23 unchanged sentences
OTHER INFORMATION.
−Removed: We have no information to disclose that was required to be disclosed in a report on Form 8-K during fourth quarter of fiscal year 2024 but was not reported.
+Added: We have no information to disclose that was required to be disclosed in a report on Form 8-K during the fourth quarter of fiscal year 2025 but was not reported.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
3 unchanged sentences
The following table sets forth certain information about our current directors and executive officers:
−Removed: Chief Excutive Officer, Chairman of the Board and Director
+Added: Chief Executive Officer, Chairman of the Board and Director
Chief Operating Officer and Director
−Removed: Chief Technology Officer
Chief Financial Officer, Secretary and Treasurer
2 unchanged sentences
Background and Business Experience:
−Removed: Victor Huang joined Airship AI as its first employee in October 2004.
+Added: Victor Huang joined Airship as its first employee in October 2004.
Huang has served as our Chief Executive Officer and Chairman of the Board since December 2023.
−Removed: He has served as Airship AI’s Chief Executive Officer since April 2007 and a member of the Board of Directors of Airship AI since March 2005 and as Chairman of the Board beginning in January 2012.
+Added: He has served as Airship’s Chief Executive Officer since April 2007, a member of its Board of Directors since March 2005 and as its Chairman of the Board beginning in January 2012.
From June 1996 to September 2004, Mr.
3 unchanged sentences
Huang attended University of Washington where he studied business administration.
−Removed: Derek Xu is a co-founder of Airship AI.
+Added: Huang is our co-founder and was appointed as a director due to the perspective and experience he brings as an investor, Chairman, Chief Executive Officer and one of our largest stockholders.
+Added: Derek Xu is a co-founder of Airship.
Xu has served as our Chief Operating Officer, Secretary and Treasurer and a member of the Board since December 2023.
−Removed: He has served as Airship AI’s Chief Operating Officer, Secretary and Treasurer since March 2022 and as a member of the Board of Directors since the incorporation of Airship AI in 2003.
−Removed: Xu also previously served as Airship AI’s Chief Technology Officer from April 2007.
+Added: He has served as Airship’s Chief Operating Officer since March 2022 and as a member of its Board of Directors since the incorporation of Airship in 2003.
+Added: Xu previously served as Airship’s Secretary and Treasurer.
+Added: Xu also previously served as Airship’s Chief Technology Officer from April 2007 to December 2023.
Prior to 2003, Mr.
4 unchanged sentences
degree in Geophysics from University of Washington.
+Added: Xu is our co-founder and was appointed as a director due to the perspective and experience he brings as an investor, director, Chief Operating Officer and one of our largest stockholders.
Paul Allen has served as our President since December 2023.
−Removed: He has served as Airship AI’s President since 2019.
−Removed: Allen joined Airship AI as the Director of Business Development in 2015 and was promoted to Vice President of Sales in 2017 before being promoted to President in 2019.
−Removed: Prior to joining Airship AI, Mr.
+Added: He has served as Airship’s President since 2019.
+Added: Allen joined Airship as the Director of Business Development in 2015 and was promoted to Vice President of Sales in 2017 before being promoted to President in 2019.
+Added: Prior to joining Airship, Mr.
Allen was partner at a boutique firm in Northern Virginia, providing technical goods and services to the U.S.
6 unchanged sentences
Allen holds a bachelor’s degree in Strategic Studies & Defense Analysis from Norwich University.
−Removed: Yanda Ma has served as our Chief Technology Officer since December 2023.
−Removed: He has served as Airship AI’s Chief Technology Officer since March 2022.
−Removed: Previously, Mr.
−Removed: Ma was Airship AI’s Vice President Engineering, a position he held from 2005.
−Removed: His primary role is aligning the direction of engineering and product development to the strategic goals of Airship AI.
−Removed: To that end, over the years Mr.
−Removed: Ma has developed multiple evolutions of Airship AI’s product offerings from introducing Airship Enterprise Management, re-focusing with a government specific surveillance solution, delivering innovative edge solutions such as Nexus Outpost and creating value-add through end-to-end solution sets.
−Removed: Ma holds a bachelor’s degree in EECS from U.C.
−Removed: He has over twenty years of technology leadership experience in the streaming video and security industries and has been awarded multiple patents for key technologies he has helped develop over the course of his career.
Scott has served as our Chief Financial Officer since March 1, 2024.
6 unchanged sentences
Peeyush Ranjan has served as a member of the Board since December 2023.
−Removed: From 2017 to present and from 2006-2015, Mr.
+Added: From 2017 to March 2025 and from 2006-2015, Mr.
Ranjan has served as VP, Director or Manager of Engineering at Google, a technology services firm.
6 unchanged sentences
in Technology Management from University of Washington.
−Removed: Louis Lebedin has served as a member of the Board since March 2021.
+Added: Ranjan was appointed as a director based on his extensive technology experience.
+Added: Louis Lebedin has served as a member of the Board since December 2023.
Lebedin has over 25 years of banking experience with a proven track record of building and leading a world class business.
12 unchanged sentences
in accounting from Syracuse University, and he earned his CPA license in 1982.
+Added: Lebedin was appointed as a director based on his extensive banking and business experience.
Amit Mital has served as a member of the Board since December 2023.
8 unchanged sentences
Mital holds a Master of Science degree in Engineering from Dartmouth College.
+Added: Mital was appointed as a director based on his executive leadership experience in the technology industry and his senior leadership experience in the United States government, as well as being a cybersecurity industry veteran.
Term of Office
−Removed: Our directors currently have terms which will end at our next annual meeting of stockholders or until their successors are elected and qualify, subject to their prior death, resignation or removal.
+Added: Our directors currently have terms which will end at our next annual meeting of stockholders or until their successors are elected and qualified, subject to their prior death, resignation or removal.
Officers serve at the discretion of the Board.
44 unchanged sentences
Compensation Committee
−Removed: Peeyush Ranjan and Amit Mital serve as members of the compensation committee of the Company (the “Compensation Committee”), with Mr.
−Removed: Ranjan serving as the chairperson.
+Added: Louis Lebedin, Peeyush Ranjan and Amit Mital serve as members of the compensation committee of the Company (the “Compensation Committee”), with Mr.
+Added: Lebedin serving as the chairperson.
Each of the members of the Compensation Committee satisfies the independence requirements under the applicable rules and regulations of the SEC and Nasdaq.
8 unchanged sentences
Nominating and Corporate Governance Committee
−Removed: Peeyush Ranjan and Amit Mital serve as members of the nominating and governance committee of the Company (the “Nominating and Governance Committee”), with Mr.
+Added: Peeyush Ranjan, Amit Mital and Victor Huang serve as members of the nominating and governance committee of the Company (the “Nominating and Governance Committee”), with Mr.
Ranjan serving as the chairperson.
36 unchanged sentences
Victor Huang, Chief Executive Officer, Chairman of the Board and Director
−Removed: Derek Xu, Chief Operating Officer, Director, Secretary and Treasurer
+Added: Derek Xu, Chief Operating Officer and Director
Paul Allen, President
+Added: Scott, Chief Financial Officer, Secretary and Treasurer
Outstanding Equity Awards as of the Years Ended December 31, 2025 and 2024
The following table summarizes the number of shares of common stock underlying outstanding equity incentive plan awards for each named executive officer as of December 31, 2025 and 2024.
−Removed: The number of shares subject to Airship AI options outstanding at the effective time of the merger, and the exercise price of such Airship AI options, have been adjusted to reflect the merger.
Option Awards
3 unchanged sentences
The following table summarizes the stock option exercises for each named executive officer as of December 31, 2025:
+Added: Option Awards
Number of Shares
−Removed: Acquired on Exercise
Value Realized
−Removed: There were no stock option exercises for each named executive officer as of December 31, 2023.
+Added: Number of Shares
+Added: Value Realized
+Added: Acquired on Exercise
+Added: Acquired on Vesting
+Added: The following table summarizes the stock option exercises for each named executive officer as of December 31, 2024:
Executive Compensation Arrangements
4 unchanged sentences
Scott was also granted options to purchase up to Twenty Five Thousand (25,000) shares of common stock with an exercise price equal to $1.49, which options vested in full on the date of issuance.
−Removed: 2022 Combined Incentive and Non-Qualified Stock Option Plan
−Removed: Related to the Share Exchange Agreement with Super Simple AI, Inc., on February 17, 2022, the Company’s Board of Directors approved the 2022 Combined Incentive and Non-Qualified Stock Option Plan (the “2022 Plan”) to issue options to acquire a maximum of 3,000,000 common stock shares.
−Removed: Effective upon the closing of the merger, the 2022 Plan will no longer be available for use for the grant of future awards.
−Removed: The 2022 Plan will continue to govern the terms of awards that have been granted under the 2022 Plan before, and that are still outstanding following, the merger.
−Removed: The 2022 Plan provides for the grant of stock options, including options that are intended to qualify as “incentive stock options” under Section 422 of the Code, as well as non-qualified stock options.
−Removed: Each award is set forth in a separate agreement with the person who received the award which indicates the type, terms and conditions of the award.
−Removed: Certain Transactions
−Removed: If as a result of any reorganization, recapitalization, stock dividend, stock split, reverse stock split or other similar change in our capital stock, the outstanding shares of common stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company without the receipt of consideration by the Company, or, if, as a result of any merger or consolidation, or sale of all or substantially all of the assets of the Company, the outstanding shares are converted into or exchanged for other securities of the Company.
−Removed: or any successor entity, the administrator shall make an appropriate and proportionate adjustment in (i) the maximum number of shares reserved for issuance under the 2022 Plan, (ii) the number and kind of shares or other securities subject to any then outstanding awards under the 2022 Plan, (iii) the repurchase price, if any, per share subject to each outstanding award, and (iv) the exercise price for each share subject to any then outstanding options under the 2022 Plan.
−Removed: Amendment and Termination
−Removed: Our board of directors may terminate or amend the 2022 Plan at any time, but no such action shall adversely affect rights under any outstanding award without the holder’s consent.
−Removed: However, we must generally obtain stockholder approval for any such amendments to the extent required by applicable law.
−Removed: The administrator may exercise its discretion to reduce the exercise price of outstanding stock options to the then current fair market value if the fair market value of the common stock covered by such option has declined since the date the option was granted, without the approval of the Company’s stockholders.
−Removed: Upon consummation of the merger, each outstanding option under the 2022 Plan that was outstanding as of immediately prior to the effective time of the merger converted into (i) an option (each, a “Converted Stock Option”), on substantially the same terms and conditions as are in effect with respect to such award immediately prior to the effective time, to purchase the number of shares of common stock, determined by multiplying the number of shares of common stock subject to such award as of immediately prior to the effective time by the conversion ratio, at an exercise price per share of common stock equal to (A) the exercise price per share of common stock of such award divided by (B) the conversion ratio, and (ii) the right to receive a number of earnout shares in accordance with, and subject to, the contingencies set forth in the Merger Agreement.
+Added: On March 4, 2025, we entered into an employment agreement with Paul Allen to serve as our President, which provides for a base salary of $350,000.
+Added: The term of the employment agreement is for a period of three years, which will be automatically extended for additional one-year periods unless either party gives the other party written notice of such party’s decision not to renew the term at least 90 days prior to the end of the initial three-year term or any renewal term.
+Added: Allen is also eligible to participate in annual performance-based bonus programs established from time to time by the Board, subject to the achievement by Mr.
+Added: Allen and the Company of the applicable performance criteria set forth in the employment agreement and established for Mr.
+Added: Allen by the Board.
+Added: The employment agreement is terminable by either party at any time.
+Added: In the event of termination by us without cause or by Mr.
+Added: Allen for good reason, as those terms are defined in the employment agreement, he is entitled to three months’ severance.
+Added: In connection with entering into the employment agreement, Mr.
+Added: Allen was granted ten-year options under our 2023 Equity Incentive Plan to purchase 100,000 shares of our common stock, which options vest immediately, at an exercise price equal to $3.27, being the fair market value on the date of grant.
+Added: Allen was also granted ten-year options under the Plan to purchase 300,000 shares of our common stock, which options vest quarterly over four years, at an exercise price equal to $3.27, being the fair market value on the date of grant.
+Added: Potential Payments upon Termination or Change in Control
+Added: Huang and Mr.
+Added: Xu have stock option grants with a grant date fair value of $216,649 that vest with a change in control.
+Added: We have the following potential payments upon termination or change in control with Mark E.
+Added: Payments Upon
+Added: Compensation:
+Added: Base salary (1)
+Added: Performance-based incentive
+Added: Stock options
+Added: Benefits and Perquisites:
+Added: Health and welfare benefits
+Added: Accrued vacation pay
+Added: We have the following potential payments upon termination or change in control with Paul Allen:
+Added: Payments Upon
+Added: Compensation:
+Added: Base salary (1)
+Added: Performance-based incentive
+Added: Stock options
+Added: Benefits and Perquisites:
+Added: Health and welfare benefits
+Added: Accrued vacation pay
Stock Appreciation Rights Plan
−Removed: Related to the Share Exchange Agreement with Super Simple AI, Inc., on February 17, 2022, the Company’s Board of Directors approved the 2022 Stock Appreciation Rights Plan (the “SAR Plan”) to issue a maximum of 1,500,000, which was later adjusted to 2,637,150 stock appreciation rights (“SAR”) after the merger.
−Removed: As of December 31, 2024, after adjusting for the merger, there were 1,758,105 SARs outstanding with a base value of $0.12 and January 2028 expiration.
+Added: Related to the Share Exchange Agreement with Super Simple AI, Inc., on February 17, 2022, the Company’s Board of Directors approved the 2022 Stock Appreciation Rights Plan (the “SAR Plan”) to issue a maximum of 1,500,000 stock appreciation rights (“SARs”), which was later adjusted to 2,637,150 SARs after the merger.
+Added: As of December 31, 2025 and 2024, there were 1,758,000 SARs outstanding with a base value of $0.12 and January 2028 expiration.
+Added: There were no SAR grants during the years ended December 31, 2025 and 2024.
Payment of Appreciation Amount
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Each Converted SAR will continue to have and be subject to substantially the same terms and conditions as were applicable to such SAR immediately prior to the effective time, except that (i) each Converted SAR will cover that number of shares of common stock equal to (A) the product of (1) the number of shares of common stock subject to such SAR immediately prior to the effective time and (2) the conversion ratio and (B) a number of earnout shares in accordance with, and subject to, the contingencies set forth in the Merger Agreement, and (ii) the per share base value for each share of common stock covered by the Converted SAR will be equal to the quotient obtained by dividing (A) the base value per share of common stock of such SAR immediately prior to the effective time by (B) the conversion ratio.
−Removed: 2023 Equity Incentive Plan
−Removed: The Company has adopted the Airship AI Holdings, Inc.
−Removed: 2023 Equity Incentive Plan (the “Equity Incentive Plan”), which plan was approved by stockholders at the extraordinary general meeting.
+Added: 2023 Amended and Restated Equity Incentive Plan
+Added: On December 4, 2023, the Company adopted the Airship AI Holdings, Inc.
+Added: 2023 Equity Incentive Plan, which plan was approved by stockholders at the extraordinary general meeting held on December 19, 2023 in connection with the merger.
+Added: On October 15, 2025, the Company adopted the Airship AI Holdings, Inc.
+Added: 2023 Amended and Restated Equity Incentive Plan (the “Equity Incentive Plan”), which increased the number of shares of common stock authorized for issuance pursuant to awards granted thereunder by 2,000,000 shares.
+Added: The Equity Incentive Plan was approved by our stockholders at our annual meeting held on December 11, 2025.
This section summarizes certain principal features of the Equity Incentive Plan.
84 unchanged sentences
Our independent non-employee directors are compensated in cash and stock option grants.
−Removed: There is no formal stock compensation plan for independent non-employee directors.
+Added: The non-employee directors receive $100,000 of compensation in cash and stock option grants after appointment at the annual shareholder meetings.
+Added: The stock option grants generally vest quarterly over four years.
Our non-employee directors received the following compensation during the year ended December 31, 2025:
22 unchanged sentences
Total Directors and Officers (8 in total)
−Removed: Airship Kirkland LP (Victor Huang) (10)
−Removed: Airship Redmond LP (Derek Xu ) (11)
Armistice Capital Master Fund LLC (9)
1 unchanged sentence
Unless otherwise noted, the business address of each of the directors and executive officers of is c/o Airship AI Holdings, Inc., 8210 154th Ave NE, Redmond, WA 98052.
−Removed: Includes (i) shares owned by Airship Kirkland Family LP, over which Mr.
−Removed: Huang has voting and dispositive power, (ii) 1,564,951 shares of common stock issuable upon the exercise of warrants to purchase shares of common stock, (iii) 1,761,835 shares of common stock subject to options exercisable within 60 days, and (iv) 1,758,105 shares of common stock subject to stock appreciation rights.
+Added: Includes (i) shares by Mr.
+Added: Huang and has voting and dispositive power, (ii) 1,691,076 shares of common stock issuable upon the exercise of warrants to purchase shares of common stock, (iii) 1,793,085 shares of common stock subject to options exercisable within 60 days, and (iv) 1,758,105 shares of common stock subject to stock appreciation rights.
Excludes the right to receive a number of earnout shares, in accordance with and subject to the contingencies set forth in the Merger Agreement.
−Removed: Includes (i) shares owned by Airship Redmond Family LP, over which Mr.
−Removed: Xu has voting and dispositive power, (ii) 1,344,951 shares of common stock issuable upon the exercise of warrants to purchase shares of common stock, and (iii) 12,500 shares of common stock subject to options exercisable within 60 days.
+Added: Includes (i) shares owned by Mr.
+Added: Xu and has voting and dispositive power, (ii) 1,344,951 shares of common stock issuable upon the exercise of warrants to purchase shares of common stock, and (iii) 43,750 shares of common stock subject to options exercisable within 60 days.
Excludes the right to receive a number of earnout shares, in accordance with and subject to the contingencies set forth in the Merger Agreement.
3 unchanged sentences
Includes (i) shares owned by Mr.
−Removed: Ma, and (ii) 687,173 shares of common stock subject to options exercisable within 60 days.
−Removed: Excludes the right to receive a number of earnout shares, in accordance with and subject to the contingencies set forth in the Merger Agreement.
−Removed: Includes 103,404 shares of common stock subject to options exercisable within 60 days.
−Removed: Excludes the right to receive a number of earnout shares, in accordance with and subject to the contingencies set forth in the Merger Agreement.
−Removed: Includes 109,880 shares of common stock subject to options exercisable within 60 days.
+Added: Scott, and (ii) 70,000 shares of common stock subject to options exercisable within 60 days.
Excludes the right to receive a number of earnout shares, in accordance with and subject to the contingencies set forth in the Merger Agreement.
−Removed: Includes 37,500 shares of common stock subject to options exercisable within 60 days.
−Removed: Includes 76,148 shares of common stock subject to options exercisable within 60 days.
+Added: Includes (i) shares owned by Mr.
+Added: Ranjan, and (ii) 157,832 shares of common stock subject to options exercisable within 60 days.
Excludes the right to receive a number of earnout shares, in accordance with and subject to the contingencies set forth in the Merger Agreement.
−Removed: Includes (i) 1,761,835 shares of common stock subject to options exercisable within 60 days, and (ii) 1,758,105 shares of common stock subject to stock appreciation rights.
+Added: Includes (i) shares owned by Mr.
+Added: Lebedin, and (ii) 97,562 shares of common stock subject to options exercisable within 60 days.
Excludes the right to receive a number of earnout shares, in accordance with and subject to the contingencies set forth in the Merger Agreement.
−Removed: Victor Huang has voting and dispositive power over the shares owned by Airship Kirkland Family LP.
+Added: Includes (i) shares owned by Mr.
+Added: Mital, and (ii) 136,972 shares of common stock subject to options exercisable within 60 days.
Excludes the right to receive a number of earnout shares, in accordance with and subject to the contingencies set forth in the Merger Agreement.
−Removed: Derek Xu has voting and dispositive power over the shares owned by Airship Redmond Family LP.
The securities are directly held by Armistice Capital Master Fund Ltd., a Cayman Islands exempted company (the “Master Fund”), and may be deemed to be beneficially owned by:
6 unchanged sentences
The following table sets forth certain information about the securities authorized for issuance under our incentive plans as of December 31, 2025:
−Removed: Plan Category
Number of securities
−Removed: to be issued upon
−Removed: exercise of outstanding
−Removed: options, warrants and rights
−Removed: Weighted-average
−Removed: exercise price of
−Removed: outstanding options,
−Removed: warrants and rights
−Removed: Number of securities
remaining available
+Added: Number of securities
+Added: Weighted-average
for future issuance
+Added: to be issued upon
+Added: exercise price of
under equity compensation
+Added: exercise of outstanding
+Added: outstanding options,
plan (excluding securities
−Removed: reflected in column
−Removed: Equity compensation plan approved by shareholders
−Removed: Equity compensation plans not approved by shareholders
−Removed: The following table sets forth certain information about the securities authorized for issuance under our incentive plans for SARS as of December 31, 2024:
Plan Category
−Removed: Number of securities
−Removed: to be issued upon
−Removed: exercise of outstanding
options, warrants and rights
−Removed: Weighted-average
−Removed: exercise price of
−Removed: outstanding options,
warrants and rights
+Added: reflected in column (a) )
+Added: Equity compensation plan
+Added: approved by shareholders
+Added: Equity compensation plans
+Added: not approved by shareholders
+Added: The following table sets forth certain information about the securities authorized for issuance under our incentive plans for SARS as of December 31, 2025:
Number of securities
remaining available
+Added: Number of securities
+Added: Weighted-average
for future issuance
+Added: to be issued upon
+Added: exercise price of
under equity compensation
+Added: exercise of outstanding
+Added: outstanding options,
plan (excluding securities
−Removed: reflected in column
−Removed: Equity compensation plan approved by shareholders
−Removed: Equity compensation plans not approved by shareholders
+Added: Plan Category
+Added: options, warrants and rights
+Added: warrants and rights
+Added: reflected in column (a) )
+Added: Equity compensation plan
+Added: approved by shareholders
+Added: Equity compensation plans
+Added: not approved by shareholders
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
−Removed: BYTE Acquisition Corp.
−Removed: Founder Shares
−Removed: On January 22, 2021, Byte Holdings LP, a Cayman Islands exempted limited partnership and the sponsor of BYTS (the “Sponsor”) paid an aggregate of $25,000 to cover certain offering costs of BYTS in consideration for 8,625,000 of BYTS Class B ordinary shares (the “Founder Shares”).
−Removed: The Founder Shares included an aggregate of up to 1,125,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would collectively represent 20% of BYTS’ issued and outstanding shares upon the completion of the BYTS’ initial public offering (excluding the private placement shares).
−Removed: On April 7, 2021, the underwriter exercised its over-allotment option in part, and 532,687 Founder Shares were subsequently forfeited by the Sponsor.
−Removed: Effective as of March 27, 2023, pursuant to the terms of BYTS’ Cayman constitutional documents, the Sponsor elected to convert each outstanding Class B ordinary share held by it on a one-for-one basis into Class A ordinary shares of BYTS, with immediate effect.
−Removed: On June 26, 2023, BYTS issued one Class B ordinary share in connection with the domestication of BYTS as a Delaware corporation.
−Removed: At the time of BYTS’ IPO, the Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of:
−Removed: (A) one year after the completion of the merger;
−Removed: and (B) subsequent to the merger, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after the merger, or (y) the date on which BYTS completes a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of BYTS’ shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
−Removed: In connection with the merger, the Sponsor entered into a support agreement, pursuant to which the Sponsor forfeited 1,000,000 Founder Shares held by it and made the share contribution to secure non-redemption agreements and/or PIPE financing.
−Removed: Related Party Loans
−Removed: On July 26, 2023, the Sponsor advanced $70,560 to BYTS, on September 8, 2023, the Sponsor advanced an additional $70,000 to BYTS, on November 1, 2023, BYTS received an additional advance from a related party of $224,500 and on November 2, 2023, the Sponsor advanced $25,159 to BYTS, for an aggregate $390,219 advanced to BYTS.
−Removed: These advances were repaid to the Sponsor at the time of closing of the merger.
−Removed: Administrative Services Agreement
−Removed: BYTS entered into an agreement that provided that, commencing on effective date of the BYTS’ initial public offering, BYTS agreed to pay the Sponsor $10,000 per month for office space, utilities, secretarial and administrative support services.
−Removed: During the three months ended December 31, 2023 and the year ended December 31, 2022, BYTS incurred $30,000 and $90,000, respectively, of such fees.
−Removed: On November 30, 2022, BYTS assigned the administrative services agreement, previously entered into by and between BYTS and the Sponsor to Sagara Group, LLC, which is a company controlled by Mr.
−Removed: In connection with the merger, the Company agreed to extend the term of the administrative services agreement for an additional three months following the closing of the merger.
−Removed: Non-Redemption Agreements
−Removed: On August 1, 2023, BYTS entered into a non-redemption agreement with the Sponsor pursuant to which the Sponsor agreed to acquire from shareholders of BYTS $6 million in aggregate value of public shares, either in the open market or through privately negotiated transactions, at a price no higher than the redemption price per share payable to public shareholders who exercise redemption rights with respect to their public shares, prior to the closing date of the merger, to waive its redemption rights and hold the public shares through the closing date of the merger, and to abstain from voting and not vote the public shares in favor of or against the merger.
−Removed: As consideration for the non-redemption agreement, BYTS agreed to pay the Sponsor $0.033 per public share per month, which will begin accruing on the date that is three days after the date of the non-redemption agreement and terminate on the closing date of the merger.
−Removed: Additionally, on August 1, 2023, BYTS entered into a non-redemption agreement with a shareholder holding public shares, pursuant to which such shareholder agreed not to redeem $1 million in aggregate value of public shares held by it on the date of the non-redemption agreement in connection with the merger.
−Removed: Such shareholder is an investor in our Sponsor and, other than indirectly through its interest in our Sponsor, such shareholder did not receive any separate consideration for such waiver.
−Removed: Airship AI Holdings, Inc.
−Removed: Advances to Founders and Transfer of Zeppelin Worldwide LLC and Zeppelin Taiwan, Ltd.
−Removed: In 2020, Victor Huang and Derek Xu, the founders, officers and directors of Airship AI (“Airship AI Founders”), borrowed $3,000,000 (“shareholder advances”) from Airship AI.
−Removed: As of January 1, 2023, Airship AI was owed $1,100,000 by the Airship AI Founders.
−Removed: Due to the uncertainty of the timing of payment, the advances were treated as a long-term asset.
−Removed: The shareholder advances bore interest at 5% and no interest was ever paid.
−Removed: Huang and Mr.
−Removed: Xu owned all the membership units of Zeppelin Worldwide, LLC and its subsidiary, Zeppelin Taiwan, Ltd.
−Removed: (together, “Zeppelin”).
−Removed: During the years ended December 31, 2022 and 2021, Zeppelin received from Airship AI an additional $1,095,000 and $590,000, respectively, in cash advances to fund operations which commenced in 2021.
−Removed: These advances between the companies are eliminated in the consolidated balance sheet.
−Removed: When Zeppelin started, their intent was to explore the technology in-development and determine value for external customers by providing cloud based back-end products.
−Removed: After a period of time for Zeppelin’s development it became apparent these efforts would be of value and accretive to Airship AI.
−Removed: In 2022, Airship AI began utilizing Zeppelin’s research and development personnel to develop Airship AI’s products.
−Removed: On February 28, 2023, the Airship AI Founders transferred their interests in Zeppelin to Airship AI for the $1,100,000 owed by the Airship AI Founders.
Advances due to Founders
−Removed: Prior to 2023, the founders had advanced to us a net $600,000.
−Removed: In the year ended December 31, 2023, Mr.
−Removed: Huang and Mr.
−Removed: Xu advanced Airship AI a total of $1,350,000 and were repaid a total of $200,000, with $1,750,000 recorded as advances from founders as of December 31, 2023.
+Added: As of January 1, 2024, advances due to founders totaled $1,750,000.
During 2024, Mr.
1 unchanged sentence
Xu advanced Airship AI $2,100,000 and were repaid $2,550,000, with $1,300,000 recorded as advances from founders as of December 31, 2024.
−Removed: The outstanding advances as of December 31, 2024 and 2023 are non-interest bearing and the Company expects to pay the balance off within a one year period.
−Removed: Warrants to Purchase Common Stock
−Removed: On May 8, 2023, Airship AI issued warrants to purchase 1,344,951 shares of common stock to each of Victor Huang and Derek Xu.
−Removed: The warrants were valued at $2,136,115 based on the exercise price of $1.77, the fair market stock price of $1.89, a five year term, a volatility of 39.4% and interest of 3.41%.
−Removed: The warrants were recorded as stock-based compensation expense and as additional paid in capital.
−Removed: All warrants are fully vested as they were issued for services performed.
−Removed: Master Loan Agreement
+Added: During 2025, Mr.
+Added: Huang and Mr.
+Added: Xu were repaid $650,000 each, with $0 recorded as advances from founders as of December 31, 2025.
+Added: Master Loan Agreement with Victor Huang
On September 27, 2024, we entered into a master loan agreement with Mr.
1 unchanged sentence
The agreement provides for interest of 6%.
−Removed: The Company paid interest for the 2024 advances (described under “Founder Advances” above) of $11,913 and issued warrants to purchase up to 220,000 shares of common stock.
+Added: We agreed to pay interest for the 2024 advances of $11,913 and issued warrants to purchase up to 220,000 shares of common stock.
The warrants have an exercise price of $2.36 per share, are exercisable immediately upon issuance and will expire in five years following the date of issuance.
The $284,478 fair value of the warrant is recorded in permanent equity in the consolidated balance sheets and was fully expensed on the date of grant.
−Removed: There are no outstanding advances under this Master Loan Agreement as of December 31, 2024.
−Removed: Issuance of Bankruptcy Plan Shares
−Removed: On December 13, 2023, BYTS formed a wholly-owned subsidiary in Nevada, BYTS NV Merger Sub, Inc.
−Removed: (“NV Merger Sub”), for the purpose of acquiring SILLC (E) Acquisition Corp., a Nevada corporation (“SILLC”), an entity subject to a bankruptcy proceeding that has no assets, no equity owners and no liabilities, except for claims of approximately 400 holders of allowed unsecured claims and a holder of allowed administrative expenses (collectively, the “Claim Holders”).
−Removed: On December 15, 2023, BYTS entered into an Agreement and Plan of Merger (the “SILLC Merger Agreement”) by and among BYTS, NV Merger Sub, SILLC, and the other parties thereto.
−Removed: On December 21, 2023, immediately following the consummation of the domestication and prior to the consummation of the merger, and as contemplated by the SILLC Merger Agreement, NV Merger Sub merged (the “SILLC Merger”) with and into SILLC, with SILLC surviving the SILLC Merger as a wholly-owned subsidiary of BYTS.
−Removed: SILLC became the successor and “Post Confirmation Debtor” pursuant to the bankruptcy plan.
−Removed: As a result of the SILLC Merger, and in accordance with the bankruptcy plan, the Company issued an aggregate of 150,000 shares of common stock (the “Plan Shares”) to the Claim Holders as full settlement and satisfaction of their respective claims, pursuant to Section 1145 of the U.S.
−Removed: Bankruptcy Code.
−Removed: The Sponsor forfeited an equal number of shares of common stock.
−Removed: The issuance of the Plan Shares by the Company was exempt from the registration requirements of the Securities Act.
−Removed: The Plan Shares will not be subject to any lock-up or other transfer restriction.
−Removed: Amended and Restated Registration Rights Agreement
−Removed: On December 21, 2023, the Company entered into an amended and restated registration rights agreement (the “Registration Rights Agreement”) with the Sponsor, Victor Huang and Derek Xu (collectively, the “Holders”), pursuant to which the Company agreed to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of common stock and warrants that are held by the Holders from time to time.
−Removed: The Registration Rights Agreement amended and restated the registration rights agreement that was entered into by BYTS, the Sponsor and the other parties thereto in connection with BYTS’ initial public offering.
−Removed: The Registration Rights Agreement will terminate on the earlier of (a) the five year anniversary of the date of the Registration Rights Agreement or (b) with respect to any Holder, on the date that such Holder no longer holds any Registrable Securities (as defined therein).
+Added: There are no outstanding advances under the master loan agreement as of December 31, 2024.
+Added: The master loan agreement was terminated September 2, 2025.
Indemnification
51 unchanged sentences
(incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed with the SEC on December 27, 2023).
−Removed: Bylaws of Airship AI Holdings, Inc.
−Removed: (incorporated by reference to Exhibit 3.3 to the registrant’s Current Report on Form 8-K filed with the SEC on December 27, 2023).
+Added: Bylaws of Airship AI Holdings, Inc., as amended (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on December 10, 2025).
Specimen Common Stock Certificate of Airship AI Holdings, Inc.
5 unchanged sentences
and Equiniti Trust Company, LLC, as warrant agent (incorporated by reference to Exhibit 4.1 to BYTE Acquisition Corp.’s Current Report on Form 8-K filed with the SEC on March 23, 2021).
−Removed: Amended and Restated Common Stock Purchase Warrant issued February 2, 2024 by Airship AI Holdings, Inc.
−Removed: to Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Description of registrant’s securities.
−Removed: Warrant Agency Agreement, dated September 3, 2024, between the Company and Equiniti Trust Company, LLC, as warrant agent (incorporated by reference to Exhibit 4.1 of the registrant’s Current Report on Form 8-K filed with the SEC on September 4, 2024).
−Removed: Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 of the registrant’s Current Report on Form 8-K filed with the SEC on September 4, 2024).
−Removed: Placement Agent Warrant, dated September 3, 2024 (incorporated by reference to Exhibit 4.3 of the registrant’s Current Report on Form 8-K filed with the SEC on September 4, 2024).
−Removed: Letter Agreement, dated March 18, 2021, by and among BYTE Acquisition Corp., its officers, its directors and Byte Holdings LP (incorporated by reference to Exhibit 10.1 of BYTE Acquisition Corp.’s Current Report on Form 8-K filed with the SEC on March 23, 2021).
−Removed: Parent Support Agreement, dated as of June 27, 2023, by and among BYTE Holdings LP, BYTE Acquisition Corp., and Airship AI Holdings, Inc.
−Removed: ((incorporated by reference to Exhibit 10.1 to BYTE Acquisition Corp.’s Current Report on Form 8-K filed with the SEC on June 27, 2023).
−Removed: Letter Amendment to Form of Bylaws, dated December 20, 2023, by and between BYTE Acquisition Corp.
−Removed: and Airship AI Holdings, Inc.
−Removed: (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on December 27, 2023).
+Added: Common Stock Purchase Warrant dated October 10, 2025.
+Added: (incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on October 9, 2025).
+Added: Description of registrant’s securities (incorporated by reference to Exhibit 4.5 to the registrant’s Annual Report on Form 10-K filed with the SEC on February 28, 2025).
Amended and Restated Registration Rights Agreement, dated December 21, 2023 by and among Airship AI Holdings, Inc.
4 unchanged sentences
Airship AI Holdings, Inc.
−Removed: Equity Incentive Plan (incorporated by reference to Annex C to BYTE Acquisition Corp.’s prospectus filed with the SEC on dated December 5, 2023.).
−Removed: Lease, dated as of December 22, 2020, by and between JDL Digital Systems Inc.
−Removed: DBA Airship Industries, Inc.
−Removed: and Langtree Development Company, LLC (incorporated by reference to Exhibit 10.15 of BYTE Acquisition Corp.’s Amendment No.
−Removed: 1 to Registration Statement on Form S-4 (File No.
−Removed: 333-274464), filed with the SEC on October 18, 2023).
−Removed: Sublease Agreement, effective July 13, 2023, by and between Helion Energy, Inc.
−Removed: and JDL Systems, Inc.
−Removed: (incorporated by reference to Exhibit 10.16 of BYTE Acquisition Corp.’s Amendment No.
−Removed: 1 to Registration Statement on Form S-4 (File No.
−Removed: 333-274464), filed with the SEC on October 18, 2023).
−Removed: Senior Secured Convertible Promissory Note issued June 22, 2023 by Airship AI Holdings, Inc.
−Removed: to Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.17 of BYTE Acquisition Corp.’s Amendment No.
−Removed: 1 to Registration Statement on Form S-4 (File No.
−Removed: 333-274464), filed with the SEC on October 18, 2023).
−Removed: Amended and Restated Senior Secured Convertible Promissory Note issued February 2, 2024 by Airship AI Holdings, Inc.
−Removed: to Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Amended and Restated Security Agreement dated February 2, 2024 between Airship AI Holdings, Inc.
−Removed: and Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Amended and Restated Guaranty dated February 2, 2024 between Airship AI Holdings, Inc., Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Amended and Restated Subordination Agreement dated February 2, 2024 between Airship AI Holdings, Inc.
−Removed: and Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Amended and Restated Senior Secured Convertible Promissory Note issued February 2, 2024 by Airship AI Holdings, Inc.
−Removed: to Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Amended and Restated Security Agreement dated February 2, 2024 between Airship AI Holdings, Inc.
−Removed: and Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Amended and Restated Guaranty dated February 2, 2024 between Airship AI Holdings, Inc., Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Amended and Restated Subordination Agreement dated February 2, 2024 between Airship AI Holdings, Inc.
−Removed: and Platinum Capital Partners Inc.
−Removed: (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed with the SEC on February 6, 2024).
−Removed: Extension Agreement between Airship AI Holdings, Inc.
−Removed: and Platinum Capital Partners Inc.
−Removed: dated June 22, 2024.
−Removed: (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on June 24, 2024).
−Removed: Placement Agency Agreement dated August 29, 2024, between the Company and Roth Capital Partners, LLC and The Benchmark Company, LLC (incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed with the SEC on September 4, 2024).
−Removed: Securities Purchase Agreement, dated August 29, 2024, between the Company and the purchaser party thereto (incorporated by reference to Exhibit 10.2 of the registrant’s Current Report on Form 8-K filed with the SEC on September 4, 2024).
−Removed: Form of Lock-up Agreement (incorporated by reference to Exhibit 10.16 of the registrant’s Amendment No.
−Removed: 1 to Registration Statement on Form S-1 (File No.
−Removed: 333-281333), filed with the SEC on August 22, 2024).
+Added: Amended and Restated 2023 Equity Incentive Plan (incorporated by reference to Annex A to the registrant’s definitive proxy statement on Schedule 14A filed with the SEC on October 27, 2025).
+Added: Agreement of Lease dated September 7, 2023 by and between Kore Westpark, LLC and JDL Digital Systems, Inc., relating to the leased premises in Redmond, WA.
+Added: Commercial Lease Agreement dated December 6, 2024 by and between Park 35 LLC and Airship AI Holdings, Inc, relating to the leased premises (Suite 8) in Mooresville, NC.
+Added: Commercial Lease Agreement dated December 6, 2024 by and between Park 35 LLC and Airship AI Holdings, Inc, relating to the leased premises (Suite 9) in Mooresville, NC.
Master Loan Agreement dated September 27, 2024 by and between the Company and Victor Huang (incorporated by reference to Exhibit 10.4 of the registrant’s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2024).
+Added: Warrant Letter Agreement dated October 8, 2025 by and between Airship AI Holdings, Inc.
+Added: and the holder named therein (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on October 9, 2025).
Code of Ethics (incorporated by reference to Exhibit 14.1 to the registrant’s Current Report on Form 8-K filed with the SEC on December 28, 2023).
−Removed: Insider Trading Policy
−Removed: Letter from Marcum LLP, dated December 28, 2023 (incorporated by reference to Exhibit 16.1 to the registrant’s Current Report on Form 8-K filed with the SEC on December 28, 2023).
+Added: Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the registrant’s Annual Report on Form 10-K filed with the SEC on February 28, 2025).
List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the registrant’s Current Report on Form 8-K filed with the SEC on December 28, 2023).
+Added: Consent of BPM LLP, Independent Registered Accounting Firm.
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
24 unchanged sentences
We have audited the accompanying consolidated balance sheets of Airship AI Holdings, Inc.
−Removed: (a Delaware corporation) (the “Company”) as of December 31, 2024 and 2023 and the related consolidated statements of operations and comprehensive (loss) income, changes in stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: (a Delaware corporation) (the “Company”) as of December 31, 2025 and 2024 and the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.
9 unchanged sentences
Accordingly, we express no such opinion.
−Removed: Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
+Added: 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.
−Removed: Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
+Added: 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.
5 unchanged sentences
As of December 31, 2025 and 2024
−Removed: December 31, 2024
−Removed: December 31, 2023
CURRENT ASSETS:
2 unchanged sentences
Prepaid expenses and other
−Removed: Income tax receivable
Total current assets
−Removed: PROPERTY AND EQUIPMENT, NET
Operating lease right of use asset
4 unchanged sentences
Accrued expenses
−Removed: Senior Secured Convertible Promissory Notes
Current portion of operating lease liability
9 unchanged sentences
STOCKHOLDERS' DEFICIT:
−Removed: Preferred stock - no par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023
+Added: Preferred stock - no par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2025 and 2024
Common stock - $ 0.0001 par value, 200,000,000 shares authorized, 34,368,162 and 30,588,413 shares issued and outstanding as of December 31, 2025 and 2024
10 unchanged sentences
AIRSHIP AI HOLDINGS, INC.
−Removed: CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
+Added: CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the years ended December 31, 2025 and 2024
−Removed: December 31, 2024
−Removed: December 31, 2023
NET REVENUES:
5 unchanged sentences
Other services
−Removed: Cost of revenue
RESEARCH AND DEVELOPMENT EXPENSES
4 unchanged sentences
( 3,505,113 )
−Removed: OTHER (EXPENSE) INCOME:
−Removed: (Loss) gain from change in fair value of earnout liability
+Added: OTHER INCOME (EXPENSE) :
+Added: Gain (loss) from change in fair value of earnout liability
( 18,171,380 )
−Removed: (Loss) gain from change in fair value of warrant liability
+Added: Gain (loss) from change in fair value of warrant liability
( 33,512,633 )
2 unchanged sentences
( 1,144,676 )
−Removed: Interest expense, net
+Added: Interest income (expense), net
( 1,003,096 )
−Removed: Other income (expense)
−Removed: Total other (expense) income, net
+Added: Total other income (expense), net
( 53,959,777 )
−Removed: (LOSS) INCOME BEFORE PROVISON FOR INCOME TAXES
+Added: INCOME (LOSS) BEFORE PROVISON FOR INCOME TAXES
( 57,464,890 )
Provision for income taxes
−Removed: NET (LOSS) INCOME
+Added: NET INCOME (LOSS)
( 57,464,890 )
OTHER COMPREHENSIVE INCOME (LOSS)
−Removed: Foreign currency translation income (loss), net
−Removed: TOTAL COMPREHENSIVE (LOSS) INCOME
+Added: Foreign currency (loss) income, net
+Added: TOTAL COMPREHENSIVE INCOME (LOSS)
$ ( 57,455,552 )
−Removed: NET (LOSS) INCOME PER SHARE:
+Added: NET INCOME (LOSS) PER SHARE:
Weighted average shares of common stock outstanding
1 unchanged sentence
AIRSHIP AI HOLDINGS, INC.
−Removed: CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
+Added: CONDENSED CONSOLIDATED STATEMENT OFCHANGES IN STOCKHOLDERS' DEFICIT
For the years ended December 31, 2025 and 2024
−Removed: Other Comprehensive
+Added: Comprehensive
Stockholders'
2 unchanged sentences
$ ( 17,487,227 )
−Removed: Stock-based compensation- stock option grants
+Added: Stock-based compensation
Stock based compensation- warrants
−Removed: Reverse recapitalization on December 21, 2023
−Removed: ( 4,816,511 )
+Added: Issuance of common stock for services
+Added: Issuance of common stock for conversion of debt
+Added: Issuance of common stock for exercise of warrants, net
+Added: Issuance of common stock for stock options exercise
+Added: Issuance of common stock for debt interest payment
+Added: Issuance of common stock and warrants for offering, net
+Added: Foreign currency translation gain
( 57,464,890 )
( 57,464,890 )
−Removed: Foreign currency translation loss
Balance as of December 31, 2024
4 unchanged sentences
( 74,941,590 )
+Added: ( 53,023,137 )
Stock-based compensation
−Removed: Stock based compensation- warrants
−Removed: Issuance of common stock for services
−Removed: Issuance of common stock for conversion of debt
Issuance of common stock for exercise of warrants, net
Issuance of common stock for stock options exercise
−Removed: Issuance of common stock for debt interest payment
−Removed: Issuance of common stock and warrants for offering, net
−Removed: Foreign currency translation gain
−Removed: ( 57,464,890 )
−Removed: ( 57,464,890 )
+Added: Issuance of common stock for earnout shares
+Added: Foreign currency translation loss
Balance as of December 31, 2025
1 unchanged sentence
$ ( 7,149,642 )
−Removed: (1) The shares of the Company's common stock, prior to the Merger, have been retroactively restated as shares reflecting the exchange ratio of approximately 1.7581 established in the Merger described in Note 1.
The accompanying notes are an integral part of these consolidated financial statements.
2 unchanged sentences
For the years ended December 31, 2025 and 2024
−Removed: December 31, 2024
−Removed: December 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
+Added: Net income (loss)
$ ( 57,464,890 )
−Removed: Adjustments to reconcile net loss to net cash used in operating activities
+Added: Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization
Stock-based compensation
−Removed: Stock-based compensation- warrants
Amortization of operating lease right of use asset
−Removed: Accelerated amortization of ROU asset - lease termination
−Removed: Gain from lease termination
Issuance of common stock for services
Noncash interest expense
−Removed: Loss (gain) from change in fair value of warrant liability
+Added: (Gain) loss from change in fair value of warrant liability
( 20,852,612 )
−Removed: Loss (gain) from change in fair value of earnout liability
+Added: (Gain) loss from change in fair value of earnout liability
( 15,401,751 )
1 unchanged sentence
Loss on note conversion
−Removed: Non cash interest, net
Changes in operating assets and liabilities:
Accounts receivable
+Added: ( 5,235,918 )
Prepaid expenses and other
10 unchanged sentences
Issuance of common stock and warrants for offering, net
−Removed: Proceeds from convertible promissory note
Proceeds from warrant exercise, net
−Removed: Advances from founders, net
−Removed: Proceeds from reverse recapitalization
+Added: Repayment of advances from founders
+Added: ( 1,300,000 )
+Added: Advances from founders
Proceeds from stock option exercises
−Removed: Repayment of small business loan and line of credit
NET CASH PROVIDED BY FINANCING ACTIVITIES
6 unchanged sentences
Noncash investing and financing
−Removed: Elimination of advances to founders in connection with contribution of Zeppelin by shareholders
−Removed: Elimination of payables to founders in connection with contribution of Zeppelin by shareholders
Issuance of common stock for debt interest payment
Issuance of common stock for debt conversion
−Removed: Recognition of warrant liability
−Removed: Recognition of right-of-use asset
+Added: Issuance of common stock for earnout shares
+Added: Recognition of operating right-of-use asset
Recognition of operating lease liability
−Removed: Noncash activity related to Merger-
−Removed: Recognition of warrant liability
−Removed: Recognition of earnout liability
−Removed: Recognition of accounts payable
The accompanying notes are an integral part of these consolidated financial statements.
17 unchanged sentences
Thus, Airship AI became a wholly-owned subsidiary of the Company.
−Removed: In connection with the Merger, Airship AI changed its name from “Airship AI Holdings, Inc.” to “Airship AI, Inc.” See Note 11 —Reverse Recapitalization for additional information.
+Added: In connection with the Merger, Airship AI changed its name from “Airship AI Holdings, Inc.” to “Airship AI, Inc.”
Fair Value Transactions in Connection with Merger
2 unchanged sentences
See Note 13– Fair Value Measurements for more information.
−Removed: Common Stock and Warrant Offering after Merger
−Removed: On September 3, 2024, the Company closed an $ 8 million public offering with net proceeds of approximately $ 7.3 million, after deducting the estimated offering expenses payable by the Company, including the placement agent fees.
−Removed: The offering consisted of 2,882,883 shares of its common stock and warrants to purchase up to an aggregate of 2,882,883 shares of its common stock at a combined public offering price of $2.775 per share and associated common stock warrant.
−Removed: The warrants have an exercise price of $ 2.65 per share, are exercisable immediately upon issuance, and will expire five years following the date of issuance.
−Removed: The warrants are classified as a component of permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, do not embody an obligation for the Company to repurchase its shares, and permit the holders to receive a fixed number of shares of common stock upon exercise.
−Removed: On December 24, 2024, the Company entered into a warrant exercise inducement agreement with a holder of existing common stock warrants exercisable for an aggregate of 2,882,883 shares of common stock at the existing exercise price of $ 2.65 per share, in exchange for the issuance of new common stock warrants to purchase 2,162,162 shares of common stock at an exercise price per share of $ 4.50 (collectively, the “Inducement Warrants”).
−Removed: The investor agreed to exercise the existing 2,882,883 warrants for cash resulting in aggregate gross proceeds of approximately $7.6 million with approximately $7.4 million in net proceeds after deducting advisory fees.
−Removed: The Inducement Warrants are immediately exercisable and will be exercisable for five years from the date of issuance.
−Removed: The Inducement Warrants are classified as a component of permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, do not embody an obligation for the Company to repurchase its shares, and permit the holders to receive a fixed numbers of shares of common stock upon exercise.
−Removed: See Note 6 – Stockholders’ Deficit for more information.
Liability as of
Liability as of
−Removed: December 31, 2024
−Removed: December 31, 2023
Earnout liability
−Removed: Senior Secured Convertible Promissory Notes
Warrant liability (Public Warrants)
1 unchanged sentence
Total liabilities measured at fair value
−Removed: Other (loss) income related to instruments recorded at fair value during the year ended December 31, 2024 and 2023
+Added: Other income (expense) related to instruments recorded at fair value during the years ended December 31, 2025 and 2024
$ ( 51,825,649 )
−Removed: Private Placement and Public Warrants in Connection with the Merger
−Removed: At the Merger closing, the Company assumed 515,000 private placement warrants and 16,184,612 public warrants.
−Removed: On June 3, 2024, the Company permanently reduced the exercise price of such warrants from $ 11.50 per share to an exercise price of $ 7.80 per share.
−Removed: On November 20, 2024, the Company further reduced the exercise price of the outstanding public warrants and private warrants to an exercise price of $ 4.50 per share.
−Removed: The purpose of this reduced exercise price was to potentially raise proceeds received from the exercise of such warrants, if any, for working capital and general corporate purposes.
−Removed: As of December 31, 2024, there were 515,000 private placement warrants and 16,158,410 public warrants outstanding.
−Removed: See Note 12– Private Placement and Public Warrants for more information.
The Company is a robust AI-driven data management platform that solves complex data challenges for large institutions operating in dynamic and mission-critical environments with rapidly increasing volumes of data being ingested from a similarly rapidly growing number of data sources.
17 unchanged sentences
Its offerings allow customers to manage their data across the full data lifecycle, when and where they need it, using a highly secure permissioned based architecture.
−Removed: The Company employed fifty-one employees as of December 31, 2024.
+Added: The Company employed sixty three employees as of December 31, 2025.
The employees are headquartered in Redmond, WA and are supported by a growing team at its Customer Center of Excellence located in Charlotte, NC.
6 unchanged sentences
generally accepted accounting principles (“GAAP”).
−Removed: For periods prior to the Merger, the reported share and per share amounts have been retroactively converted by the applicable exchange ratio with the exception of the authorized shares and shares reserved for issuance.
−Removed: See Note 11—Reverse Recapitalization for additional information.
Functional Currency
53 unchanged sentences
Promised performance obligations are identified,
−Removed: The transaction price, or the amount the Company expects to receive, is determinable and
+Added: The transaction price, or the amount the Company expects to receive, is determinable
+Added: The transaction price is allocated to multiple performance obligations, and
The Company has satisfied the performance obligations to the customer.
6 unchanged sentences
Accounts receivable are recorded at invoiced amounts and are non-interest bearing.
−Removed: The Company adopted Accounting Standards Update (“ASU”) No.
−Removed: 2016-13, Financial Instruments — Credit Losses (codified as Accounting Standards Codification (“ASC”) 326) on January 1, 2023.
−Removed: ASC 326 adds to U.S.
−Removed: GAAP the current expected credit loss (“CECL”) model, a measurement model based on expected losses rather than incurred losses.
−Removed: Prior to the adoption of ASC 326, the Company evaluated receivables regularly and adjusted the allowance for doubtful accounts accordingly.
The Company determined estimates of uncollectible accounts receivable based primarily on actual historical bad debt and sales return trends, customers financial condition and general economic conditions.
−Removed: Under the application of ASC 326, the Company’s historical credit loss experience provides the basis for the estimation of expected credit losses, as well as current economic and business conditions, and anticipated future economic events that may impact collectability.
+Added: Under the application of Accounting Standards Codification 326, the Company’s historical credit loss experience provides the basis for the estimation of expected credit losses, as well as current economic and business conditions, and anticipated future economic events that may impact collectability.
In developing its expected credit loss estimate, the Company evaluated the appropriate grouping of financial assets based upon its evaluation of risk characteristics, including consideration of the types of products and services sold.
3 unchanged sentences
As of December 31, 2025 and 2024, the Company did not have a reserve for credit losses as all accounts receivable are considered collectible.
−Removed: Accounts receivable balances as of January 1, 2023, December 31, 2023 and December 31, 2024 were $705,752, $ 1,648,904 and $ 1,226,757 , respectively.
+Added: Accounts receivable balances as of December 31, 2025 and 2024 and January 1, 2024 were $ 6,462,675 , $ 1,226,757 and $ 1,648,904 , respectively.
Concentration of Credit and Sales Risk
The Company sells its product to commercial and government customers under agreements that are normally paid within 30 days of contract completion.
+Added: For the year ended December 31, 2025, the Company had revenue from ninety two customers and four customers represented 87 % of total revenue.
+Added: The primary reason for the high level of customer concentration for the year ended December 31, 2025 was due to reliance on these four customers for the year ended December 31, 2025.
+Added: As of December 31, 2025, three customers represent approximately 84 % of outstanding account receivables.
+Added: Due to the nature of the customers and timely payment history, customer concentration and credit risk in account receivables is estimated to be minimal.
For the year ended December 31, 2024, the Company had revenue from seventy-four customers and one customer represented 57 % of total revenue, although such a high level of customer concentration is not typical.
The primary reason for the high level of customer concentration for the year ended December 31, 2024 was due to one large order received in late 2023 which was fulfilled in the year ended December 31, 2024.
−Removed: As of December 31, 2024, four customers represent approximately 36 %, 25 %, 19 % and 12 % of outstanding account receivables.
−Removed: Due to the nature of the customers and timely payment history, customer concentration and credit risk in account receivables is estimated to be minimal.
−Removed: For the year ended December 31, 2023, three customers represented 34 %, 21 % and 12 % of total revenue from 58 customers, although such a high level of customer concentration is not typical.
−Removed: As of December 31, 2023, three customers represented approximately 51 %, 26 % and 17 % of outstanding account receivables.
−Removed: Due to the nature of the customers and timely payment history, customer concentration and credit risk in account receivables is estimated to be minimal.
+Added: As of December 31, 2024, four customers represent approximately 92 % of outstanding account receivables.
+Added: Due to the nature and concentration of the customers and timely payment history, credit risk in account receivables is estimated to be minimal.
The Company’s purchase of inventory, primarily computer servers, is undertaken to match purchase orders received from customers.
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Level 3 — Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
−Removed: The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of December 31, 2024 and 2023 are based upon the short-term nature of the assets and liabilities.
−Removed: The Company recorded its Senior Secured Convertible Promissory Notes, earnout liability (unvested earnout shares), and the warrants that were issued with the Convertible Promissory Notes at fair value, remeasured on a recurring basis and considered them as Level 3 instruments.
+Added: The Company initially recorded its senior secured convertible promissory notes, earnout liability (unvested earnout shares), and the warrants that were issued with the notes at fair value, remeasured on a recurring basis and considered them as Level 3 instruments.
The public and private warrants were considered Level 1 and 2 instruments, respectively.
−Removed: The fair value of the vested earnout shares was considered a Level 1 instrument.
−Removed: The method of determining the fair value of the Senior Secured Convertible Promissory Notes and attached warrants is described below.
+Added: The senior secured convertible promissory notes were converted to equity during the year ended December 31, 2024.
+Added: The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities as of December 31, 2025 and 2024 are based upon the short-term nature of the assets and liabilities.
The Company classifies as liabilities any contracts that (i) require net-cash settlement (including a requirement to net- cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).
−Removed: Accounting for Senior Secured Convertible Promissory Notes at Fair Value
−Removed: The Company has elected the fair value option to account for the senior secured convertible promissory note that was issued on June 22, 2023 and the convertible notes that were issued in October and November 2023 with changes in fair value recorded in the Consolidated Statements of Operations and Comprehensive Loss.
−Removed: As a result of applying the fair value option, direct costs and fees related to the convertible notes are recognized in earnings as incurred and not deferred.
−Removed: Values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
−Removed: The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the liability.
−Removed: Considerable judgment is necessary to interpret market data and determine an estimated fair value.
−Removed: The use of different market assumptions or valuation methods may have a material effect on the estimated fair values.
−Removed: As of December 31, 2024, the Company has used a Monte Carlo simulation pricing model that factors in potential outcomes being consummated, such as the convertible notes being repaid in cash and the convertible notes being converted to common stock.
−Removed: All of these scenarios take into consideration the terms and conditions of the underlying convertible notes plus potential changes in the underlying value of the common stock.
−Removed: For the years ended December 31, 2024 and 2023, the Company recognized an unrealized loss of $141,636 and $240,724, respectively for the change in fair value of the senior secured convertible promissory notes and is included in the Consolidated Statements of Operations and Comprehensive Loss.
−Removed: The Company believes accounting for the senior secured convertible promissory notes at fair value better aligns the measurement methodologies of assets and liabilities, which may mitigate certain earnings volatility.
−Removed: All of the Company’s senior secured convertible promissory notes were converted to equity during the year ended December 31, 2024.
Derivative Liabilities and Earnout Liabilities
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At the Merger closing, the Company assumed 515,000 private placement warrants and 16,184,612 public warrants.
−Removed: On June 3, 2024, the Company permanently reduced the exercise price of such warrants from $ 11.50 per share to an exercise price of $ 7.80 per share.
−Removed: On November 20, 2024, the Company further reduced the exercise price of the outstanding public warrants and private warrants to an exercise price of $4.50 per share.
−Removed: The purpose of this reduced exercise price was to potentially raise proceeds received from the exercise of such warrants, if any, for working capital and general corporate purposes.
As of December 31, 2025, there were 515,000 private placement warrants and 16,145,008 public warrants outstanding.
−Removed: See Note 12– Private Placement and Public Warrants for more information.
Upon consummation of the Merger, the Company evaluated the warrants and concluded that they did not meet the criteria to be classified within the stockholders’ deficit.
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The subsequent estimated fair value of the public warrants is based on the listed price in an active market for such warrants while the fair value of the private placement warrants continues to be measured using a Monte Carlo simulation with the key inputs being directly or indirectly observable public warrants listed price.
−Removed: Since the public and private warrants meet the definition of a derivative, the Company recorded the public and private warrants as liabilities on the consolidated balance sheet at fair value upon the Merger closing, with subsequent changes in the fair value recognized in the consolidated statements of operations at each reporting date.
−Removed: At the closing of the Merger, the Airship AI securityholders that hold shares of common stock of Airship AI, Airship AI options, Airship AI earnout warrants or Airship AI SARs have the contingent right to receive up to 5.0 million additional shares of common stock, subject to certain contingencies.
+Added: At the closing of the Merger, the Airship AI securityholders that hold shares of common stock of Airship AI, Airship AI options, Airship AI earnout warrants or Airship AI SARs had the contingent right to receive up to 5.0 million additional shares of common stock, subject to certain contingencies.
These earnout shares have been categorized into two components:
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At the closing of the Merger, the earnout shares associated with unvested underlying shares were considered to be equity instruments and valued at approximately $ 2,675,000 .
−Removed: This amount will be recognized as stock-based compensation going forward over the five-year vesting period.
+Added: During the years ended December 31, 2025 and 2024, the Company stock-based compensation expense for the vesting of earnout shares was $ 535,044 .
+Added: As of December 31, 2025, unrecognized compensation cost related to unvested earnout shares totaled $ 1,605,136 .
+Added: The weighted average period over which this remaining compensation cost is expected to be recognized is 3 years.
Derivative warrant and earnout shares liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of significant current assets or require the creation of current liabilities.
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The Company considers historical and future taxable income, future reversals of existing taxable temporary differences, taxable income in prior carryback years, and ongoing tax planning strategies in assessing the need for valuation.
−Removed: Comprehensive Gain (Loss)
−Removed: Comprehensive gain is defined as the change in equity of a business during a period from non-owner sources.
−Removed: There was other comprehensive gain of $ 9,338 and loss of $ 2,702 related to foreign exchange translation for the years ended December 31, 2024 and 2023, respectively.
+Added: Comprehensive (Loss) Gain
+Added: Comprehensive (loss) gain is defined as the change in equity of a business during a period from non-owner sources.
+Added: There was other comprehensive loss of $ 7,409 and gain of $ 9,338 related to foreign exchange translation for the years ended December 31, 2025 and 2024, respectively.
Going Concern Assessment
7 unchanged sentences
Significant estimates and assumptions included in the Company’s consolidated financial statements relate to the calculation of revenue recognition, stock-based compensation, valuation of common stock, valuation of senior secured convertible notes, warrant liability, earnout share liabilities, accruals for potential liabilities including income taxes, valuation of deferred tax assets and valuation assumptions related to share-based compensation.
−Removed: (Loss) Income Per Share
−Removed: Basic (loss) income per share is based upon the net (loss) income for the years ended December 31, 2024 and 2023 divided by the weighted average shares of common stock outstanding.
−Removed: Diluted net income per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, warrants, convertible notes payable and stock appreciation rights) outstanding during the period using the treasury stock method for the year ended December 31, 2023.
+Added: Income (Loss) Per Share
+Added: Basic income (loss) per share is based upon the net income (loss) for the years ended December 31, 2025 and 2024 divided by the weighted average shares of common stock outstanding.
+Added: Diluted net income per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, warrants and stock appreciation rights) outstanding during the period using the treasury stock method.
Common stock equivalents for the year ended December 31, 2024 are not included in the calculation of diluted earnings (loss) per share given the Company incurred a loss and they are anti-dilutive.
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The CODM monitors the revenue and expense components of the various products and services the Company offers, but operations are managed and financial performance is evaluated on a corporation-wide basis in comparison to a business plan which is developed each year.
−Removed: Accordingly, all operations are considered by the CODM to be one operating segment and one reportable segment as contained in the Consolidated Statements of Operations and Comprehensive Loss to the consolidated financial statements.
+Added: Accordingly, all operations are considered by the CODM to be one operating segment and one reportable segment as contained in the Consolidated Statements of Operations and Comprehensive Income (Loss) to the consolidated financial statements.
+Added: The CODM uses consolidated net income (loss) as its required measure of segment profit/loss, as such measure is determined in accordance with the measurement principles most consistent with the consolidated financial statements.
Recent Accounting Pronouncements
−Removed: All recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
−Removed: Advances due to and from Founders
+Added: In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures” (“ASU 2023-09”).
+Added: ASU 2023-09 requires public entities, on an annual basis, to provide:
+Added: a tabular rate reconciliation (using both percentages and reporting currency amounts) of (1) the reported income tax expense (or benefit) from continuing operations, to (2) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal (national) income tax rate of the jurisdiction (country) of domicile using specific categories, and separate disclosure for any reconciling items within certain categories that are equal to or greater than a specified quantitative threshold.
+Added: For each annual period presented, ASU 2023-09 also requires all reporting entities to disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign.
+Added: It also requires additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received).
+Added: ASU 2023-09 is effective for public entities for fiscal years beginning after December 15, 2024.
+Added: ASU 2023-09 is to be applied on a prospective basis with the option to apply the standard retrospectively.
+Added: The Company adopted this standard and disclosed the impact from this standard in Note 10 – Income Taxes.
+Added: All other recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
+Added: Recent Legislation
+Added: On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States.
+Added: Key provisions of the OBBBA include permanent extension of once-temporary provisions of the Tax Cuts and Jobs Act of 2017, along with the introduction of other significant changes that may impact the Company.
+Added: The legislation has multiple effective dates, with certain provisions effective in the Company’s fiscal year 2025 and others implemented through the Company’s fiscal year 2028.
+Added: The Company continues to evaluate the impact of the OBBBA and has included the impact of changes in the law that were effective during its fiscal year 2025 in the results of its consolidated financial statements
Advances due to Founders
−Removed: Prior to 2023, the founders had advanced the Company a net $ 600,000 .
−Removed: In the year ended December 31, 2023, Mr.
−Removed: Huang and Mr.
−Removed: Xu advanced Airship AI a total of $ 1,350,000 and were repaid a total of $ 200,000 , with $ 1,750,000 recorded as advances from founders as of December 31, 2023.
+Added: As of January 1, 2024, advances due to founders totaled $ 1,750,000 .
During 2024, Mr.
1 unchanged sentence
Xu advanced Airship AI $ 2,100,000 and were repaid $ 2,550,000 , with $ 1,300,000 recorded as advances from founders as of December 31, 2024.
−Removed: The outstanding advances as of December 31, 2024 are non-interest bearing and the Company expects to pay the balance off within a one-year period.
−Removed: Master Loan Agreement
−Removed: On September 27, 2024, the Company entered into a Master Loan Agreement with Mr.
−Removed: Huang, whereby he may provide additional funding of up to $ 1,500,000 under certain terms and conditions.
−Removed: The agreement provides for interest of 6 %.
−Removed: The Company paid interest for the 2024 advances (described under “Founder Advances” above) of $ 11,913 and issued warrants to purchase up to 220,000 shares of common stock.
−Removed: The warrants have an exercise price of $ 2.36 per share, are exercisable immediately upon issuance and will expire in five years following the date of issuance.
−Removed: The $ 284,478 fair value of the warrant is recorded in permanent equity in the consolidated balance sheets and was fully expensed on the date of grant.
−Removed: There are no outstanding advances under this Master Loan Agreement as of December 31, 2024.
+Added: During 2025, Mr.
+Added: Huang and Mr.
+Added: Xu were repaid $ 650,000 each, with $ 0 recorded as advances from founders as of December 31, 2025.
Disaggregation of Revenue
−Removed: The Company’s net revenues for the years ended December 31, 2024 and 2023 consisted of approximately $ 18.7 million and $ 7.4 million of hardware and software bundled systems for which revenue is transferred at a point in time.
−Removed: The Company’s remaining net revenue of approximately $ 4.3 million and $ 4.9 million relates to PCS revenue and other services which are transferred over time.
+Added: The Company’s net revenues for the years ended December 31, 2025 and 2024 consisted of approximately $ 10.1 million and $ 18.7 million, respectively, of hardware and software bundled systems for which revenue is transferred at a point in time.
+Added: The Company’s remaining net revenue for the years ended December 31, 2025 and 2024 of approximately $ 5.2 million and $ 4.3 million, respectively, relates to PCS revenue and other services which are transferred over time.
Within each product category, contract terms, conditions and economic factors affecting the nature, amount, timing, and uncertainty around revenue recognition and cash flow are substantially similar.
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On June 22, 2023, the Company issued a $ 2,000,000 senior secured convertible promissory note to Platinum Capital Partners, Inc.
−Removed: On February 2, 2024, the Company issued an amended and restated senior secured convertible promissory note to Platinum in the principal amount of $ 2,000,000 .
−Removed: Interest accrued on the Platinum convertible note at the rate of 6 % per annum calculated on the basis of 360 days.
−Removed: At the option of Platinum, the $ 2,000,000 principal amount of the note plus any accrued but unpaid interest was convertible into shares of the Company’s common stock at a conversion price per share equal to the lower of (i) $ 3.69717 , subject to appropriate adjustment as provided in the note, and (ii) 65% of the VWAP of the common stock for the five trading days immediately prior to any conversion, but in no event below $ 2.27 518, subject to appropriate adjustment as provided in the note.
−Removed: The note contained “weighted average” anti-dilution protection for issuances of shares of common stock or common stock equivalents at a price less than the conversion price then in effect.
−Removed: In connection with the issuance of the Platinum convertible note, the Company issued to Platinum an amended and restated common stock purchase warrant dated February 2, 2024, to purchase 189,334 shares of the Company’s common stock at an exercise price per share of $3.69717.
−Removed: On March 18, 2024, Platinum exercised the Platinum warrant and received 137,367 shares of common stock.
−Removed: Platinum forfeited 51,967 shares.
−Removed: On June 22, 2024, the Company entered into an extension agreement related to the Platinum convertible note.
−Removed: The extension agreement extended the due date of the note to June 22, 2025.
−Removed: In consideration for entering into the extension agreement, the Company issued to Platinum 232,360 shares of the Company’s restricted common stock in payment of all interest and extension fees through June 22, 2025 with a value of $ 1,008,400 .
−Removed: Approximately $ 487,000 of the total payment related to the future interest periods and were initially recorded in prepaid expenses and other on the consolidated balance sheet.
−Removed: The Platinum convertible note was converted into equity as of December 31, 2024 and all prepaid interest was charged to expense for the year ended December 31, 2024.
−Removed: During the year ended December 31, 2024, the Company issued 879,051 shares of common stock related to the conversion of $ 2,000,000 of the senior secured convertible promissory note and recorded a loss on note conversion of $ 751,423 .
+Added: During the year ended December 31, 2024, the Company issued 879,051 shares of common stock related to the conversion of $ 2,000,000 of the senior secured convertible promissory note.
On October 3, 2023, the Company issued senior secured convertible promissory notes for $ 600,000 to two private investors.
2 unchanged sentences
On September 13, 2024, the Company issued an additional 86,198 shares of common stock related to the conversion of notes at $ 2.65 per share.
−Removed: The Company recognized a loss on debt conversion of $ 393,253 , respectively during the year ended December 31, 2024.
−Removed: The Company accounts for the notes under the fair value method of accounting and as of December 31, 2024 and December 31, 2023, the notes were recorded at $ 0 and $ 2,825,366 , respectively.
−Removed: During the year ended December 31, 2024, and prior to the conversion of the notes, the Company recorded an unrealized loss due to the decrease in the fair value of the convertible notes payable totaling $ 141,636 .
−Removed: During the year ended December 31, 2023, the Company recorded an unrealized loss due to the increase in the fair value of the convertible notes payable totaling $ 240,784 , respectively, which were recorded as gain or loss from change in fair value of convertible debt on the statement of operations and comprehensive loss.
−Removed: See Note 14 – Fair Value Measurements for more information.
+Added: During the year ended December 31, 2024, the Company recorded an unrealized loss due to the increase in the fair value of the convertible notes payable totaling $ 141,636 and a loss of $ 1,144,676 for the conversion of these convertible notes.
Stockholders’ Deficit
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Year Ended December 31, 2025
+Added: During the year ended December 31, 2025, the Company had the following issuances of equity securities:
+Added: As of September 30, 2024, the Company determined the First Operating Performance Milestone of the earnout shares was achieved resulting in the vesting of 1,250,000 shares, of which 1,160,906 shares of the Company’s common stock were issued to applicable personnel on January 7, 2025.
+Added: During the year ended December 31, 2025, investors exercised public warrants for 13,502 shares of the Company’s common stock at $ 4.50 per share, and the Company received proceeds of $ 60,759 .
+Added: On October 8, 2025, the Company entered into warrant exercise inducement offer letter with the holder of its existing common stock warrants and issued 2,162,162 shares of its common stock to exercise its existing warrants at the existing exercise price of $ 4.50 per share, in exchange for our agreement to issue new common stock warrants to purchase 2,702,702 shares of common stock at an exercise price per share of $ 6.20 .
+Added: The aggregate gross proceeds from the exercise of the existing warrants were approximately $ 9,729,729 , before deducting financial advisory fees of $ 231,593 .
+Added: During the year ended December 31, 2025, the Company issued an aggregate of 443,179 shares of common stock and received $ 149,288 upon the exercise of stock options at a weighted average exercise price of $ 0.34 per share.
+Added: Year Ended December 31, 2024
During the year ended December 31, 2024, the Company had the following sales of equity securities:
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During the year ended December 31, 2024, the Company issued an aggregate of 163,669 shares of common stock upon the exercise of various warrants at $ 4.92 weighted average price per share.
−Removed: On December 24, 2024, the Company issued 2,882,883 shares of common stock upon the exercise of warrants at an exercise price of $ 2.65 per share related to an inducement agreement.
−Removed: Year Ended December 31, 2023
−Removed: During the year ended December 31, 2023, the Company issued 9,424,704 shares of common stock as part of the reverse recapitalization on December 21, 2023.
+Added: On December 24, 2024, the Company issued 2,882,883 shares of common stock upon the exercise of warrants at an exercise price of $ 2.65 per share related to a warrant inducement agreement.
2023 Equity Incentive Plan
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The 2022 Plan will continue to govern the terms of awards that have been granted under the 2022 Plan before, and that are still outstanding following the Merger.
+Added: On December 11, 2025, the Company’s shareholders approved the Airship AI Holdings, Inc.
+Added: 2023 Amended and Restated Equity Incentive Plan and increased the number of shares of the Company’s common stock authorized for issuance pursuant to awards granted under the plan by 2,000,000 shares.
The aggregate number of shares of common stock initially reserved and available for grant and issuance under the 2023 Plan is 4,000,000 .
4 unchanged sentences
The Company had the following stock option activity during the years ended December 31, 2025 and 2024:
+Added: Year Ended December 31, 2025
+Added: During the year ended December 31, 2025, the Company granted stock options to employees to purchase an aggregate of 1,816,000 shares of common stock with a weighted average exercise price of $ 3.39 per share, which vest primarily quarterly over four years and expire by December 2035.
+Added: During the year ended December 31, 2025, two employees forfeited stock options to purchase an aggregate of 107,500 shares of common stock with a weighted average exercise price of $ 2.95 per share.
+Added: During the year ended December 31, 2025, the Company issued an aggregate of 443,179 shares of common stock and received $ 149,288 upon the exercise of stock options at a weighted average exercise price of $ 0.34 per share.
+Added: Year Ended December 31, 2024
During the year ended December 31, 2024, the Company granted stock options to employees to purchase an aggregate of 1,590,000 shares of common stock with a weighted average exercise price of $ 3.47 per share and which vest primarily quarterly over four years and expire March to August 2034.
2 unchanged sentences
During the year ended December 31, 2024, the Company issued an aggregate of 415,218 shares of common stock and received $ 240,567 upon the exercise of stock options at a weighted average exercise prices of $ 0.58 per share.
−Removed: During the year ended 31, 2023, the Company granted stock options to purchase an aggregate of 502,522 shares of common stock with a weighted average exercise price of $ 1.64 per share.
Stock option activity for the years ended December 31, 2025 and 2024 were as follows:
2 unchanged sentences
Outstanding as of January 1, 2024
−Removed: Outstanding as of December 31, 2023
+Added: Outstanding as of January 1, 2025
Outstanding as of December 31, 2025
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The significant weighted-average assumptions relating to the valuation of the Company’s stock option grants were as follows for the years ended December 31, 2025 and 2024:
−Removed: Estimated stock price
−Removed: $ 1.49 - 7.61
Exercise price
$ 3.06 - 3.28
+Added: $ 1.49 - 7.61
Dividend yield
1 unchanged sentence
Expected volatility
−Removed: 57.1 % - 69.3 %
Risk free interest rate
3.605 %- 3.635
−Removed: 4.09 % - 4.23 %
There were stock incentive plan awards outstanding at December 31, 2025 totaling 6,792,880 shares with an aggregate intrinsic value of $ 9,124,344 .
Stock Appreciation Rights Plan
−Removed: Related to the Share Exchange Agreement with Super Simple AI, Inc., on February 17, 2022, the Company’s Board of Directors approved the 2022 Stock Appreciation Rights Plan (the “SAR Plan”) to issue a maximum of 1,500,000, which was later adjusted to 2,637,150 stock appreciation rights (“SARs”) after the Merger.
+Added: Related to the Share Exchange Agreement with Super Simple AI, Inc., on February 17, 2022, the Company’s Board of Directors approved the 2022 Stock Appreciation Rights Plan (the “SAR Plan”) to issue a maximum of 1,500,000 stock appreciation rights (“SARs”), which was later adjusted to 2,637,150 SARs after the Merger .
As of December 31, 2025 and 2024, there were 1,758,000 SARs outstanding with a base value of $ 0.12 and January 2028 expiration.
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The summary table below of outstanding warrants as of December 31, 2024 and 2023 include public and private placement warrants in Note 11.
+Added: Year Ended December 31, 2025
The Company had the following warrant activity during the year ended December 31, 2025:
+Added: During the year ended December 31, 2025, investors exercised public warrants for 13,502 shares of the Company’s common stock at $ 4.50 per share, and the Company received proceeds of $60,759.
+Added: On October 8, 2025, the Company entered into warrant exercise inducement offer letter with the holder of its existing common stock warrants and issued 2,162,162 shares of its common stock to exercise its existing warrants at the existing exercise price of $ 4.50 per share, in exchange for our agreement to issue new common stock warrants (“Inducement Warrants”) to purchase 2,702,702 shares of common stock at an exercise price per share of $ 6.20 .
+Added: The aggregate gross proceeds from the exercise of the existing warrants were approximately $ 9,729,729 , before deducting financial advisory fees.
+Added: The Inducement Warrants are immediately exercisable and will be exercisable for five years from the date of issuance.
+Added: In accordance with ASC Topic 815 guidance on equity classified warrant modifications, the modification is consistent with the equity issuance classification under that guidance as the reason for the modification was to induce the holders of the warrants to cash exercise their warrants, which raised equity capital and generated gross proceeds of approximately $ 9.7 million.
+Added: As the existing warrants and the Inducement Warrants issued on October 8, 2025 were classified as equity instruments before and after the exchange, and as the exchange is directly attributable to an equity offering, the Company recognized the effect of the modification of approximately $ 6.2 million (fair value of Inducement Warrants) as an equity issuance cost.
+Added: The Company determined the fair value using the Black-Scholes-Morton pricing model with the following assumptions:
+Added: stock price $ 5.14 , volatility of 61.2 %, risk-free interest rate of 3.74 % and expected term of four years.
+Added: Year Ended December 31, 2024
+Added: The Company had the following warrant activity during the year ended December 31, 2024:
In connection with the issuance of the Platinum convertible note, the Company issued to Platinum an amended and restated common stock purchase warrant dated February 2, 2024 to purchase 189,334 shares of common stock at an exercise price per share of $ 3.69717 .
18 unchanged sentences
Outstanding January 1, 2024
−Removed: Assumed in the Merger
+Added: ( 3,046,552 )
Outstanding January 1, 2025
19 unchanged sentences
Related Party Transactions
−Removed: Transfer of Zeppelin Membership Units
−Removed: In 2020, Victor Huang and Derek Xu, the Founders, officers and directors of the Company, borrowed $ 3,000,000 (“shareholder advances”) from Airship.
−Removed: As of January 1, 2023, the Company was owed $ 1,100,000 by the Founders.
−Removed: Due to the uncertainty of the timing of payment, the advances were treated as a long-term asset.
−Removed: The shareholders’ advances bore interest at 5 % and no interest was ever paid.
−Removed: On February 28, 2023, the Founders transferred their interest in Zeppelin to the Company and the $ 1,100,000 and related interest owed by the Founders to the Company was eliminated.
−Removed: As of December 31, 2022, Zeppelin received from the Company $ 1,095,000 , respectively, in cash advances to fund operations which commenced in 2021.
−Removed: These advances between the companies are eliminated in the consolidated balance sheet.
−Removed: As of January 1, 2023, Zeppelin owed the Founders $1,100,000 for funds they have provided for the commencement of operations in 2021.
−Removed: The balance was not expected to be paid in the next year and was treated as long-term liabilities.
−Removed: On February 28, 2023, in connection with the transfer of the Zeppelin ownership from the shareholders to the Company, the $ 1,100,000 Payable to the founders was eliminated.
−Removed: Huang and Mr.
−Removed: Xu originally owned all the Zeppelin membership units.
−Removed: When Zeppelin started, their intent was exploring the technology in-development and determining value for external customers by providing cloud based back-end products.
−Removed: After a period of time for Zeppelin’s development it became apparent these efforts would be of value and accretive to the Company.
−Removed: In 2022, the Company began utilizing research and development personnel to further develop the Company’s products.
−Removed: On February 28, 2023, the Founders transferred its interest in Zeppelin to the Company.
Advances due to Founders
−Removed: Prior to 2023, the founders had advanced the Company a net $ 600,000 .
−Removed: In the year ended December 31, 2023, Mr.
−Removed: Huang and Mr.
−Removed: Xu advanced Airship AI a total of $ 1,350,000 and were repaid a total of $ 200,000 , with $ 1,750,000 recorded as advances from founders as of December 31, 2023.
+Added: As of January 1, 2024, advances due to founders totaled $ 1,750,000 .
During 2024, Mr.
1 unchanged sentence
Xu advanced Airship AI $ 2,100,000 and were repaid $ 2,550,000 , with $ 1,300,000 recorded as advances from founders as of December 31, 2024.
−Removed: The outstanding advances as of December 31, 2024 are non-interest bearing and the Company expects to pay the balance off within a one-year period.
−Removed: Warrants to Purchase Common Stock
−Removed: On May 8, 2023, Airship AI issued warrants to purchase 1,344,951 shares of common stock to each of Victor Huang and Derek Xu.
−Removed: The warrants were valued at $ 2,136,115 based on the exercise price of $ 1.77 , the fair market stock price of $ 1.89 , a five-year term, a volatility of 39.4 % and interest of 3.41 %.
−Removed: The warrants are treated as equity instruments and the fair value as calculated at issuance was recorded as stock-based compensation expense and as additional paid in capital.
−Removed: All warrants are fully vested as they were issued for services performed.
−Removed: Upon completion of the Merger in December 2023, the Airship AI warrants were exchanged for warrants of the Company with the same term and conditions.
−Removed: Master Loan Agreement
−Removed: On September 27, 2024, the Company entered into a Master Loan Agreement with Mr.
+Added: During 2025, Mr.
+Added: Huang and Mr.
+Added: Xu were repaid $ 650,000 each, with $ 0 recorded as advances from founders as of December 31, 2025.
+Added: Master Loan Agreement with Victor Huang
+Added: On September 27, 2024, we entered into a master loan agreement with Mr.
Huang, whereby he may provide additional funding of up to $ 1,500,000 under certain terms and conditions.
The agreement provides for interest of 6 %.
−Removed: The Company paid interest for the 2024 advances (described under “Founder Advances” above) of $ 11,913 and issued warrants to purchase up to 220,000 shares of common stock.
+Added: We agreed to pay interest for the 2024 advances of $ 11,913 and issued warrants to purchase up to 220,000 shares of common stock.
The warrants have an exercise price of $ 2.36 per share, are exercisable immediately upon issuance and will expire in five years following the date of issuance.
The $ 284,478 fair value of the warrant is recorded in permanent equity in the consolidated balance sheets and was fully expensed on the date of grant.
−Removed: There are no outstanding advances under this Master Loan Agreement as of December 31, 2024.
+Added: There are no outstanding advances under the master loan agreement as of December 31, 2024.
+Added: The master loan agreement was terminated September 2, 2025.
Commitments, Contingencies and Legal Proceedings
2 unchanged sentences
The Company is currently not a party to any pending legal proceeding that is not ordinary routine litigation incidental to its business.
−Removed: Employment Agreement
+Added: Employment Agreements
On March 1, 2024, the Company entered into an employment agreement with Mark E.
2 unchanged sentences
Scott was also granted options to purchase up to twenty-five thousand (25,000) shares of Common Stock with an exercise price equal to $ 1.49 , which options vested in full on the date of issuance.
+Added: On March 4, 2025, the Company entered into an employment agreement with Paul Allen to serve as its President, which provides for a base salary of $ 350,000 .
+Added: The term of the employment agreement is for a period of three years, which will be automatically extended for additional one-year periods unless either party gives the other party written notice of such party’s decision not to renew the term at least 90 days prior to the end of the initial three-year term or any renewal term Mr.
+Added: Allen is also eligible to participate in annual performance-based bonus programs established from time to time by the Board, subject to the achievement by Mr.
+Added: Allen and the Company of the applicable performance criteria set forth in the employment agreement and established for Mr.
+Added: Allen by the Board.
+Added: The employment agreement is terminable by either party at any time.
+Added: In the event of termination by us without cause or by Mr.
+Added: Allen for good reason, as those terms are defined in the employment agreement, he is entitled to three months’ severance.
+Added: In connection with entering into the employment agreement, Mr.
+Added: Allen was granted ten-year options under our 2023 Equity Incentive Plan to purchase 100,000 shares of our common stock, which options vest immediately, at an exercise price equal to $3.27, being the fair market value on the date of grant .
+Added: Allen was also granted ten-year options under the Plan to purchase 300,000 shares of our common stock, which options vest quarterly over four years, at an exercise price equal to $3.27, being the fair market value on the date of grant.
Properties and Operating Leases-Right of Use Asset and Lease Liability
6 unchanged sentences
The Company also elected the practical expedient to not separate lease and non-lease components for all asset classes.
−Removed: The Company adopted ASC 842 effective January 1, 2022 and the adoption did not have any impact on previously reported stockholders’ deficit.
The Company has entered into operating leases for office and development facilities for four years and include options to renew.
13 unchanged sentences
Total lease liability
−Removed: On May 1, 2019, the Company leased 31,765 square feet for its executive offices in Redmond, Washington.
−Removed: The Company’s net monthly payment was $ 44,440 .
−Removed: The monthly payment increased approximately 3 % each year and the lease was set to expire on April 30, 2024.
−Removed: The Company had two five-year renewal options.
−Removed: In April 2023, the Company and its landlord entered into an agreement whereby the Company’s office lease was terminated on September 30, 2023.
−Removed: During the year ended December 31, 2023, the Company recorded a net gain on lease termination of $ 78,963 as an offset to selling general and administrative expenses on the consolidated statements of operations and comprehensive loss.
−Removed: The gain is comprised of a $ 344,093 gain from lease liability termination and a loss of $ 265,130 for accelerated amortization of right-of-use asset.
−Removed: On July 13, 2023, the Company entered into a lease in Redmond, WA for 15,567 square feet of office and warehouse space which started on October 1, 2023.
−Removed: The monthly payment is $ 25,000 per month.
−Removed: The lease expires October 31, 2027 and the monthly payment increases 3 % on July 31, 2024 and each year thereafter.
+Added: On September 7, 2023, the Company entered into a lease in Redmond, WA for 15,567 square feet of office and warehouse space which started August 1, 2024.
+Added: The monthly payment is currently approximately $ 29,600 per month.
+Added: The lease expires October 31, 2027 and the monthly payment increases 3 % on August 1, 2025 and each year thereafter.
There is a one three year option to extend the lease based on the fair market rate on October 31, 2027.
−Removed: The option to extend is not considered reasonably certain as of December 31, 2024.
−Removed: On February 29, 2024, the Company extended an office lease in Mooresville, North Carolina.
−Removed: The Company leases 3,621 square feet and the net monthly payment is $ 6,488 .
−Removed: On August 27, 2024, the Company extended the lease to February 28, 2025.
−Removed: The Company will exit this location on February 28, 2025 .
−Removed: On February 1, 2025, the Company entered into an office lease in Mooresville, North Carolina.
−Removed: The Company leases 5,240 square feet and the net monthly payment is $ 9,105 .
−Removed: The lease expires January 31, 2028 and the monthly payment increases 3 % on February 1, 2026 and each year thereafter.
+Added: We do not believe that is reasonably certain that the lease will be extended.
+Added: On December 6, 2024, the Company entered into two separate office leases in Mooresville, North Carolina, the terms of which commenced on February 1, 2025.
+Added: The Company leases an aggregate of 5,240 square feet and the net monthly payment is approximately $ 9,105 .
+Added: The leases expire January 31, 2028 and the monthly payment increases 3 % on February 1, 2026 and each year thereafter.
There is no option to extend the lease.
For each of the years ended December 31, 2025 and 2024, the Company’s income tax expense was $0 and the effective tax rate was 0%.
−Removed: The sources of (loss) income before income taxes are as follows for the years ended December 31, 2024 and 2023:
−Removed: The components of the provision for income taxes for the years ended December 31, 2024 and 2023 consisted of the following:
−Removed: A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the years ended December 31, 2024 and 2023 are as follows:
−Removed: For the year ended December 31, 2024, the Company’s effective tax rate differs from the federal statutory rate principally due to non-taxable revaluation of fair value of earnout shares and warrants liabilities, change in valuation allowance and other permanent differences being excluded from the determination of taxable loss.
+Added: The sources of income (loss) before income taxes are as follows for the years ended December 31, 2025 and 2024:
+Added: Year Ended December 31,
United States
1 unchanged sentence
International
−Removed: (Loss) income before income taxes
+Added: Income (loss) before income taxes
$ ( 57,464,890 )
+Added: The components of the provision for income taxes for the years ended December 31, 2025 and 2024 consisted of the following:
+Added: Years Ended December 31,
Total current provision
1 unchanged sentence
Total provision for income taxes
+Added: Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures , as described in Note 2, the reconciliation of taxes at the federal statutory rate to the provision for income taxes for the year ended December 31, 2025 was as follows:
+Added: Years Ended December 31,
Federal Statutory Tax Rate
−Removed: Share based compensation
−Removed: Non-taxable revaluation of fair value of earnout shares liability
−Removed: Non-taxable revaluation of fair value of warrants liability
Change in valuation allowance
+Added: Non-taxable and non-deductible items
+Added: Share-based payment awards
+Added: Change in fair value of earnout shares liability
+Added: ( 3,234,368 )
+Added: Change in warrants liability
+Added: ( 4,379,049 )
+Added: For the year ended December 31, 2025, the Company’s effective tax rate differs from the federal statutory rate principally due to non-taxable revaluation of fair value of earnout shares and warrants liabilities, change in valuation allowance and other permanent differences being excluded from the determination of taxable loss
+Added: As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differed from the statutory federal income tax rate as follows:
+Added: Years Ended December 31,
+Added: Federal statutory tax rate
+Added: Change in valuation allowance
+Added: Share-based compensation
+Added: Non-taxable change in fair value of earnout shares liability
+Added: Non-taxable change in fair value of warrants liability
Other permanent differences
1 unchanged sentence
The components of net deferred tax assets as of December 31, 2025 and 2024 consisted of the following:
+Added: Years Ended December 31,
Deferred tax assets:
12 unchanged sentences
Right-of-use-assets
−Removed: Total net deferred tax
+Added: Total net deferred tax assets
As of December 31, 2025 and 2024, the Company has a federal net operating loss carryforward totaling approximately $ 11,305,000 and $ 2,939,000 .
8 unchanged sentences
The valuation allowance increased by approximately $ 943,000 and $ 30,000 in 2025 and 2024, respectively.
−Removed: The increase during the current year is primarily related to capitalized research and development expenditures and net operating losses.
+Added: The increase during the current year is primarily related to net operating losses.
Pursuant to Sections 382 and 383 of the Internal Revenue Code, or IRC, annual use of the Company's net operating losses and tax credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period.
8 unchanged sentences
Interest and penalties related to unrecognized tax benefits, if any, will be recognized as a component of income tax expense.
+Added: The Company did not have any cash paid amount for income taxes, net of refunds for the year ended December 31, 2025.
The Company is subject to possible tax examination for the years 2014 through 2025.The Company is also subject to examination with respect to federal net operating loss carryforwards generated and carried forward from those years.
There are currently no federal or state income tax audits in process.
−Removed: Reverse Recapitalization
−Removed: On December 21, 2023, the Company completed the Merger and received net proceeds of $ 2.8 million, net of transaction costs of $ 6.6 million.
−Removed: The Merger was accounted for as a reverse recapitalization in accordance with GAAP.
−Removed: Under this method of accounting, BYTS, who was the legal acquirer, was treated as the “acquired” company for accounting purposes and Airship AI was treated as the accounting acquirer.
−Removed: Accordingly, the Merger was treated as the equivalent of Airship AI issuing shares at the closing of the Merger for the net assets of BYTS as of the closing date, accompanied by a recapitalization.
−Removed: The net assets of BYTS was stated at historical cost, with no goodwill or other intangible assets recorded.
−Removed: Airship AI was determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
−Removed: Airship AI’s stockholders have the majority voting interest in the combined company;
−Removed: The Airship Pubco Board is composed of one (1) director designated by BYTS and four (4) directors designated by Airship AI;
−Removed: Airship AI’s senior management is the senior management of Airship Pubco;
−Removed: The business of Airship AI comprises the ongoing operations of Airship Pubco;
−Removed: Airship AI is the larger entity, in terms of substantive assets.
−Removed: The table below summarizes the shares of common stock issued immediately after the closing of the Merger as well as the impact on the consolidated statement of stockholders’ equity as of December 21, 2023:
−Removed: Adjusted for correction of transaction expense discussed below.
−Removed: Immaterial Revision of Prior Period Financial Information
−Removed: In connection with the preparation of its consolidated financial statements, the Company identified an immaterial error related to the classification of prepaid expenses and transaction expenses (classified in accumulated deficit as reverse recapitalization).
−Removed: In accordance with SAB No.
−Removed: 99, “Materiality,” and SAB No.
−Removed: 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in the Current Year Financial Statements,” the Company evaluated the error and determined that the impact was not material to its financial statements for the prior annual and current interim period, accordingly the Company revised the prior period financial information for comparative purposes.
−Removed: The revision does not impact the consolidated statements of operations and comprehensive loss.
−Removed: A summary of the revision to the Company’s previously reported consolidated balance sheets is included below for comparative purposes:
−Removed: As of December 31, 2023
−Removed: Prepaid expenses and other
−Removed: $ ( 894,662 )
−Removed: Total current assets
−Removed: Accumulated deficit
−Removed: ( 16,582,038 )
−Removed: ( 17,476,700 )
−Removed: Total stockholders' deficit
−Removed: ( 16,592,565 )
−Removed: ( 17,487,227 )
−Removed: The revision had no impact to cash provided by operating activities in such period.
−Removed: Paid in Capital
−Removed: SPAC Financing
−Removed: Transaction expenses (1)
−Removed: ( 6,651,674 )
−Removed: Earnout liability
−Removed: ( 4,470,918 )
−Removed: ( 22,638,859 )
−Removed: Warrants liability
−Removed: ( 2,009,105 )
−Removed: Reverse capitalization on December 21, 2023 (1)
−Removed: $ ( 4,816,511 )
−Removed: $ ( 23,533,521 )
Warrant Liability
24 unchanged sentences
As of December 31, 2025 and 2024, the Private and Public Warrants had an aggregate fair value of $ 13,328,006 and $ 34,180,618 .
−Removed: The Company recorded a loss of $ 33,512,633 and a gain of $ 1,341,120 due to change in the fair value of the warrant liability during the years ended December 31, 2024 and 2023, respectively.
+Added: The Company recorded a gain of $ 20,852,612 and a loss of $ 33,512,633 due to change in the fair value of the warrant liability during the years ended December 31, 2025 and 2024, respectively.
See Note 13 – Fair Value Measurements for more information.
13 unchanged sentences
The Unvested Shares are equity-classified share-based compensation to be recognized over time under ASC 718 due to the service component.
−Removed: At the closing of the Merger on December 21, 2023, the earnout liability had an initial fair value of $ 27,109,777 , which was recorded as a long-term liability and a reduction to additional paid in capital in the consolidated balance sheet.
−Removed: As of December 31, 2023, the earnout liability had decreased to $ 5,133,428 as a result of the decline in the Company’s share price since the closing of the Merger.
−Removed: As of December 31, 2024, the estimated fair value of the earnout liability increased to $ 23,304,808 primarily due to the increase in the Company’s share price, which resulted in a loss due to the change in fair value of the earnout liability during the year ended December 31, 2024 of $ 18,171,380 and is recorded on the consolidated statements of operations and comprehensive loss.
+Added: As of September 30, 2024, the Company determined the first operating performance milestone was achieved resulting in the vesting of 1,250,000 earnout shares, of which 1,160,906 shares of the Company’s common stock were issued to applicable personnel on January 7, 2025.
+Added: The fair value of the 1,160,906 vested shares on the issuance date of $ 5,282,008 was determined using the Company’s closing trading price on January 7, 2025 and was reclassified from earnout liability to equity as additional paid in capital on the consolidated balance sheet.
+Added: The remaining 89,094 shares that vested as of September 30, 2024 will continue to be valued on a recurring basis as a Level 1 instrument until issued.
+Added: The remaining unvested earnout shares continue to be accounted for as liabilities until their respective triggering event occurs.
+Added: As of December 31, 2024, the estimated fair value of the earnout liability was $ 23,304,808 and decreased to $ 2,620,933 as of December 31, 2025 primarily due to the common stock issued to settle approximately $ 5.3 million of earnout liability on January 7, 2025, the decrease in the Company’s share price and a decline in revenue, which resulted in a gain due to the change in fair value of the earnout liability during the year ended December 31, 2025 of approximately $ 15.4 million.
+Added: During the year ended December 31, 2024, the Company recorded a loss from the change in fair value of the earnout liability of approximately $ 18.2 million.
+Added: The Company records the gain and losses from the change in fair value of the earnout liability on the consolidated statements of operations and comprehensive loss.
See Note 13– Fair Value Measurements for more information.
2 unchanged sentences
As a result, these unvested earn-out shares are equity-classified awards and have an aggregated grant date fair value of $ 2,675,223 (or $5.96 per share).
−Removed: During the years ended December 31, 2024 and 2023, the Company stock-based compensation expense for the vesting of earnout shares was $ 535,044 and $ 0 , respectively.
+Added: During each of the years ended December 31, 2025 and 2024, the Company stock-based compensation expense for the vesting of earnout shares was $ 535,044 , respectively.
As of December 31, 2025, unrecognized compensation cost related to unvested earnout shares totaled $ 1,605,136 .
The weighted average period over which this remaining compensation cost is expected to be recognized is 3 years.
−Removed: As of September 30, 2024, the Company determined the First Operating Performance Milestone (A,2) was achieved and 1,250,000 shares of the Company’s common stock were issued to applicable personnel on January 7, 2025.
−Removed: The fair value of the 1,250,000 vested shares as of December 31, 2024 of $7,825,000 was determined using the Company’s closing trading price on December 31, 2024 and is included in the earnout liability on the consolidated balance sheet.
−Removed: The vested earnout shares are considered a level 1 fair value instrument.
−Removed: See Note 14– Fair Value Measurements for more information.
Fair Value Measurements
−Removed: The following table sets forth by level within the ASC 820, Fair Value Measurement, fair value hierarchy of the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2024:
+Added: The following table sets forth by level within the ASC 820, Fair Value Measurement, fair value hierarchy of the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2025 and 2024:
December 31, 2025
3 unchanged sentences
Total liabilities measured at fair value
−Removed: The following table sets forth by level within the ASC 820, Fair Value Measurement, fair value hierarchy of the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2023:
December 31, 2024
Earnout liability
−Removed: Senior Secured Convertible Promissory Notes
Warrant liability (Public Warrants)
4 unchanged sentences
The following assumptions were used in the simulation at each valuation date:
−Removed: December 31, 2024
−Removed: December 31, 2023
Risk-free interest rate
2 unchanged sentences
Dividend yield
−Removed: The assumptions also included the probability of meeting the federal law enforcement agency growth milestone at 100%.
The fair value of the 1,250,000 vested shares as of December 31, 2024 of $ 7,825,000 was determined using the Company’s closing trading price on December 31, 2024.
+Added: On January 7, 2025, 1,160,906 shares were issued with a fair value of $ 5,282,125 to applicable personnel and were reclassified to equity as additional paid in capital.
+Added: The fair value of the remaining 89,094 shares that vested as of September 30, 2024 was determined using the Company’s closing stock price on December 31, 2025.
The initial estimated fair value of the private warrants was measured using a Monte Carlo simulation.
3 unchanged sentences
The senior secured convertible promissory notes were fully converted to equity as of December 31, 2024.
−Removed: The following assumptions were used in the simulation:
−Removed: December 31, 2024
−Removed: December 31, 2023
−Removed: $ 3.18 - 3.74
−Removed: Effective discount rate
−Removed: 11.34 - 11.51
−Removed: Expected term (in years)
−Removed: Expected volatility
−Removed: Dividend yield
On September 13, 2024, the vested earnout shares were transferred from Level 3 to Level 1 upon the Board approval of the achievement of the First Operating Performance Milestone (A,2).
1 unchanged sentence
There were no transfers of financial instruments between valuation levels during the year ended December 31, 2025.
−Removed: The changes in Level 3 liabilities measured at fair value for the year ended December 31, 2024 were as follows:
+Added: The changes in Level 3 liabilities measured at fair value for the years ended December 31, 2025 and 2024 were as follows:
Beginning Balance
4 unchanged sentences
January 1, 2025
−Removed: Realized Loss
+Added: Realized Gain
Settlements (a)
December 31, 2025
+Added: $ ( 13,116,356 )
+Added: $ ( 13,116,356 )
+Added: Beginning Balance
+Added: Unrealized and
+Added: Conversions /
+Added: Transfers out
+Added: Ending Balance as of
+Added: January 1, 2024
+Added: Realized Gain
+Added: Settlements (a)
+Added: December 31, 2024
Earnout liability
$ ( 3,400,000 )
−Removed: Senior Secured Convertible Prommissory Notes
+Added: Senior Secured Convertible Promissory Notes
( 2,967,002 )
4 unchanged sentences
The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders:
−Removed: December 31, 2024
−Removed: December 31, 2023
−Removed: Net (loss) income
+Added: Net income (loss)
$ ( 57,464,890 )
Weighted average shares outstanding-
−Removed: dilutive effect of stock options, SARs and Airship warrants
−Removed: (Loss) income per share-
+Added: dilutive effect of stock options, SARs and warrants
+Added: Income (loss) per share-
The following potentially dilutive shares were not included in the calculation of diluted shares outstanding for the periods presented as the effect would have been anti-dilutive:
−Removed: December 31, 2024
−Removed: December 31, 2023
+Added: Anti-dilutive shares
Public Warrants
Private Warrants
−Removed: Convertible debt
Outstanding stock options
Earnout shares
−Removed: The 3,750,000 -remaining unvested earnout shares as of December 31, 2024 are excluded from basic and diluted net loss per share as such shares are contingently issuable until the Company exceeds certain milestone thresholds that have not been achieved.
−Removed: The 1,250,000 vested earnout shares are included as anti-dilutive shares for the year ended December 31, 2024 and were issued to applicable personnel on January 7, 2025.
−Removed: As a result of the Merger, the weighted-average number of shares of common stock used in the 2023 calculation of net income (loss) per share have been retroactively converted by applying the conversion ratio.
+Added: The 3,750,000 -remaining unvested earnout shares as of December 31, 2025 and 2024 are excluded from basic and diluted net loss per share as such shares are contingently issuable until the Company exceeds certain milestone thresholds that have not been achieved.
+Added: The 1,250,000 vested earnout shares are included as anti-dilutive shares for the year ended December 31, 2024 of which 1,160,906 were issued to applicable personnel on January 7, 2025.
Subsequent Events
The Company evaluated subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements were issued.
−Removed: Subsequent to December 31, 2024, there were the following material transaction that occurred that would require recognition or disclosure in the financial statements:
−Removed: As of September 30, 2024, the Company determined the First Operating Performance Milestone (A,2) of the earnout shares was achieved and 1,250,000 shares of the Company’s common stock were issued to applicable personnel on January 7, 2025.
+Added: Subsequent to December 31, 2025, there were no items that require recognition or disclosure in the financial statements.
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, thereunto duly authorized.
23 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.