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 5,000,000 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 June 30, 2026, there were no issued and outstanding shares of Series B Preferred Stock.

On November 21, 2025, the Company entered into an Equity Distribution Agreement (“2025 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 original terms of the 2025 ATM Sales Agreement, the Company could offer and sell shares of common stock having an aggregate offering price of up to $10,000,000. We pay a commission of up to 3% of gross sales proceeds of any common stock sold under the 2025 ATM Sales Agreement. In January 2026 the parties amended the 2025 ATM Sales Agreement to increase the amount that may be sold under the agreement to $50,000,000, subject to any limitations imposed under SEC rules.

During the six months ended June 30, 2026, the Company sold 1,459,503 shares under the ATM program for gross proceeds of approximately $27.7 million, before deducting placement agent’s fees and other estimated offering expenses payable by the Company of approximately $834,000.

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 (the “Ionic Warrant”), and 6 shares of Company common stock for net proceeds of $1,345,025 after deducting offering costs of $155,000.

Each share of Series B Preferred Stock was convertible into a number of shares of common stock, subject to certain limitations, including a beneficial ownership limitation.

In connection with the transactions under the Securities Purchase Agreement, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with Maxim and 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 expenses incurred by Maxim, 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 6. 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 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.

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 6. 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.

On December 2, 2025, the Company, Hexstone Capital, LLC (“Hexstone”), and Ionic entered into a fourth letter agreement (the “Fourth Letter Agreement”) that set forth certain understandings and agreements among the Company and Ionic related to the Securities Purchase Agreement described in Note 7. Hexstone was assigned certain rights shares acquired by Ionic under the Ionic Warrant. Under the Fourth Letter Agreement, 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 (i) a transaction that may be effected utilizing the registration statement on Form S-3 (File No. 333-281578) as generally identified in the Fourth Letter Agreement and (ii) a potential underwritten public offering not to exceed $10 million. In consideration for the consent of Ionic and Hexstone, the Company agreed, among other things, to change the conversion price of Series B Convertible Preferred Stock as set forth in that certain Certificate of Designation for the Series B Convertible Preferred Stock by filing an amendment to the Certificate such that shares of Series B Convertible Preferred Stock could convert at a lower price.

During the six months ended June 30, 2025, the Company issued a total of 1,100 shares of Series B Preferred Stock upon various exercises of the Ionic Warrant for gross proceeds of $11,000,000 before deducting offering costs of $770,000. As a result of these exercises, the Ionic Warrant was no longer outstanding as of June 30, 2026 and December 31, 2025.

During the six months ended June 30, 2025, the Company issued 7,307 shares of common stock for the conversion of 361 shares of Series B Preferred Stock.

During the six months ended June 30, 2026, the Company issued 198,854 shares of common stock for the conversion of 750 shares of Series B Preferred Stock.

At June 30, 2026 no shares of Series B Preferred Stock remain issued and outstanding and no additional shares are expected to be issued.

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 then wholly owned subsidiary of the Company (“SpinCo”). Pursuant to the Merger Agreement, (i) as a condition to closing on the Merger Agreement, the Company agreed to distribute all of the shares of SpinCo, on a pro rata basis, to the Company’s stockholders (the “Distribution” and sometimes referred to in this Quarterly Report as the “Spin-Off”) and (ii) Merger Sub was to 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.

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 agreed to transfer the business, operations, services and activities of the Company’s fractional and jet card business to SpinCo and distribute all of the shares of common stock of SpinCo (“SpinCo Common Stock”) to the Company’s stockholders (the “Distribution”).

On May 6, 2025, the parties entered into an Amended and Restated Agreement and Plan of Merger and Reorganization (the “Amended Merger Agreement”). Under the Amended Merger Agreement, 80% of the Merger Consideration Shares (as defined in the Amended Merger Agreement) would be issued upon closing, and 20% of the Merger Consideration Shares would be held in reserve by flyExclusive until a final post-closing purchase price is determined. Once the final post-closing purchase price is determined, flyExclusive will only issue additional Merger Consideration Shares from the reserve on a dollar-for-dollar basis up to the lesser of the final purchase price and the initial purchase price.

On July 13, 2026, the parties entered into an Amendment No. 5 to Amended and Restated Agreement and Plan of Merger and Reorganization (the “Amendment”). The Amendment provides for certain adjustments to the final calculation of the Purchase Price (as defined in the Amended Merger Agreement) in connection with the potential post-closing disposition by flyExclusive of certain SpinCo assets. The final Purchase Price will be used to determine whether any Reserve Shares or Additional Merger Consideration Shares (each as defined below) will be issued by flyExclusive post-closing. All other terms of the Merger Agreement remain unchanged.

On July 13, 2026, the Company completed the Distribution and Merger as contemplated by the Amended Merger Agreement and the Separation and Distribution Agreement. The completion of the transactions, including the Merger, resulted in the disposition of the Company’s fractional and jet card business. See Note 10 for additional information.

Regulation A Offerings

In June 2021, the Company undertook a Regulation A, Tier 2 offering for which it was selling up to shares of 20 non-voting common stock at $1,080,000 per share for a maximum of $21,880,000. During the year ended December 31, 2023, the Company issued an additional share 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 June 30, 2026.

Share Repurchase Program

On March 12, 2026, 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 $5 million in value of the Company’s outstanding shares of common stock from time to time through December 31, 2026. 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 June 30, 2026, no shares had been repurchased under the Share Repurchase Program.

Stock Options

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. In December 2025, the 2023 Plan was amended to increase the number of shares of common stock authorized under the 2023 Plan to 3,875 shares (plus an amount of shares that will account for all shares issuable in connection with the vesting of certain performance share unit awards that we granted to our executive management team). As of June 30, 2026, the total number of shares reserved for issuance under the Omnibus Incentive Plan was 3,875 shares. The Omnibus Incentive Plan is administered by the Company’s Board of Directors, and expires ten years after its initial adoption, unless terminated by the Board.

During the six months ended June 30, 2026 and 2025, stock-based compensation expense of $128,764 and $1,314,068, respectively, was recognized for the vesting of these options and restricted stock units. As of June 30, 2026, there was approximately $63,000 in unrecognized stock-based compensation, which will be recognized through September 2027.

A summary of our stock option activity for the six months ended June 30, 2026 and 2025, is as follows:

SCHEDULE OF STOCK OPTIONS ACTIVITY

Warrants

The number of outstanding warrants issued by the Company as of June 30, 2026 is as follows:

SCHEDULE OF OUTSTANDING WARRANTS