of the Business Combination, Oxbridge ceased paying these monthly fees. For the year ended December 31, 2023,
the Company accrued $125,557 payable to the Sponsor under the Administrative Services Agreement.

 Jet Token's Related Party Transactions

 From time to time, related parties made payments on
Jet Token's behalf or advance cash to Jet Token for operating costs which require repayment. Such transactions are considered short-term
advances and non-interest bearing. During the years ended December 31, 2024 and 2023, Michael Winston, Jet Token's Founder and Executive
Chairman, advanced a total of $0 and $72,000, respectively, to Jet Token in the form of a non-interest-bearing loan and Jet Token repaid
$0 and $242,196 of these advances, respectively. As of December 31, 2023 such advances had been fully repaid.

 Related Party Transaction Policy

 Our audit committee charter provides that the audit
committee will establish and periodically review policies and procedures for the review, approval and ratification of related person transactions
(as defined in applicable SEC rules and regulations), review related person transactions, and oversee other related party transactions
governed by applicable accounting standards.

 On April 17, 2024, our audit committee and board approved
the Jet. AI Related Party Transaction Policy, which establishes a framework for identifying, reviewing, and approving "Related Party
Transactions", defined as a transaction, arrangement, or relationship, or any series of similar transactions, arrangements, or relationships
in which the Company and any Related Party have a direct or indirect interest, including but not limited to sales or purchases of goods
or services, loans or guarantees, leasing arrangements, compensation arrangements and joint ventures or investments.

 A "Related Party" under the policy includes:

 Any
 person who is, or at any time since the beginning of the Company's last fiscal year was, a

 director,
 executive officer or employee of the Company (or its subsidiaries);

 Any
 stockholder owning 5% or more of the Company's voting securities;

 Any
 person or entity that controls, is controlled by, or under common control with the Company;

 Any
 entity in which a director or executive officer has a significant influence;

 Any
 other party with whom the Company has a close business relationship that could create a conflict of interest;

 Any
 immediate family member of any of the foregoing persons, including spouse, parents, children, siblings, mothers and fathers-in-law,
 sons and daughters-in-law, and anyone (other than domestic employees) who shares such person's home.

 The policy is administered by the Audit Committee.
It provides for notification to the Corporate Secretary of the initiation or negotiation of any potential transaction involving a Related
Party followed by an assessment by the Chairman and/or the Chief Financial Officer of materiality and potential for conflicts of interest
and whether or not the transaction requires review by the audit committee under the policy. The audit committee is then responsible for
reviewing and considering whether the transaction is conducted on arm's-length terms and in accordance with fair market value; whether
the transaction is in the best interests of the Company and its stockholders; and any potential conflicts of interest that may arise from
the transaction. The audit committee must approve the transaction prior to its initiation unless not practicable, in which case the audit
committee may retrospectively review and ratify the transaction. The audit committee is also responsible for reviewing ongoing Related
Party Transactions annually.

 Prior to the adoption of this policy, it has generally
been the Company's practice to obtain pre-approval from the audit committee for any related party transactions occurring subsequent
to the Business Combination that our Interim Chief Executive Officer believes are significant. The transactions described under " –
Related Party Transactions in Connection with and Subsequent to the Business Combination – Maxim Payment and Settlement Agreement "
and " – Related Party Transactions in Connection with and Subsequent to the Business Combination – Sponsor Settlement
Agreement " above were approved by the Oxbridge audit committee prior to the consummation of the Business Combination. The transactions
described under " – Related Party Transactions in Connection with and Subsequent to the Business Combination – Bridge
Agreement " above were pre-approved by our audit committee. The engagement described under " – Related Party Transactions
in Connection with and Subsequent to the Business Combination – Maxim Advisory Agreement " was not approved by either the
Board or the audit committee. The Placement Agreement described under " – Related Party Transactions in Connection with
and Subsequent to the Business Combination – Maxim Placement Agreement " above was pre-approved by unanimous consent by
the Board. Prior to the Business Combination, the audit committee of Oxbridge was responsible for approving transactions with the Sponsor,
any officer, any director or their respective affiliates and for reviewing any payments made to such persons on a quarterly basis. The
transactions described under " – Related Party Transactions prior to the Business Combination – Oxbridge Related Party
Transactions" above were approved by the Oxbridge board of directors in connection with Oxbridge's IPO or, subsequent
to the IPO, were approved by the Oxbridge audit committee.

 Independent Directors

 For a discussion of our independent directors and
our audit, compensation and nominating and corporate governance committees, please see Item 10 above.

 Item 14 Principal Accountant Fees and Services

 The following table sets forth fees for all professional
services rendered by Hacker Johnson to the Company for the years ended December 31, 2024 and 2023.

 Year ended December 31,

 2024

 2023

 Audit fees

 $
 70,000

 $
 54,500

 Audit-related fees

 29,900

 46,000

 Total audit and audit-related fees

 99,900

 100,500

 Tax fees

 —

 —

 Other fees

 —

 —

 Total fees

 $
 99,900

 $
 100,500

 All services provided by Hacker Johnson are permissible
under applicable laws and regulations. The audit committee charter provides that the audit committee is directly responsible, in its capacity
as a committee of the Board, for the appointment, compensation, retention and oversight of the work of the outside auditor. In this regard,
the audit committee will appoint, retain, compensate, evaluate and terminate, when appropriate, the outside auditor, who will report directly
to the audit committee. The charter further provides that the audit committee will approve, or as permitted by the Board, pre-approve
all audit and permissible non-audit services (other than de minimis non-audit services) to be provided by the outside auditor. The fees
paid to Hacker Johnson shown in the table above were all approved in accordance with the audit committee charter and include:

 Audit Fees — These are fees for professional
services performed by Hacker Johnson for the audit of the Company and certain subsidiary companies, review of financial statements included
in the Company's quarterly 10-Q filings, and services that are normally provided in connection with statutory and regulatory filings
or engagements.

 Audit-Related Fees — These are fees for
assurance and related services performed by Hacker Johnson that are reasonably related to the performance of the audit or review of the
Company's financial statements. This includes: due diligence related to mergers and acquisitions; audits and reviews associated
with registration statements related to mergers and acquisitions; other attestations by Hacker Johnson, including those that are required
by statute, regulation or contract; and consulting on financial accounting/reporting standards and controls.

 Tax Fees — These are fees for professional
services performed by Hacker Johnson with respect to tax compliance and tax returns. This includes review of original and amended tax
returns for the Company and its consolidated subsidiaries; refund claims, payment planning/tax audit assistance; tax compliance for employee
benefit plans; and tax work stemming from "Audit-Related" items.

 Other Fees – These are fees for other
permissible work performed by Hacker Johnson that does not meet the above category descriptions. The fees cover other engagements that
are permissible under applicable laws and regulations including sustainability efforts.

 These services are actively monitored (both spending
level and work content) by the Audit Committee to maintain the appropriate objectivity and independence in Hacker Johnson's core
work, which is the audit of the Company's consolidated financial statements. The Audit Committee concluded that Hacker Johnson's
provision of audit and non-audit services to the Company and its affiliates is compatible with Hacker Johnson's independence.

 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 (a)

 See Index to Consolidated
 Financial Statements on Page 73 and Exhibit Index below.

 (b)

 See Exhibit Index below.

 (c)

 Not applicable.

 Exhibit Index

 The following exhibits are filed as part of, or incorporated
by reference into, this Annual Report.

 Exhibit Number

 Description

 2.1

 Business Combination Agreement and Plan of Reorganization, dated as of February 24, 2023, by and among Oxbridge, First Merger Sub, Second Merger Sub and Jet Token (incorporated by reference to Exhibit 2.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).

 2.2

 Amendment No. 1 to Business Combination Agreement and Plan of Reorganization, dated May 11, 2023, by and among Oxbridge, First Merger Sub, Second Merger Sub and Jet Token (incorporated by reference to Exhibit 2.2 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).

 2.3#

 Agreement and Plan of Merger and Reorganization dated as of February 13, 2025, by and among Jet. AI Inc., flyExclusive, Inc., FlyX Merger Sub, Inc., and Jet. AI SpinCo, Inc. (incorporated by reference to Exhibit 2.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on February 20, 2025).

 3.1*

 Certificate of Incorporation of Jet. AI Inc., as amended through November 12, 2024.

 3.2*

 Certificate of Designation of the Series A Convertible Preferred Stock of Jet. AI Inc., as amended through July 15, 2024.

 3.3

 Certificate of Designation of the Series A-1 Convertible Preferred Stock of Jet. AI Inc., dated August 10, 2023 (incorporated by reference to Exhibit 3.3 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).

 3.4*

 Certificate of Designations of Series B Convertible Preferred Stock of Jet. AI Inc., as amended through February 14, 2025.

 3.5*

 Bylaws of Jet. AI Inc., as amended through August 5, 2024.

 4.1

 Warrant by and between Jet. AI Inc. and GEM Yield Bahamas Limited (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1 (File. No. 333-274432) of Jet. AI Inc. filed with the SEC on September 8, 2023).

 4.2

 Warrant Agreement Amendment by and between Jet. AI Inc. and GEM Yield Bahamas Limited (incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-1/A (File No. 333-274432) of Jet. AI Inc. filed with the SEC on October 27, 2023).

 4.3

 Warrant by and between Jet. AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 4.5 of Jet. AI's Annual Report on Form 10-K filed with the SEC on April 1, 2024).

 10.1+

 2023 Jet. AI Inc. Amended and Restated Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on September 26, 2024).

 10.2+

 Employment Offer Letter dated August 8, 2023 between George Murnane and Jet. AI Inc. incorporated by reference to Exhibit 10.12 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).

 10.3 +

 Employment Offer Letter dated August 8, 2023 between Michael Winston and Jet. AI Inc. (incorporated by reference to Exhibit 10.11 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).

 10.4+

 Employment Offer Letter dated July 11, 2023 between Patrick McNulty and Jet. AI Inc. (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 (File No. 333-274432) of Jet. AI Inc. filed with the SEC on September 8, 2023).

 10.5

 Share Purchase Agreement by and among Jet Token Inc., GEM Global Yield LLC SCS and GEM Yield Bahamas Limited, dated August 4, 2022 (incorporated by reference to Exhibit 10.7 of Oxbridge Acquisition Corp.'s Form S-4/A (File No. 333-270848) filed with the SEC on May 11, 2023).

 10.6

 Registration Rights Agreement by and among Jet Token Inc., GEM Global Yield LLC SCS and GEM Yield Bahamas Limited, dated August 4, 2022 (incorporated by reference to Exhibit 10.8 of Oxbridge Acquisition Corp.'s Form S-4/A (File No. 333-270848) filed with the SEC on May 11, 2023).

 10.7

 Form of Forward Purchase Agreement, dated August 6, 2023 (incorporated by reference to Exhibit 10.1 of Oxbridge Acquisition Corp.'s Current Report on Form 8-K filed with the SEC on August 7, 2023).

 10.8

 Form of FPA Funding Amount PIPE Subscription Agreement, dated August 6, 2023 (incorporated by reference to Exhibit 10.2 of Oxbridge Acquisition Corp.'s Current Report on Form 8-K filed with the SEC on August 7, 2023).

 10.9

 Forward Purchase Agreement Confirmation Amendment dated as of August 31, 2023 (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on September 1, 2023).

 10.10

 Forward Purchase Agreement Confirmation Second Amendment, dated as of October 2, 2023, among Jet. AI Inc. and the other parties named therein (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on October 10, 2023).

 10.11

 Settlement Agreement date August 10, 2023 between Oxbridge Acquisition Corp. and Maxim Group LLC (incorporated by reference to Exhibit 10.6 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).

 10.12

 Registration Rights Agreement dated August 10, 2023 between Oxbridge Acquisition Corp. and Maxim Group LLC (incorporated by reference to Exhibit 10.7 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).

 10.13

 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.4 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 14, 2023).

 10.14

 Form of 2023 Warrant Exchange Agreement dated as of December 28, 2023 (incorporated by reference to Exhibit 10.28 of Jet. AI's Current Report on Form 8-K filed with the SEC on January 3, 2024).

 10.15

 Form of 2024 Warrant Exchange Agreement (incorporated by reference to Exhibit 10.29 of Jet. AI's Current Report on Form 8-K filed with the SEC on January 17, 2024).

 10.16

 Securities Purchase Agreement dated as of March 28, 2024 and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.30 of Jet. AI's Annual Report on Form 10-K filed with the SEC on April 1, 2024).

 10.17

 Voting Agreement dated as of March 29, 2024 by and among Jet. AI Inc. and certain stockholders (incorporated by reference to Exhibit 10.31 of Jet. AI's Annual Report on Form 10-K filed with the SEC on April 1, 2024).

 10.18

 Registration Rights Agreement dated as of March 29, 2024 between Jet. AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.32 of Jet. AI's Annual Report on Form 10-K filed with the SEC on April 1, 2024).

 10.19

 Placement Agency Agreement (incorporated by reference to Exhibit 10.33 of Jet. AI's Current Report on Form 8-K filed with the SEC on April 19, 2024).

 10.20

 Amendment No.1 to Settlement Agreement between Jet. AI Inc. and Maxim Group LLC (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on July 17, 2024).

 10.21

 Settlement Agreement and Stipulation dated August 21, 2024 by and between Jet. AI Inc. and Sunpeak Holdings Corporation (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on August 30, 2024).

 10.22

 Letter Agreement, dated September 24, 2024, between Jet. AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on September 25, 2024).

 10.23

 Letter Agreement, dated October 10, 2024, between Jet. AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on October 10, 2024).

 10.24

 Letter Agreement, dated October 18, 2024, between Jet. AI Inc. and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on October 18, 2024).

 10.25

 Form of Securities Purchase Agreement, dated October 10, 2024, between Jet. AI Inc. and certain institutional investors (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on October 11, 2024).

 10.26

 Form of Lock-Up Agreement, dated October 10, 2024 (incorporated by reference to Exhibit 10.3 of Jet. AI's Current Report on Form 8-K filed with the SEC on October 11, 2024)

 10.27

 Form of Securities Purchase Agreement, dated October 21, 2024, between Jet. AI Inc. and certain institutional investors (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on October 22, 2024).

 10.28

 Equity Distribution Agreement, dated October 25, 2024, between Jet. AI Inc. and Maxim Group LLC (incorporated by reference to Exhibit 1.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on October 25, 2024).

 10.29^

 Aircraft Purchase Agreement, dated October 31, 2024, between Galilee, LLC, a wholly-owned subsidiary of Jet. AI Inc., and Textron Aviation Inc. (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on November 5, 2024).

 10.30

 Separation and Distribution Agreement dated as of February 13, 2025, by and among Jet. AI Inc., Jet. AI SpinCo, Inc., and flyExclusive, Inc. (incorporated by reference to Exhibit 10.1 of Jet. AI's Current Report on Form 8-K filed with the SEC on February 20, 2025).

 10.31

 Form of Stockholder Support Agreement (incorporated by reference to Exhibit 10.2 of Jet. AI's Current Report on Form 8-K filed with the SEC on February 20, 2025).

 21.1*

 List of Subsidiaries of Jet. AI Inc.

 23.1*

 Consent of Hacker Johnson & Smith PA.

 31.1*

 Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 31.2*

 Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 32.1**

 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 32.2**

 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 97.1*

 Jet. AI Inc. Clawback Policy.

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 *

 Filed herewith.

 **

 Furnished herewith.

 +

 Management contracts.

 #

 Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the SEC; provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 under the Exchange Act for any exhibits or schedules so furnished.

 ^

 Portions of this exhibit have been omitted as being both (i) not material and (ii) the type of information that the registrant treats as private or confidential. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon its request.

 ITEM 16. FORM 10-K SUMMARY.

 None.

 SIGNATURES

 Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

 JET.AI INC.

 By:

 /s/ Mike Winston

 Name:

 Mike Winston

 Title:

 Executive Chairman and Interim Chief Executive Officer

 (Principal Executive Officer)

 Date: March 26, 2025

 Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this report has been signed by the following persons in the capacities and on the dates
indicated.

 Signature

 Title

 Date

 /s/ Mike Winston

 Executive Chairman and Interim Chief Executive Officer

 Mike Winston

 (Principal Executive Officer)

 /s/ George Murnane

 Interim Chief Financial Officer and Director

 (Principal Financial Officer, Principal Accounting Officer)

 /s/ William Yankus

 William Yankus

 /s/ Wrendon Timothy

 Wrendon Timothy

 /s/ Lt. Col. Ran David

 Lt. Col. Ran David

 /s/ Donald Jeffrey Woods

 Donald Jeffrey Woods

 /s/ Ehud Talmor

 Ehud Talmor

TO CONSOLIDATED FINANCIAL STATEMENTS

 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Stockholders' Equity (Deficit)

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 Report
of Independent Registered Public Accounting Firm

 To
the Shareholders and the Board of Directors

Inc.

 Las
Vegas, Nevada:

 Opinion
on the Consolidated Financial Statements

 We
have audited the accompanying consolidated balance sheets of Jet. AI Inc. (the "Company"), as of December 31, 2024 and 2023
and the related consolidated statements of operations, changes in stockholders' equity (deficit) and cash flows for the years then
ended and the related notes and consolidated financial statement schedules (collectively referred to as the "consolidated financial
statements"). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the consolidated financial position of the Company as of December 31, 2024 and 2023, and the consolidated results of its operations and
its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

 Going
Concern

 The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a significant accumulated
deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters
are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome
of this uncertainty.

 Basis
for Opinion

 These
consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.

 F- 1

 To
the Shareholders and the Board of Directors

Inc.

 Page
Two

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

 HACKER,
JOHNSON & SMITH PA

 We
have served as the Company's auditor since 2023.

 Tampa,
Florida

 March
26, 2025

 F- 2

INC.

 CONSOLIDATED
BALANCE SHEETS

 2024

 2023

 31,

 2024

 2023

 Assets

 Current assets:

 Cash and cash
 equivalents

 $
 5,872,627

 $
 2,100,543

 Accounts receivable

 132,230

 96,539

 Other current assets

 357,751

 190,071

 Prepaid
 offering costs

 -

 800,000

 Total current assets

 6,362,608

 3,187,153

 Property and equipment, net

 5,055

 7,604

 Intangible assets, net

 86,745

 73,831

 Right-of-use lease asset

 1,048,354

 1,572,489

 Investment in joint venture

 Deposit on aircraft

 2,400,000

 -

 Deposits and other assets

 794,561

 798,111

 Total
 assets

 $
 10,797,323

 $
 5,739,188

 Liabilities and Stockholders' Equity
 (Deficit)

 Current liabilities:

 Accounts payable

 $
 280,450

 $
 1,656,965

 Accrued liabilities

 1,663,338

 2,417,115

 Deferred revenue

 1,319,746

 1,779,794

 Operating lease liability

 525,547

 510,034

 Note payable, net

 -

 321,843

 Notes
 payable - related party, net

 -

 266,146

 Notes payable, net

 -

 266,146

 Total current liabilities

 3,789,081

 6,951,897

 Lease liability, net of current portion

 495,782

 1,021,330

 Redeemable preferred stock

 -

 1,702,000

 Total
 liabilities

 4,284,863

 9,675,227

 Commitments and contingencies (Notes 2, 5,
 and 11)

 -

 -

 Stockholders' Equity (Deficit)

 Preferred Stock, 4,000,000
 shares authorized,
 par value $ 0.0001, 0 issued and outstanding

 -

 -

 Series B Convertible Preferred
 Stock, 5,000 shares authorized,
 par value $ 0.0001, 250 and 0 issued and outstanding

 -

 -

 Preferred Stock, value

 -

 -

 Common stock, 200,000,000
 shares authorized, par value $ 0.0001,
 1,629,861 and 43,353 issued and outstanding

 Subscription receivable

)

)

 Additional paid-in capital

 59,065,100

 35,343,069

 Accumulated
 deficit

 ( 52,546,078
)

 ( 39,272,388
)

 Total
 stockholders' equity (deficit)

 6,512,460

 ( 3,936,039
)

 Total
 liabilities and stockholders' equity (deficit)

 $
 10,797,323

 $
 5,739,188

 See
accompanying notes to consolidated financial statements

 F- 3

INC.

 CONSOLIDATED
STATEMENTS OF OPERATIONS

 2024

 2023

 Year Ended

 31,

 2024

 2023

 Revenues

 $
 14,022,628

 $
 12,214,556

 Cost of revenues

 14,987,245

 12,393,089

 Gross loss

 ( 964,617
)

 ( 178,533
)

 Operating Expenses:

 General and administrative
 (including stock-based
 compensation of $ 4,287,236, and $ 6,645,891, respectively)

 10,752,048

 11,597,173

 Sales and marketing

 687,785

 573,881

 Research
 and development

 162,152

 160,858

 Total
 operating expenses

 11,601,985

 12,331,912

 Operating loss

 ( 12,566,602
)

 ( 12,510,445
)

 Other expense (income):

 Interest expense

 167,054

 103,615

 Other
 income

 ( 221
)

 ( 116
)

 Total other expense

 166,833

 103,499

 Loss before provision for income taxes

)

 ( 12,613,944
)

 Provision for income taxes

 -

 2,464

 Net Loss

 $
)

 $
 ( 12,616,408
)

 Deemed dividend from warrant
 exchange offer

 ( 540,255
)

 -

 Cumulative
 preferred stock dividends

 ( 109,303
)

 ( 46,587
)

 Net
 Loss to common stockholders

 $
 ( 13,382,993
)

 $
 ( 12,662,995
)

 Weighted average shares outstanding -
 basic and diluted

 279,201

 28,119

 Net loss per share -
 basic and diluted

 $
 ( 47.93
)

 $
 ( 450.34
)

 See
accompanying notes to consolidated financial statements

 F- 4

INC.

 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

 Receivable

 Capital

 Deficit

 (Deficit)

 Series B Preferred Stock

 Common Stock

 Subscription

 Additional Paid-in

 Accumulated

 Total Stockholders' Equity

 Receivable

 Capital

 Deficit

 (Deficit)

 Balance at December 31, 2022

 -

 -

 19,799

 ( 15,544
)

 27,407,815

 ( 26,655,980
)

 736,293

 Stock-based compensation

 -

 -

 -

 -

 6,645,891

 -

 6,645,891

 Sale of Common Stock for cash

 -

 -

 -

 ( 86,370
)

 1,598,630

 -

 1,512,260

 Receipt of subscription receivable

 -

 -

 -

 -

 95,190

 -

 -

 95,190

 Offering costs

 -

 -

 -

 -

 -

 ( 437,665
)

 -

 ( 437,665
)

 Recapitalization

 -

 -

 19,977

 -

 ( 2,128,547
)

 -

 ( 2,128,545
)

 Issuance of Common Stock upon exercise of warrants

 -

 -

 -

 -

 1,035,000

 -

 1,035,000

 Issuance of Common Stock pursuant to Forward Purchase Agreement

 -

 -

 2,222

 -

 -

 1,221,945

 -

 1,221,945

 Net loss

 -

 -

 -

 -

 -

 -

 ( 12,616,408
)

 ( 12,616,408
)

 Balance at December 31, 2023

 -

 $
 -

 43,353

 $

 $
)

 $
 35,343,069

 $
 ( 39,272,388
)

 $
 ( 3,936,039
)

 Balance

 -

 $
 -

 43,353

 $

 $
)

 $
 35,343,069

 $
 ( 39,272,388
)

 $
 ( 3,936,039
)

 Stock-based compensation

 -

 25,889

 -

 4,287,233

 -

 4,287,236

 Sale of Common Stock for cash

 -

 -

 976,372

 -

 11,849,909

 -

 11,850,006

 Issuance of Common Stock for settlement of accounts payable and accrued liabilities

 -

 -

 162,481

 -

 2,916,882

 -

 2,916,898

 Issuance of Common Stock from warrant exchange

 -

 -

 53,528

 -

 540,250

 ( 540,255
)

 -

 Issuance of Common Stock upon exercise of warrants

 -

 -

 6,891

 -

 742,473

 -

 742,474

 Series A Preferred Stock conversion

 -

 -

 10,166

 -

 550,999

 -

 551,000

 Sale of Series B Convertible Preferred Units

 -

 1,111

 -

 -

 1,500,025

 -

 1,500,025

 Issuance of Series B Preferred Stock upon exercise of warrants

 -

 -

 -

 -

 4,000,000

 -

 4,000,000

 Series B Preferred Stock conversion

 ( 350
)

 -

 293,184

 -

 ( 29
)

 -

 -

 Offering costs

 -

 -

 56,886

 -

 ( 2,665,711
)

 -

 ( 2,665,705
)

 Net loss

 -

 -

 -

 -

 -

 -

)

)

 Balance at December 31, 2024

 $
 -

 1,629,861

 $

 $
)

 $
 59,065,100

 $
 ( 52,546,078
)

 $
 6,512,460

 Balance

 $
 -

 1,629,861

 $

 $
)

 $
 59,065,100

 $
 ( 52,546,078
)

 $
 6,512,460

 See
accompanying notes to consolidated financial statements

 F- 5

INC.

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 2024

 2023

 Year Ended

 31,

 2024

 2023

 CASH FLOWS FROM OPERATING
 ACTIVITIES:

 Net loss

 $
)

 $
 ( 12,616,408
)

 Adjustments to reconcile
 net loss to net cash used in operating activities:

 Amortization and depreciation

 2,557

 135,251

 Amortization of debt discount

 80,761

 87,989

 Stock-based compensation

 4,287,236

 6,645,891

 Non-cash operating lease
 costs

 524,135

 509,079

 Changes in operating assets
 and liabilities:

 Accounts receivable

 ( 35,691
)

 ( 96,539
)

 Other current assets

 ( 167,680
)

 167,790

 Accounts payable

 740,383

 366,594

 Accrued liabilities

 46,223

 665,426

 Deferred revenue

 ( 460,048
)

 846,433

 Operating
 lease liability

 ( 510,035
)

 ( 494,979
)

 Net
 cash used in operating activities

 ( 8,225,594
)

 ( 3,783,473
)

 CASH FLOWS FROM INVESTING
 ACTIVITIES:

 Purchase of property and
 equipment

 -

 ( 4,339
)

 Purchase of intangible
 assets

 ( 12,922
)

 ( 51,524
)

 Investment in joint venture

 -

 ( 100,000
)

 Deposit on aircraft

 ( 2,400,000
)

 -

 Deposits
 and other assets

 3,550

 ( 35,135
)

 Net
 cash used in investing activities

 ( 2,409,372
)

 ( 190,998
)

 CASH FLOWS FROM FINANCING
 ACTIVITIES:

 Proceeds from notes payable,
 net of discount

 -

 275,000

 Proceeds from related party
 notes payable, net of discount

 -

 225,000

 Repayments of notes payable

 ( 371,250
)

 -

 Repayments of related party
 notes payable

 ( 297,500
)

 -

 Redemption of Series A
 and Series A-1 Preferred Stock

 ( 1,151,000
)

 -

 Offering costs

 ( 1,865,705
)

 ( 437,665
)

 Proceeds from exercise
 of common stock warrants

 742,474

 1,035,000

 Proceeds from exercise
 of Series B Preferred Stock warrants

 4,000,000

 -

 Proceeds from sale of Series
 B Preferred Stock

 1,500,025

 -

 Proceeds from sale of Common
 Stock

 11,850,006

 2,829,395

 Proceeds
 from business combination

 -

 620,893

 Net
 cash provided by financing activities

 14,407,050

 4,547,623

 Increase in cash and cash
 equivalents

 3,772,084

 573,152

 Cash
 and cash equivalents, beginning of year

 2,100,543

 1,527,391

 Cash
 and cash equivalents, end of year

 $
 5,872,627

 $
 2,100,543

 Supplemental disclosures
 of cash flow information:

 Cash
 paid for interest

 $
 167,054

 $
 -

 Cash
 paid for income taxes

 $
 -

 $
 2,464

 Non cash financing activities:

 of Common Stock for settlement of accounts payable

 $
 2,116,898

 $
 -

 of Common Stock from warrant exchange

 $
 540,255

 $
 -

 of Common Stock for Series A Preferred Stock conversion

 $
 551,000

 $
 -

 of Common Stock for Series B Preferred Stock conversion

 $

 $
 -

 of Common Stock for offering costs

 $
 175,500

 $
 -

 Decrease
 in prepaid offering costs and accrued liabilities from issuance of common stock

 $
 800,000

 $
 -

 Subscription
 receivable from sale of Common Stock

 $
 -

 $
 86,370

 Increase
 in accounts payable due to Business Combination

 $
 -

 $
 1,047,438

 Increase
 in redeemable preferred stock due to Business Combination

 $
 -

 $
 1,702,000

 Increase
 in prepaid offering costs and accounts payable

 $
 -

 $
 800,000

 Discounts
 issued with notes payable

 $
 -

 $
 168,750

 See
accompanying notes to consolidated financial statements

 F- 6

INC.

 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE
1 – ORGANIZATION AND NATURE OF OPERATIONS

 Oxbridge
Acquisition Corp. ("Oxbridge") was incorporated as a Cayman Islands exempted company on April 12, 2021. Oxbridge was incorporated
for the purpose of effecting a merger, capital stock or share exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses. Jet Token Inc. was formed on June 4, 2018 ("Inception") in the State of
Delaware and is headquartered in Las Vegas, Nevada.

 On
August 10, 2023 (the "Closing Date"), Oxbridge consummated the business combination transaction ("Business Combination")
pursuant to the Business Combination Agreement and Plan of Reorganization (the "Business
Combination Agreement") with OXAC Merger Sub I, Inc., a Delaware corporation and a direct wholly owned subsidiary of Oxbridge ("First
Merger Sub"), Summerlin Aviation LLC (f/k/a OXAC Merger Sub II, 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 terms of the Business Combination Agreement, a business combination between Oxbridge and Jet Token was effected
through the merger of First Merger Sub and Jet Token, with Jet Token emerging as the surviving company, followed by a merger between
Jet Token and Second Merger Sub, with Second Merger Sub emerging as the surviving company as a wholly owned subsidiary of Oxbridge. In
connection with the finalization of the Business Combination on August 10, 2023, the Company was domesticated and continues as a Delaware
corporation (the "Domestication") and immediately changed its name to Jet. AI, Inc.
 ("Jet. AI" or the "Company"). Following the Business Combination, the Company has one class of common stock,
par value $ 0.0001 per share, which was then listed on The Nasdaq Global Market ("Nasdaq") under the ticker symbol "JTAI".
The Company also had two forms of publicly traded warrants, being its five-year redeemable warrants (the "Redeemable Warrants")
issued in connection with the Company's initial public offering and its ten-year merger consideration warrants (the "Merger
Consideration Warrants") issued in connection with the Business Combination. The Redeemable Warrants and the Merger Consideration
Warrants at the Closing Date were listed on Nasdaq under the ticker symbols "JTAIW" and "JTAIZ," respectively.

 Following
the closing of the Business Combination, the Company owns, directly or indirectly, all of the issued and outstanding equity interests
in Second Merger Sub and its subsidiaries, and the stockholders of Jet Token as of immediately prior to the effective time of the First
Merger (the "Jet Token Stockholders") hold a portion of the Company's common stock, par value $ 0.0001 per share (the
"Jet. AI Common Stock").

 As
a result of and upon the effective time of the Domestication: (a) each then issued and outstanding Class A Ordinary Share of Oxbridge
was converted automatically, on a one-for-one basis, into a share of Jet. AI Common Stock; (b) each then issued and outstanding Class
B Ordinary Share of Oxbridge was converted automatically, on a one-for-one basis, into a share of Jet. AI Common Stock; (c) each then
issued and outstanding Oxbridge Warrant was converted automatically into a warrant to purchase one share of Jet. AI Common Stock pursuant
to the Warrant Agreement ("Jet. AI Warrant"); and (d) each then issued and outstanding Oxbridge Unit was converted automatically
into a Jet. AI Unit, each consisting of one share of Jet. AI Common Stock and one Jet. AI Warrant.

 At
the effective time of the Business Combination (the "Effective Time"), (i) each outstanding share of Jet Token Common Stock,
including each share of Jet Token Preferred Stock that was converted into shares of Jet Token Common Stock immediately prior to the Effective
Time, was cancelled and automatically converted into the right to receive (x) the number of shares of Jet. AI Common Stock equal to the
Stock Exchange Ratio of 0.03094529, and (y) the number of "Merger Consideration Warrants" equal to the Warrant Exchange Ratio
of 0.04924242; (ii) each Jet Token Option, whether or not exercisable and whether or not vested, that was outstanding immediately prior
to the Effective Time was automatically converted into an option to purchase a number of Jet. AI Options based on the Option Exchange
Ratio (determined in accordance with the Business Combination Agreement and as further described in the Proxy Statement); (iii) each
Jet Token Warrant issued and outstanding immediately prior to the Effective Time was automatically converted into a warrant to acquire
(x) a number of shares of Jet. AI Common Stock equal to the Stock Exchange Ratio and (y) a number of Merger Consideration Warrants equal
to the Warrant Exchange Ratio; and (iv) each Jet Token RSU Award that was outstanding immediately prior to the Effective Time was converted
into a Jet. AI RSU Award with respect to a number of RSUs based on the applicable exchange ratio as determined in accordance with the
Business Combination Agreement.

 F- 7

 The
Company, directly and indirectly through its subsidiaries, is principally involved in (i) the sale of fractional and whole interests
in aircraft, (ii) the sale of jet cards, which enable holders to use certain of the Company's and other's aircraft at agreed-upon
rates, (iii) the operation of a proprietary booking platform (the "App"), which functions as a prospecting and quoting platform
to arrange private jet travel with third party carriers as well as via the Company's leased and managed aircraft, (iv) direct chartering
of its HondaJet aircraft by Cirrus, (v) aircraft brokerage and (vi) service revenue from the monthly management and hourly operation
of customer aircraft.

 NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Going
Concern and Management Plans

 The
Company has limited operating history and has incurred losses from operations since Inception. These matters raise concern about the
Company's ability to continue as a going concern.

the next twelve months, the Company intends to fund its operations with capital from its operations, drawdowns under its Share Purchase
Agreement with GEM Yield LLC SCS and GEM Yield Bahamas Limited, proceeds from the exercise of warrants under its Securities Purchase
Agreement with Ionic Ventures, LLC and other sales of debt or equity securities. Additionally, the Company may explore other potential
sources of outside capital. The Company could, if necessary, reduce cash burn to preserve capital. There are no assurances, however,
that management will be able to raise capital on terms acceptable to the Company. If the Company is unable to obtain sufficient amounts
of additional capital, the Company may be required to reduce the near-term scope of its planned development and operations, which could
delay implementation of the Company's business plan and harm its business, financial condition and operating results. The consolidated
balance sheets do not include any adjustments that might result from these uncertainties.

 Basis
of Presentation

 The
consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative
GAAP as found in the Accounting Standards Codification ("ASC") and an Accounting Standards Update ("ASU") of
the Financial Accounting Standards Board ("FASB"). The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements
herein.

 The
Business Combination was accounted for as a reverse recapitalization in accordance with GAAP, whereby Oxbridge is treated as the acquired
company and Jet Token is treated as the acquirer (the "Reverse Recapitalization"). Accordingly, for accounting purposes,
the Reverse Recapitalization was treated as the equivalent of Jet Token issuing stock for the net assets of Oxbridge, accompanied by
a recapitalization. The net assets of Oxbridge were stated at historical cost, with no goodwill or other intangible assets recorded.

 Jet
Token was determined to be the accounting acquirer in the Business Combination based on the following predominate factors:

 Jet
 Token's existing stockholders had the greatest voting interest in the combined entity;

 Jet
 Token existing stockholders had the ability to nominate a majority of the initial members of the combined entity's board of
 directors;

 Jet
 Token's senior management is the senior management of the combined entity

 Jet
 Token is the larger entity based on historical operating activity and has the larger employee base; and

 The
 post-combination company has assumed a Jet Token branded name: "Jet. AI Inc."

 F- 8

 Reverse
Stock Split

 On
November 12, 2024, the Company effected a reverse common stock split of the Company's issued and outstanding shares of common stock
at a ratio of one-for-225. On the effective date, every 225 shares of common stock issued and outstanding were combined into one issued
share of common stock. In addition, the aggregate number of equity-based awards that remain available to be granted under the Company's
equity compensation plans was decreased proportionately and proportionate adjustments were made to the per share exercise price and the
number of shares issuable upon the exercise of outstanding stock options, as applicable, as well as to the number of shares that would
be owned upon vesting and settlement of restricted stock units and other equity-based awards, as applicable. Similar proportionate adjustments
were also made to the outstanding warrants. No fractional shares were issued as a result of the reverse stock split and any fractional
shares resulting from the reverse stock split were rounded down to the nearest number of whole shares so that we issued cash in lieu
of any fractional shares that such stockholder would have received as a result of the reverse stock split. In accordance with ASC 260-10-55-12,
the Company has adjusted the number of shares, per-share computations and the computations of basic and diluted EPS retroactively for
all periods presented in the consolidated financial statements and related notes.

 Principles
of Consolidation

 The
accompanying consolidated financial statements include the accounts of Jet. AI and its wholly owned subsidiaries, Summerlin Aviation LLC,
Jet Token Software Inc., Jet Token Management Inc., Galilee LLC and Galilee 1 SPV LLC. All intercompany accounts and transactions have
been eliminated in consolidation.

 The
consolidated assets, liabilities, and results of operations prior to the Reverse Recapitalization are those of Jet Token. The shares
and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based
on shares reflecting the exchange ratio established in the Business Combination.

 Use
of Estimates

 The
preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant
judgement. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that
existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in
the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

 Fair
Value of Financial Instruments

 Fair
value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date.
Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable
inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs
are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from
sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that
market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

 Level
1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

 Level
2 - Include other inputs that are directly or indirectly observable in the marketplace.

 Level
3 - Unobservable inputs which are supported by little or no market activity.

 The
fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value.

 F- 9

 Risks
and Uncertainties

 The
Company has a limited operating history, and to date, has only generated limited revenue from intended operations. The Company's
business and operations are sensitive to general business and economic conditions in the United States (the "U.S.") and worldwide
along with local, state, and federal governmental policy decisions. A host of factors beyond the Company's control could cause
fluctuations in these conditions. Adverse conditions may include but are not limited to: changes in the airline industry, fuel and operating
costs, adverse macro-economic conditions, changes to corporate governance best practices for executive flying, general demand for private
jet travel, regulations on carbon emissions from aviation and market acceptance of the Company's business model. These adverse
conditions could affect the Company's financial condition and the consolidated results of its operations.

 Cash
and Cash Equivalents

 For
purposes of the consolidated statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original
maturity of three months or less to be cash equivalents. Included within cash and cash equivalents is restricted cash of $ 500,000 at
December 31, 2024 and 2023.

 Offering
Costs

 The
Company complies with the requirements of ASC 340, Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion
of an offering, offering costs will be capitalized as deferred offering costs on the consolidated balance sheets. The deferred offering
costs will be charged to stockholders' equity (deficit) upon the completion of an offering or to expenses if the offering is not
completed.

 Other
Current Assets

 Other
current assets include security deposits, which relate primarily to contractual prepayments to third-parties for future services, prepaid
expenses and customer receivables for additional expenses incurred in their charter trips.

 Property
and Equipment

 Property
and equipment are recorded at cost, less accumulated depreciation. Expenditures for major additions and improvements are capitalized
and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise
disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results
of operations for the respective year. Depreciation is provided over the estimated useful lives of the related assets using the straight-line
method for financial statement purposes. As of December 31, 2024 and 2023, property and equipment consisted entirely of equipment which
is being depreciated over a three -year period.

 Internal
Use Software

 The
Company incurs software development costs to develop software programs to be used solely to meet its internal needs and cloud-based applications
used to deliver its services. In accordance with ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software, the Company capitalizes
development costs related to these software applications once a preliminary project stage is complete, funding has been committed, and
it is probable that the project will be completed, and the software will be used to perform the function intended. As of December 31,
2024 and 2023, the Company has capitalized approximately $ 398,000 of internal software related costs, which is included in intangible
assets in the accompanying consolidated balance sheets. Amortization expense for the years ended December 31, 2024 and 2023 was $ 0 and
$ 99,527, respectively, and is included in cost of revenues in the accompanying consolidated statements of operations. Accumulated amortization
as of December 31, 2024 and 2023 was $ 398,000.

 Investments
in Joint Ventures

 In
January 2023, the Company formed a 50/50 joint venture subsidiary with Great Western Air LLC dba Cirrus Aviation Services, 380 Software
LLC, a Nevada limited liability company. Costs and profits are to be shared equally. The Company accounts for these investments using
the equity method whereby the initial investment is recorded at cost and subsequently adjusted by the Company's share of income
or loss from the joint venture. There is currently no financial activity or material assets to report for this joint venture beyond this
initial investment.

 F- 10

 Allowance
for Credit Losses

 The
Company recognizes an expected allowance for credit losses with respect to its accounts receivable. In addition, also at each reporting
date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. Accounts receivable
are evaluated individually for impairment. This estimate is adjusted for management's assessment of current conditions, reasonable
and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical
loss information is a reasonable starting point in which to calculate the expected allowance for credit losses. The Company writes off
receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility
of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in operations or an offset
to credit loss expense in the year of recovery, in accordance with the entity's accounting policy election. No allowance for credit
losses was considered necessary at December 31, 2024 and 2023.

 Leases

 The
Company determines if an arrangement is a lease at inception on an individual contract basis. Operating leases are included in operating
lease right-of-use assets, operating lease liabilities, current and operating lease liabilities, non-current on the consolidated balance
sheets. Operating lease right-of-use assets represent the right to use an underlying asset for the lease term. Operating lease right-of-use
assets are recognized at lease commencement date based on the present value of the future minimum lease payments over the lease term.
The interest rate implicit in each lease was readily determinable to discount lease payments.

 The
operating lease right-of-use assets include any lease payments made, including any variable amounts that are based on an index or rate,
and exclude lease incentives. Lease terms may include options to extend or terminate the lease. Renewal option periods are included within
the lease term and the associated payments are recognized in the measurement of the operating right-of-use asset when they are at the
Company's discretion and considered reasonably certain of being exercised. Lease expense for lease payments is recognized on a
straight-line basis over the lease term.

 The
Company has elected the practical expedient not to recognize leases with an initial term of 12 months or less on the Company's
consolidated balance sheets and lease expense is recognized on a straight-line basis over the term of the short-term lease.

 Impairment
of Long-Lived Assets

 The
Company follows ASC 360-10, Impairment and Disposal of Long-Lived Assets. ASC 360-10 requires that if events or changes in circumstances
indicate that the carrying value of long-lived assets or asset groups may be impaired, an evaluation of recoverability should be performed
by comparing the estimated future undiscounted cash flows associated with the asset to the asset's carrying value to determine
if a write-down to market value is required. Long-lived assets or asset groups that meet the criteria in ASC 360-10 as being held for
sale are reflected at the lower of their carrying amount or fair market value, less costs to sell.

Recognition

 In
applying the guidance of ASC 606, Revenue from Contracts with Customers, the Company determines revenue recognition through the following
steps:

 of the contract, or contracts, with a customer;

 of the performance obligations in the contract;

 Determination
 of the transaction price;

 Allocation
 of the transaction price to the performance obligations in the contract; and

 Recognition
 of revenue when, or as, a performance obligation is satisfied.

 F- 11

is derived from a variety of sources including, but not limited to, (i) fractional/whole aircraft sales, (ii) fractional ownership and
jet card programs, (iii) ad hoc charter through the Company's and (iv) aircraft management.

 Under
the fractional ownership program, a customer purchases an ownership share in a jet which guarantees the customer access to the jet for
a preset number of hours per year. The fractional ownership program consists of a down payment,
one or more progress payments, a payment on delivery, a Monthly Management Fee (MMF) and an Occupied Hourly Fee (OHF). Revenues
from the sale of fractional or whole interests in an aircraft are recognized at the time title to the aircraft is transferred to the
purchasers, which generally occurs upon delivery or ownership transfer.

 The
jet card program provides the customer with a preset number of hours of guaranteed private jet access over the agreement term (generally
a year) without the larger hourly or capital commitment of purchasing an ownership share. The jet card program consists of a fixed hourly
rate for flight hours typically paid 100% up front.

is recognized upon transfer of control of the Company's promised services, which generally occurs upon the flight hours being used.
Any unused hours for the fractional jet and jet card programs are forfeited at the end of the contract term and are thus immediately
recognized as revenue at that time.

revenue is an obligation to transfer services to a customer for which the Company has already received consideration. Upon receipt of
a prepayment from a customer for all or a portion of the transaction price, the Company initially recognizes a contract liability. The
contract liability is settled, and revenue is recognized when the Company satisfies its performance obligation to the customer at a future
date. As of December 31, 2024 and 2023, the Company deferred $ 1,091,235 and $ 1,510,976, respectively, related to prepaid flight hours
under the jet card program for which the related travel had not yet occurred.

 The
Company also generates revenues from individual ad hoc charter bookings processed through the Company's App, whereby the Company
sources, negotiates, and arranges travel on a charter basis for a customer based on pre-selected options and pricing provided by the
Company to the customer through the App. In addition, Cirrus Aviation markets charters on the Company's aircraft for the Company's
benefit. Deferred revenue with respect to the App was $ 212,278 and $ 268,818 as of December 31, 2024 and 2023, respectively.

 The
Company utilizes certificated independent third-party air carriers in the performance of a portion of flights. The Company evaluates
whether there is a promise to transfer services to the customer, as the principal, or to arrange for services to be provided by another
party, as the agent, using a control model. The nature of the flight services the Company provides to members is similar regardless of
which third-party air carrier is involved. The Company directs third-party air carriers to provide an aircraft to a member or customer.
Based on evaluation of the control model, it was determined that the Company acts as the principal rather than the agent within all revenue
arrangements. Owner charter revenue is recognized for flights where the owner of a managed aircraft sets the price for the trip. The
Company records owner charter revenue at the time of flight on a net basis for the margin we receive to operate the aircraft. If the
Company has primary responsibility to fulfill the obligation, then the revenue and the associated costs are reported on a gross basis
in the consolidated statements of operations. Deferred revenue with respect to the management of aircraft was $ 16,233 and $ 0 as of December
31, 2024 and 2023, respectively.

 The
following is a breakout of revenue components by subcategory for the years ended December 31, 2024 and 2023.

OF BREAKOUT OF REVENUE COMPONENTS BY SUBCATEGORY

 2024

 2023

 Year Ended

 31,

 2024

 2023

 Software App and Cirrus Charter

 $
 8,128,997

 $
 7,125,230

 Jet Card and Fractional Programs

 2,288,036

 2,847,533

 Management and Other Services

 3,605,595

 2,241,793

 Total revenues

 $
 14,022,628

 $
 12,214,556

 F- 12

 Flights

 Flights
and flight-related services, along with the related costs of the flights, are earned and recognized as revenue at the point in time in
which the service is provided. For round-trip flights, revenue is recognized upon arrival at the destination for each flight segment.

 Fractional
and jet card members pay a fixed quoted amount for flights based on a contractual capped hourly rate. Ad hoc charter customers primarily
pay a fixed rate for flights. In addition, flight costs are paid by members through the purchase of dollar-denominated prepaid blocks
of flight hours ("Prepaid Blocks"), and other incidental costs such as catering and ground transportation are billed monthly
as incurred. Prepaid Blocks are deferred and recognized as revenue when the member completes a flight segment.

Management

 The
Company manages aircraft for owners in exchange for a contractual fee. Revenue associated with the management of aircraft also includes
the recovery of owner-incurred expenses including maintenance coordination, cabin crew and pilots, as well as recharging of certain incurred
aircraft operating costs and expenses such as maintenance, fuel, landing fees, parking and other related operating costs. The Company
passes the recovery and recharge costs back to owners at either cost or a predetermined margin.

management-related revenue contains two types of performance obligations. One performance obligation is to provide management services
over the contract period. Revenue earned from management services is recognized over the contractual term, on a monthly basis. The second
performance obligation is the cost to operate and maintain the aircraft, which is recognized as revenue at the point in time such services
are completed.

Sales

 The
Company acquires aircraft from vendors and various other third-party sellers in the private aviation industry. The Company classifies
the purchase as aircraft inventory on the consolidated balance sheets. Aircraft inventory is valued at the lower of cost or net realizable
value. Sales are recorded on a gross basis within revenues and cost of revenue in the consolidated statements of operations. The Company
recorded aircraft sales of $ 0 for the years ended December 31, 2024 and 2023.

 Pass-Through
Costs

 In
applying the guidance of ASC 606, the Company recognizes revenue when a customer obtains control of promised goods or services, in an
amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue
recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:
(i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction
price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the
entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company
will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception,
once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract
and determines those that are distinct performance obligations. The Company then assesses whether it is acting as an agent or a principal
for each identified performance obligation and includes revenue within the transaction price for third-party costs when the Company determines
that it is acting as the principal.

 F- 13

 Cost
of Sales

 The
cost of sales expenses includes costs incurred in providing air transportation services, such as chartering third-party aircraft, aircraft
lease expenses, pilot training and wages, aircraft fuel, aircraft maintenance, and other aircraft operating expenses, each of which is
discussed below.

 1.

 Chartering
 Third-Party Aircraft: The cost of chartering third-party aircraft is recorded as a part of the cost of sales expense. These expenses
 include the fees paid to third-party operators for providing aircraft services on behalf of the company. Expenses are recognized
 in the statements of operations in the period when the service is rendered and are reported on an accrual basis.

 2.

 Lease Expenses: Aircraft lease expenses include the cost of leasing aircraft for the company's operations. The lease expenses
 are recognized as an operating expense in the statements of operations over the lease term on a straight-line basis.

 3.

 Pilot
 Training and Wages: Pilot training costs are expensed as incurred and are included in the cost of sales expenses. This encompasses
 expenses related to initial pilot training, recurrent training, and any additional required training programs. Pilot wages, including
 salaries, bonuses, and benefits, are also recognized as a part of the cost of sales expenses and are reported on an accrual basis.

 4.

 Fuel: The cost of aircraft fuel is recognized as an expense in the cost of sales category based on the actual consumption during
 flight operations. Fuel costs are recorded in the statements of operations in the period when the fuel is consumed and are reported
 on an accrual basis.

 5.

 Maintenance: Aircraft maintenance expenses include both routine and non-routine maintenance. Routine maintenance costs are expensed
 as incurred and are recorded as a part of the cost of sales expense. Non-routine maintenance expenses, such as major repairs and
 overhauls, are capitalized and amortized over their expected useful life. The amortization expense is included in the cost of sales
 expense and is recognized in the statements of operations on a straight-line basis over the asset's useful life.

 6.

 Other
 Aircraft Operating Expenses: Other aircraft operating expenses include costs such as insurance, landing fees, navigation charges,
 and catering services. These expenses are recognized in the statements of operations s a part of the cost of sales expenses in the
 period when they are incurred and are reported on an accrual basis.

 Advertising
Costs

 The
Company expenses the cost of advertising and promoting the Company's services as incurred. Such amounts are included in sales and
marketing expense in the consolidated statements of operations and totaled $ 687,785 and $ 573,881 for the years ended December 31, 2024
and 2023, respectively.

 Research
and Development

 The
Company incurs research and development costs during the process of researching and developing its technologies and future offerings.
The Company's research and development costs consist primarily of payments for third-party software development that is not capitalizable.
The Company expenses these costs as incurred until the resulting product has been completed, tested, and made ready for commercial use.

 Stock-Based
Compensation

 The
Company accounts for stock awards under ASC 718, Compensation – Stock Compensation. Under ASC 718, stock-based compensation cost
is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the employee's
requisite vesting period or over the nonemployee's period of providing goods or services. The fair value of each stock option or
warrant award is estimated on the date of grant using the Black-Scholes option valuation model.

 Income
Taxes

 The
Company applies ASC 740 Income Taxes. Deferred income taxes are recognized for the tax consequences in future years of differences between
the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws
and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes
represents the tax expense for the period, if any and the change during the period in deferred tax assets and liabilities.

 F- 14

 ASC
740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from
an uncertain position is recognized only if it is "more likely than not" that the position is sustainable upon examination
by the relevant taxing authority based on its technical merit.

 The
Company is subject to tax in the United States and files tax returns in the U.S. Federal jurisdiction and Nevada state jurisdiction.
The Company is subject to potential U.S. Federal, state, and local income tax examinations by tax authorities for all periods since Inception.
The Company currently is not under examination by any tax authority.

 Loss
per Common Share

 The
Company presents basic loss per share ("EPS") and diluted EPS on the face of the consolidated statements of operations. Basic
EPS is computed as net loss divided by the weighted average number of common shares outstanding for the period. For periods in which
the Company incurs a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from the diluted
EPS calculations. For the years ended December 31, 2024 and 2023, there were 22,668 and 16,268 options, 9,686 and 115,444 warrants to
purchase common stock, and 208,176 and 0 common shares issuable upon conversion of Series B Preferred Stock, respectively, excluded.

 Concentration
of Credit Risk

 The
Company maintains its cash with several major U.S. financial institutions which it believes to be creditworthy. Balances are insured
by the Federal Deposit Insurance Corporation up to $ 250,000. At times, however the Company may maintain balances in excess of the federally
insured limits.

 Segment
Reporting

 The
Company identifies operating segments as components of the Company for which discrete financial information is available and is regularly
reviewed by the chief operating decision maker (the "CODM"), or decision-making group, in making decisions regarding resource
allocation and performance assessment. The CODM is the Company's chief executive officer. The Company determined that the Company
operates in a single operating and reportable segment, private aviation services, as the CODM reviews financial information presented
on a consolidated basis, accompanied by disaggregated information about revenue, for purposes of making operating decisions, allocating
resources, and assessing performance. All of the Company's long-lived assets are located in the United States and revenue from
private aviation services is substantially earned from flights throughout the United States.

 Recent
Accounting Pronouncements

 In
December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures." ASU 2023-09 requires disclosure of
specific categories in the income tax rate reconciliation and requires additional information for reconciling items that meet a quantitative
threshold. The standard requires an annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state
and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. The standard is effective for
fiscal years beginning after December 15, 2024 and early adoption is permitted. The Company does not expect the adoption of the standard
to have a material impact on its disclosures.

 In
November 2024, the FASB issued ASU 2024-03, "Expense Disaggregation Disclosures." ASU 2024-03 requires disclosure to disaggregate
prescribed expenses within relevant statement of operations captions. The standard is effective for fiscal years beginning after December
15, 2026 and for interim periods after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes
to its existing disclosures.

 F- 15

 NOTE
3 – OTHER ASSETS

 Other
assets consisted of the following:

OF OTHER ASSETS

 2024

 2023

 31,

 2024

 2023

 Deposits

 $
 104,811

 $
 108,361

 Lease Maintenance Reserve

 689,750

 689,750

 Total Other Assets

 $
 794,561

 $
 798,111

 NOTE
4 – NOTES PAYABLE

 Bridge
Agreement

 On
September 11, 2023, the Company entered into a binding term sheet (the "Bridge Agreement") with eight investors whereby the
investors purchased senior secured promissory notes (the "Bridge Notes") from the Company in the aggregate principal amount
of $ 625,000, which included $ 281,250 from related parties.

 The
Company received net proceeds from the sale of the Bridge Notes of $ 500,000, resulting in an original issue discount of $ 112,500. The
notes accrued interest at five percent ( 5 %) per annum and matured on March 11, 2024. The Company recognized a debt discount of $ 168,250
from the Bridge Notes, of which $ 77,625 and $ 90,625 was amortized during the years ended December 31, 2024 and 2023, respectively. Interest
expense was $ 79,314 and $ 103,615 for the years ended December 31, 2024 and 2023, respectively.

 These
Bridge Notes and accrued interest payable were fully repaid during the year ended December 31, 2024.

 NOTE
5 – COMMITMENTS AND CONTINGENCIES

 Operating
Lease

 In
November 2021, the Company entered into a leasing arrangement with a third party for an aircraft to be used in the Company's operations.
The lease term is for 60 months, expiring November 2026, and requires monthly lease payments. At any time during the lease term, the
Company has the option to purchase the aircraft from the lessor at the aircraft's fair market value at that time.

 The
lease agreement also requires the Company to hold a liquidity reserve of $ 500,000 in a separate bank account as well as a maintenance
reserve of approximately $ 690,000 for the duration of the lease term. The liquidity reserve is held in a bank account owned by the Company.
As such, this is classified as restricted cash in the accompanying consolidated balance sheets. The maintenance reserve are funds held
by the lessor to be used for reasonable maintenance expenses in excess of those covered by the airframe and engine maintenance programs
maintained by the Company. These maintenance programs are designed to fully cover the Company's aircraft's maintenance costs,
both scheduled and unscheduled, and therefore the Company does not expect these funds will be drawn upon. If funds from the maintenance
reserve are expended by the lessor, the Company is required to replenish the maintenance reserve account up to the required reserve amount.
Any funds remaining at the end of the Lease term will be returned to the Company. The maintenance reserve is included within deposits
and other assets in the accompanying consolidated balance sheets.

 Total
lease expense for the years ended December 31, 2024 and 2023 was $ 1,357,520 and $ 1,192,184, respectively, which is included within cost
of revenues in the accompanying statements of operations.

 F- 16

 Right-of-use
lease assets and lease liabilities for our operating leases was recorded in the consolidated balance sheets as follows:

OF OPERATING LEASE RIGHT OF USE OF ASSETS AND LIABILITIES

 2024

 2023

 31,

 2024

 2023

 Operating lease right-of-use asset

 $
 2,576,036

 $
 2,576,036

 Accumulated amortization

 ( 1,527,682
)

 ( 1,003,547
)

 Net balance

 $
 1,048,354

 $
 1,572,489

 Lease liability, current portion

 $
 525,547

 $
 510,034

 Lease liability, long-term

 495,782

 1,021,330

 Total operating lease
 liabilities

 $
 1,021,329

 $
 1,531,364

 As
of December 31, 2024, the weighted average remaining lease term was 1.8 years, and the weighted average discount rate was 3 %.

 As
of December 31, 2024, future minimum required lease payments due under the non-cancellable operating lease are as follows:

OF FUTURE MINIMUM LEASE PAYMENTS

 2025

 549,000

 2026

 503,250

 Total future minimum lease payments

 1,052,250

 Less imputed interest

 ( 30,921
)

 Maturities of lease
 liabilities

 $
 1,021,329

 GEM
Share Purchase Agreement

 Jet
Token executed a Share Purchase Agreement, dated as of August 4, 2022, with GEM Yield LLC SCS and GEM Yield Bahamas Limited (together
with GEM Yield LLC SCS, "GEM"), which was automatically assumed by the Company when the Business Combination was effected.
The Company has the right to periodically issue and sell to GEM, and GEM has agreed to purchase, up to $ 40,000,000 aggregate value of
shares of the Company's common stock during the 36-month period following the date of listing on Nasdaq.

the year ended December 31, 2024, the Company issued 58,447 shares of common stock pursuant to the agreement for total consideration
of approximately $ 2.5 million.

 The
Company agreed to pay GEM a commitment fee equal to $ 800,000 payable in cash or freely tradable shares of the Company's common
stock, payable on or prior to the first anniversary of the date of listing and which fee was satisfied in October 2024 through the issuance
of 36,886 shares of common stock.

to the Share Purchase Agreement, the Company issued to GEM a warrant (the "GEM Warrant") granting it the right to purchase
up to 9,686 shares of common stock of the Company on a fully diluted basis. The GEM Warrant was issued with an exercise price of $ 1,935.00
and a term of three years. The GEM Warrant included an adjustment mechanism, whereby the exercise price is subject to adjustment from
time to time. Pursuant to the Warrant, on the first anniversary following the Public Listing Date as defined in the GEM Warrant (the
"Adjustment Date"), if all or any portion of the GEM Warrant remains unexercised and the average closing price of the Company's
common stock for the 10 trading days following the Adjustment Date is less than 90% of the then current exercise price of the warrant
(the "Baseline Price"), then the exercise price of the unexercised Warrant Shares that remain exercisable pursuant to the
Warrant shall be adjusted to 110% of the Baseline Price. Accordingly, the warrant exercise price was reduced to $ 14.12 per share as of
December 31, 2024.

 On
August 4, 2022, the Company entered into a Registration Rights Agreement with GEM, obligating the Company to file a registration statement
with respect to resales of the shares of common stock issuable to GEM under the Share Purchase Agreement and upon exercise of the GEM
Warrant. Because that registration statement was not declared effective by October 23, 2023 (the "Effectiveness Deadline"),
the Company may be obligated to pay GEM an amount equal to $ 10,000 for each day following the Effectiveness Deadline until the registration
statement has been declared effective subject to a $ 300,000 cap if such delay in the declaration of effectiveness of the registration
statement is caused by delays in SEC review of the registration statement or the SEC's refusal to declare the registration statement
effective. The registration statement was declared effective on December 21, 2023. The Company has accrued $ 300,000 as of December 31,
2024 and 2023 with respect to this agreement.

 F- 17

 On
October 23, 2023, the Company entered into a warrant amendment agreement retroactively effective as of August 10, 2023 (the "GEM
Warrant Amendment"). The GEM Warrant Amendment provides that GEM can elect to limit the exercisability of the "GEM Warrant"
to purchase shares of the Company's common stock, such that it is not exercisable to the extent that, after giving effect to the
exercise, GEM and its affiliates, to the Company's actual knowledge, would beneficially own in excess of 4.99 % of the Company's
common stock outstanding immediately after giving effect to such exercise. On October 23, 2023, GEM provided a notice to the Company
electing to have this limit apply to the GEM Warrant effective as of August 10, 2023. GEM may revoke this election notice by providing
written notice to the Company of such revocation, which revocation would not be effective until 61 days after such notice is delivered
to the Company.

 Forward
Purchase Agreement

 On
August 6, 2023, Oxbridge entered into an agreement (the "Forward Purchase Agreement") with (i) Meteora Capital Partners,
LP ("MCP"), (ii) Meteora Select Trading Opportunities Master, LP ("MSTO"), and (iii) Meteora Strategic Capital,
LLC ("MSC" and, collectively with MCP and MSTO, "Seller") for OTC Equity Prepaid Forward Transactions. For purposes
of the Forward Purchase Agreement, Oxbridge is referred to as the "Counterparty" prior to the consummation of the Business
Combination, while Jet. AI is referred to as the "Counterparty" after the consummation of the Business Combination. Capitalized
terms used in this description but not otherwise defined have the meanings ascribed to such terms in the Forward Purchase Agreement.

to the terms of the Forward Purchase Agreement, Seller intended, but was not obligated, to purchase up to 5,275 (the "Purchased
Amount") Class A ordinary shares, par value $ 0.0001 per share, of Oxbridge ("Oxbridge Shares") concurrently with the
closing pursuant to the Seller's FPA Funding Amount PIPE Subscription Agreement (as defined below), less the number of Oxbridge
Shares purchased by the Seller separately from third parties through a broker in the open market ("Recycled Shares"). The
number of shares subject to the Forward Purchase Agreement was subject to reduction following a termination of the Forward Purchase Agreement
with respect to such shares as described under "Optional Early Termination" in the Forward Purchase Agreement.

 The
Forward Purchase Agreement provided for a prepayment shortfall in an amount in U.S. dollars equal to $ 1,250,000 (the "Prepayment
Shortfall"); provided that Seller was to pay one-half (1/2) of the Prepayment Shortfall to Counterparty on the Prepayment Date
(which amount was netted from the Prepayment Amount) (the "Initial Shortfall") and, at the request of Counterparty, the other
one-half (1/2) of the Prepayment Shortfall (the "Future Shortfall") on the date that the SEC declares the Registration Statement
related to the Business Combination effective (the "Registration Statement Effective Date"), provided the VWAP Price is greater
than $ 1,350.00 for any 45 trading days during the prior 90 consecutive trading day period and average daily trading value over such period
equals at least four times the Future Shortfall. Seller in its sole discretion and had the right to sell Recycled Shares at any time
following the Trade Date and at any sales price, without payment by Seller of any Early Termination Obligation until such time as the
proceeds from such sales equal 100 % of the Initial Shortfall and 100 % of the Future Shortfall actually paid to Counterparty (as set forth
under Shortfall Sales in the Forward Purchase Agreement) (such sales, "Shortfall Sales," and such Shares, "Shortfall
Sale Shares"), all as further described in the "Optional Early Termination" and "Shortfall Sales" sections
in the Forward Purchase Agreement.

 The
Forward Purchase Agreement provided that the Seller would be paid directly an aggregate cash amount (the "Prepayment Amount")
equal to (x) the product of (i) the number of shares as set forth in a Pricing Date Notice and (ii) the redemption price per share as
defined in Article 49.5 of Oxbridge's Amended and Restated Memorandum and Articles of Association, effective as of August 11, 2021,
as amended from time to time (the "Initial Price"), less (y) the Prepayment Shortfall.

 The
Seller agreed to waive any redemption rights with respect to any Recycled Shares in connection with the Business Combination, as well
as any redemption rights under Oxbridge's Amended and Restated Memorandum and Articles of Association that would require redemption
by Oxbridge. Such waiver reduced the number of Oxbridge Shares redeemed in connection with the Business Combination, which may have altered
the perception of the potential strength of the Business Combination.

 F- 18

 The
shares initially held by Seller consisted of 2,949 shares it purchased from third parties through a broker in open market transactions
or by reversing previously submitted redemption requests and waived its redemption rights with respect to these shares. Furthermore,
Seller purchased
 1,101 "Additional Shares" directly from the Company for a per share price of $ 2,250.00 pursuant to a subscription agreement
entered into on August 6, 2023 (the "FPA Funding Amount PIPE Subscription Agreement"). Of the shares it purchased, 222 shares
represented Share Consideration to Seller under the Forward Purchase Agreement and are not
subject to the terms of the Forward Purchase Agreement, meaning that Seller is free to sell
such shares and retain all proceeds therefrom. Netting out the Share Consideration, the total "Number of Shares" initially
subject to the terms of the Forward Purchase Agreement was 3,828, comprising 2,727 "Recycled Shares" and 1,101 Additional
Shares. Following the closing of the Business Combination, approximately $ 7.4 million remained in the trust account pursuant to the Forward
Purchase Agreement. The Company paid Seller $ 6,805,651, representing amounts payable by
us to Seller under the Forward Purchase Agreement, net of the aggregate purchase price of
the total number of Additional Shares issued to Seller under the FPA Funding Amount PIPE
Subscription Agreement; and Seller paid the Company one-half (1/2) of the Prepayment Shortfall,
or $ 625,000.

 On
August 31, 2023 and October 2, 2023, the Company entered into an amendment and a second amendment, respectively (together, the "Amendments")
to the Forward Purchase Agreement.

 The
combined effect of the Amendments was to:

 increase
 the total number of additional shares Seller purchased from the Company under an FPA Funding Amount PIPE Subscription Agreement to
 2,436 shares of the Company's common stock;

 provide
 payment to the Company of "Future Shortfall" amounts totaling $ 550,000 and reducing the Prepayment Shortfall to $ 1,175,000,
 all of which has been paid to the Company;

 increase
 the total share consideration to Seller to 1,222 shares of the Company's common stock,

 reduce
 the remaining number of Recycled Shares to 1,318;

 increase
 the number of shares subject to the Forward Purchase Agreement to 4,421; and

 extend
 the "Valuation Date" to the two-year anniversary of the Closing of the Business Combination, or earlier at the discretion
 of Seller and upon notice to the Company.

 The
Forward Purchase Agreement, as amended, provides for a cash settlement following the Valuation Date, at which time Seller is obligated
to pay the Company an amount equal to the "Number of Shares" subject to the Forward Purchase Agreement (provided such Shares
are registered for resale or freely transferrable pursuant to an exemption from registration) multiplied by a per share price reflecting
the Company's volume weighted average trading price over a number of days following the Valuation Date, subject to alternate calculations
in certain circumstances. At settlement, the Company is obligated to pay Seller a settlement adjustment of $ 450 per share for the total
Number of Shares, which is payable in cash, or in shares of the Company's common stock if the settlement adjustment is greater
than the settlement amount payable by Seller and provided that Seller's ownership would not exceed 9.9 % of the Company's
outstanding common stock. Provided further, that is the settlement amounts less the settlement amount adjustment is a negative number
and the Company has elected to pay the settlement amount adjustment in cash, then neither Meteora nor the Company shall be liable to
the other party for any payment under the Forward Purchase Agreement. The Forward Purchase Agreement was determined to be a freestanding
equity-linked financial instrument under ASC 480. The FPA does not include an obligation to issue warrants. As such, the FPA shares were
classified as equity and net payments made to the Company were recorded to additional paid in capital as part of the recapitalization.

 FPA
Funding Amount PIPE Subscription Agreements

 On
August 6, 2023, Oxbridge entered into a subscription agreement (the "FPA Funding Amount PIPE Subscription Agreement")
 with Seller.

to the FPA Funding PIPE Subscription Agreement, Seller agreed to subscribe for and purchase, and Oxbridge agreed to issue and sell to
Seller, on the Closing Date, an aggregate of up to 5,275 Oxbridge Shares, less the Recycled Shares in connection with the Forward Purchase
Agreement.

 F- 19

 Maxim
Settlement Agreement

 On
August 10, 2023, the Company entered into a settlement agreement ("Maxim Settlement Agreement") with Maxim Group LLC, the
underwriter for the Company's initial public offering ("Maxim"). Pursuant to the Maxim Settlement Agreement, the Company
issued 1,200 shares of Jet. AI Common Stock to settle the payment obligations of the Company under the underwriting agreement dated on
or about August 11, 2021, by and between the Company and Maxim, which shares of Jet. AI Common Stock are subject to a Registration Rights
Agreement. The Company also issued 1,127 shares of 8% Series A Cumulative Convertible Preferred Stock in an amount equal in value to
$ 1,127,000 (the "Series A Preferred Shares"). The shares of Jet. AI Common Stock issuable upon conversion of the Series A
Preferred Shares were subject to mandatory redemption on August 10, 2024, which was automatically extended by an additional three months
as the Company did not complete one or more equity financings prior to such date that, in total, result in gross proceeds to the Company
of $ 10.0 million or greater. If the Company raises equity capital, 15 % of the net proceeds were required to be used to redeem the Series
A Preferred Shares.

 In
July 2024, the Company and Maxim entered into an amendment to the Maxim Settlement Agreement and agreed to, among other things, amend
the definition of the "Series A Conversion Price" for the Series A Preferred Shares and certain restrictions with respect
to shares of Company common stock Maxim may acquire upon the conversion of its shares of Series Preferred Stock.

the year ended December 31, 2024, the Company issued 10,166 shares of Common Stock upon the conversion of 551 Series A Preferred Shares.
In November 2024, the Company redeemed in full all of the remaining 576 Series A Preferred Shares for an aggregate redemption price of
$ 663,740, which included cumulative unpaid preferred stock dividends totaling $ 87,740. As a result of this redemption there are no Series
A Preferred Shares issued and outstanding as of December 31, 2024.

 Sponsor
Settlement Agreement

 On
August 10, 2023, Jet Token, Oxbridge, and OAC Sponsor Ltd. (the "Sponsor") entered into a settlement agreement (the "Sponsor
Settlement Agreement"). Pursuant to the Sponsor Settlement Agreement, the Company issued 575 shares of the Company's 5% Series
A-1 Convertible Preferred Stock (the "Series A-1 Preferred Shares") to settle the payment obligations of the Company under
a promissory note in the principal amount of $ 575,000 dated November 14, 2022 in favor of Sponsor. The shares of Jet. AI Common Stock
issuable upon conversion of the Series A-1 Preferred Shares were subject to mandatory redemption on August 10, 2024, which was automatically
extended by an additional three months as the Company did not complete one or more equity financings prior to such date that, in total,
result in gross proceeds to the Company of $ 10.0 million or greater. If the Company raises equity capital, 15 % of the net proceeds were
required to be used to redeem the Series A-1 Preferred Shares.

 In
August 2024, Sponsor agreed to waive certain notice and redemption rights in favor of Sponsor pursuant to terms of the Series A-1 Preferred
Convertible Stock held by Sponsor related to equity financings conducted by the Company in consideration of a $ 100,000 fee which was
paid in full in October 2024.

 In
October 2024, the Company redeemed in full all of the 575 issued and outstanding Series A-1 Preferred Shares for an aggregate redemption
price of $ 575,000. As a result of this redemption there are no Series A-1 Preferred Shares issued and outstanding as of December 31,
2024.

 Sunpeak
Settlement Agreement

 On
August 21, 2024, the Company entered into a Settlement Agreement and Stipulation, effective on August 28, 2024 (the "Sunpeak Settlement
Agreement"), with Sunpeak Holdings Corporation ("SHC") to settle outstanding claims owed to SHC. Pursuant to the Sunpeak
Settlement Agreement, SHC agreed to purchase certain outstanding payables between the Company and designated vendors of the Company totaling
approximately $ 2.1 million (the "SHC Claims") and agreed to exchange the SHC Claims for shares of Common Stock (the "Settlement
Shares"). The Company also agreed to issue to SHC an additional 444 shares of Common Stock pursuant to Section 3(a)(10) of the
Securities Act of 1933, as amended, in accordance therewith as a settlement fee. The settlement fee was recorded to General and Administrative
expenses as stock-based compensation based on the fair value of the shares of $ 33,800.

the year ended December 31, 2024, the Company issued 162,481 shares of common stock for settlement of approximately $ 2.1 million in SHC
Claims under the Sunpeak Settlement Agreement.

 F- 20

 Textron
Aircraft Purchase Agreement

 On
October 31, 2024, the Company entered into an aircraft purchase agreement with Textron Aviation Inc. ("Textron"), for the
purchase of three Cessna Citation CJ4 aircraft (the "CJ4 Aircraft"). Under the aircraft purchase agreement, the Company may
purchase from Textron specifically configured CJ4 Aircraft at prevailing market rates whereby the aggregate purchase price could be approximately
$ 40.5 million. The aircraft are expected to be delivered in the third and fourth quarter of 2026. The Company made deposits totaling
$ 2.4 million under the purchase agreement through December 31, 2024, and will be required to make additional deposits totaling $ 3.2 million
during 2025.

 Engagement
Letter with Maxim Group LLC

 On
December 4, 2024, the Company entered into an engagement letter (the "Maxim Engagement Letter") with Maxim Group LLC. ("Maxim"),
pursuant to which the Company engaged Maxim to serve as its exclusive financial advisor with respect to one or more potential business
combinations involving the Company for a period of seven months. Pursuant to the Maxim Engagement Letter, the Company agreed to pay Maxim
a non-refundable stock fee of 25,000 shares (the "Retainer") which were issued upon execution of the engagement letter. The
shares were recorded to General and Administrative expenses as stock-based compensation based on the fair value of the shares of $ 95,000.

 If
the Company consummates a Transaction with a Potential Buyer, then Maxim shall receive a fee (the "Success Fee") of $ 500,000
upon the closing of the Transaction. In the event that the Company enters into an agreement with respect to a Transaction during the
term of this Agreement that is subsequently terminated, and the Company becomes entitled to a break-up, termination, topping, expense
reimbursement or similar fee or payment (including any judgment for damages or amount in settlement of any dispute as a result of such
termination, or any profit on any stock acquired from, or stock option granted by, any party to such transaction), a fee (the "Break-up
Fee") equal 25 % of all such amounts, payable promptly upon receipt of such amounts by the Company. In addition to the Retainer,
Success Fee and Break-up Fee payable pursuant to the Maxim Engagement Letter, and regardless of whether any Transaction is proposed or
consummated, the Company shall reimburse Maxim for all reasonable travel, food, lodging and other out-of-pocket expenses incurred in
connection with the services performed by Maxim pursuant to Maxim Engagement Letter promptly after submission of such properly evidenced
expenses to the Company.

 NOTE
6 – STOCKHOLDERS' EQUITY

 Common
Stock and Preferred Stock

 Under
the Amended and Restated Certificate of Incorporation of the Company, as amended, the Company is authorized to issue up to 204,000,000
shares, consisting of two classes: 200,000,000 shares of common stock, $ 0.0001 par value per share, and 4,000,000 shares of preferred
stock, $ 0.0001 par value per share, of which 5,000 shares of preferred stock have been designated as Series B Convertible Preferred Stock,
par value $ 0.0001 ("Series B Preferred Stock"). As of December 31, 2024, there were no issued and outstanding shares of Series
A and Series A-1 Preferred Stock, and 250 issued and outstanding shares of Series B Preferred Stock.

 Upon
the consummation of the Business Combination, 20,103 shares of Jet. AI Common Stock and 31,984 Merger Consideration Warrants were issued
to the Historical Rollover Shareholders (as defined in the Business Combination Agreement) in exchange for all outstanding shares of
Jet Token Common Stock (including shares of Jet Token Preferred Stock converted in the Conversion). The Company also reserved for issuance
up to 14,598 shares of Common Stock in respect of Jet. AI Options issued in exchange for outstanding pre-merger Jet Token Options, and
 662 shares of Jet. AI Common Stock and 1,053 Merger Consideration Warrants in respect of Jet. AI RSU Awards issued in exchange for outstanding
pre-merger Jet Token RSU Awards. Each Merger Consideration Warrant entitled the holder to purchase one whole share of the Company's
common stock at a price of $ 3,375 per share and were to expire ten years after issuance.

 F- 21

 In
addition, in connection with the Business Combination, the Jet. AI Board adopted the 2023 Omnibus Incentive Plan (the "2023 Plan")
in order to facilitate the grant of equity awards to attract, retain and incentivize employees (including the named executive officers),
independent contractors and directors of Jet. AI Inc. and its affiliates, which is essential to Jet. AI Inc.'s long term success.
The 2023 Plan is a continuation of the 2018 Plan and 2021 Plan (each as defined below), which were assumed from Jet Token and amended,
restated and re-named into the form of the 2023 Plan effective as of the consummation of the Business Combination.

 On
October 10, 2024, the Company entered into Securities Purchase Agreements (the "First Purchase Agreement") with institutional
investors for the sale of 118,518 shares of common stock at a per share price of $ 20.25. The closing of the offering occurred on October
11, 2024. In connection with offering, the Company entered into a placement agency agreement with
Maxim, pursuant to which the Company agreed to pay Maxim (as the placement agent) an aggregate fee equal to 7.0 % of the aggregate gross
proceeds received by the Company from the sale of the shares in the offering. The Company also agreed to reimburse Maxim for certain
expenses in an amount up to $ 100,000. The gross proceeds from the offering were approximately $ 2.4 million, before deducting the
placement agent's fees and other estimated offering expenses payable by the Company of approximately $ 300,000.

 On
October 21, 2024, the Company entered into Securities Purchase Agreements (the "Second Purchase Agreement") with institutional
investors for the sale of 69,444 shares of common stock at a per share price of $ 21.60. The closing of the offering occurred on October
21, 2024. In connection with offering, the Company entered into a placement agency agreement with
Maxim, pursuant to which the Company agreed to pay Maxim (as the placement agent), an aggregate fee equal to 7.0 % of the aggregate gross
proceeds received by the Company from the sale of the shares in the offering. The Company also agreed to reimburse Maxim for certain
expenses in an amount up to $ 25,000. The gross proceeds from the offering were approximately $ 1.5 million, before deducting the
placement agent's fees and other estimated offering expenses payable by the Company of approximately $ 150,000.

 On
October 25, 2024, the Company entered into an Equity Distribution Agreement ("ATM Sales Agreement") with Maxim, which provides
for the sale, in our sole discretion, of shares of our common stock through Maxim, as our sales agent. In accordance with the terms of
the ATM Sales Agreement, the Company may offer and sell shares of our common stock, par value $ 0.0001 per share, having an aggregate
offering price of up to $ 5,400,000. We pay a commission of up to 3 % of gross sales proceeds of any common stock sold under the ATM Sales
Agreement. The Company sold 729,963 shares for gross proceeds of $ 5.4 million, before deducting placement agent's fees and other
estimated offering expenses payable by the Company of approximately $ 202,000.

 On
November 14, 2024, the Company issued 20,000 shares of common stock for offering costs. The fair value of the shares of $ 175,500 was
recorded to stockholders' deficit as a reduction of additional paid-in capital.

 Warrant
Exchange

 On
July 30, 2024, the Company completed an exchange offer relating to its previously outstanding Redeemable Warrants, Merger Consideration
Warrants, and private placement warrants (the "Private Placement Warrants"), whereby the holders of the Redeemable Warrants
and Private Placement Warrants were offered 0.3054 shares of common stock, and holders of Merger Consideration Warrants were offered
 1.0133 shares of common stock, in exchange for each outstanding warrant tendered (the "Warrant Exchange Offer"). In connection
with the closing of the Warrant Exchange Offer, a total of 42,597 shares of common stock were issued in exchange for 87,644 warrants.
Pursuant to an amendment to the warrant agreement with respect to each class of warrants approved by the holders in connection with the
Warrant Exchange Offer, on September 9, 2024, the 14,764 outstanding warrants that were not tendered in the exchange were exchanged for
 10,938 shares of common stock. There were no Redeemable Warrants, Merger Consideration Warrants, or Private Placement Warrants outstanding
as of December 31, 2024.

 As
a result of these transactions, the Company recognized a deemed dividend of $ 540,255 from the excess of the fair value of the common
stock over the fair value of the warrants immediately prior to the exchange.

 F- 22

 Series
B Convertible Preferred Stock Securities Purchase Agreement

 On
March 28, 2024, the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with Ionic
Ventures, LLC ("Ionic") for a private placement, which closed on March 29, 2024. Pursuant to the Securities Purchase Agreement
the Company sold 150 shares of Series B Preferred Stock, a warrant to purchase up to 1,500 shares of Series B Preferred Stock with an
exercise price of $ 10,000 per share, and 1,111 shares of Jet. AI Common Stock for net proceeds of $ 1,345,025 after deducting offering
costs of $ 155,000.

 Each
share of Series B Preferred Stock is convertible into a number of shares of Jet. AI Common Stock, subject to certain limitations, including
a beneficial ownership limitation of 4.99% (calculated in accordance with the rules promulgated under Section 13(d) of the Securities
Exchange Act of 1934), which can be adjusted to a beneficial ownership limitation of 9.99% upon 61 days prior written notice by Iconic.
Prior to the approval by the Company's stockholders of the issuance of shares of common stock issuable upon exercise of the shares
of Series B Preferred Stock in accordance with Nasdaq Stock Market Rules, shares of Series B Preferred Stock could not be converted into
shares of common stock if, as a result of such conversion, the number of shares of common stock to be issued would exceed 19.9% of the
total number of shares of the Company's outstanding common stock as of the closing date. At the annual meeting of stockholders
held on September 24, 2024, the Company's stockholders approved a proposal that served to remove the 19.9% limitation.

 Subject
to the limitations set forth in the preceding paragraph and provided there is an effective registration statement covering Ionic's
resale of the Jet. AI Common Stock underlying the Series B Preferred Stock, shares of Series B Preferred Stock will automatically convert
into shares of Jet. AI Common Stock on or prior to the tenth trading day after the issuance date of such shares of Series B Preferred
Stock. The number of shares of common stock issuable upon conversion of a share of Series B Preferred Stock is calculated by dividing
the conversion amount per share of Series B Preferred Stock by the then conversion price. The conversion amount is equal to the stated
value of the shares of Series B Preferred Stock, which is $ 10,000, plus any additional amounts and late charges calculated in accordance
with the Certificate of Designations. The conversion price is equal to 90% (or, in the case of a delisting, 80%) of the lowest daily
volume weighted average price of Common Stock over a period beginning on the trading day after the Company delivers shares of common
stock upon such conversion to Ionic and ending on the trading day on which the aggregate dollar trading volume of our common stock exceeds
seven times the applicable conversion amount, subject to a five trading day minimum period for such calculation, and subject to certain
adjustments.

 If
certain defined "triggering events" defined in the Certificate of Designations occur, such as a breach of the Ionic Registration
Rights Agreement, suspension of trading, or the Company's failure to convert the Series B Preferred Stock into common stock when
a conversion right is exercised, then the Company may be required to redeem the Series B Preferred Stock for cash at 110 % of the stated
value.

 In
connection with the transactions under the Securities Purchase Agreement, the Company entered into a placement agency agreement (the
"Placement Agency Agreement") with Maxim. Pursuant to the terms of the Placement Agency Agreement, the Company agreed to
pay Maxim a cash fee equal to 7 % of the aggregate gross proceeds raised under the Securities Purchase Agreement and reimburse Maxim,
directly upon the initial closing under the Securities Purchase Agreement for all travel and other documented out-of-pocket expenses
incurred by Maxim, including the reasonable fees, costs and disbursements of its legal counsel, in an amount not to exceed an aggregate
of $ 15,000. The Company paid Maxim a total of $ 120,000 out of the gross proceeds it received at closing. From time to time as the Company
issues additional securities to Ionic as contemplated by the Securities Purchase Agreement, the Company would be obligated to pay Maxim
cash fees of up to $ 1,050,000.

 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 related to the Securities Purchase Agreement. Under the Letter Agreement, Ionic
agreed to refrain from taking action to protect its legal rights under the Securities Purchase Agreement. In consideration for the waiver,
the Company agreed to a release of Ionic and its affiliates and issued to Ionic 50 additional shares of Series B Preferred Stock. The
share issuance was recorded to General and Administrative expenses as stock-based compensation based on the fair value of the equivalent
common shares on the issuance date of $ 459,000.

 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 related to the Securities Purchase Agreement described in Note 5. Under
the Second Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the Securities Purchase Agreement,
and the related documents and agreements among the parties, related to certain actions and transactions identified in the Second Letter
Agreement. In consideration of Ionic's consent, the Company has agreed to, among other things, change the Conversion Measurement
Period (as defined in the Certificate of Designations) for the 200 shares of Series B Convertible Preferred Stock that Ionic held as
of the date of the Second Letter Agreement to begin on March 28, 2024 and to end in accordance with the Certificate of Designations.

 F- 23

 On
October 18, 2024, the Company and Ionic entered into a third letter agreement (the "Third Letter Agreement") that set forth
certain understandings and agreements among the Company and Ionic related to the Securities Purchase Agreement described in Note 5. Under
the Third Letter Agreement, Ionic agreed to refrain from taking action to protect its legal rights under the Securities Purchase Agreement,
and the related documents and agreements among the parties, related to a transaction that may be effected utilizing the registration
statement on Form S-3 (File No. 333-281578) as generally identified in the Third Letter Agreement. In consideration for Ionic's
consent, the Company agreed to, among other things, change the Conversion Measurement Period (as defined in the Certificate of Designations)
for the first 200 shares of Series B Convertible Preferred Stock that Ionic would hold upon exercise of the Ionic Warrant, to begin on
March 28, 2024 and to end in accordance with the Certificate of Designations for the Series B Preferred Stock.

 In
November and December 2024, the Company issued 400 shares of Series B Preferred Stock from the exercise of 400 Series B Preferred warrants
for gross proceeds of $ 4,000,000 before deducting offering costs of $ 280,000.

the year ended December 31, 2024, the Company issued 293,184 shares of common stock for the conversion of 350 shares of Series B Convertible
Preferred Stock.

 Regulation
A offerings

 In
June 2021, the Company undertook another Regulation A, Tier 2 offering for which it was selling up to 4,012 non-voting common stock at
$ 5,400 per share for a maximum of $ 21,880,000. During the year ended December 31, 2023, the Company issued an additional 293 shares of
non-voting common stock under the Regulation A, Tier 2 campaign for aggregate gross proceeds of $ 1,598,630, with $ 6,724 of these proceeds
pending release from escrow at December 31, 2024.

 Share
Repurchase Program

 On
November 13, 2024, the Company's Board of Directors authorized and approved a share repurchase program (the " Share Repurchase
Program ") pursuant to which the Company may repurchase up to $ 2 million of the Company's outstanding shares of common
stock from time to time through December 31, 2025. The Company may buy back its common stock from time to time, in amounts, at prices,
and at such times as the Company deems appropriate, subject to market conditions, pursuant to Rule 10b-18 of the Securities Exchange
Act of 1934, and federal and state laws governing such transactions, through a variety of methods, which may include open market purchases,
privately negotiated transactions, block trades, accelerated share repurchase transactions, purchases through 10b5-1 trading plans, or
by any combination of such methods. The Share Repurchase Program does not oblige the Company to acquire any specific number of shares
and may be modified, discontinued, or suspended at any time. As of December 31, 2024, no shares had been repurchased under the Share
Repurchase Program.

 Stock
Options

 In
connection with the Business Combination, the Company adopted the 2023 Plan. The
2023 Plan provides for the grant of equity awards to employees, outside directors, and consultants, including the direct award or sale
of shares, stock options, and restricted stock units to purchase shares. The 2023 Plan is a continuation
of the 2018 Plan and 2021 Plan, which were assumed from Jet Token and amended, restated and re-named into the form of the 2023 Omnibus
Incentive Plan effective as of the consummation of the Business Combination. In September 2024, the 2023 Plan was amended to increase
the number of shares of common stock authorized under the 2023 Plan to 10,933 shares and to eliminate the automatic share replenishment
provision. As of December 31, 2024, the total number of shares reserved for issuance under the Omnibus Incentive Plan was 10,933
shares. The Omnibus Incentive Plan is administered by the Company's Board of Directors, and expires ten years after adoption, unless
terminated by the Board.

 On
June 4, 2018, the Company's Board of Directors adopted the Jet. AI, Inc. 2018 Stock Option and Grant Plan (the "2018 Plan").
The 2018 Plan provides for the grant of equity awards to employees, non-employee directors and consultants, to purchase shares of Jet. AI
Common Stock. As of December 31, 2024, the total number of shares reserved for issuance under the 2018 Plan was 10,301. The 2018 Plan
is administered by the Board.

 F- 24

 In
August 2021, the Board adopted the Jet Token Inc. 2021 Stock Plan (the "2021 Plan"). The 2021 plan provides for the grant
of equity awards to employees, outside directors, and consultants, including the direct award or sale of shares, stock options, and restricted
stock units to purchase shares. Up to 688 shares of common stock may be issued pursuant to awards granted under the 2021 Plan. During
the year ended December 31, 2022, the 2021 Plan was amended to increase the number of shares of common stock authorized under the 2021
Plan to 2,063. In the event that shares of common stock subject to outstanding options or other securities under the Company's
2018 Stock Option and Grant Plan expire or become exercisable in accordance with their terms, such shares shall be automatically transferred
to the 2021 Plan and added to the number of shares then available for issuance under the 2021 Plan. The 2021 Plan is administered by
the Board, and expires ten years after adoption, unless terminated by the Board.

the year ended December 31, 2023, the Company granted a total of 2,038 stock options to purchase common stock to various employees, advisors
and consultants. The options have a ten -year life and weighted average exercise price of $ 880.41. Approximately 190 of the options vest
over a period of two months, while the remaining options vest in monthly tranches over a three-year period. The options had a grant date
fair value of approximately $ 2,113,000, which will be recognized over the vesting period.

the year ended December 31, 2024, the Company granted a total of 6,400 stock options to purchase common stock and 485 restricted stock
units to various employees, advisors and consultants. The options have a ten-year life and an exercise price ranging from $ 22.75 to $ 24.35.
Approximately 3,958 of the options were immediately vested on the grant date, while the remaining options vest in monthly tranches over
a three-year period. The options had a grant date fair value of approximately $ 115,000, which will be recognized over the vesting period.
The 485 restricted stock units were immediately vested on the grant date.

 A
summary of our stock option activity for the years ended December 31, 2024 and 2023, is as follows:

OF STOCK OPTIONS ACTIVITY

 Number
 of Shares

 Weighted
 Average Exercise Price

 Weighted
 Average Remaining Contractual Term

 Outstanding at December 31, 2022

 14,299

 $
 1,457.73

 8.06

 Granted

 2,038

 880.41

 10.00

 Exercised

 -

 -

 -

 Expired/Cancelled

 ( 69
)

 2,345

 -

 Outstanding at December 31, 2023

 16,268

 $
 1,381.64

 7.40

 Granted

 6,400

 23.74

 10.00

 Exercised

 -

 -

 -

 Expired/Cancelled

 -

 -

 -

 Outstanding at December 31, 2024

 22,668

 $
 998.26

 7.32

 Exercisable at December 31, 2024

 14,513

 $
 1,555

 6.70

 F- 25

 The
Company estimates the fair value of stock options that contain service and/or performance conditions using the Black-Scholes option pricing
model. The range of input assumptions used by the Company were as follows:

OF STOCK OPTIONS VALUATION ASSUMPTIONS

 31,

 2024

 2023

 Expected life (years)

 to 10

 Risk-free interest rate

 3.55 %
 - 3.95
 %

 3.55 %
 - 4.55
 %

 Expected volatility

 %

 %

 Annual dividend yield

 %

 %

 Per share grant date fair value

 $
 18.19

 $
 1,036.57

 The
Company recognizes stock option forfeitures as they occur as there is insufficient historical data to accurately determine future forfeitures
rates.

 The
risk-free interest rate assumption for options granted is based upon observed interest rates on the United States government securities
appropriate for the expected term of the Company's stock options.

 The
expected term of stock options is calculated using the simplified method which takes into consideration the contractual life and vesting
terms of the options.

 The
Company determined the expected volatility assumption for options granted using the historical volatility of comparable public company's
common stock. The Company will continue to monitor peer companies and other relevant factors used to measure expected volatility for
future stock option grants, until such time that the Company's common stock has enough market history to use historical volatility.

 The
dividend yield assumption for options granted is based on the Company's history and expectation of dividend payouts. The Company
has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the
foreseeable future.

the years ended December 31, 2024 and 2023, stock-based compensation expense of $ 4,287,236 and $ 6,645,891, respectively, was recognized
for the vesting of these options and restricted stock units. As of December 31, 2024, there was approximately $ 1,125,000 in unrecognized
stock-based compensation, which will be recognized through September 2027.

 Warrants

 The
number of outstanding warrants issued by the Company as of December 31, 2024 is as follows:

OF OUTSTANDING WARRANTS

 Warrant

 Expiration
 Date

 Exercise
 Price

 Number
 Outstanding

 GEM Common Stock Warrants

 /11/2026

 $
 14.12

 9,686

 Ionic Series B Preferred
 Stock Warrants

 /29/2026

 $
 10,000

 1,100

 Total

 10,786

 NOTE
7 – RELATED PARTY TRANSACTIONS

 See
Note 4 for a discussion of the Bridge Agreement entered into with related parties.

 See
Note 5 for a discussion of the related party Settlement Agreement and Engagement Letter entered into with Maxim.

 See
Note 5 for a discussion of the related party Settlement Agreement entered into with Sponsor.

 See
Note 6 for a discussion of related party Placement Agent Agreement with Maxim.

 NOTE
8 – FAIR VALUE OF FINANCIAL INSTRUMENTS

 The
carrying amount of the Company's financial instruments, which consist of cash and cash equivalents, accounts receivable, accounts
payable, and notes payable approximate fair value due to their short-term nature.

 F- 26

 NOTE
9 – DEFERRED REVENUE

in deferred revenue for the years ended December 31, 2024 and 2023 were as follows:

OF DEFERRED REVENUE

 Deferred revenue as of December 31, 2022

 $
 933,361

 Amounts deferred during
 the period

 3,695,476

 Revenue recognized from
 amounts included in the deferred revenue beginning balance

 ( 933,361
)

 from current year sales

 ( 1,915,682
)

 Deferred revenue as of December 31, 2023

 $
 1,779,794

 Amounts deferred during
 the period

 7,625,047

 Revenue recognized from
 amounts included in the deferred revenue beginning balance

 ( 1,779,794
)

 from current year sales

 ( 6,305,301
)

 Deferred revenue as of December 31, 2024

 $
 1,319,746

 NOTE
10 – INCOME TAXES

 For
the years ended December 31, 2024 and 2023, the Company did not record a current or deferred income tax expense or benefit due to current
and historical losses incurred by the Company. The Company's losses before income taxes consist solely of losses from domestic
operations.

 A
reconciliation of income tax expense (benefit) computed at the statutory federal income tax rate to income taxes as reflected in the
financial statements is as follows:

OF RECONCILIATION OF INCOME TAX EXPENSE (BENEFIT)

 2024

 2023

 Statutory US Federal tax rate

 21.0
 %

 21.0
 %

 Permanent differences:

 State and local income
 taxes, net of Federal benefit

 0.0
 %

 0.0
 %

 Stock compensation

 - 7.0
 %

 - 11.1
 %

 Other

 0.0
 %

 - 0.1
 %

 Temporary differences

 - 0.4
 %

 - 1.3
 %

 Valuation allowance

 - 13.6
 %

 - 8.5
 %

 Total

 0.0
 %

 0.0
 %

taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes.
The significant components of the Company's deferred tax assets and liabilities as of December 31, 2024 and 2023 are comprised
of the following:

OF DEFERRED TAX ASSETS AND LIABILITIES

 2024

 2023

 Deferred tax asset attributable to:

 Net operating
 loss carryover

 $
 4,299,000

 $
 2,529,000

 Valuation
 allowance

 ( 4,299,000
)

 ( 2,529,000
)

 Net deferred tax asset

 $
 -

 $
 -

 F- 27

 The
Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which are comprised
primarily of net operating loss carryforwards. Management has considered the Company's history of cumulative net losses in the
United States, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely
than not that the Company will not realize the benefits of its U.S. federal and state deferred tax assets. Accordingly, a full valuation
allowance has been established against these net deferred tax assets as of December 31, 2024 and 2023, respectively. The Company reevaluates
the positive and negative evidence at each reporting period. The Company's valuation allowance increased during 2024 by approximately
$ 1,770,000 primarily due to the generation of a net operating loss of approximately $ 8,200,000.

 At
December 31, 2024, the Company had federal net operating loss carry forwards of approximately $ 20,400,000. The federal operating losses
since inception have no expiration.

 Utilization
of the U.S. federal and state net operating loss may be subject to a substantial annual limitation under Section 382 and Section 383
of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, due to ownership changes that have occurred
previously or that could occur in the future. These ownership changes may limit the amount of net operating loss that can be utilized
annually to offset future taxable income and tax liabilities, respectively. The Company is currently performing an analysis but has not
completed its study to assess whether a change of ownership has occurred, or whether there have been multiple ownership changes since
its formation. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development
tax credit carryforwards before utilization.

 The
Company is subject to tax in the United States ("U.S.") and files income tax returns in the U.S. Federal jurisdiction and
several states and local jurisdictions where the Company has determined it has tax nexus. The Company is subject to U.S. Federal, state
and local income tax examinations by tax authorities for all periods since Inception. The Company currently is not under examination
by any tax authority.

 NOTE
11 – SUBSEQUENT EVENTS

 Share
Issuances

 In
January 2025, the Company issued 250
shares of Series B Preferred Stock upon the partial exercise of the Ionic Warrant for total consideration of $ 2,500,000.

 In
January 2025, the Company issued 532,100 shares of common stock for the conversion of 50 shares of Series B Preferred Stock.

 In
February 2025, the Company issued 850
shares of Series B Preferred Stock upon the full exercise of the Ionic Warrant for total consideration of $ 8,500,000.

 Potential
flyExclusive Transaction

 On
February 13, 2025, the Company entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") with
flyExclusive, Inc. ("flyExclusive"), FlyX Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of flyExclusive
("Merger Sub"), and Jet. AI SpinCo, Inc., a Delaware corporation and wholly owned subsidiary of the Company ("SpinCo").
Pursuant to the Merger Agreement, (i) as a condition to closing on the Merger Agreement, the Company will distribute all of the shares
of SpinCo, on a pro rata basis, to the Company's stockholders and (ii) Merger Sub will merge with and into SpinCo (the "Merger"
and, together with the Distribution and all other transactions contemplated under the Merger Agreement, the "Transactions")
with SpinCo surviving the Merger as a wholly owned subsidiary of flyExclusive.

 F- 28

 In
connection with executing the Merger Agreement, the Company, SpinCo, and flyExclusive entered into a Separation and Distribution Agreement
(the "Separation and Distribution Agreement") pursuant to which the Company will transfer the business, operations, services
and activities of the Company's jet charter business to SpinCo (the "Separation"). Upon the terms and subject to the
conditions set forth in the Separation and Distribution Agreement, the Company will distribute all of the shares of common stock of SpinCo,
$ 0.001 par value per share ("SpinCo Common Stock") to the Company's stockholders on a pro rata basis as set forth in
the Separation and Distribution Agreement (the "Distribution"). As such, the Company will no longer operate a jet charter
business as of consummation of the Distribution. There will be no change to the Company's board of directors or executive officers
as a result of the Transactions.

 As
consideration for the Merger and upon closing of the Merger, the holders of common stock of SpinCo will have their SpinCo Common Stock
converted on a pro rata basis into the right to receive shares of Class A common stock of flyExclusive, $ 0.0001 par value per share ("flyExclusive
Common Stock"), based on an exchange ratio equal to the quotient of (i) the "Initial Purchase Price" divided by the
volume weighted average closing sale price of the flyExclusive Common Stock as reported on NYSE American for a period of 30 consecutive
trading days ending on the trading day three trading days prior to the day of closing of the Merger (the "Merger Consideration
Shares"), divided by (ii) the total outstanding shares of SpinCo Common Stock. The "Initial Purchase Price" is an amount
equal to the product of (x) SpinCo's estimated net cash, multiplied by certain premium percentages depending on SpinCo's
estimated net cash upon closing of the Merger. The number of Merger Consideration Shares that holders of SpinCo Common Stock will receive
is subject to adjustment, depending on, among other things, the actual amount of SpinCo's net cash at closing of the Merger. The
Company's stockholders will continue to own and hold their existing shares of the Company's common stock as of closing of
the Merger.

 The
Transactions are subject to shareholder approval and are expected to close during the second quarter of 2025.

 The
Company has evaluated subsequent events that occurred after December 31, 2024 through March ___, 2025, the date that these consolidated
financial statements were available to be issued, and noted no additional events requiring recognition for disclosure.

 F- 29