AIRSHIP(AISP) - 2025 Q4 - Annual Report

Stock Performance and Ownership - Airship AI's common stock was last reported at $2.43, with public warrants having an exercise price of $4.50, indicating potential liquidity issues for warrant holders [205]. - Approximately 38.6% of the voting power is controlled by co-founders Victor Huang and Derek Xu, which may limit shareholder influence on corporate matters [194]. - The concentration of stock ownership may adversely affect the market price of common stock and deter potential acquirers from pursuing control of the company [196]. - The company is classified as a "smaller reporting company" and "emerging growth company" under U.S. federal securities laws, which may make its common stock less attractive to investors due to reduced reporting requirements [210]. - 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 [211]. - 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 billion in non-convertible debt securities during the prior three-year period [212]. Financial Condition and Liabilities - The company has not capitalized any software development costs for the years ended December 31, 2025, and 2024, indicating a focus on operational expenses rather than capital investments [190]. - Airship AI is subject to significant tax liabilities and uncertainties, which could adversely affect its financial condition and results of operations [187]. - Changes in tax laws, such as those enacted by the 2017 Tax Cuts and Jobs Act, may impact the company's financial reporting and tax liabilities [189]. - The company faces risks related to limited insurance coverage, which may not fully protect against third-party claims, potentially impacting financial stability [186]. Corporate Governance and Legal Matters - The company does not intend to pay cash dividends in the foreseeable future, with any returns on investment expected to come from increases in stock value [203]. - The company is subject to extensive public company reporting requirements, which may strain resources and divert management's attention from core business activities [197]. - Anti-takeover provisions in the company's charter and bylaws could impair a takeover attempt, potentially limiting stockholders' opportunities to receive a premium for their shares [213]. - 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 [216]. - The choice of forum provision may discourage lawsuits and result in increased costs for investors to bring claims against the company [217]. Market Conditions - The market price of Airship AI's equity securities may be volatile, influenced by various factors including operational performance and market conditions [204].