BYTE Acquisition (BYTS) - 2024 Q4 - Annual Report

Stock Performance and Market Conditions - Airship AI's common stock was last reported at $4.48, while the exercise price of public warrants is$ 4.50, indicating potential challenges for warrant holders to exercise their options [187]. - The stock market for Airship AI's securities may experience significant volatility, which could lead to substantial fluctuations in market price [186]. - The company has limited liquidity in its stock market, which may hinder investors' ability to sell their securities [174]. - The company may become subject to penny stock rules if its common stock price falls below $5.00, which could reduce trading activity and make it difficult for shareholders to sell their shares [191]. - The reduced reporting requirements for smaller reporting companies may make the company's common stock less attractive to investors [193]. Ownership and Control - The concentration of ownership among key stockholders, who control approximately 49.5% of voting power, may limit public investors' influence and could adversely affect stock price [175]. - Anti-takeover provisions in the company's charter could delay or prevent undesirable acquisitions, potentially limiting stockholder opportunities to receive a premium for their shares [196]. - The company’s charter requires that certain stockholder litigation matters be brought in the Court of Chancery of the State of Delaware, which may limit stockholders' ability to obtain a favorable judicial forum [197]. - The board of directors has the ability to issue preferred stock without stockholder approval, which could significantly dilute the ownership of a hostile acquirer [198]. - A special meeting of stockholders can only be called by the board of directors or the chairman, potentially delaying stockholder actions [198]. Financial Performance and Liabilities - The company has not capitalized any software development costs for the years ended December 31, 2024, and 2023, indicating a focus on operational expenses until technological feasibility is established [173]. - Airship AI is subject to significant tax liabilities, with potential volatility in tax provisions due to changes in operating structures and tax laws, which could adversely impact financial results [170]. - Changes in tax laws, particularly those enacted by the 2017 Tax Cuts and Jobs Act, may require capitalization of research and experimental expenditures, impacting financial reporting [172]. - The company does not intend to pay cash dividends in the foreseeable future, meaning returns for investors will rely on increases in stock value [185]. Regulatory and Compliance Risks - Compliance with public company regulations may strain resources and divert management's attention from core business activities, affecting overall performance [178]. - The company may incur additional costs if a court finds its choice of forum provision inapplicable, which could harm its business and financial condition [199]. - The company is subject to various risks including loss of strategic relationships, variations in operating results, and competitive pricing pressures [192]. Company Status and Growth Potential - The company will remain a smaller reporting company until the market value of its common stock held by non-affiliates exceeds$ 250 million or annual revenues exceed $100 million and market value exceeds$ 700 million [194]. - The company will remain an emerging growth company until it has total annual gross revenue of at least $1.23 billion or issues more than$ 1.00 billion in non-convertible debt securities during the prior three-year period [195].