What changed in this filing

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Item 1. Financial Statements

2026-05-15 compared with 2025-11-13 · 961 added, 715 removed, 199 unchanged (89% of the section changed)

FINANCIAL STATEMENTS

VOLATO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except par value amounts)

September 30,

2025 December 31,

BALANCE SHEETS

in thousands, except par value amounts)

Current assets:

Cash $ 4,350 $ 2,161

Restricted cash — 1,839

Accounts receivable, net

Contract assets, net

Deposits 3,000 36,000

Note receivable, current

Investment in M2i

Investment in flyExclusive

Aviation asset option

Prepaid expenses and other current assets

3 unchanged sentences

Operating lease, right-of-use assets

Deposits 65 300

Note receivable, non-current

Non-current assets - discontinued operations — 1,838

Total assets $ 13,590 $ 46,299

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

LIABILITIES AND SHAREHOLDERS’ DEFICIT

Current liabilities:

Accounts payable and accrued liabilities

Dividend payable

Convertible notes, net

Operating lease liability

Credit facility and other loans — 28,855

Customer deposits and deferred revenue

2 unchanged sentences

Operating lease liability, non-current

Non-current liabilities - discontinued operations — 305

Total liabilities

COMMITMENTS AND CONTINGENCIES (Note 13)

Shareholders’ equity (deficit):

Shareholders’ deficit:

Common Stock Class A, $ 0.0001 par value;

200,000,000 authorized;

7,435,756 and 1,843,852 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

20,185,249 and 9,510,784 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

Accumulated deficit

Total shareholders’ equity (deficit) 4,105 ( 16,334 )

Total liabilities and shareholders’ equity $ 13,590 $ 46,299

The accompanying notes are an integral part of these consolidated financial statements .

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share data)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Revenue $ 381 $ 38,466 $ 50,719 $ 38,695

Total shareholders’ deficit

Total liabilities and shareholders’ deficit

accompanying notes are an integral part of these unaudited consolidated financial statements .

STATEMENTS OF OPERATIONS

in thousands, except share data)

Three Months Ended March 31,

Costs and expenses:

2 unchanged sentences

Total costs and expenses

Operating (loss) income ( 2,564 ) 2,133 834 ( 5,852 )

Operating income (loss)

Other income (expenses):

Other income, net

Loss from change in fair value of financial instruments ( 539 ) — ( 1,289 ) ( 2,982 )

Gain on sale of asset

Gain (loss) from change in fair value of financial instruments

Interest income (expense), net

1 unchanged sentence

Income (loss) before provision for income taxes and discontinued operations

Provision for incomes taxes 272 11 559 26

Provision for income taxes

Net income (loss) from continuing operations

1 unchanged sentence

Net income (loss)

Basic and diluted net loss per share:

Basic and diluted net income (loss) per share:

Net income (loss) per share from continuing operations, basic

$ 0.46 $ ( 0.89 ) $ 1.25 $ ( 12.10 )

Net income (loss) per share from continuing operations, diluted

$ 0.45 $ ( 0.89 ) $ 1.30 $ ( 12.10 )

Net income (loss) per share from discontinued operations, basic

3 unchanged sentences

Weighted average common shares outstanding:

5,039,340 1,180,562 4,303,537 1,177,853

Diluted 5,978,762 1,180,562 5,037,805 1,177,853

The accompanying notes are an integral part of these consolidated financial statements .

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(Amounts in thousands, except shares)

accompanying notes are an integral part of these unaudited consolidated financial statements .

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

in thousands, except shares)

Class A Common Stock

Shareholders’

Equity (Deficit)

Shares Amount

Balance as of December 31, 2023, as adjusted 1,121,738 $ 3 $ 78,410 $ ( 63,662 ) $ 14,751

Stock-based compensation

Issuance of common stock 48,327 — — — —

Common stock and warrant reclass from in-kind liability to APIC

Additional Paid-in

Shareholders’ Equity

Balance as of December 31, 2024

$ ( 104,307 )

Net loss — — — ( 17,390 ) ( 17,390 )

Balance as of March 31, 2024, as adjusted 1,170,065 $ 3 $ 82,743 $ ( 81,052 ) $ 1,694

Stock-based compensation

— — 185 — 185

Issuance of common stock

Net loss — — — ( 16,918 ) ( 16,918 )

Balance as of June 30, 2024, as adjusted 1,180,709 $ 3 $ 82,964 $ ( 97,970 ) $ ( 15,003 )

Stock-based compensation

Balance as of March 31, 2025

$ ( 103,852 )

Issuance of common stock 664 — 3 — 3

Net loss — — — ( 4,435 ) ( 4,435 )

Balance as of September 30, 2024, as adjusted 1,181,373 $ 3 $ 82,768 $ ( 102,405 ) $ ( 19,634 )

Class A Common Stock

Shareholders’

Equity (Deficit)

Shares Amount

Balance at December 31, 2024 1,843,852 $ 5 $ 87,968 $ ( 104,307 ) $ ( 16,334 )

Stock-based compensation

Issuance of common stock

57,041 — — — —

Net income — — — 455 455

Balance at March 31, 2025 1,900,893 $ 5 $ 88,014 $ ( 103,852 ) $ ( 15,833 )

Stock-based compensation

Balance as of December 31, 2025

$ ( 100,771 )

Issuance of common stock

$ ( 100,771 )

Net income — — — 3,602 3,602

Balance at June 30, 2025 4,622,737 $ 5 $ 93,181 $ ( 100,250 ) $ ( 7,064 )

Stock-based compensation

Issuance of common stock

Issuance of common stock for debt conversion

Issuance of restricted stock units

Net income (loss)

Balance as of March 31, 2026

$ ( 103,405 )

Net income — — — 7,145 7,145

Balance at September 30, 2025 7,435,756 $ 5 $ 97,205 $ ( 93,105 ) $ 4,105

The accompanying notes are an integral part of these consolidated financial statements .

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

Nine Months Ended September 30,

$ ( 103,405 )

accompanying n otes are an integral part of these unaudited consolidated financial statements .

STATEMENTS OF CASH FLOWS

in thousands)

Three Months Ended March 31,

Operating activities:

5 unchanged sentences

Stock compensation expense

Loss from sale of property and equipment 6 —

Gain from sale of asset

(Gain) loss from disposal property and equipment

Loss from sale of consolidated entity

Gain on settlement of liabilities

Loss on dividend payable

Amortization right-of-use asset

Amortization of debt discount

Change in fair value forward purchase agreement — 2,982

Change in fair value of convertible notes

Loss on investment in M2i

Loss on investment in flyExclusive

Loss on aviation asset option

Changes in assets and liabilities:

Accounts receivable

Notes receivable ( 86 )

Contract assets, net

Prepaid and other current assets

Deposits 5,237 3,400

Account payable and accrued liabilities

Customers’ deposits and deferred revenue

Net cash provided by operating activities from continuing operations 1,208 7,771

Change in assets and liabilities of discontinued operations

Net cash provided by (used in) operating activities from continuing operations

Net cash used in operating activities from discontinued operations

3 unchanged sentences

Proceeds from the sale of property and equipment

Cash used in investing activities - discontinued operations — ( 3 )

Net cash used in investing activities ( 39 ) ( 145 )

Net cash (used in) provided by investing activities

Financing activities:

Principal payment on lease obligations

Repayments of lines of credit — ( 1,000 )

Proceeds from issuance of term loan — 4,000

Proceeds from issuance of convertible notes, net 4,050 —

Repayment of loans

Costs of share issuance

Repayment on loans ( 1,124 ) ( 2,928 )

Proceeds from exercise of stock options — 39

Cash used in financing activities - discontinued operations — ( 597 )

Net cash provided by (used in) financing activities 2,831 ( 486 )

Net increase (decrease) in cash 350 ( 11,122 )

Cash and restricted cash, beginning of period 4,000 16,723

Cash and restricted cash, end of period $ 4,350 $ 5,601

Net cash used in financing activities

Net decrease in cash

Cash, beginning of period

Cash, end of period

Supplemental disclosure of cash flow information:

4 unchanged sentences

Non-cash interest

Credit facility for the aircraft deposits $ ( 28,000 ) $ —

In-kind dividend paid

Credit facility for aircraft deposit

Issuance of shares for convertible notes

Investment in M2i - share exchange $ 2,065 $ —

Investment in flyExclusive

Financing for aircraft purchase

1 unchanged sentence

Deposits on aircraft

Issuance of shares in exchange for debt reduction $ 463 $ —

Initial recognition of right-of-use asset $ — $ 201

The accompanying notes are an integral part of these consolidated financial statements .

VOLATO GROUP, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Volato Group, Inc.

(“we”, “us”, “the Company”, or “Volato”) is a holding company for several wholly owned subsidiaries, including Volato, Inc., Fly Vaunt, LLC, Gulf Coast Aviation, LLC (f/k/a Gulf Coast Aviation, Inc)., Volato Merger Subsidiary, Inc., and Parslee, LLC.

accompanying notes are an integral part of these unaudited consolidated financial statements .

TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

(“we”, “us”, “the Company”, or “Volato”) is a holding company for several

wholly owned subsidiaries, including Volato, Inc., Fly Vaunt, LLC, Gulf Coast Aviation, LLC (f/k/a Gulf Coast Aviation, Inc.), Volato

Merger Subsidiary, Inc., and Parslee, LLC.

The Company’s primary operating subsidiary was founded in 2021.

That year, the Company entered the private jet charter and fractional ownership market with its Part 135 HondaJet ownership program, taking delivery of its first jet in August 2021 and completing its first Part 135 charter flight in October of 2021.

In March 2022, the Company acquired Gulf Coast Aviation, Inc.

(n/k/a Gulf Coast Aviation, LLC), owner of G C Aviation, Inc., a Texas entity and Part 135 air carrier certificate holder.

That year, the

Company entered the private jet charter and fractional ownership market with its Part 135 HondaJet ownership program, taking delivery

of its first jet in August 2021 and completing its first Part 135 charter flight in October of 2021.

In March 2022, the Company acquired

Gulf Coast Aviation, Inc.

(n/k/a Gulf Coast Aviation, LLC), owner of G C Aviation, Inc., a Texas entity and Part 135 air carrier certificate

In March 2022, the Company placed orders for four Gulfstream G280s for delivery in 2024 and 2025.

In September 2022, the Company started internal development on its full suite Flight Management Software platform Mission Control, and in the fourth quarter of 2023 the Company commercially launched Vaunt, our proprietary consumer facing empty leg platform.

In September 2024, the Company entered into an agreement with flyExclusive, Inc., (“flyExclusive”) a leading provider of private jet charter services, to transition the management of its aircraft ownership fleet operations to flyExclusive.

This move was intended to bring substantial cost savings and allow Volato to focus on its potential high-growth areas, including aircraft sales and proprietary software products.

The Company has continued to take delivery of new aircraft and also generate revenue from its proprietary software, including the Vaunt platform, its empty leg consumer app.

In the fourth quarter of 2024, we transferred our aircraft lease agreements to flyExclusive and have no further obligations under the aircraft lease agreements or control over flight operations.

The Company has retained insider card liabilities of $ 0.3 million that is included in discontinued operations as of September 30, 2025.

On February 24, 2025, the Company effected a reverse stock split of its issued and outstanding Class A common stock (also referred to as “common stock” in this Quarterly Report), at a ratio of 1-for-25 (the “Reverse Stock Split”) with no change in par value.

In September 2022, the Company

started internal development on its full suite Flight Management Software platform Mission Control, in the fourth quarter of 2023 the

Company commercially launched Vaunt, our proprietary consumer facing empty leg platform, and in the fourth quarter of 2025 the Company

commercially launched Parslee, our AI based document intelligence platform.

September 2024, the Company entered into an agreement with flyExclusive, Inc., (“flyExclusive”) a leading provider of private

jet charter services, to transition the management of its aircraft ownership fleet operations to flyExclusive.

This move was intended

to bring substantial cost savings and allow Volato to focus on its potential high-growth areas, including aircraft sales and proprietary

software products.

The Company has continued to take delivery of new aircraft and also generate revenue from its proprietary software,

including the Vaunt platform, its empty leg consumer app.

In the fourth quarter of 2024, we transferred our aircraft lease agreements

to flyExclusive and have no further obligations under the aircraft lease agreements or control over flight operations.

The Company has

retained insider card liabilities of $ 0.1 million that is included in discontinued operations as of March 31, 2026.

February 24, 2025, the Company effected a reverse stock split of its issued and outstanding Class A common stock (also referred to as

“common stock” in this Quarterly Report), at a ratio of 1-for-25 (the “Reverse Stock Split”) with no change in par

All share amounts have been retroactively adjusted to account for the split as if it occurred at inception.

On March 20, 2025 the Company sold its former subsidiary GC Aviation, Inc., which holds the FAA Part 135 certificate for $ 2.0 million, of which $ 1.8 million was a note receivable.

On July 28, 2025, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Volato Merger Subsidiary, Inc., a Nevada corporation and wholly-owned subsidiary of Volato (“Merger Sub”), and M2i Global, Inc., a Nevada corporation (“M2i”), pursuant to which Merger Sub will merge with and into M2i, with M2i surviving the merger as a wholly-owned subsidiary of Volato (together with all other transactions contemplated by the Merger Agreement, the “Merger”).

March 20, 2025, the Company sold its former subsidiary GC Aviation, Inc., which held the FAA Part 135 certificate for $ 2.0 million,

of which $ 1.8 million was a note receivable.

28, 2025, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Volato

Merger Subsidiary, Inc., a Nevada corporation and wholly-owned subsidiary of Volato (“Merger Sub”), and M2i Global, Inc.,

a Nevada corporation (“M2i”), pursuant to which Merger Sub will merge with and into M2i, with M2i surviving the merger as

a wholly-owned subsidiary of Volato (together with all other transactions contemplated by the Merger Agreement, the “Merger”).

The Merger is subject to approval by the Company’s stockholders and other customary closing conditions.

Upon consummation of the Merger it is currently expected that M2i’s stockholders will own approximately 85 % of the combined company.

In July 2025, the Company began development of an Artificial Intelligence based software platform designed to enhance the reliability of leading large language models when analyzing contracts, SEC filings and reports, and other structured documents.

On September 30, 2025, Company, entered into Share Exchange Agreements (the “Share Exchange Agreements”), with Tysadco Partners, LLC and Douglas Cole (together the “Investors”).

The Investors are shareholders of M2i whose common stock is publicly quoted on the OTCQB Venture Market of OTC Markets Group, Inc.

under the symbol “MTWO”.

Pursuant to the Share Exchange Agreements, the Company agreed to issue an aggregate of 1,197,604 shares of the Company’s Class A common stock to the Investors in exchange for an aggregate of 16,000,000 shares of M2i common stock.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going concern, liquidity, and capital resources

The Company has limited operating history, and although the Company has realized net income of approximately $ 11.2 million for the nine months ended September 30, 2025, and has a working capital of approximately $ 1.9 million, the Company has an accumulated deficit of approximately $ 93.1 million as of September 30, 2025.

These above matters raise substantial doubt about the Company's ability to continue as a going concern.

During the next twelve months, the Company intends to fund its operations through the issuance of financial instruments including debt or equity securities and the revenues from operations including from the sale of aircraft at a premium to cost.

Accordingly, management believes that its current cash position, along with its anticipated margin from aircraft sales and proceeds from future debt and/or equity financings, when combined with prudent expense management, will allow the Company to continue as a going concern and to fund its operations for at least one year from the date of issuance of these financial statements.

There are no assurances, however, that management will be able to raise capital or debt on terms acceptable to the Company.

If the Company is unable to obtain sufficient additional capital or debt on terms acceptable to the Company, the Company may be required to reduce the near-term scope of its planned development and operations, which could delay implementation of the Company’s business plan and harm its business, financial condition, and operating results.

The balance sheets do not include any adjustments that might result from these uncertainties.

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP” or “GAAP”) on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and following the requirements of the Securities and Exchange Commission (the “SEC”), for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by U.S.

GAAP have been condensed or omitted and, accordingly, the condensed consolidated balance sheet as of December 31, 2024 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S.

GAAP for complete financial statements.

These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments that are necessary for a fair presentation of the Company’s financial information.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other interim period or for any other future year.

The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the consolidated financial statements and the related notes thereto for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2025 (as amended the “2024 Form 10-K”).

Reclassifications

Certain amounts in 2024 have been reclassified to conform with the current period’s presentation to reflect discontinued operations.

Principles of consolidatio n

The consolidated financial statements include the Company’s accounts and the accounts of its wholly owned subsidiaries.

Upon consummation of the

Merger, it is currently expected that M2i’s stockholders will own approximately 85 % of the combined company.

July 2025, the Company began development of an Artificial Intelligence based software platform designed to enhance the reliability of

leading large language models when analyzing contracts, SEC filings and reports, and other structured documents.

October 1, 2025, the Company entered into a Fourth Amendment (the “Amendment”) to Aircraft Management Services Agreement

(as amended the “Agreement”) with flyExclusive to bring the Agreement in line with Company’s anticipated shift in operations,

new business directives, and to better accommodate the proposed Merger with M2i.

The Amendment served to (i) modify the term of the Agreement;

(ii) grant flyExclusive, subject to certain terms and conditions, the right to purchase certain aviation-related assets from the Company

and assume certain obligations of the Company (the “flyExclusive Asset Option”);

(iii) grant the Company, subject to certain

terms and conditions, the right to sell certain aviation-related assets to flyExclusive and assign certain obligations of the Company

to flyExclusive (the “Company Asset Option,” and collectively with the flyExclusive Asset Option, the “Asset Options”);

(iv) obligate flyExclusive to pay the Company $ 100,000 upon execution of the Amendment as settlement of net payables owed by flyExclusive

to the Company under the terms of the Agreement (the “Net Payables Obligation”);

and (v) modify the material terms of flyExclusive’s

right to cause the Company to merge with and into a wholly owned subsidiary of flyExclusive (the “flyExclusive Merger Option”),

including that the flyExclusive Merger Option is to be only exercisable in the event that the Company and M2i terminate the Merger Agreement.

flyExclusive paid the Net Payables Obligation by issuing the Company 20,576 shares of Class A common stock.

consideration for the execution of the Amendment, flyExclusive agreed to pay $ 2,000,000 to the Company, in cash or shares of flyExclusive

Class A common stock, in exchange for the right to receive either (i) the net proceeds that the Company receives from the sale of a certain

G280 aircraft, or (ii) if, and only if, Gulfstream provides written consent, assignment of the G280 Agreement from the Company to flyExclusive

subject to the execution of an asset purchase agreement relating solely to the transfer of the G280 Agreement.

The G280 aircraft was

later delivered to the Company pursuant to an existing agreement (the “G280 Agreement”) with Gulfstream Aerospace Corporation

(“Gulfstream”).

flyExclusive elected to pay all of the $ 2,000,000 in shares of its Class A common stock and issued an aggregate

of 411,523 shares of its Class A common stock to the Company, which occurred in the fourth quarter of 2025.

January 2026, the Company issued a dividend of 432,099 shares of Class A common stock of flyExclusive to Volato shareholders.

March 6, 2026, the Company signed amendment number five to the Agreement with flyExclusive, pursuant to which the Company sold

certain unused intellectual property assets for $ 1.3

million payable in cash or shares of flyExclusive’s Class A common stock.

Such assets represent a portion of the total assets

which were anticipated to be sold under one of the Asset Options as described above.

flyExclusive issued an aggregate of 451,901

shares of its Class A common stock to the Company in March 2026 and is recorded as Investment in flyExclusive on the consolidated

balance sheets.

With the sale of the asset, the Company recorded a gain on the sale of the asset of $ 1.1

million and is recorded in Other Income on the Consolidated Statements of Operations.

Following the sale of the intellectual

property assets pursuant to the fifth amendment, there is $ 700,000

in remaining assets that may be sold to flyExclusive under the terms of the Agreement, as amended.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

concern, liquidity, and capital resources

Company has limited operating history, the Company realized net loss of approximately $ 2.6 million for the three months ended March 31,

2026, the Company has a working capital deficit of approximately $ 0.3 million and an accumulated deficit of approximately $ 103.4 million

as of March 31, 2026.

above matters raise substantial doubt about the Company’s ability to continue as a going concern.

During the next twelve months,

the Company intends to fund its operations through the issuance of financial instruments including debt or equity securities and revenues

from operations.

management believes that its current cash position, along with its proceeds from future debt and/or equity financings, when combined

with prudent expense management, will allow the Company to continue as a going concern and to fund its operations for at least one year

from the date of issuance of these financial statements.

There are no assurances, however, that management will be able to raise capital

or debt on terms acceptable to the Company.

If the Company is unable to obtain sufficient additional capital or debt on terms acceptable

to the Company, the Company may be required to reduce the near-term scope of its planned development and operations, which could delay

implementation of the Company’s business plan and harm its business, financial condition, and operating results.

The balance sheets

do not include any adjustments that might result from these uncertainties.

March 17, 2026, the Company received a notice (the “notice”) from the NYSE American LLC (the “NYSE American”) advising

the Company that it is not in compliance with the NYSE American continued listing standards set forth in Section 1003(a)(i) of the NYSE

American Company Guide (the “Company Guide”) requiring a company to have stockholders’ equity of at least $ 2.0 million

if it has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years and Section 1003(a)(ii)

of the Company Guide requiring a company to have stockholders’ equity of at least $ 4.0 million if it has reported losses from continuing

operations and/or net losses in three of its four most recent fiscal years.

The Company submitted a plan (the “plan”)

to the NYSE American on April 16, 2026 outlining the actions the Company will take to regain compliance by December 17, 2026.

does not affect the Company’s ongoing business operations or its reporting requirements with the United States Securities and Exchange

Commission (the “SEC”).

of presentation

accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S.

GAAP” or “GAAP”) on a going concern basis, which

contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and

following the requirements of the Securities and Exchange Commission (the “SEC”).

The unaudited interim consolidated financial statements are condensed and should be read in conjunction with the

Company’s latest annual audited 2025 condensed consolidated financial statements, which are included in the Company’s Annual

Report on Form 10-K filed with the SEC on March 12, 2026 (the “Form 10-K”).

The results of operations for interim periods

are not necessarily indicative of results to be expected for the fiscal year ending March 31, 2026 or for any other future annual or interim

of consolidatio n

unaudited interim consolidated financial statements include the Company’s accounts and the accounts of its wholly owned

subsidiaries.

All intercompany transactions and balances have been eliminated.

Use of estimates

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of revenues and expenses during the reporting period.

Accordingly, actual results could differ from those estimates.

Such estimates include:

• Useful lives of property, plant, and equipment.

• Assumptions used in valuing debt or equity instruments.

• Deferred income taxes and related valuation allowance.

• Assessment of long-lived assets impairment.

• Assumptions used in the valuation of notes receivable.

Cash and restricted cash

Cash consists primarily of cash on hand and bank deposits.

The Company maintains cash deposits with financial institutions that may exceed federally insured limits at times.

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

At September 30, 2025 and December 31, 2024, the Company had no cash equivalents besides what was in the cash balance as of that date.

The Company had zero and $ 1.8 million of restricted cash at September 30, 2025, and December 31, 2024, respectively, which served as collateral for the credit facility with SAC Leasing G280 LLC described in Note 11 below.

Accounts receivable

Accounts receivables are reported on the consolidated balance sheets at the outstanding principal amount adjusted for any allowance for credit losses and any charge offs.

The Company provides an allowance for credit losses to reduce trade receivables to their estimated net realizable value equal to the amount that is expected to be collected.

This allowance is estimated based on historical collection experience, the aging of receivables, specific current and expected future macro-economic and market conditions, and assessments of the current creditworthiness and economic status of customers.

The Company considers a receivable delinquent if it is unpaid after the term of the related invoice has expired.

lives of property, plant, and equipment.

used in valuing debt or equity instruments.

income taxes and related valuation allowance.

of long-lived assets impairment.

used in the aviation asset put/call option.

consists primarily of cash on hand and bank deposits.

The Company maintains cash deposits with financial institutions that may exceed

federally insured limits at times.

The Company considers all highly liquid investments with an original maturity of three months or less

when purchased to be cash equivalents.

At March 31, 2026 and December 31, 2025, the Company had no cash equivalents besides what was

in the cash balance as of that date.

The Company had 0 zero restricted cash at March 31, 2026, and December 31, 2025, respectively.

receivable are reported on the consolidated balance sheets at the outstanding principal amount adjusted for any allowance for credit

losses and any charge offs.

The Company provides an allowance for credit losses to reduce trade receivables to their estimated net realizable

value equal to the amount that is expected to be collected.

This allowance is estimated based on historical collection experience, the

aging of receivables, specific current and expected future macro-economic and market conditions, and assessments of the current creditworthiness

and economic status of customers.

The Company considers a receivable delinquent if it is unpaid after the term of the related invoice

Balances that are still outstanding after management has used reasonable collection efforts are written off.

The Company reviews its allowance for credit losses on a quarterly basis.

The Company recognized approximately zero and zero of bad debt expense during the three months ended September 30, 2025 and 2024, respectively.

During the nine months ended September 30, 2025 and 2024, the Company recognized $ 147 thousand and zero bad debt expense, respectively.

Fixed assets are stated at cost, less accumulated depreciation.

Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, which range from three to seven years :

Classification Life

Machinery and equipment 3 - 7 years

Automobiles 5 years

Computer and office equipment 5 years

Website development costs 3 years

Computer software development

Software development costs are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40, Internal Use Software .

Internal software development costs are capitalized from the time the internal use software is considered probable of completion until the software is ready for use.

Business analysis, system evaluation and software maintenance costs are expensed as incurred.

The capitalized computer software development costs are reported under the section “Property and equipment net” in the consolidated balance sheets and are amortized using the straight-line method over the estimated useful life of the software, generally three years from when the asset is placed in service.

The Company capitalized $ 69 thousand internal software development costs during the nine months ended September 30, 2025 and 2024.

The Company recognized $ 37 thousand and $ 26 thousand of amortization expense related to computer software development during the three months ended September 30, 2025 and 2024, respectively.

The Company recognized $ 133 thousand and $ 78 thousand of amortization expense related to computer software development during the nine months ended September 30, 2025 and 2024, respectively.

The Company also expenses internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities.

During the three and nine months ended September 30, 2025, the Company reduced the value of software development cost by $ 75 thousand and $ 129 thousand, respectively, related to a non-monetary exchange with a third party and their use of our mission control software.

This software development cost was originally developed for internal use and has subsequently been licensed to a third party in a non-monetary transaction.

Website development cost

The costs incurred for activities during the website application and infrastructure development stage are capitalized in accordance with the guidance on internal-use software in FASB ASC 350-40.

The Company capitalized zero and $ 142 thousand of website development costs during the nine months ended September 30, 2025 and 2024, respectively.

The Company recognized approximately $ 24 thousand and $ 26 thousand of amortization expense related to website development costs during the three months ended September 30, 2025 and 2024, respectively.

The Company recognized $ 72 thousand and $ 77 thousand of amortization expense during the nine months ended September 30, 2025 and 2024, respectively.

Valuation of long-lived assets

In accordance with FASB ASC 360, property, plant, and equipment, and long-lived assets are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.

The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment.

If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable.

In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value.

No impairment was recognized during the nine months ended September 30, 2025 and 2024, respectively.

Fair value of financial instruments

The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S.

reviews its allowance for credit losses on a quarterly basis.

the three months ended March 31, 2026 and 2025, the Company recognized $ 6 thousand and $ 24 thousand of bad debt expense, respectively.

assets are stated at cost, less accumulated depreciation.

Depreciation is computed using the straight-line method over the estimated

useful lives of the respective assets, which range from three to seven years:

SCHEDULE OF SEGMENT REPORTING IN NET INCOME OR LOSS AND TOTAL ASSETS

Classification

Machinery and equipment

Computer and office equipment

Website development costs

software development

development costs are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards

Codification (“ASC”) 350-40, Internal Use Software .

Internal software development costs are capitalized from the time

the internal use software is considered probable of completion until the software is ready for use.

Business analysis, system evaluation

and software maintenance costs are expensed as incurred.

The capitalized computer software development costs are reported under the section

“Property and equipment, net” in the consolidated balance sheets and are amortized using the straight-line method over the

estimated useful life of the software, generally three years from when the asset is placed in service.

The Company capitalized $ 172 thousand

and 0 zero and of internal software development costs during the three months ended March 31, 2026 and 2025, respectively.

recognized $ 27 thousand and $ 48 of amortization expense related to computer software development during the three months ended March

31, 2026 and 2025, respectively.

The Company also expenses internal costs related to minor upgrades and enhancements, as it is impractical

to separate these costs from normal maintenance activities.

During the three months ended March 31, 2026 and 2025, the Company reduced

the value of software development cost by $ 32 thousand and zero, related to a non-monetary exchange with a third party and their use

of our mission control software.

This software development cost was originally developed for internal use, was licensed to a third party

in a non-monetary transaction and subsequently sold to the same third-party in March 2026.

development cost

costs incurred for activities during the website application and infrastructure development stage are capitalized in accordance with

the guidance on internal-use software in FASB ASC 350-40.

The Company capitalized zero of website development costs during the three

months ended March 31, 2026 and 2025, respectively.

The Company recognized $ 24 thousand of amortization expenses during the three months

ended March 31, 2026 and 2025, respectively.

of long-lived assets

accordance with FASB ASC 360, property, plant, and equipment, and long-lived assets are analyzed for impairment whenever events or changes

in circumstances indicate that the related carrying amounts may not be recoverable.

The Company evaluates at each balance sheet date

whether events and circumstances have occurred that indicate possible impairment.

If there are indications of impairment, the Company

uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are

In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written

down to their estimated fair value.

No impairment was recognized during the three months ended March 31, 2026 and 2025, respectively.

value of financial instruments

Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework

for measuring fair value under U.S.

GAAP, and expands disclosures about fair value measurements.

The Company measures fair value under a framework that utilizes a hierarchy prioritizing the inputs to relevant valuation techniques.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Company measures fair value under a framework that utilizes a hierarchy prioritizing the inputs to relevant valuation techniques.

hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)

and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of inputs used in measuring fair value are:

Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company as the ability to access.

Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the

Company as the ability to access.

Inputs to the valuation methodology include:

• Quoted prices for similar assets or liabilities in active markets.

• Quoted prices for identical or similar assets or liabilities in inactive markets.

• Inputs other than quoted prices that are observable for the asset or liability.

• Inputs that are derived principally from or corroborated by observable market date by correlation or other means;

• If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

prices for similar assets or liabilities in active markets.

prices for identical or similar assets or liabilities in inactive markets.

other than quoted prices that are observable for the asset or liability.

that are derived principally from or corroborated by observable market date by correlation or other means;

the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of

the asset or liability.

Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

On November 28, 2023, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”).

The fair value of the Company’s recorded Forward Purchase Agreement was determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification.

A Monte Carlo simulation model was used to determine the fair value as of December 31, 2023 .

The Company recorded the Forward Purchase Agreement at fair value on the consolidated balance sheets with changes in fair value recorded in the consolidated statements of operations.

On July 23, 2024, the Company received notice of termination of the Forward Purchase Agreement and recognized an impairment in the value of the Forward Purchase Agreement in the second quarter of 2024 due to receipt of the termination notice.

A loss of $ 3.0 million was recorded due to the cancellation of the Forward Purchase Agreement in 2024.

In December 2024, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) pursuant to which the Company may issue a series of convertible notes for an aggregate principal amount not to exceed $ 36.0 million.

During the year ended December 31, 2024, the Company issued a single convertible note in the principal amount of $ 4.5 million, (the “2024 Convertible Note”), of which $ 4.1 million was funded as of December 31, 2024, representing an original issue discount of ten percent.

The Company elected the fair value guidance under ASC 825-10 and the 2024 Convertible Note was recognized at initial fair value as of the issuance date.

December 2024, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) pursuant to which

the Company may issue a series of convertible notes for an aggregate principal amount not to exceed $ 36.0 million.

During the year ended

December 31, 2024, the Company issued a single convertible note in the principal amount of $ 4.5 million, (the “2024 Convertible

Note”), of which $ 4.1 million was funded as of December 31, 2024, representing an original issue discount of ten percent.

elected the fair value guidance under ASC 825-10 and the 2024 Convertible Note was recognized at initial fair value as of the issuance

The value of the 2024 Convertible Note at issuance approximated fair value as of December 31, 2024.

Any issuances of additional convertible promissory notes are subject to the terms and conditions of the Security Purchase Agreement (see Note 10).

In September 2025, the Company entered into Share Exchange Agreements with the Investors.

The Investors who are shareholders of M2i, whose common stock is publicly quoted on the OTCQB Venture Market of OTC Markets Group, Inc.

Any issuances of additional

convertible notes are subject to the terms and conditions of the Security Purchase Agreement (see Note 10).

September 30, 2025, Company, entered into Share Exchange Agreements (the “Share Exchange Agreements”), with two investors

(together the “Investors”).

The Investors are shareholders of M2i whose common stock is publicly quoted on the OTCQB Venture

Market of OTC Markets Group, Inc.

under the symbol “MTWO”.

Pursuant to the Share Exchange Agreements, the Company agreed to issue an aggregate of 1,197,604 shares of the Company’s common stock to the Investors in exchange for an aggregate of 16,000,000 shares of M2i common stock (the “Investment in M2i”).

At the date of the exchange, the Company recognized a loss of $ 115 thousand in “Loss from change in fair value of financial instruments” on the consolidated statement of operations for the difference between the fair value of the Volato shares issued and the fair value of the Investment in M2i.

Pursuant to ASC 321, the Investment in M2i is measured at fair value each reporting period, with unrealized gain or loss recognized in earnings.

The Investment in M2i is classified within Level 2 of the fair value hierarchy under ASC 820, as it is based on quoted prices for identical assets in inactive markets.

During the three and nine months ended September 30, 2025, the Company recorded a loss of $ 40 thousand related to the change in fair value of the Investment in M2i.

The following table presents balances of the fair value instruments as of September 30, 2025 and December 31, 2024, in thousands:

Fair Value Measurements as of September 30, 2025

Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other

Observable Inputs (Level 2) Significant Unobservable

Inputs (Level 3) Total

Pursuant to the Share Exchange Agreements, the Company agreed

to issue an aggregate of 1,197,604 shares of the Company’s Class A common stock to the Investors in exchange for an aggregate of

16,000,000 shares of M2i common stock (the “Investment in M2i”).

At the date of the exchange, the Company recognized a loss

of $ 115 thousand in “Loss from change in fair value of financial instruments” on the consolidated statement of operations

for the difference between the fair value of the Volato shares issued and the fair value of the Investment in M2i.

to ASC 321, the Investment in M2i is measured at fair value each reporting period, with unrealized gain or loss recognized in

The Investment in M2i is classified within Level 2 of the fair value hierarchy under ASC 820, as it is based on quoted

prices for identical assets in inactive markets.

The inputs are obtained from OTC quoted prices for level II.

During the three

months ended March 31, 2026, the Company recorded a loss of $ 821

thousand related to the change in fair value of the Investment in M2i.

October 1, 2025, the Company entered into the Amendment with flyExclusive, as described in Note 1.

As part of the amendment, flyExclusive

agreed to pay $ 2.1 million in cash or shares of common stock to the Company for the net payables option and the proceeds from the sale

of the fourth G280.

flyExclusive issued the Company 432,099 shares of Class A common stock (the “Investment in flyExclusive”)

in the fourth quarter of 2025.

At the date of the exchange, the Company recognized a loss of $ 6.1 million in Other expense in the consolidated

statements of operations.

In January 2026, the Company issued a divided of flyExclusive stock to all Volato shareholders.

With the issuance

of the dividend the company recorded a loss of $ 101 thousand on the loss of the settlement of shares during the three months ended March

March 6, 2026, the Company signed amendment number five to the Agreement with flyExclusive, pursuant to which the Company sold certain

unused intellectual property assets for $ 1.3 million payable in cash or shares of flyExclusive’s Class A common stock.

represent a portion of the total assets which were anticipated to be sold under one of the Asset Options as described above.

issued an aggregate of 451,901 shares of its Class A common stock to the Company in March 2026 and is recorded as Investment in flyExclusive

on the consolidated balance sheets.

During the three months ended March 31, 2026, the Company recorded a loss of $ 74 thousand related

to the change in fair value of the Investment in flyExclusive.

to ASC 321, the Investment in flyExclusive is measured at fair value each reporting period, with unrealized gain or loss recognized in

The Investment in flyExclusive is classified within Level 1 of the fair value hierarchy under ASC 820, as it is traded in an

active market.

Additionally,

with the signing of the Amendment with flyExclusive, as described in Note 1, it granted flyExclusive the right to purchase certain

aviation-related assets from the Company and assume certain obligations of the Company (the “Call Option”) and granted

the Company the right to sell certain obligations of the Company to flyExclusive (the “Put Option”).

The fair value of

the Company’s recorded Aviation Asset Option was determined based on unobservable inputs that are not corroborated by market

data, which require a Level 3 classification.

A Black-Scholes model was used to determine the fair value as of December 31, 2025.

of December 31, 2025 the Company fair valued the aviation asset and recorded a gain on the asset of $ 324

In March of 2026, the Company determined that the exercise of the Call Option and Put Option prior to the expiration of

the Agreement was not probable and as such the value of the aviation asset was reduced to 0 zero

and a loss of $ 324

thousand was recorded in gain (loss) on change in financial instruments in the consolidated statements of operations.

following table presents balances of the fair value instruments as of March 31, 2026 and December 31, 2025, in thousands:

SCHEDULE OF FAIR VALUE ASSETS MEASURED ON RECURRING BASIS

Fair Value Measurements as of March 31, 2026

Quoted Prices in Active Markets for Identical Assets

Significant Other

Observable Inputs (Level 2)

Significant Unobservable

Inputs (Level 3)

Financial liabilities:

Third Tranche Note

Total financial liabilities

Financial assets:

Investment in M2i

Investment in flyExclusive

Total financial assets

Fair Value Measurements as of December 31, 2025

Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other

Observable Inputs (Level 2) Significant Unobservable

Inputs (Level 3) Total

2024 Convertible Note $ — $ — $ 4,050 $ 4,050

Total $ — $ — $ 4,050 $ 4,050

The following table presents changes of all convertible notes issued under the Securities Purchase Agreement (see Note 10) with significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2025, in thousands:

Quoted Prices in Active Markets for Identical Assets

Significant Other

Observable Inputs (Level 2)

Significant Unobservable

Inputs (Level 3)

Financial liabilities:

Third Tranche Note

Fourth Tranche Note

Total financial liabilities

Financial assets:

Investment in M2i

Investment in flyExclusive

Aviation asset option

Total financial assets

following table presents changes of all convertible notes issued under the Securities Purchase Agreement (see Note 10) with significant

unobservable inputs (Level 3) for the three months ended March 31, 2026, in thousands:

SCHEDULE OF FAIR VALUE LIABILITIES MEASURED UNOBSERVABLE INPUT

2024 Convertible Note

2 unchanged sentences

Balance at March 31, 2026

Change in fair value ( 99 )

Conversions ( 4,676 )

Additions 1,350

Balance at June 30, 2025 1,474

Change in fair value 384

Conversions ( 1,492 )

Additions 2,700

Balance at September 30, 2025 $ 3,066

The Company measured the Third Tranche Note using a Monte Carlo simulation valuation model using the following assumptions:

Three and Nine months ended September 30, 2025

Company measured the Third Tranche Notes using a Monte Carlo simulation valuation model using the following assumptions:

SCHEDULE OF FAIR VALUE MEASUREMENT INPUTS AND VALUATION TECHNIQUES

Three months ended March 31, 2026

Third Tranche

Volume Weighted average stock price (“VWAP”)

Simulation Period 0.81 year

Simulation Period

Expected Volatility

1 unchanged sentence

Risk-free Rate

The following table represents the change of the Investment in M2i (Level 2) for the three and nine months ended September 30, 2025, in thousands:

Investment in M2i

Balance at June 30, 2025 $ —

Additions 1,950

following table represents the change in the Aviation asset option for the three months ended, March 31, 2026, in thousands:

FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION

Aviation asset option

Balance at December 31, 2025

Change in fair value

Balance at September 30, 2025 $ 1,910

There were no gains and losses attributable to changes in instrument specific credit risk as the Company determined the likelihood of an event of default to be de minimus.

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid and other assets, accounts payable and accrued expenses, deposits, and members’ deposit approximate their fair value because of the short maturity of those instruments.

The Company’s credit facility, convertible notes and other loans approximate the fair value of such liabilities based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements and due to the short-term maturity of these instruments at September 30, 2025 and December 31, 2024.

Commitments and contingencies

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480 Distinguishing Liabilities from Equity (“ASC 480”) and FASB ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding.

All of the Company’s warrants have met the criteria for equity treatment.

Revenue recognition

Revenues are recognized on a gross basis and presented on the consolidated statements of operations net of rebates, discounts, and taxes collected concurrent with revenue-producing activities.

The transaction price in the Company’s contracts with its customers is fixed at the time control of goods and services are transferred to the customer.

Therefore, the Company does not estimate variable consideration or perform a constraint analysis for our contracts.

The Company determines revenue recognition pursuant to ASC 606, Revenue from Contracts with Customers, through the following steps:

Identification of the contract, or contracts, with a customer.

Identification of the performance obligation(s) in the contract.

Determination of the transaction price.

Allocation of the transaction to the performance obligation(s) in the contract.

The Company generates revenue primarily through:

Balance at March 31, 2026

were no transfers between fair value levels during the period.

There were no gains and losses attributable to changes in instrument specific

credit risk as the Company determined the likelihood of an event of default to be de minimus.

The carrying amount of the Company’s

financial assets and liabilities, such as cash, accounts receivable, prepaid and other assets, accounts payable and accrued expenses,

deposits, and members’ deposits approximate their fair value because of the short maturity of those instruments.

The Company’s

credit facility, convertible notes and other loans approximate the fair value of such liabilities based upon management’s best

estimate of interest rates that would be available to the Company for similar financial arrangements and due to the short-term maturity

of these instruments at March 31, 2026 and December 31, 2025.

and contingencies

Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies.

Liabilities for loss contingencies arising from

claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred,

and the amount of the assessment can be reasonably estimated.

Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s

specific terms and applicable authoritative guidance in FASB ASC 480 Distinguishing Liabilities from Equity (“ASC 480”)

and FASB ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding

financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all

of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common

stock, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted

at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding.

All of the Company’s

warrants have met the criteria for equity treatment.

are recognized on a gross basis and presented on the consolidated statements of operations net of rebates, discounts, and taxes collected

concurrent with revenue-producing activities.

The transaction price in the Company’s contracts with its customers is fixed at the

time control of goods and services are transferred to the customer.

Therefore, the Company does not estimate variable consideration or

perform a constraint analysis for our contracts.

Company determines revenue recognition pursuant to ASC 606, Revenue from Contracts with Customers, through the following steps:

Identification

of the contract, or contracts, with a customer.

Identification

of the performance obligation(s) in the contract.

Determination

of the transaction price.

of the transaction to the performance obligation(s) in the contract.

revenue when or as the entity satisfies a performance obligation.

Company has generated revenue primarily through:

(i) the sale of aircraft, and (ii) our Vaunt software-as-a-subscription product.

Revenue is recognized when control of the promised service is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services.

At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies, as a performance obligation, each promise to transfer a good or service to a customer that is distinct.

To identify its performance obligations, the Company considers all of the goods and services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

For each revenue stream, we evaluate whether our obligation is to provide the good or service itself, as the principal or to arrange for the good or service to be provided by the other party, as the agent, using the control model.

In such circumstances, the Company is primarily responsible for satisfying the overall performance obligation with the customer and is considered the principal in the relationship.

Revenue from aircraft sales is recognized upon the delivery of the aircraft.

The Company generated revenue during the three and nine months ended September 30, 2025 and 2024, broken down as follows, in thousands:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

is recognized when control of the promised service is transferred to a customer, in an amount that reflects the consideration the Company

expects to be entitled to in exchange for those services.

At contract inception, the Company assesses the goods and services promised

in its contracts with customers and identifies, as a performance obligation, each promise to transfer a good or service to a customer

that is distinct.

To identify its performance obligations, the Company considers all of the goods and services promised in the contract

regardless of whether they are explicitly stated or are implied by customary business practices.

each revenue stream, we evaluate whether our obligation is to provide the good or service itself, as the principal or to arrange for

the good or service to be provided by the other party, as the agent, using the control model.

In such circumstances, the Company is primarily

responsible for satisfying the overall performance obligation with the customer and is considered the principal in the relationship.

from aircraft sales is recognized upon the delivery of the aircraft.

Company generated revenue during the three months ended March 31, 2026 and 2025, broken down as follows, in thousands:

SCHEDULE OF DISAGGREGATION OF REVENUE

Three Months Ended March 31,

Aircraft sales

Subscription 381 316 1,119 545

Total $ 381 $ 38,466 $ 50,719 $ 38,695

Revenue from the sales of our Vaunt Software-as-a-subscription is deferred and recognized over the subscription term of the software and is included in customer deposits and deferred revenue on the consolidated balances sheets.

The following table provides a rollforward of deferred revenue for the nine months ended September 30, 2025:

from the sales of our Vaunt Software-as-a-subscription is deferred and recognized over the subscription term of the software and is included

in customer deposits and deferred revenue on the consolidated balance sheets.

Additionally, in the three months ended March 31, 2026

we recognized revenue related to mission control and the third-party non-monetary transaction.

following table provides a rollforward of deferred revenue, recorded in customer deposits and deferred revenue in the consolidated balance

sheets, for the three months ended March 31, 2026, in thousands:

SCHEDULE OF CHANGES IN DEFERRED REVENUE

Balance as of December 31, 2025

1 unchanged sentence

Revenue deferred

Balance as of September 30, 2025 $ 1,772

Assets Recognized from the Costs to Obtain Revenue Contracts

We recognize an asset for the incremental costs of obtaining a contract with a client if we expect the amortization period to be longer than one year, such costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations, and are expected to be recovered.

We have determined the costs incurred are incremental and recoverable and are subject to capitalization and amortization under ASC 340-40.

Balance as of March 31, 2026

Recognized from the Costs to Obtain Revenue Contracts

recognize an asset for the incremental costs of obtaining a contract with a client if we expect the amortization period to be longer

than one year, such costs are specifically identifiable, generate or enhance resources used to satisfy future performance obligations,

and are expected to be recovered.

We have determined the costs incurred are incremental and recoverable and are subject to capitalization

and amortization under ASC 340-40.

The capitalized costs relate to revenue share with Vaunt operators and Vaunt sales commissions.

The assets are capitalized and amortized ratably over the expected period of the benefit, which is currently estimated at 14 months.

The following tables present the asset balances and related amortization expense for the contract assets:

As of and for the nine months ended September 30, 2025

Beginning Balance Amount Capitalized Amortization Ending Balance

assets are capitalized and amortized ratably over the expected period of the benefit, which is currently estimated at 14 months.

following tables present the asset balances and related amortization expense for the contract assets:

SCHEDULE OF RELATED AMORTIZATION EXPENSES

Contract assets

The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.

Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the temporary differences are expected to be recovered or settled.

Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company follows the guidance of 740-10-25 of the FASB ASC (“Section 740-10-25”) with regards to uncertainty in income taxes.

Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.

Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.

Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

The Company had no material adjustments to its assets and/or liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

The Company is subject to tax in the United States (“U.S.”) and files tax returns in the U.S.

Federal jurisdiction, and state jurisdictions.

Amount Capitalized

Contract assets

As of and for the three months ended March 31, 2026

Beginning Balance

Amount Capitalized

Ending Balance

Contract assets

Amount Capitalized

Contract assets

As of and for the twelve months ended December 31, 2025

Beginning Balance

Amount Capitalized

Ending Balance

Contract assets

Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected

future tax consequences of events that have been included in the financial statements or tax returns.

Under this method, deferred tax

assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted

tax rates in effect for the fiscal year in which the temporary differences are expected to be recovered or settled.

Deferred tax assets

are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment

Company follows the guidance of 740-10-25 of the FASB ASC (“Section 740-10-25”) with regards to uncertainty in income taxes.

Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded

in the financial statements.

Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if

it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits

of the position.

The tax benefits recognized in the financial statements from such a position should be measured based on the largest

benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.

Section 740-10-25 also provides

guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased

The Company had no material adjustments to its assets and/or liabilities for unrecognized income tax benefits according

to the provisions of Section 740-10-25.

Company is subject to tax in the United States (“U.S.”) and files tax returns in the U.S.

Federal jurisdiction, and state

jurisdictions.

The Company is subject to U.S.

Federal, state, and local income tax examinations by tax authorities.

The Company currently is not under examination by any tax authority.

Stock-based compensation

The Company accounts for equity-based compensation using the fair value method as set forth in the ASC 718, C ompensation—Stock Compensation , which requires the measurement and recognition of compensation expense for all stock-based payment awards based on estimated fair values.

The Company currently

is not under examination by any tax authority.

Company accounts for equity-based compensation using the fair value method as set forth in the ASC 718, Compensation—Stock Compensation ,

which requires the measurement and recognition of compensation expense for all stock-based payment awards based on estimated fair values.

This method requires companies to estimate the fair value of stock-based compensation on the date of grant using an option pricing model.

The Company estimates the fair value of each equity-based payment award on the date of grant using the Black-Scholes pricing model.

The Black-Scholes model determines the fair value of equity-based payment awards based on the fair value of the underlying common stock on the date of grant and requires the use of estimates and assumptions, including the fair value of the Company’s common stock, exercise price of the stock option, expected volatility, expected life, risk-free interest rate and dividend rate.

The Company estimates the expected volatility of its stock options by taking the average historical volatility of a group of comparable publicly traded companies over a period equal to the expected life of the options;

it is not practical for the Company to estimate its own volatility due to the lack of historical prices.

The expected term of the options is determined in accordance with existing equity agreements as the underlying options are assumed to be exercised upon the passage of time.

The risk-free interest rate is the estimated average interest rate based on U.S.

Black-Scholes model determines the fair value of equity-based payment awards based on the fair value of the underlying common stock on

the date of grant and requires the use of estimates and assumptions, including the fair value of the Company’s common stock, exercise

price of the stock option, expected volatility, expected life, risk-free interest rate and dividend rate.

The Company estimates the expected

volatility of its stock options by taking the average historical volatility of a group of comparable publicly traded companies over a

period equal to the expected life of the options;

it is not practical for the Company to estimate its own volatility due to the lack

of historical prices.

The expected term of the options is determined in accordance with existing equity agreements as the underlying

options are assumed to be exercised upon the passage of time.

The risk-free interest rate is the estimated average interest rate based

Treasury zero-coupon notes with terms consistent with the expected life of the awards.

The expected dividend yield is zero as the Company does not anticipate paying any recurring cash dividends in the foreseeable future.

The Company accounts for forfeitures as they occur.

Net income (loss) per share

The Company computes basic and diluted earnings per share amounts pursuant to section 260-10-45 of the FASB ASC.

Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities.

Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the period.

The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially dilutive debt or equity.

In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation.

Securities that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive for the three and nine months ended September 30, 2025, include stock options, restricted stock units and warrants.

The Company had 17,766 and 64,301 outstanding stock options to purchase an equivalent number of shares of common stock at September 30, 2025, and 2024, respectively.

The Company had 47,323 and 49,555 outstanding restricted stock units to purchase an equivalent number of shares of common stock at September 30, 2025 and 2024, respectively.

The Company also had 1,161,195 outstanding warrants to purchase an equivalent number of shares of common stock as of September 30, 2025 and 2024, respectively at a weighted average strike price of $ 287.50 .

Concentration of credit risk

The Company maintains its cash with a major financial institution located in the United States of America which it believes to be creditworthy.

The expected dividend yield is zero as

the Company does not anticipate paying any recurring cash dividends in the foreseeable future.

The Company accounts for forfeitures as

income (loss) per share

Company computes basic and diluted earnings per share amounts pursuant to section 260-10-45 of the FASB ASC.

Basic earnings per share

is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock

outstanding during the period, excluding the effects of any potentially dilutive securities.

Diluted earnings per share is computed by

dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the

The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first

day of the year for any potentially dilutive debt or equity.

In periods in which a net loss has been incurred, all potentially dilutive

common shares are considered anti-dilutive and thus are excluded from the calculation.

Securities that are excluded from the calculation

of weighted average dilutive common shares because their inclusion would have been antidilutive for the three months ended March 31,

2026, include stock options, restricted stock units and warrants.

Company had 17,043 and 18,048 outstanding stock options to purchase an equivalent number of shares of common stock at March 31, 2026,

and 2025, respectively.

Company had 10,964 and 32,789 outstanding restricted stock units to purchase an equivalent number of shares of common stock at March

31, 2026 and 2025, respectively.

Company also had 1,161,195 outstanding warrants to purchase an equivalent number of shares of common stock as of March 31, 2026 and 2025,

respectively at a weighted average strike price of $ 287.50 .

Concentration

of credit risk

Company maintains its cash with a major financial institution located in the United States of America which it believes to be creditworthy.

Balances are insured by the Federal Deposit Insurance Corporation up to $ 250,000 .

At times, the Company may maintain balances in excess of the federally insured limits.

Intangible assets

Intangible assets other than goodwill consists of acquired finite-lived customer relationships and acquired indefinite-lived Part 135 air carrier certificate.

At initial recognition, intangible assets acquired in a business combination are recognized at their fair value as of the date of acquisition.

Following initial recognition, finite-lived intangible assets are carried at cost less accumulated amortization and impairment losses, if any, and are amortized on a straight-line basis over the estimated useful life of the asset, which was determined based on management’s estimate of the period over which the asset will contribute to our future cash flows.

The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired.

These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale, or disposition of a significant portion of the business, or other factors.

If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the fair value.

There was no impairment loss for the three and nine months ended September 30, 2025 or 2024, respectively.

Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations.

Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations.

The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill.

If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required.

The Company tests for goodwill impairment annually during its fourth quarter.

At times, the Company may maintain balances in excess

of the federally insured limits.

As of March 31, 2026 the Company had approximately $ 1.7 million in excess of FDIC-insured limits.

The Company has

not experienced any losses in such accounts and believes it is not exposed to significant credit risk on cash.

assets other than goodwill consisted of acquired finite-lived customer relationships and acquired indefinite-lived Part 135 air carrier

At initial recognition, intangible assets acquired in a business combination were recognized at their fair value as of the

date of acquisition.

Following initial recognition, finite-lived intangible assets were carried at cost less accumulated amortization

and impairment losses, if any, and are amortized on a straight-line basis over the estimated useful life of the asset, which was determined

based on management’s estimate of the period over which the asset will contribute to our future cash flows.

Company reviewed the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more

likely than not that they are impaired.

These events could include a significant change in the business climate, legal factors, a decline

in operating performance, competition, sale, or disposition of a significant portion of the business, or other factors.

If the review

indicated the impairment, an impairment loss would be recorded for the difference of the value recorded and the fair value.

no impairment loss for the three months ended March 31, 2026 or 2025, respectively.

represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations.

Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that

the carrying value may not be recoverable.

Events or changes in circumstances that could trigger an impairment review include a significant

adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel,

significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry

or economic trends, or significant underperformance relative to expected historical or projected future results of operations.

has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination

that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill.

after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value

of a reporting unit is less than its carrying amount, additional impairment testing is not required.

The Company tests for goodwill impairment

annually during its fourth quarter.

In March 2025, the Company sold GC Aviation, Inc.

and the Part 135 air carrier certificate.

In connection with that sale, the Company recorded an impairment on goodwill of $ 35 thousand for the nine months ended September 30, 2025.

The loss is recorded in other income, net in the consolidated statements of operations.

There was no impairment loss recorded for the nine months ended September 30, 2024.

Segment reporting

The Company identifies operating segments as components of the Company for which discrete financial information is available and is regularly reviewed by the chief operating decision maker (“CODM”), or decision-making group, in making decisions regarding resource allocation and performance assessment.

which held the Part 135 air carrier certificate.

In connection

with that sale, the Company recorded an impairment on goodwill of $ 35 thousand for the three months ended March 31, 2025.

recorded in other income, net in the consolidated statements of operations.

There was no impairment loss recorded for the three months

ended March 31, 2026.

Company identifies operating segments as components of the Company for which discrete financial information is available and is regularly

reviewed by the chief operating decision maker (“CODM”), or decision-making group, in making decisions regarding resource

allocation and performance assessment.

The CODM is the chief executive officer.

We determined that the Company operates in a single operating and reportable segment, private aviation services, the CODM reviews financial information including total assets from continuing operations and net income from continuing operations presented on a consolidated basis for purposes of making operating decisions, allocating resources, and assessing performance.

We determined that the Company operates in a single operating

and reportable segment, private aviation services, and the CODM reviews financial information including total assets from continuing

operations and net income (loss) from continuing operations before income taxes presented on a consolidated basis for purposes of making

operating decisions, allocating resources, and assessing performance.

Substantially all of our long-lived assets are located in the U.S.

Cost of revenue

Cost of revenue includes costs that are directly related to the related revenue streams – aircraft sales and subscription based revenue.

of revenue includes costs that are directly related to the related revenue streams – aircraft sales and subscription based revenue.

Aircraft sales cost of revenue is our purchase price of the aircraft.

Subscription costs includes costs of our proprietary software, the Vaunt platform.

Advertising costs

Advertising costs are expensed as incurred and included in selling, general and administrative expenses on the statements of operations.

Such advertising amounted to $ 0.3 million and $ 0.2 million for the three months ended September 30, 2025 and 2024, respectively and $ 0.6 million and $ 3.4 million for the nine months ended September 30, 2025 and 2024, respectively.

ASC Topic 842, “Leases” (“ASC 842”) requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset (“ROU asset”).

ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease.

The right-of-use asset and lease liability are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term.

Subscription costs includes costs of our proprietary software,

the Vaunt platform.

costs are expensed as incurred and included in selling, general and administrative expenses on the statements of operations.

Such advertising

amounted to $ 270 thousand and $ 137 thousand for the three months ended March 31, 2026 and 2025, respectively.

Topic 842, “Leases” (“ASC 842”) requires lessees to recognize most leases on the balance sheet with a corresponding

right-of-use asset (“ROU asset”).

ROU asset represents the Company’s right to use an underlying asset for the lease

term and lease liability represents the Company’s obligation to make lease payments arising from the lease.

The right-of-use asset

and lease liability are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the

ROU asset is evaluated for impairment using the long-lived asset impairment guidance.

Leases will be classified as financing or operating, which will drive the expense recognition pattern.

The Company elects to exclude short-term leases when recording a ROU asset and lease liability if and when the Company has them.

Recent accounting pronouncements

In November 2023, the FASB issued Accounting Standards Update “ASU” 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments.

The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker “CODM” and included within each reported measure of segment profit and loss.

The amendments also require disclosure of all other segment items by reportable segment and a description of its composition.

Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Leases will be classified as financing

or operating, which will drive the expense recognition pattern.

The Company elects to exclude short-term leases when recording a ROU

asset and lease liability if and when the Company has them.

accounting pronouncements

November 2023, the FASB issued Accounting Standards Update “ASU” 2023-07, Segment Reporting (Topic 280):

Improvements to

Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments.

The amendments in

the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker “CODM”

and included within each reported measure of segment profit and loss.

The amendments also require disclosure of all other segment items

by reportable segment and a description of its composition.

Additionally, the amendments require disclosure of the title and position

of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance

and deciding how to allocate resources.

This update is effective for annual periods beginning after December 15, 2023, and interim periods

within fiscal years beginning after December 15, 2024.

Early adoption was permitted.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

The Company adopted this standard and the adoption

did not have a material impact on the Company’s consolidated financial statements and related disclosures.

The Company has one

reportable segment.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic

Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

The update will be effective for annual periods beginning after December 15, 2025.

The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

In November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation and cash taxes

The Company adopted this standard in its Annual Report on Form 10-K for the year ended December 31, 2025 using the prospective approach.

The adoption affected disclosures only and did not impact the Company’s consolidated financial position, results of operations,

or cash flows.

November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense

Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

ASU 2024-03 is intended to enhance the disclosures for expenses for all public entities in accordance with ASC Topic 220, Income Statement-Reporting Comprehensive Income.

ASU 2024-03 addresses investor requests for more detailed information about expenses, specifically cost of sales and selling, general, and administrative expenses.

ASU 2024-03 requires a public entity to disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption presented on the face of the income statement as well as a qualitative description of the amounts remaining in the relevant expense captions that are not separately disaggregated quantitatively.

ASU 2024-03 also requires a public entity to disclose the total amount of selling expenses and the entity’s definition of selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

ASU 2024-03 is

intended to enhance the disclosures for expenses for all public entities in accordance with ASC Topic 220, Income Statement-Reporting

Comprehensive Income.

ASU 2024-03 addresses investor requests for more detailed information about expenses, specifically cost of sales

and selling, general, and administrative expenses.

ASU 2024-03 requires a public entity to disclose the amounts of (a) purchases of inventory,

(b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized

as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption presented

on the face of the income statement as well as a qualitative description of the amounts remaining in the relevant expense captions that

are not separately disaggregated quantitatively.

ASU 2024-03 also requires a public entity to disclose the total amount of selling expenses

and the entity’s definition of selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and

interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

A public entity should apply ASU 2024-03 either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of ASU 2024-03 on its future consolidated financial statements and related disclosures.

NOTE 3 – DISCONTINUED OPERATIONS

In September 2024, the Company entered into an agreement with flyExclusive to transition our aircraft ownership program fleet operations to flyExclusive.

We have continued to take delivery of new aircraft, while also generating revenue from our proprietary software, including the Vaunt platform, Volato’s empty leg consumer app.

In March 2025, the Company sold GC Aviation, Inc., which holds the FAA Part 135 certificate, therefore items related to managed aircraft are included in discontinued operations.

Major classes of line items constituting net income (loss) from discontinued operations are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

A public entity should apply ASU

2024-03 either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively

to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of ASU 2024-03 on its future

consolidated financial statements and related disclosures.

3 – DISCONTINUED OPERATIONS

September 2024, the Company entered into an agreement with flyExclusive to transition our aircraft ownership program fleet

operations to flyExclusive.

During 2024 and 2025 we continued to take delivery of new aircraft, while also generating revenue from

our proprietary software, including the Vaunt platform, Volato’s empty leg consumer app.

In March 2025, the Company sold GC

Aviation, Inc., which held the FAA Part 135 certificate, therefore items related to managed aircraft and GC Aviation Inc.

included in discontinued operations.

classes of line items constituting net income (loss) from discontinued operations are as follows:

SCHEDULE OF NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS

Three Months Ended March 31,

Revenue - Aircraft usage

3 unchanged sentences

Selling, general and administrative

Other income from discontinued operations 4,840 4,147 5,845 4,147

Other income (loss) from discontinued operations

Loss from discontinued operations before provision for taxes

1 unchanged sentence

Net income (loss) from discontinued operations, net

Carrying amounts and major classes of assets included as part of discontinued operations are as follows:

September 30,

2025 December 31,

amounts and major classes of assets included as part of discontinued operations are as follows:

Accounts receivable, net

Prepaid and other assets

Property and equipment, net — 3

Intangibles, net — 1,200

Goodwill — 635

Total assets associated with discontinued operations

Carrying amounts and major classes of liabilities included as part of discontinued operations are as follows:

September 30,

2025 December 31,

amounts and major classes of liabilities included as part of discontinued operations are as follows:

Accounts payable and accrued liabilities

Credit facility and other loans 298 918

Customer deposits and deferred revenue

Deferred income tax liability — 305

Total liabilities associated with discontinued operations

NOTE 4– INTANGIBLES

Finite-Lived Intangible Assets

As of December 31, 2024, the Company impaired the remaining value of the customer relationships asset and recorded a loss on the impairment of $ 130 thousand which was recorded in selling, general and administrative expenses .

Intangible asset amortization expense was zero and $ 15 thousand for the three months ended September 30, 2025 and 2024, respectively.

Intangible asset amortization expense was zero and $ 45 thousand for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025 and December 31, 2024 the balance of customer relationships was zero .

Indefinite - Lived Intangible Assets

The following table summarizes the balances of the indefinite-lived intangible assets and is included in discontinued operations as of September 30, 2025 and December 31, 2024, in thousands:

September 30, 2025 December 31, 2024

Intangible asset - Part 135 certificate $ — $ 1,200

The FAA Part 135 certificate amount of $ 1.2 million relates to the certificate held by GC Aviation, Inc.

In March 2025, the Company sold GC Aviation, Inc., and the FAA Part 135 Certificate for $ 2.0 million.

The Company did not recognize any impairment of the Part 135 certificate during the three or nine months ended September 30, 2025 and 2024, respectively.

NOTE 5 - MERGER TRANSACTION COSTS PAYABLE

In connection with the business combination in December 2023, the Company entered into three agreements (together, the “Agreements”) with financial institutions, in which the Company agreed to pay a success fee in the aggregate amount of $ 4.25 million to the financial institutions in case the Company consummated certain acquisition(s).

The success fees were to be paid in shares of the Company’s common stock and warrants during the 2024 fiscal year.

ASC 480 Distinguishing Liabilities From Equity requires liability classification for all instruments that embodies an unconditional obligation that the Company must or may settle by issuing a variable number of its equity shares, if, at inception, the monetary value of the obligation is based solely on a fixed monetary amount know at inception.

As a result, the Company classified such liability in current liabilities as of December 31, 2023.

In January 2024, the Company issued an aggregate number of 48,342 shares of common stock and 4,000 warrants in accordance with the Agreements in full settlement of the Company’s obligations to the three financial institutions.

As of September 30, 2025 and December 31, 2024 the merger transaction costs payable were zero .

NOTE 6 – FORWARD PURCHASE AGREEMENT

On November 28, 2023, the Company Volato, Inc.

and Vellar Opportunities Fund Master, Ltd.

(“Seller”), entered into the Forward Purchase Agreement for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”).

The Seller could purchase, prior to the closing of a business combination we completed in December 2023, up to 2.0 million shares (the “Maximum Number of Shares”) of the Company from third parties through a broker in the open market.

The Number of Shares subject to the Forward Purchase Agreement were subject to reduction following a termination of the Forward Purchase Agreement with respect to such shares as described under “Optional Early Termination” in the Forward Purchase Agreement.

Under the Forward Purchase Agreement the Seller was directly paid an aggregate cash amount equal to the product of (i) the number of shares as set forth in the pricing date notice and (ii) the redemption price paid by the Company on the closing of its 2023 business combination date to holders of its common stock who exercised their redemption rights in connection with the closing.

During the year ended December 31, 2023, the Company paid an aggregate amount of approximately $ 18.9 million.

The Company collected $ 2.4 million in December 2023 and recognized a loss on the change in fair value of the Forward Purchase Agreement in the aggregated amount of $ 13.4 million, which was reported in other expenses in the consolidated statement of operations for the year ended December 31, 2023.

In July 2024, the Seller notified the Company of the termination of the Forward Purchase Agreement, following a delivery of a notice establishing the Valuation Date (as defined in the Forward Purchase Agreement);

upon termination, Seller was not obligated to pay the Company a cash amount.

The Company recorded the impact of the notice in the second quarter of 2024.

In the nine months ended September 30, 2025 and 2024, the Company recognized a loss on the change in fair value of zero and $ 3.0 million, respectively, reported in other expenses in the consolidated statement of operations.

NOTE 7– PROPERTY AND EQUIPMENT, NET

Property and equipment, net consist of the following at September 30, 2025 and December 31, 2024, in thousands:

September 30,

2025 December 31,

Machine and equipment $ 186 $ 188

Automobiles — 72

NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT

Prepaid expenses and other current

assets totaled $ 1.2 million as of March 31, 2026, consisting primarily of $ 754 thousand of prepaid directors and

officers insurance, $ 163 thousand of prepaid software costs, and $ 48 thousand of prepaid NYSE fees.

The remaining balance

consisted of other miscellaneous prepaid expenses and current assets.

5 – INTANGIBLES

- Lived Intangible Assets

March 2025, the Company sold GC Aviation, Inc., which held the FAA Part 135 Certificate for $ 2.0 million.

The Company did not recognize any

impairment of the Part 135 certificate during the three months ended March 31, 2025.

As of March 31, 2026 and December 31, 2025, the

value of the FAA Part 135 certificate was 0 zero.

6– PROPERTY AND EQUIPMENT, NET

and equipment, net consist of the following at March 31, 2026 and December 31, 2025, in thousands:

OF PROPERTY AND EQUIPMENT, NET

Machinery and equipment

Website development costs

3 unchanged sentences

Property and equipment, net

During the three months ended September 30, 2025 and 2024, the Company recognized $ 75 thousand and $ 65 thousand of depreciation and amortization, respectively.

During the nine months ended September 30, 2025 and 2024, the Company recognized $ 243 thousand and $ 194 thousand of depreciation and amortization, respectively.

During the three and nine months ended September 30, 2025, the Company reduced the value of software development cost by $ 75 thousand and $ 129 thousand, respectively related to a non-monetary exchange with a third party and their use of our mission control software.

This software development cost was originally developed for internal use and has subsequently been licensed to a third party in a non-monetary transaction.

NOTE 8 – DEPOSITS

Deposits consist of the following at September 30, 2025 and December 31, 2024, in thousands:

September 30, 2025 December 31, 2024

Deposits on aircraft $ 3,000 $ 36,000

the three months ended March 31, 2026 and 2025, the Company recognized $ 58 thousand and $ 85 thousand of depreciation and amortization,

respectively.

the three months ended March 31, 2026 and 2025, the Company reduced the value of software development cost by $ 32

thousand and 0 zero,

related to a non-monetary exchange with a third party and their use of our mission control software.

This software development cost

was for software originally developed for internal use and has subsequently been sold to the third party in a non-monetary

consist of the following at March 31, 2026 and December 31, 2025, in thousands:

Other deposits

Total deposits 3,065 36,300

Less current portion

Total deposits, non-current

Below is a breakdown of the deposits on aircraft as of September 30, 2025 and December 31, 2024, in thousands:

September 30,

2025 December 31,

Gulfstream aircraft deposits $ 3,000 $ 36,000

Total deposits on aircraft 3,000 36,000

Less current portion ( 3,000 ) ( 36,000 )

Total deposits on aircraft non-current $ — $ —

Gulfstream Aerospace, LP

In 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G280 aircraft for total consideration of $ 79 million with expected delivery throughout fiscal year 2025.

The first Gulfstream G280 was delivered in the third quarter of 2024.

The second Gulfstream G280 was delivered in January 2025.

The third Gulfstream G280 was delivered in April 2025.

The remaining Gulfstream G280 is expected to be delivered in the fourth quarter of 2025.

The Company fully funded an aggregate amount of $ 48.0 million in deposits towards the acquisition price of the four Gulfstream G280 aircraft in accordance with the scheduled payment terms of the agreements as of September 30, 2025, and December 31, 2024, respectively.

Upon delivery of the first Gulfstream G280 in the third quarter of 2024, $ 12.0 million of the deposits were applied toward the purchase price of the airplane.

Upon delivery of the second GulfStream G280, in January 2025, $ 12.0 million of the deposits were applied toward the purchase price of the airplane.

Additionally, in March 2025, GulfStream notified the Company that the fourth Gulfstream G280 would be delayed from the original timeline with delivery now expected in the fourth quarter of 2025.

In connection with the delivery delay, GulfStream agreed to return the deposit on the fourth Gulfstream G280 reducing the deposits by $ 9.0 million.

In April 2025, the third Gulfstream G280 was delivered and $ 12.0 million of the deposits were applied toward the purchase price of the airplane.

During the nine months ended September 30, 2024, the Company funded $ 9.0 million pursuant to the terms of the executed purchase agreements, of which $ 9.0 million was funded through the SAC Leasing G280 line of credit further described in Note 11.

NOTE 9 – PROMISSORY NOTE- RELATED PARTY

Dennis Liotta - March 2023 note

On March 15, 2023, the Company entered into a promissory note agreement with Dennis Liotta, an affiliate of the Company, for a total amount of $ 1.0 million, with an effective date of February 27, 2023 and which matured on March 31, 2024 (“March 2023 note”).

The entire outstanding principal balance together with accrued but unpaid interest were due at the maturity date.

The March 2023 note included a ten percent ( 10 %) interest rate per annum.

On April 1, 2024, the March 2023 note was paid in full.

Promissory note from related party was zero as of September 30, 2024, and December 31, 2024, respectively.

The Company incurred zero of interest on the March 2023 note during each of the three months ended September 30, 2025 and 2024.

The Company incurred zero and $ 23 thousand of interest expense during the nine months ended September 30, 2025 and 2024, respectively.

NOTE 10 – UNSECURED CONVERTIBLE NOTES

Unsecured convertible notes consisted of the following at September 30, 2025 and December 31, 2024, in thousands:

September 30,

2025 December 31,

2024 unsecured convertible note, 4 % coupon, due December 2025

Unsecured convertible note, 4 % coupon, due June 2026*

8 – UNSECURED CONVERTIBLE NOTES

convertible notes consisted of the following at March 31, 2026 and December 31, 2025, in thousands:

OF LONG-TERM DEBT INSTRUMENTS

Unsecured convertible note, 4 % coupon, due July 2026 **

Unsecured convertible note, 4 % coupon, due October 2026 ***

Less current portion

Total unsecured convertible note, long term

* Represents the Second Tranche Note (as described in this Note 10)

** Represents the Third Tranche Note (as described in this Note 10)

Unsecured convertible note due December 2025 - 2024 Convertible Note

During the year ended December 31, 2024, the Company entered into the Securities Purchase Agreement as described in Note 2 above pursuant to which the Company may issue a series of convertible notes for an aggregate principal not to exceed $ 36.0 million.

During the year ended December 31, 2024, the Company issued a single convertible note in a principal amount of $ 4.5 million, (as defined above, the “2024 Convertible Note”) of which $ 4.1 million was funded as of December 31, 2024, representing an original issue discount of ten percent.

** Represents the

Third Tranche Note (as described in this Note 8)

*** Represents the Fourth

Tranche Note (as described in this Note 8)

During the year ended December 31, 2024, the Company

entered into the Securities Purchase Agreement as described in Note 2 above pursuant to which the Company may issue a series of convertible

notes for an aggregate principal not to exceed $ 36.0 million.

As of March 31, 2026, the company had issued $ 11.22 million in aggregate

principal amount of convertible notes, leaving $ 24.78 million of remaining capacity available for future issuances.

The Company does not

expect to issue additional convertible notes in 2026.

convertible note due December 2025 - 2024 Convertible Note

the year ended December 31, 2024, the Company issued a single convertible note in a principal amount of $ 4.5

million, (as defined above, the “2024 Convertible Note”)

of which $ 4.1

million was funded as of December 31, 2024, representing an

original issue discount of ten percent.

Interest is payable quarterly at the Company’s option and shall either be (i) paid in cash;

1 unchanged sentence

or (iii) compound and become additional principal outstanding.

The Company recorded $ 14 thousand of accrued interest expense in the year ended December 31, 2024.

During the three months ended March 31, 2025 the $ 14 thousand of paid-in-kind interest was rolled into the principal balance of the 2024 Convertible note.

The 2024 Convertible Note is accounted for as a single liability measured at fair value in accordance with ASC 825-10.

At March 31, 2025, the Company valued the 2024 Convertible Note using the Monte-Carlo valuation model.

In June 2025, the outstanding principal and interest of the 2024 Convertible Note was converted into 2,538,939 shares of the Company’s common stock, settling in full the Company’s repayment obligations related to that note.

Immediately prior to the conversions, the Company remeasured the liability to its fair value as of the conversion date.

The Company recognized a gain of $ 223 thousand and a loss of $ 626 thousand related to the change in the fair value of the 2024 Convertible Note recorded in other income expense on the consolidated statements of operations for the three and nine months ended September 30, 2025, respectively.

Unsecured convertible note due June 2026 - Second Tranche Note

In June 2025, the Company issued a second convertible note (the “Second Tranche Note”) in accordance with the terms of the Securities Purchase Agreement in the principal amount of $ 1.5 million, for a purchase price of $ 1.4 million, representing an original issue discount of ten percent, which matures on June 13, 2026.

The Company recorded $ 14

thousand of accrued interest expense in the year ended December

During the three months ended March 31, 2025 the $ 14

thousand of paid-in-kind interest was rolled into the principal

balance of the 2024 Convertible note.

2024 Convertible Note is accounted for as a single liability measured at fair value in accordance with ASC 825-10.

At March 31, 2026

and 2025 , the Company valued the 2024 Convertible Note using the Monte-Carlo valuation model.

June 2025, the outstanding principal and interest of the 2024 Convertible Note was converted into 2,538,939 shares of the Company’s

common stock, settling in full the Company’s repayment obligations related to that note.

Immediately prior to the conversions,

the Company remeasured the liability to its fair value as of the conversion date.

The Company recognized a loss of $ 626 thousand related

to the change in the fair value of the 2024 Convertible Note recorded in Loss from change in fair value of financial instruments on the

consolidated statements of operations for the twelve months ended December 31, 2025, respectively.

convertible note due June 2026 - Second Tranche Note

June 2025, the Company issued a second convertible note (the “Second Tranche Note”) in accordance with the terms of the Securities

Purchase Agreement in the principal amount of $ 1.5

million, for a purchase price of $ 1.4

million, representing an original issue discount of ten 10 percent,

which matures on June 13, 2026.

The Second Tranche Note was recorded at a fair value of $ 1.4 million.

The Company recorded a loss of $ 124 thousand on the change in fair value of the Second Tranche Note in the three months ended June 30, 2025.

In July 2025, $ 1.1 million of the outstanding principal and accrued interest of the Second Tranche Note was converted into 988,240 shares of the Company’s common stock.

Immediately prior to the conversions, the Company remeasured the liability to its fair value as of the conversion date.

The Company recorded a loss of $ 6 thousand related to the change in fair value as of the conversion date.

In August 2025, the remaining $ 0.4 million of the outstanding principal and accrued interest of the Second Tranche Note was converted into 344,242 shares of the Company’s common stock.

Immediately prior to the conversion, the Company remeasured the liability to its fair value at the conversion date.

The Company recorded a loss of

$ 124 thousand on the change in fair value of the Second Tranche Note in the three months ended June 30, 2025.

July 2025, $ 1.1 million of the outstanding principal and accrued interest of the Second Tranche Note was converted into 988,240 shares

of the Company’s common stock.

Immediately prior to the conversions, the Company remeasured the liability to its fair value as

of the conversion date.

The Company recorded a loss of $ 6 thousand related to the change in fair value as of the conversion date.

The Company recorded a loss of $ 18 thousand and $ 142 thousand for the three and nine months ended September 30, 2025.

Unsecured convertible note due July 2026 - Third Tranche Note

In July 2025, the Company issued a third convertible note, (the “Third Tranche Note”), in accordance with the terms of the Securities Purchase Agreement, in the principal amount of $ 3.0 million, for a purchase price of $ 2.7 million, representing an original issue discount of 10 %, which matures on July 21, 2026.

August 2025, the remaining $ 0.4 million of the outstanding principal and accrued interest of the Second Tranche Note was converted into

344,242 shares of the Company’s common stock.

Immediately prior to the conversion, the Company remeasured the liability to its

fair value at the conversion date.

The Company recorded a loss of $ 12 thousand related to the change in fair value as of the conversion

The Company recorded a loss of $ 142 thousand for the twelve months ended December 31, 2025.

convertible note due July 2026 - Third Tranche Note

July 2025, the Company issued a third convertible note, (the “Third Tranche Note”), in accordance with the terms of the Securities

Purchase Agreement, in the principal amount of $ 3.0

million, for a purchase price of $ 2.7

million, representing an original issue discount of ten percent 10 ,

which matures on July 21, 2026.

The Third Tranche Note was recorded at an initial fair value of $ 2.9 million.

The Company recorded a loss of $ 366 thousand on the change in fair value of the Third Tranche Note in the three and nine months ended September 30, 2025.

NOTE 11 – CREDIT FACILITY AND OTHER LOANS

Credit facility and other loans consisted of the following at September 30, 2025 and December 31, 2024, in thousands:

September 30,

2025 December 31,

SAC Leasing G280 LLC credit facility, 12.5 % interest, net of deposits

Term Loan — 1,102

Less discounts — ( 247 )

Total credit facility, net of discount and deposits $ — $ 28,855

SAC Leasing G280 LLC Line of credit

The Company entered into the pre-delivery payment agreement on October 5, 2022, with SAC Leasing G280, LLC to obtain loans in the aggregate amount of $ 40.5 million for the purchase of four ( 4 ) Gulfstream G280 aircraft to be delivered in 2024 and 2025.

On August 25, 2023, the Company and SAC Leasing G280, LLC entered into the first amendment to pre-delivery payment agreement.

The maturity date of amounts drawn under the SAC Leasing G280 credit facility is the earlier of the delivery date of the aircraft or September 14, 2025, which is thirty-five ( 35 ) months from the date of funding.

The purchase agreement contracts were assigned to SAC G280 LLC as collateral on this credit facility.

During the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G280 aircraft for total consideration of $ 79.0 million with expected deliveries in 2024 and 2025, of which an aggregate amount of $ 48.0 million was funded and paid as of December 31, 2024, partially through a credit facility from SAC Leasing G280.

During the year ended December 31, 2024, the Company funded an additional $ 9.0 million through the SAC Leasing G280 credit facility.

During the nine months ended September 30, 2025, the Company decreased its SAC leasing G280 line of credit by $ 28.0 million which was a combination of a repayment in the amount of $ 10.5 million, with the sale of the second G280 in February 2025 and the deposit release and corresponding pay down of the G280 line of credit of $ 9.0 million with the delay of the fourth G280 until Q4 2025.

In April 2025, the Company repaid the remaining $ 8.5 million, terminating the credit facility with SAC Leasing G280.

The line of credit balance was zero as of September 30, 2025.

The Company incurred zero and $ 68 thousand of incremental closing costs, which are reported as debt discount against the liability in the consolidated balance sheets as of September 30, 2025, and December 31, 2024, respectively.

During the three months ended September 30, 2025 and 2024, the Company amortized to interest expense zero and $ 45 thousand of debt discount, respectively.

During the nine months ended September 30, 2025 and 2024, the Company amortized to interest expense $ 247 thousand and $ 137 thousand of debt discount, respectively.

During the three months ended September 30, 2025 and 2024, the Company incurred approximately zero and $ 1.0 million of interest under this facility, respectively.

During the nine months ended September 30, 2025 and 2024, the Company incurred $ 641 thousand and $ 3.3 million of interest, respectively.

In connection with the purchase and sale of the second G280, the Company entered into a financing agreement with OgaraJets.

The Company borrowed $ 19.6 million from OgaraJets to facilitate the delivery and subsequent sale of the second G280.

Upon the sale of the second G280, in February 2025, $ 19.7 million was repaid to OgaraJets.

The Company recorded a

loss of $ 449 thousand on the change in fair value of the Third Tranche Note in the twelve months ended December 31, 2025.

the first quarter of 2026, $ 2.8 million of the outstanding principal and accrued interest of the Third Tranche Note was converted into

8,677,847 shares of the Company’s common stock.

Immediately prior to the conversions, the Company remeasured the liability to its

fair value as of the conversion date.

The Company recorded a loss of $ 29 thousand related to the change in fair value as of the conversion

The Company recorded a loss of $ 11 thousand on the change in fair value of the Third Tranche Note in the three months ended March

convertible note due October 2026 - Fourth Tranche Note

October 2025, the Company issued a fourth convertible note, (the “Fourth Tranche Note”) in accordance with the Securities

Purchase Agreement, in the principal amount of $ 2.2

million, for a purchase price of $ 2.0

million, representing an original issue discount of ten percent 10 ,

which matures on October 16, 2026.

The Fourth Tranche Note was recorded at an initial fair value of $ 2.2 million.

The Company recorded

a loss of $ 200 thousand on the change in fair value of the Fourth Tranche Note at issuance.

In December 2025, $ 1.2 million of the outstanding

principal and accrued interest of the Fourth Tranche Note was converted into 1,604,091 shares of the Company’s common stock.

prior to the conversions, the Company remeasured the liability to its fair value as of the conversion date and recorded a gain of $ 10

thousand related to the change in fair value as of the conversion date.

The Company recorded a loss of $ 272 thousand on the change in

fair value for the twelve months ended December 31, 2025.

In January 2026, the remaining $ 1.0 million of outstanding principal and accrued

interest was converted into 1,926,618 shares of the Company’s common stock.

Immediately prior to the conversion, the Company remeasured

the liability to its fair value as of the conversion date.

The company recorded a loss of $ 20 thousand related to the change in fair

value as of the conversion date.

9 – CREDIT FACILITY AND OTHER LOANS

Leasing G280 LLC Line of credit

Company entered into the pre-delivery payment agreement on October 5, 2022, with SAC Leasing G280 LLC to obtain loans in the

aggregate amount of $ 40.5

million for the purchase of four ( 4 )

Gulfstream G280 aircraft that were delivered in 2024 and 2025.

On August 25, 2023, the Company and SAC Leasing G280 LLC entered into

the first amendment to pre-delivery payment agreement.

The maturity date of amounts drawn under the SAC Leasing G280 LLC credit

facility was the earlier of the delivery date of the aircraft or September 14, 2025, which is thirty-five ( 35 )

months from the date of funding.

The purchase agreement contracts were assigned to SAC G280 Leasing LLC as collateral on this credit

the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the

acquisition of four ( 4 )

Gulfstream G280 aircraft for total consideration of $ 79.0

million with expected deliveries in 2024 and 2025, of which an aggregate amount of $ 48.0

million was funded and paid as of December 31, 2024, partially through a credit facility from SAC Leasing G280 LLC.

During the year

ended December 31, 2024, the Company funded an additional $ 9.0

million through the SAC Leasing G280 LLC credit facility.

the three months ended March 31, 2025, the Company decreased its SAC leasing G280 LLC line of credit by $ 28.0

million which was a combination of a repayment in the amount of $ 10.5

million, with the sale of the second G280 in February 2025 and the deposit release and corresponding pay down of the G280 line of

credit of $ 9.0

million with the delay of the fourth G280 until Q4 2025.

In April 2025, the Company repaid the remaining $ 8.5

million, terminating the credit facility with SAC Leasing G280 LLC.

The line of credit balance was zero as of December 31,

the three months ended March 31, 2026 and 2025, the Company amortized to interest expense zero and $ 62 thousand of debt discount, respectively.

the three months ended March 31, 2026 and 2025, the Company incurred zero and $ 641 thousand of interest, respectively.

connection with the purchase and sale of the second G280, the Company entered into a financing agreement with OgaraJets.

borrowed $ 19.6 million from OgaraJets to facilitate the delivery and subsequent sale of the second G280.

Upon the sale of the second

G280, in February 2025, $ 19.7 million was repaid to OgaraJets.

All transactions occurred during the first quarter of 2025.

In connection with the purchase and sale of the third G280, the Company entered into a financing agreement with OgaraJets.

The Company borrowed $ 17.9 million from OgaraJets to facilitate the delivery and subsequent sale of the third G280.

Upon the sale of the third G280 in June 2025, $ 17.9 million was repaid to OgaraJets.

connection with the purchase and sale of the third G280, the Company entered into a financing agreement with OgaraJets.

The Company borrowed

$ 17.9 million from OgaraJets to facilitate the delivery and subsequent sale of the third G280.

Upon the sale of the third G280 in June

2025, $ 17.9 million was repaid to OgaraJets.

All transactions occurred during the second quarter of 2025.

In July 2024, the Company entered into a business loan and security agreement (the “Loan”) with TVT Capital Sources LLC (the “Lender”), for a term loan in the amount of $ 4.0 million.

Net proceeds of $ 3.9 million were received by the Company and used to fund operations.

The Loan bore interest at an annual percentage rate of 165 % and matured on January 28, 2025, with principal and interest payments made weekly.

The Company incurred financing fees of $ 200 thousand, which were recorded as a direct discount to the debt and were being amortized over the term of the Loan.

The Company amortized zero and $ 64 thousand of financing fees in the three months ended September 30, 2025 and 2024, respectively and $ 36 thousand and $ 64 thousand in the nine months ended September 30, 2025 and 2024, respectively.

The Company recorded $ 107 thousand and $ 894 thousand of interest expense related to the Loan in the nine months ended September 30, 2025 and 2024, respectively.

In November 2024, the Company entered into an agreement with a third party to settle outstanding payables owed by the Company to designated vendors in exchange for a settlement amount in shares of common stock.

As of December 31, 2024 in accordance with the agreement, the Company issued 639,720 shares of common stock for the payment of $ 1.475 million of principal and interest due to the Lender under the Loan and $ 725 thousand of payables related to a separate vendor.

The Company recorded a $ 2.8 million loss on extinguishment of debt upon the settlement of each issuance equal to the payables less the fair value of the shares calculated as of the closing stock price on the date of settlement.

In February 2025, the Company paid the remaining principal balance due on the Loan of $ 1.1 million and outstanding interest of $ 107 thousand.

NOTE 12 – RELATED PARTIES

Liotta Family Office, LLC

Liotta Family Office, LLC (“LFO”) is owned 20 % by the Company’s Chief Executive Officer (“CEO”), 60 % owned by the father of the Company’s Chief Executive Officer, and 20 % by the brother of the CEO.

LFO currently owns 74,372 Shares of the Company’s issued and outstanding common stock which represents 1 % of the Company’s issued and outstanding Common Stock as of September 30, 2025.

During the year ended December 31, 2023, LFO entered into an unsecured promissory note for a total amount of $ 1.0 million (see Note 9).

The Company incurred approximately $ 23 thousand of interest during the nine months ended September 30, 2024.

In April 2024, the promissory note and interest was paid in full.

The Company historically facilitated the formation of limited liability companies (“Plane Co’s”), which were then funded by third party members prior to the sale and delivery of an aircraft purchased from Honda Aircraft that entered into the Company’s fractional program.

In October 2024, as part of the agreement with flyExclusive, Volato sold all of its interest in the Plane Co’s to flyExclusive.

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled zero and $ 0.8 million for the three months ended September 30, 2025 and 2024, respectively.

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled zero and $ 3.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Expenses charged to the Company by Plane Co’s and included in loss from discontinued operations, totaled zero and $ 0.9 million for the three months ended September 30, 2025 and 2024, respectively.

Expenses charged to the Company by Plane Co’s and included in loss from discontinued operations, totaled zero and $ 2.8 million for the nine months ended September 30, 2025 and 2024, respectively.

Balance due to Plane Co’s amounted to zero and $ 4 thousand as of September 30, 2025 and December 31, 2024, respectively.

NOTE 13 – INCOME TAXES

Management has determined that the Company does not have any uncertain tax positions and associated unrecognized benefits that would impact the consolidated financial statements or related disclosures.

The effective tax rate was 4 % and 2.5 % for the three and nine months ended September 30, 2025, respectively.

The effective tax rate was zero percent for the three and nine months ended September 30, 2024, respectively.

Our effective tax rate for the three and nine months ended September 30, 2025 differs from the federal statutory rate of 21% and was a result of the valuation allowance on the deferred tax benefit .

NOTE 14 – SHAREHOLDERS’ EQUITY (DEFICIT)

On October 28, 2024, the Company filed an amendment to its Amended and Restated Certificate of Incorporation to increase the number of authorized shares to 201,000,000 shares consisting of 200,000,000 shares of common stock and 1,000,000 shares of preferred stock.

On February 24, 2025, the Company effected the Reverse Stock Split described elsewhere in this Quarterly Report.

All share amounts have been retroactively adjusted to account for the Reverse Stock Split as if it occurred at inception.

The Reverse Stock Split did not have an effect on the number of authorized shares of common stock.

Preferred Stock

No shares of preferred stock have been issued as of September 30, 2025 and December 31, 2024.

Stock Options - Equity Incentive Plans

Summary of the 2025 Plan

The 2025 Stock Incentive Plan (the “2025 Plan”) was approved at the annual meeting of the shareholders of the Company on July 21, 2025.

The 2025 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock- and cash-based awards.

The Company has reserved a pool of shares of common stock for issuance pursuant to awards under the 2025 Plan equal to 415,584 shares.

As of September 30, 2025 the Company had 220,838 shares a vailable for issuance.

Summary of the 2023 Plan

The 2023 Stock Incentive Plan (the “2023 Plan”) was approved at the special meeting of the shareholders of the Company on November 28, 2023.

The 2023 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock- and cash-based awards.

connection with the purchase and sale of the fourth G280, the Company entered into a financing agreement with Ogara Jets.

borrowed $ 18.4 million from OgaraJets to facilitate the delivery and subsequent sale of the fourth G280.

Upon the sale of the fourth

G280, in December 2025, $ 18.4 million was repaid to Ogara Jets.

All transactions occurred during the fourth quarter of 2025.

10 – RELATED PARTIES

Family Office, LLC

Family Office, LLC (“LFO”) is owned 20 % by the Company’s Chief Executive Officer (“CEO”), 60 % owned by

the father of the Company’s Chief Executive Officer, and 20 % by the brother of the CEO.

LFO currently owns 74,372 Shares of the

Company’s issued and outstanding common stock which represents less than 1 % of the Company’s issued and outstanding common

stock as of March 31, 2026.

11 – INCOME TAXES

has determined that the Company does not have any uncertain tax positions and associated unrecognized benefits that would impact the

consolidated financial statements or related disclosures.

effective tax rate was zero and negative 39.00 % percent for the three months ended March 31, 2026 and 2025, respectively.

Our effective

tax rate for the three months ended March 31, 2026 differs from the federal statutory rate of 21 % and was negative as a result of the

valuation allowance on the deferred tax benefit due to the convertible note fair value adjustments.

12 – SHAREHOLDERS’ EQUITY (DEFICIT)

October 28, 2024, the Company filed an amendment to its Amended and Restated Certificate of Incorporation to increase the number of authorized

shares to 201,000,000 shares consisting of 200,000,000 shares of common stock and 1,000,000 shares of preferred stock.

February 24, 2025, the Company effected the Reverse Stock Split described elsewhere in this Quarterly Report.

All share amounts have been

retroactively adjusted to account for the Reverse Stock Split as if it occurred at inception.

The Reverse Stock Split did not have an

effect on the number of authorized shares of common stock.

stock at the market sales agreement

December 5, 2025, the Company entered into an ATM Sales Agreement with Virtu Americas LLC (“Virtu”)

pursuant to which Virtue acted as the Company’s sole sales agent or principal with respect to the offer and sale from time-to-time

of shares of the Company’s Class A Common Stock, par value $ 0.0001 per share, having an aggregate gross sales price of an aggregate

of up to $ 9.3 million.

The Company issued 436,757 shares of common stock for proceeds of $ 463 thousand in the twelve months ended December

March 19, 2026, the Company delivered a notice of termination to Virtu terminating the ATM Sales Agreement as of March 22, 2026.

March 27, 2026, the Company entered into an ATM Sales Agreement with Curvature Securities, LLC (“Curvature”) pursuant to

which Curvature will act as the Company’s sole sales agent or principal with respect to the offer and sale from time-to-time of

shares of the Company’s Class A Common Stock, par value $ 0.0001 per share, having an aggregate gross sales price of an aggregate

of up to $ 3,700,000 .

shares of preferred stock have been issued as of March 31, 2026 and December 31, 2025.

Options - Equity Incentive Plans

of the 2025 Plan

2025 Stock Incentive Plan (the “2025 Plan”) was approved at the annual meeting of the shareholders of the Company on

July 21, 2025.

The 2025 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options),

stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock- and cash-based

The Company has reserved a pool of shares of common stock for issuance pursuant to awards under the 2025 Plan equal to 415,584 shares.

As of September 30, 2025 the Company had 21,855 shares available for issuance.

Stock option activity for the periods presented is as follows:

Options Weighted

As of March 31, 2026 the Company had 39,060 shares

available for issuance.

of the 2023 Plan

2023 Stock Incentive Plan (the “2023 Plan”) was approved at the special meeting of the shareholders of the Company on November

The 2023 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock

appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock- and cash-based awards.

Company has reserved a pool of shares of common stock for issuance pursuant to awards under the 2023 Plan equal to 224,348 shares.

of March 31, 2026 the Company had 22,515 shares available for issuance.

option activity for the periods presented is as follows:

OF STOCK OPTION ACTIVITY

Exercise Price

Per Share Weighted

Outstanding at December 31, 2024 18,614 $ 5.59 7.5

Cancelled ( 848 ) 20.30

Exercised — —

Outstanding as of September 30, 2025 17,766 $ 5.57 6.7

Exercisable as of September 30, 2025 16,144 $ 4.81

The Black-Scholes option pricing model is used by the Company to determine the weighted-average fair value of share-based payments.

The Company recognizes forfeitures as they occur.

There were no stock options granted in the three and nine months ended September 30, 2025.

Outstanding as of December 31, 2025

Outstanding as of March 31, 2026

Exercisable as of March 31, 2026

Black-Scholes option pricing model is used by the Company to determine the weighted-average fair value of share-based payments.

recognizes forfeitures as they occur.

There were no stock options granted in the three months ended March 31, 2026 or 2025.

stock unit activity for the period presented is as follows:

OF RESTRICTED STOCK UNIT

Restricted Stock

Restricted stock unit activity for the period presented is as follows:

Restricted Stock Units Weighted Average Grant Date Fair Value

Outstanding at December 31, 2024 29,080 $ 18.75

Granted 358,397 1.83

Vested ( 340,154 ) 2.85

Forfeited — —

Outstanding as of September 30, 2025 47,323 $ 4.87

Stock based compensation expense was $ 1 thousand and negative $ 199 thousand for the three months ended September 30, 2025 and 2024, respectively.

Stock based compensation expense was $ 604 thousand and $ 69 thousand for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, there were 552,000 public warrants and 609,195 private placement warrants issued and outstanding.

Private placement warrants

The Company has 609,195 private placement warrants outstanding.

Each private placement warrant is exercisable for one whole share of Class A common stock at a price of $ 287.50 per share.

Such private placement warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are not redeemable by the Company.

The private placement warrants are all exercisable as of September 30, 2025.

There was no activity during the three and nine months ended September 30, 2025.

Public warrants

Pursuant to the initial public offering (“IPO”) by Proof Acquisition Corp I (“PACI”) in 2021, the Company sold 1,104,000 units at a price of $ 250.00 per unit.

Weighted Average

Grant Date Fair

Outstanding as of December 31, 2025

Outstanding as of March 31, 2026

based compensation expense was $ 30

thousand and $ 46

thousand for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026 the unrecognized compensation costs related to non-vested awards was $ 6 thousand is and expected

to be recognized over a weighted average period of 0.06 years.

of March 31, 2026, there were 552,000 public warrants and 609,195 private placement warrants issued and outstanding.

placement warrants

Company has 609,195 private placement warrants outstanding.

Each private placement warrant is exercisable for one whole share of Class

A common stock at a price of $ 287.50 per share.

Such private placement warrants are exercisable for cash or on a cashless basis, at the

holder’s option, and are not redeemable by the Company.

The private placement warrants are all exercisable as of March 31, 2026.

There was no activity during the three months ended March 31, 2026.

to the initial public offering (“IPO”) by Proof Acquisition Corp I (“PACI”) in 2021, the Company sold 1,104,000

units at a price of $ 250.00 per unit.

Each unit consisted of one share of Class A common stock and one-half of one redeemable warrant.

Each whole public warrant entitles the holder to purchase one share of Class A common stock at a price of $ 287.50 per share, subject to adjustment.

Each whole public warrant entitles the holder to purchase one share of Class A common stock at a price of $ 287.50 per share, subject

to adjustment.

A majority of the shares were redeemed before the December 2023 merger transaction, but the warrants remain.

As a result, there are 552,000 public warrants outstanding as of September 30, 2025.

The public warrants became exercisable on the later of (a) 30 days after the completion of a business combination and (b) 12 months from the closing of the IPO.

The public warrants expire five years after the completion of a business combination or earlier upon redemption or liquidation.

there are 552,000 public warrants outstanding as of March 31, 2026.

public warrants became exercisable on the later of (a) 30 days after the completion of a business combination and (b) 12 months from

the closing of the IPO.

The public warrants expire five years after the completion of a business combination or earlier upon redemption

or liquidation.

The public and private warrants expire on December 1, 2028.

The public warrants are all exercisable as of September 30, 2025.

There was no activity during the three and nine months ended September 30, 2025.

NOTE 15 – COMMITMENT AND CONTINGENCIES

Gulfstream Aerospace, LP

During the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G280 aircraft for total consideration of $ 79.0 million and with expected deliveries in 2024 through 2025, for which the Company made prepayments totaling $ 48.0 million and $ 48.0 million as of September 30, 2025, and September 30, 2024, respectively.

The $ 48.0 million is non-refundable, except in some specific circumstances, and would serve as consideration for liquidated damages of $ 3.0 million per aircraft should the purchase agreement be terminated by the Company.

In September 2024, the Company took delivery of one Gulfstream G280 and received $ 12.0 million in deposits related to the aircraft, of which $ 9.0 million paid down the SAC Leasing G280 line of credit and $ 3.0 million was retained by the Company.

In the first quarter of 2025, an additional $ 12 million in deposits was received as a result of the delivery of the second Gulfstream G280 and the return of $ 9 million in deposits related to the fourth Gulfstream G280.

The $ 9 million in returned deposits were used to pay down the SAC Leasing G280 line of credit.

In April 2025, the third Gulfstream G280 was delivered and $ 12.0 million of the deposits were applied toward the purchase price of the airplane.

Future minimum payments under the purchase agreements with Gulfstream Aerospace, LP at September 30, 2025, are as follows, in thousands:

2025 $ 18,038

Total expected contractual payments $ 18,038

The Company had a credit facility in place with SAC Leasing G280 LLC to fund $ 40.5 million of the original $ 79.0 million due under these purchase agreements with Gulfstream Aerospace LP.

In April 2025, the Company paid the remaining balance and terminated the credit facility.

The remaining balance to be funded by SAC Leasing G280 LLC is zero as of September 30, 2025.

Operating Leases

The Company leases property and equipment under operating leases.

For leases with terms greater than 12 months, the Company records the related assets and obligations at the present value of the lease payments over the lease term.

Many of the leases contain renewal options and/or termination options that are factored into our determination of lease payments when appropriate.

The Company uses its incremental borrowing rate to discount lease payments to present value, as the rates implicit in its leases are not readily determinable.

The incremental borrowing rate is based on the estimated interest rate for collateralized borrowing over a similar term of the lease at the commencement date.

Aircraft Leases

During 2023, the Company began leasing an aircraft with a term of five years which has fixed lease payments.

The Company recognized an operating lease liability in the amount of the net present value of the future minimum lease payments, and a ROU asset.

The discount rate used for this lease was 12 %, which was determined to be the incremental borrowing rate based on comparative secured financing in the marketplace at the inception of the fixed lease payments.

Lease expense is recognized on a straight-line basis over the lease term.

Lease expense related to this lease consisting of fixed and variable lease costs was zero and $ 78 thousand for the three months ended September 30, 2025 and 2024, respectively.

Lease expense was zero and $ 312 thousand for the nine months ended September 30, 2025 and 2024, respectively.

Additionally, the Company leases other aircraft under operating leases with remaining terms ranging from one to five years .

These leases require lease payments that are variable and are dependent on flight hours that generate charter revenues, with no minimum lease payment commitments.

Because of the variable nature of the lease payments, these leases are not recorded on our consolidated balance sheets as ROU assets and lease liabilities.

Certain leases have renewal options to extend lease terms for additional periods ranging from three to twelve months .

Some of the aircraft leases have lease terms of 12 months or less.

The Company has made a policy election to classify lease agreements with a lease term of 12 months or less as short-term leases.

Accordingly, the Company has not recognized ROU assets or lease liabilities related to these lease agreements pursuant to the short-term election.

The Company recognizes short-term lease costs on a straight-line basis over the lease term and accrues the difference each period between the amount expensed and the amount paid.

Variable lease costs associated with the aircraft operating leases were zero and $ 1.9 million for the three months ended September 30, 2025, and 2024, respectively.

Variable lease costs associated with the aircraft operating leases were zero and $ 7.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Short-term lease costs on the aircraft leases were zero and $ 40 thousand for the three months ended September 30, 2025, and 2024, respectively.

Short-term lease costs on the aircraft leases were zero and $ 196 thousand for the nine months ended September 30, 2025 and 2024, respectively.

As of December 31, 2024, the Company had terminated all the aircraft leases as part of the flyExclusive agreement.

Airport Facilities

Our facilities leases are for space at airports throughout the south with remaining terms ranging from one to eleven months .

These leases consist of hangar space and office space.

The public warrants are all exercisable as of March 31, 2026.

There was no activity during the three months ended March 31, 2026.

13 – COMMITMENT AND CONTINGENCIES

facilities leases are for space at airports throughout the south with remaining terms ranging from one 1 to eleven months .

consist of office space.

The leases have lease terms of 12 months or less.

Accordingly, the Company has not recognized ROU assets or lease liabilities related to these lease agreements pursuant to the short-term lease election.

The Company has made a policy election to not separate lease and non-lease components for these facility leases.

Short-term lease costs related to these leases were zero and $ 21 thousand for the three months ended September 30, 2025, and 2024, respectively.

Short term lease costs related to these leases were $ 3 thousand and $ 57 thousand for the nine months ended September 30, 2025 and 2024, respectively.

In January 2024, the Company began leasing space for aircraft with a term of 5 years with fixed lease payments.

The Company recognized an operating lease liability in the amount of the net present value of the future minimum lease payments, and a ROU asset.

Customer Deposits and Deferred Revenue

Customer deposits and deferred revenue consisted of deposits from customers for the purchase of aircraft of $ 0.1 million and $ 10.7 million as of September 30, 2025 and December 31, 2024, respectively, as well as deferred revenue of $ 1.8 million and $ 696 thousand as of September 30, 2025 and December 31, 2024, respectively.

Legal Contingencies

From time to time, the Company receives claims of and becomes subject to consumer protection, employment, intellectual property and other commercial litigation related to the conduct and operation of the Company’s business.

In connection with such litigation, the Company may be subject to significant damages.

Accordingly, the Company has not recognized ROU assets or

lease liabilities related to these lease agreements pursuant to the short-term lease election.

The Company has made a policy election

to not separate lease and non-lease components for these facility leases.

Short term lease costs related to these leases were zero and

$ 3 thousand for the three months ended March 31, 2026 and 2025, respectively.

January 2024, the Company began leasing space for aircraft with a term of 5 years with fixed lease payments.

The Company recognized an

operating lease liability in the amount of the net present value of the future minimum lease payments, and a ROU asset.

rate used for this lease was 12 %, which was determined to be the incremental borrowing rate based on comparative secured financing in

the marketplace at the inception of the fixed lease payments.

Deposits and Deferred Revenue

deposits and deferred revenue consisted of deposits from customers for the purchase of aircraft of $ 0.1 million as of March 31, 2026

and December 31, 2025, respectively, as well as deferred revenue of $ 3.3 million and $ 2.7 million as of March 31, 2026 and December 31,

2025, respectively.

Contingencies

time to time, the Company receives claims of and becomes subject to consumer protection, employment, intellectual property and other

commercial litigation related to the conduct and operation of the Company’s business.

In connection with such litigation, the Company

may be subject to significant damages.

We may also be subject to equitable remedies and penalties.

Such litigation could be costly and time consuming and could divert or distract Company management and key personnel from its business operations.

The Company is currently the defendant in suits brought by vendors, customers and suits related to the transfer of the flight operations and leases to flyExclusive and does not currently believe that any of its outstanding litigation will have a material adverse effect on its financial statements or business.

However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s business, results of operations, financial position, or cash flows.

In the Tampa Division of the U.S.

Such litigation could be costly and

time consuming and could divert or distract Company management and key personnel from its business operations.

The Company is currently

the defendant in suits brought by vendors, customers and suits related to the transfer of the flight operations and leases to flyExclusive

and does not currently believe that any of its outstanding litigation will have a material adverse effect on its financial statements

However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some

or all of these matters could materially affect the Company’s business, results of operations, financial position, or cash flows.

the Tampa Division of the U.S.

District Court, in and for the Middle District of Florida on September 12, 2024, Joshua G.

Newsteder, LouAnn Gray, and those similarly situated (the “Plaintiffs”) filed suit against the Volato Group, Inc.

LouAnn Gray, and those similarly situated (the “Plaintiffs”) filed suit against the Volato Group, Inc.

and Volato, Inc.

(together, the “Defendants”) citing various allegations including that the termination of employment of 230 employees that occurred on August 30, 2024 violated requirements of the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C.

the “Defendants”) citing various allegations including that the termination of employment of 230 employees that occurred

on August 30, 2024 violated requirements of the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C.

Plaintiffs are seeking unpaid wages or salary, benefits and other relief deemed by the court as just and proper.

The Defendants deny all allegations.

Current range of loss can not be estimated.

NOTE 16 – SEGMENT INFORMATION

The Company has one reportable segment, private aviation services, managed on a consolidated basis by the CEO who is the CODM.

The private aviation services segment provides airplane sales and software-as-a-service subscriptions.

The Company derives revenue primarily in North America and manages the business activities on a consolidated basis.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance and decides how to allocate resources based on net income (loss) from continuing operations before income taxes that is also reported on the consolidated statements of operations.

The measure of segment assets is reported on the consolidated balance sheets as consolidated total assets.

The CODM allocates resources and evaluates performance based on net income (loss) from continuing operations before income taxes, which is the Company’s measure of segment profit or loss.

The CODM considers year-over-year variances for net income (loss) from continuing operations before taxes when making decisions about how to utilize the Company’s resources.

The components of segment profit or loss were as follows:

Three Months Ended Nine Months Ended

September 30, September 30,

2025 2024 2025 2024

Revenue $ 381 $ 38,466 $ 50,719 $ 38,695

The Defendants

deny all allegations.

Current range of loss cannot be estimated.

14 – SEGMENT INFORMATION

Company has one 1 reportable segment, private aviation services, managed on a consolidated basis by the CEO who is the CODM.

aviation services segment provides airplane sales and software-as-a-service subscriptions.

The Company derives revenue primarily in North

America and manages the business activities on a consolidated basis.

accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The CODM assesses

performance and decides how to allocate resources based on net income (loss) from continuing operations before income taxes that is also

reported on the consolidated statements of operations.

The measure of segment assets is reported on the consolidated balance sheets as

consolidated total assets.

CODM allocates resources and evaluates performance based on net income (loss) from continuing operations before income taxes, which is

the Company’s measure of segment profit or loss.

The CODM considers year-over-year variances for net income (loss) from continuing

operations before taxes when making decisions about how to utilize the Company’s resources.

components of segment profit or loss were as follows:

SCHEDULE OF SEGMENT REPORTING INFORMATION, BY SEGMENT

Three Months Ended

Cost of revenue

Selling, general and administrative (1)

2,822 4,262 7,687 12,390

(Gain) Loss on fair value adjustment of financial instruments 539 — 1,289 2,982

Loss on fair value adjustment of financial instruments

Interest income (expense), net

5,679 56 9,990 214

Other gain (loss) (2)

Net income (loss) from continuing operations before income taxes

(1) Includes amounts for depreciation and amortization expense.

(2) Other includes gains of $ 5.7 million and $ 10.0 million for settlements of deposits and other liabilities at a discount for the three and nine months ended September 30, 2025, respectively.

NOTE 17 – BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders (in thousands, except share and per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

(1) Includes amounts

for depreciation and amortization expense.

(2) Other includes

gains of $ 1.1 million for the sale of mission control as part of the flyExclusive 5 th amendment and $ 1.5 million for settlements

of deposits and other liabilities at a discount for the three months ended March 31, 2026 and 2025, respectively.

15 – BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders (in thousands,

except share and per share amounts):

SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED

Three Months Ended March 31,

Net income (loss) from continuing operations

stock based compensation expense, net of tax — — 43 —

(gain) loss on convertible note, net of tax 384 — 1,134 —

Net income (loss) attributable to common stockholders from continuing operations, dilutive $ 2,715 $ ( 1,056 ) $ 6,551 $ ( 14,249 )

stock based compensation expense, net of note, net of tax

loss on convertible note, net of tax

Net income (loss) attributable to common stockholders from continuing operations,

Net income (loss) from discontinued operations

1 unchanged sentence

options and restricted stock units

2024 convertible note and second tranche note on as-converted basis 939,422 — 730,631 —

2024 Convertible note on as-converted basis

Weighted-average shares outstanding, dilutive

The following securities were excluded due to their anti-dilution effect on net loss per share attributable to common stockholders recorded in each of the periods:

As of September 30,

following securities were excluded due to their anti-dilution effect on net income (loss) per share attributable to common stockholders

recorded in each of the periods:

SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

As of March 31,

Warrants to purchase common stock

1 unchanged sentence

Restricted stock units with performance and market conditions

Total 1,189,925 1,237,360

NOTE 18 – SUBSEQUENT EVENTS

On October 16, 2025, pursuant to the Securities Purchase Agreement the Company issued a fourth tranche convertible note in the principal amount of $ 2.2 million for a purchase price of $ 2.0 million, representing an original issue discount of ten percent ( 10 %), and matures on October 16, 2026.

On October 1, 2025, the Company entered into a Fourth Amendment (the “Amendment”) to Aircraft Management Services Agreement (as amended the “Agreement”) with flyExclusive to bring the Agreement in line with Company’s anticipated shift in operations, new business directives, and to better accommodate the proposed Merger with M2i.

The Amendment (i) modifies the term of the Agreement;

(ii) grants flyExclusive, subject to certain terms and conditions, the right to purchase certain aviation-related assets from the Company and assume certain obligations of the Company (the “flyExclusive Asset Option”);

(iii) grants the Company, subject to certain terms and conditions, the right to sell certain aviation-related assets to flyExclusive and assign certain obligations of the Company to flyExclusive (the “Company Asset Option,” and collectively with the flyExclusive Asset Option, the “Asset Options”);

(iv) adds the obligation for flyExclusive to pay the Company $ 100,000 upon execution of the Amendment as settlement of net payables owed by flyExclusive to the Company under the terms of the Agreement (the “Net Payables Obligation”);

and (v) modifies the material terms of flyExclusive’s right to cause the Company to merge with and into a wholly owned subsidiary of flyExclusive (the “flyExclusive Merger Option”), including that the flyExclusive Merger Option is to be only exercisable in the event that the Company and M2i terminate the Merger Agreement.

The purchase price for the Asset Options and the Net Payables Obligations may be paid by flyExclusive in cash or shares of flyExclusive Class A common stock, at the sole discretion of flyExclusive.

flyExclusive elected to pay the Net Payables Obligation by issuing the Company 20,576 shares of Class A common stock upon the receipt of all necessary approvals and conditions.

As consideration for the execution of the Amendment, flyExclusive agreed to pay $ 2,000,000 to the Company, in cash or shares of flyExclusive Class A common stock, in exchange for the right to receive either (i) the net proceeds that the Company receives from the sale of a certain G280 aircraft, which is expected to be delivered to the Company pursuant to an existing agreement (the “G280 Agreement”) with Gulfstream Aerospace Corporation (“Gulfstream”), or (ii) if, and only if, Gulfstream provides written consent, assignment of the G280 Agreement from the Company to flyExclusive subject to the execution of an asset purchase agreement relating solely to the transfer of the G280 Agreement.

flyExclusive has elected to pay all of the $ 2,000,000 in shares of its Class A common stock and will issue an aggregate of 411,523 shares of its Class A common stock to the Company upon the receipt of all necessary approvals and conditions.

16– SUBSEQUENT EVENTS

April 2026, the Company received $ 3.6 million in net proceeds from the sale of stock under our at-the-market program.

In April 2026, the remaining $ 231 thousand of principal

and interest on the Third Tranche note was converted into 1,154,915 shares of common stock.

April, 2026, the Company entered into a Share exchange Agreement (the “Share Exchange Agreement”), with three investors (together

the “Investors”).

The investors are shareholders of M2i whose common stock is publicly quoted on the OTCQB Venture Market

of OTC Markets Group, Inc.

under the symbol “MTWO”.

Pursuant to the Share Exchange Agreements, the Company agreed

to issue an aggregate of 5,407,499 shares of the Company’s Class A common stock to the Investors in exchange for an aggregate

of 48,044,912 shares of M2i common stock.

On May 7, 2026, the Company held a special meeting

of its shareholders to seek approval of the Merger and related matters and the Company’s shareholders approved all proposals presented

at the meeting, including the adoption of the Merger Agreement and approval of all transactions contemplated by the Merger Agreement.

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.

What changed 10-Q

Item 1. Financial Statements