Material Agreement Form 8 K

Item 1.01. Entry into a Material Definitive Agreement.

As previously announced, on August 10, 2023, Jet.AI Inc. (the "Company") entered into a settlement agreement (the "Settlement Agreement") with Maxim Group LLC ("Maxim"), pursuant to which the Company issued 1,127 shares of Series A Convertible Preferred Stock to Maxim. Also on August 10, 2023, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the "Certificate of Designation") with the Secretary of State of the State of Delaware, establishing the rights, preferences, privileges and other terms relating to the Series A Convertible Preferred Stock.

On July 15, 2024, the Company and Maxim entered into Amendment No.1 to Settlement Agreement (the "Settlement Agreement Amendment"), pursuant to which the Company and Maxim agreed to: amend the Certificate of Designation as further described below; certain "leak-out" restrictions with respect to shares of Company common stock Maxim may acquire upon the conversion of its shares of Series A Convertible Preferred Stock; and other related matters.

Also on July 15, 2024, in connection with the Settlement Agreement Amendment, the Company filed Amendment No. 1 to Certificate of Designation of Series A Convertible Preferred Stock of Jet.AI Inc. (the "COD Amendment") with the Secretary of State of the State of Delaware. The COD Amendment was approved by Maxim, the sole holder of all of the outstanding shares of Series A Convertible Preferred Stock as of such date, and by the unanimous written consent of the board of directors of the Company. The COD Amendment became effective upon filing with the Secretary of State of the State of Delaware.

The COD Amendment amended the definition of "Series A Conversion Price" by replacing Section 2(t) of the Certificate of Designation with the following:

"Series A Conversion Price" shall mean 100% of the VWAP of the Common Stock during the five (5) Trading Days immediately preceding, but not including, the date of conversion, as adjusted pursuant to Section 8, provided, however, that in no event shall outstanding shares of Series A Preferred Stock be converted into more than 19.99% of the outstanding shares of Common Stock as of the date of issuance, until such time as the Company obtains the approval of its shareholders to issue in excess of such 19.99% in accordance with the rules and regulations of the Nasdaq Stock Market. If, at any time while the Series A Preferred Stock is outstanding, the Company sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or enters into any agreement to issue, regardless of whether issued or not, or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any person to acquire shares of Common Stock at an effective price per share that is lower than the then Series A Conversion Price (such lower price, the "Base Conversion Price" and such issuances, collectively, a "Dilutive Issuance") (if the holder of the Common Stock so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Series A Conversion Price, such issuance shall be deemed to have occurred for less than the Series A Conversion Price on such date of the Dilutive Issuance), then simultaneously with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Series A Conversion Price shall be reduced to equal the Base Conversion Price. If the Company enters into a variable rate transaction, the Company shall be deemed to have issued Common Stock at the lowest possible conversion price at which such securities may be converted or exercised. The Company shall notify the Holder in writing, no later than the trading day following the issuance of any Common Stock subject to this subsection, indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the "Dilutive Issuance Notice"). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice, upon the occurrence of any Dilutive Issuance, the Holder is entitled to convert its Series A Preferred Stock based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion."