On July 16, 2019, Karem Aircraft was granted a patent covering technology it intends to use in the development of the Butterfly eVTOL aircraft. The design will be based on the patented Optimum Speed Rotor technology previously developed by company founder Abe Karem.

Also on July 16, 2019, Karem announced that it has raised $25 million through a Series A funding round. The main backer for this was South Korean industrial group Hanwha Systems. The funding was approved on December 8, 2019, by the U.S. Committee on Foreign Investment in the United States. It will be used to launch a new spin-off company called Overair (earlier referred to as K4 Aeronautics) that will bring the Butterfly to market and establish an air-taxi operation in support of Karem’s partnership with Uber Air. In the future, Karem Aircraft will mainly focus on its activities in the defense market.

In January 2020, Karem Aircraft formed Overair, Inc. as a spin-off venture to lead the development of the Butterfly under the leadership of president and CEO Ben Tigner. This was one of 10 eVTOL aircraft programs selected as a partner in the Uber Elevate air taxi program, but this alliance broke up in late 2020 when Elevate was acquired by Joby Aircraft. Overair had been working to a goal of getting the Butterfly certified and in service by 2023, and the company is reportedly one of several eVTOL pioneers actively working with the FAA on a path to type certification.

In August 2021, Overair emerged from more than two years of largely working in stealth mode to reveal the design for the Butterfly eVTOL aircraft. It told a press briefing that it is on track to complete FAA Part 23 type certification by the end of 2025 and to be ready to start commercial operations in 2026, with CEO Ben Tigner explaining that it aims to start flying a prototype in Southern California during 2022, mainly to finalize the all-electric model’s propulsion system. By 2023, it expects to be flying a conforming prototype.

Using the Optimum Speed Rotor system, the aircraft's four large tilting propellers spin slowly in hover and even slower during cruise flight, which Overair says results in reduced power consumption that boosts payload, as well as safety margins for operating in challenging environmental conditions. The high aspect ratio wings have full-span flaps to support low stall speeds.

The large blade area of the propellers, combined with their slow rotation speed and low disk loading, will minimize pressure disturbance, which is also expected to deliver low noise by comparison with both helicopters and other eVTOL designs. According to the company, the noise level at hover (measured at a distance of 100 meters) is estimated at 55 dBA, while at cruise (measured at 500 meters) should be around 30 dBA.

According to Overair, the Butterfly will be able to carry five passengers plus an unspecified amount of cargo on trips of over 100 miles. It is expected to have a top speed of 200 mph and be able to operate in IFR conditions.

The company says it is yielding dividends from more than $150 million investment in supporting technologies through various U.S. Department of Defense and NASA programs. Overair says it will seek further investments to complete the type certification process. It is now operating from a new headquarters facility in Santa Ana, California. This includes a large manufacturing area, a machine shop, a composites shop, and an avionics department. 

In May 2022, Overair became the latest advanced air mobility company to join the Urban Movement Labs partnership developing an ecosystem for eVTOL air taxi services in Los Angeles.

In July 2022, Overair selected Toray Composite Materials America to supply pre-impregnated material, a carbon fiber composite infused with an epoxy resin, for the Butterfly eVTOL prototype.