What changed in this filing

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Item 1. Business

2024-03-26 compared with 2023-02-27 · 464 added, 248 removed, 1 unchanged (100% of the section changed)

We are a blank check company incorporated as a Delaware corporation on March 16, 2021 for the purpose of effecting a merger, capital stock

exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses (a “Business Combination”).

We have engaged in limited operations and have generated no operating revenue to date.

our business activities, the Company is a “shell company” as defined under the Securities Exchange Act of 1934 (the “Exchange Act”) because we have no substantive operations and nominal assets consisting almost entirely of cash.

On December 3, 2021, we consummated our initial public offering (“Initial Public Offering”) of 27,600,000 units, including 3,600,000 units as a result

of the underwriter’s full exercise of their over-allotment option (the “Units”).

Each Unit consists of one share of Class A common stock (a “Public Share”) and one-half of one redeemable warrant.

Each whole warrant (a “Public Warrant”) entitles the

holder thereof to purchase one share of Class A common stock at a price of $11.50 per share.

The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $276,000,000.

On March 31, 2021, the Sponsor received 5,750,000 of the Company’s Class B common stock (the “Founder Shares”) for a payment of $25,000 made on May 4,

On November 30, 2021, the Company effected a 1.2:1 stock split for each outstanding share of Class B common stock, resulting in the Sponsor holding an aggregate of 6,900,000 Founder Shares.

As of December 3, 2021, there was 6,900,000 shares

of Class B common stock issued and outstanding, of which 6,440,000 are held by our Sponsor and the remaining 460,000 are held by certain funds and accounts managed by BlackRock, Inc.

(collectively referred to herein as “BlackRock”).

The number of

Founder Shares outstanding was determined based on the Company’s expectation that the total size of the Initial Public Offering would be a maximum of 27,600,000 Units if the underwriter’s over-allotment option was exercised in full, and therefore,

that the Founder Shares would represent 20% of the outstanding shares after the Initial Public Offering.

Simultaneously with the closing of the Initial Public Offering, pursuant to purchase agreements entered into with the Sponsor and Blackrock, the

Company completed the private sale of an aggregate of 15,226,000 warrants (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds to the Company of $15,226,000 (the “Private

The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants, so long as they are held by the Sponsor, Blackrock, or their permitted transferees, (i) are not redeemable by the

Company, (ii) may not, and the Class A common stock issuable upon the exercise of the Private Placement Warrants may not, subject to certain limited exceptions, be transferred, assigned, or sold by the holders until 30 days after the completion

of the Company’s initial Business Combination, (iii) may be exercised by the holders on a cashless basis, and (iv) under certain circumstances, are entitled to registration rights.

No underwriting discounts or commissions were paid with respect

to the Private Placement.

If the Private Placement Warrants are held by holders other than the original purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on

the same basis as the Public Warrants included in the Units sold in the Initial Public Offering.

If the Company does not consummate its initial Business Combination by June 3, 2023, or by December 3, 2023 if we decide to extend the term, the

Private Placement Warrants will expire worthless.

The issuance of the Private Placement Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

Upon the closing of the Initial Public Offering and the Private Placement, $281,520,000 was placed in a trust account with Continental Stock Transfer

& Trust Company acting as trustee (the “Trust Account”).

Except for the withdrawal of interest to pay taxes, if any, and to fund our working capital requirements (subject to an annual limit of $100,000), our amended and restated certificate

of incorporation (the “Charter”) provides that none of the funds held in trust will be released from the Trust Account until the earlier of (i) the completion of our initial Business Combination;

(ii) the redemption of any Public Shares related

to certain amendments to our Charter, or (iii) the redemption of 100% of the Public Shares if we are unable to complete an initial Business Combination by June 3, 2023, or by December 3, 2023 if we decide to extend the term.

With respect to

amendments to our Charter, holders of Public Shares may be entitled to redeem their Public Shares (i) in connection with a stockholder vote to amend the Charter to modify the substance or timing of our obligation to redeem 100% of the Public

Shares if we do not complete an initial Business Combination by December 3, 2023 or (ii) with respect to any other material provisions relating to stockholders’ rights or pre-initial Business Combination activity.

The proceeds held in the Trust

Account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less or in money

market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.

government treasury obligations.

After the payment of underwriting discounts and commissions and approximately $443,739 in Public Offering costs, approximately $3,742,261 of the net

proceeds of the Initial Public Offering and Private Placement was not deposited into the Trust Account and was retained by us for working capital purposes.

The net proceeds deposited into the Trust Account remain on deposit in the Trust Account

earning interest.

As of December 31, 2022, there was $281,521,183 in investments and cash held in the Trust Account and $2,579,658 of cash held outside the Trust Account available for working capital purposes.

As of December 31, 2022, no funds

had been withdrawn from the Trust Account to pay the Company’s income taxes.

Initial Business Combination

We are not presently engaged any operations intended to generate operating revenue and will not generate operating revenue for an indefinite period

We intend to effectuate our initial Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our equity or debt, or a combination of these as the consideration to be

paid in our initial Business Combination.

We may seek to complete our initial Business Combination with a company or business that may be in its early stages of development or growth, which would subject us to the numerous risks inherent in such

a company or business.

If our initial Business Combination is paid for using equity or debt, or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our initial Business Combination or used for redemptions of our shares of Class A common stock, we may apply the

balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of the post-Business Combination company, the payment of principal or interest due on indebtedness

incurred in completing our initial Business Combination, to fund the purchase of other companies, or for working capital.

Sources of Target Businesses

We anticipate that target business candidates will be brought to our attention from unaffiliated sources, including investment market participants,

private equity groups, investment banking firms, consultants, accounting firms and large business enterprises.

Target businesses may be brought to our attention by unaffiliated sources as a result of being solicited by us through calls or

These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since some of these sources will be aware of the Company and know what types of businesses we are targeting.

officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as

well as attending trade shows or conventions.

In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers and

We may also engage the services of professional firms or other individuals that specialize in business acquisitions on a formal basis, in which

event we may pay a finder’s fee, consulting fee, or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction.

We will engage a finder only to the extent our management determines that the use of a

finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue.

Payment of finder’s

fees is customarily tied to completion of a transaction, in which case the fee will be paid out of the funds held in the Trust Account, if there are sufficient funds remaining in the Trust Account after redemptions.

If there are not sufficient

funds, the finder’s fee will be paid out of the operating capital of the combined company.

In no event, however, will our Sponsor or any of our existing officers or directors, or their respective affiliates be paid by us any finder’s fee or

consulting fee prior to, or for any services they render in order to effectuate, the completion of our initial Business Combination (regardless of the type of transaction).

We have agreed to reimburse our Sponsor for any out-of-pocket expenses

related to identifying, investigating, and completing an initial Business Combination.

We have also agreed to pay a salary to certain officers who assist in our day to day operations and have entered into a consulting agreement with one of our

directors to manage the vetting process for potential acquisition candidates.

Some of our officers and directors may also enter into employment or consulting agreements with the post-transaction company following our initial Business

The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an acquisition candidate.

We may also pursue an initial Business Combination with a company that is affiliated with our Sponsor, officers, or directors.

In the event we seek

to complete our initial Business Combination with a company that is affiliated with our Sponsor or any of our officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm

that is a member of FINRA or an independent accounting firm that the initial Business Combination is fair to the Company from a financial point of view.

Our stockholders may not be provided with a copy of the opinion nor will they be able to rely

on the opinion.

We are not required to obtain an opinion in any other context.

Evaluation of a Target Business and Structuring of Our Initial Business Combination

In evaluating a prospective target business, we expect to conduct an extensive due diligence review which may encompass, as applicable and among other

things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, and a review of financial and other information about the target and its industry.

We will also utilize our

management team’s operational and capital planning experience.

If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the Business Combination transaction.

The time required to select and evaluate a target business and to structure and complete our initial Business Combination, and the costs associated

with this process, are not currently ascertainable with any degree of certainty.

Any costs incurred with respect to the identification and evaluation of, and negotiation with, a prospective target business with which our initial Business

Combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another Business Combination.

If our initial proposed Business Combination is not completed, we may continue to try to complete a Business Combination with a different target until

June 3, 2023 (or up to December 3, 2023, if applicable).

Structure of an Initial Business Combination

In accordance with the rules of the NYSE, our initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding taxes payable on the income earned on the Trust Account) at the time

of our signing a definitive agreement in connection with our initial Business Combination.

We refer to this as the “80% fair market value test.” If our board of directors is not able to independently determine the fair market value of the target

business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions.

Our stockholders may not be provided with a copy of the opinion nor will they be

able to rely on such an opinion.

Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective businesses, although we will not be permitted to effectuate our initial

Business Combination with another blank check company or a similar company with nominal operations.

We anticipate structuring our initial Business Combination so that the post-transaction company in which our public stockholders will own shares will

own or acquire 100% of the issued and outstanding equity interests or assets of the target business or businesses.

We may, however, structure our initial Business Combination in such a way that the post-transaction company owns or acquires less

than 100% of equity interests or assets of the target business in order to meet certain objectives of the prior owners of the target business, the target management team or stockholders, or for other reasons.

We only intend to complete a Business

Combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target business or otherwise acquires a controlling interest in the target business sufficient for it not to be

required to register as an investment company under the Investment Company Act.

Even if the post-transaction company owns or acquires 50% or more of the voting securities of a target, our stockholders prior to our initial Business Combination may

collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target business and us in the initial Business Combination transaction.

For example, we could pursue a transaction in which we issue a

substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares, or other equity interests of a target, or issue a substantial number of new shares to third parties in connection with financing our initial

Business Combination.

In this case, we would acquire a 100% controlling interest in the target.

However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial Business Combination

could own less than a majority of our issued and outstanding shares subsequent to our initial Business Combination.

If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the

post-transaction company, the portion of the business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test.

If the Business Combination involves more than one target business, the 80% fair

market value test will be based on the aggregate value of all target businesses and we will treat the target businesses together as the initial Business Combination for purposes of a tender offer or for seeking stockholder approval, as

Extension of Time to Complete an Initial Business Combination

We will have until June 3, 2023 to consummate an initial Business Combination.

However, if we anticipate that we may not be able to consummate our

initial Business Combination by June 3, 2023, we may extend the period to consummate a Business Combination two times by an additional three months each (until December 3, 2023 at the latest).

Pursuant to the terms of our amended and restated certificate of incorporation and the Trust Agreement entered into between us and Continental Stock

Transfer & Trust Company, in order to extend the time available for us to consummate our initial Business Combination, our Sponsor or its affiliates or designees, upon five days advance notice to us prior to the applicable deadline, must

deposit into the Trust Account $2,760,000 ($0.10 per Public Share) on or prior to the date of the applicable deadline for each of the available three month extensions.

A total deposit of $5,520,000 must be deposited to reach an aggregate Business

Combination period extending to December 3, 2023 and the deposit may be made in cash or in the form of a non-interest bearing, unsecured promissory notes.

The promissory notes may be converted into warrants to purchase our Class A common stock, at

a price of $1.00 per warrant at the option of the lender.

The warrants would be identical to the Private Placement Warrants.

Promissory notes issued to extend the applicable period that are not converted to warrants will be non-interest bearing and

payable upon the consummation of our initial Business Combination.

If we complete our initial Business Combination, we would repay the loaned amounts out of the proceeds of the Trust Account released to us if there are sufficient funds in the Trust

Account after redemptions to repay the loans.

If we do not complete a Business Combination or if there are not sufficient remaining funds in the Trust Account after redemptions, we will not repay the loans.

Furthermore, the letter agreements with

our initial shareholders contain a provision pursuant to which our Sponsor has agreed to waive its right to be repaid for promissory notes issued to extend the applicable period out of the funds held in the Trust Account in the event that we do not

complete a Business Combination.

We will issue a press release announcing each extension at least three days prior to the deadline for each extension and we will issue a press release the day after the deadline announcing whether the funds have

been timely deposited.

Our sponsor and its affiliates or designees are not obligated to fund the Trust Account so that we may extend the time available for us to complete our initial Business Combination.

Our public stockholders will not be afforded an opportunity to vote on our extension of time to consummate an initial Business Combination from June

3, 2023 to December 3, 2023 at the latest as described above or redeem their shares in connection with these extensions.

This feature is different than the traditional special purpose acquisition company structure, in which any extension of the

Company’s period to complete a Business Combination requires a vote of the Company’s shareholders and shareholders have the right to redeem their public shares in connection with such a vote.

However, our public stockholders will be entitled to

vote and redeem their Public Shares in connection with a stockholder meeting held to approve an initial Business Combination or in a tender offer undertaken in connection with an initial Business Combination if we propose one during any

three-month extension period.

Redemption of Public Shares and Liquidation if Initial Business Combination Not Completed

Our initial stockholders, executive officers, and directors have agreed, and our amended and restated certificate of incorporation provides, that we

will have only until June 3, 2023 (or up to December 3, 2023, if applicable) to complete our initial Business Combination.

If we have not completed our initial Business Combination by June 3, 2023 (or at the latest by December 3, 2023, if

applicable), we will:

(i) cease all operations except for the purpose of winding up;

(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to

the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, including franchise and income taxes (less up to $100,000 of interest to

pay dissolution expenses), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating

distributions, if any), subject to applicable law;

and (iii) as promptly as reasonably possible following the redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case

to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we

fail to complete our initial Business Combination.

Redemption Rights for Holders of Public Shares Upon Consummation of Our Initial Business Combination

We will provide the holders of our Public Shares with the opportunity to redeem all or a portion of their shares of Class A common stock upon the

completion of our initial Business Combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business

Combination, including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, if any, divided by the number of then-issued and outstanding public shares, subject to the limitations and on the

conditions described herein.

At the completion of our initial Business Combination, we will be required to purchase any Public Shares properly delivered for redemption and not withdrawn.

The amount in the Trust Account is initially anticipated to

be $10.20 per public share, and such amount will be increased by $0.10 per public share for any three-month extension of our time to consummate our initial Business Combination, as described herein.

The redemption rights will include the

requirement that a beneficial holder must identify itself to validly redeem its shares.

There will be no redemption rights upon the completion of our initial Business Combination with respect to our warrants.

Further, we will not proceed with

redeeming our Public Shares, even if a public stockholder has properly elected to redeem its shares, if a Business Combination does not close.

Our Sponsor and each member of our management team have entered into an agreement with us, pursuant to

which they have agreed to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of our initial Business Combination, and BlackRock has agreed to waive its redemption rights

with respect to any founder shares held by it.

Conduct of Redemptions Pursuant to Tender Offer Rules

If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our

amended and restated articles of incorporation:

(a) conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, which regulate issuer tender offers;

and (b) file tender offer documents with the U.S.

Securities and

Exchange Commission (the “SEC”) prior to completing our initial Business Combination which contain substantially the same financial and other information about the initial Business Combination and the redemption rights as is required under

Regulation 14A under the Exchange Act, which regulates the solicitation of proxies.

Submission of Our Initial Business Combination to a Stockholder Vote

If we seek stockholder approval of our initial Business Combination, we will distribute proxy materials and, in connection therewith, provide our

public stockholders with the redemption rights described herein upon completion of the initial Business Combination.

If we seek stockholder approval, we will complete our initial Business Combination only if a majority of the outstanding shares of common stock voted

are voted in favor of the Business Combination.

Our Sponsor, officers and directors, and Blackrock have agreed to vote their Founder Shares and our Sponsor, officers, and directors have agreed to vote any Public Shares purchased during or after the

Initial Public Offering in favor of our initial Business Combination.

Each holder of Public Shares may elect to redeem its Public Shares irrespective of whether it votes for or against the proposed transaction.

In addition, our Sponsor, officers,

and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of our initial Business

Limitation on Redemption Rights Upon Completion of Our Initial Business Combination If We Seek Stockholder

If we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business

Combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in

concert or as a “group” (as defined in Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to excess shares without our prior consent.

We believe this restriction will discourage stockholders from

accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed Business Combination as a means to force the Company or management to purchase their shares at

a significant premium to the then-current market price or on other undesirable terms.

Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in the Initial Public Offering could threaten to exercise its

redemption rights if such holder’s shares are not purchased by us, our sponsor or our management at a premium to the then-current market price or on other undesirable terms.

By limiting our stockholders’ ability to redeem no more than 15% of the

shares sold in the Initial Public Offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial Business Combination, particularly in connection with a Business

Combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.

However, we would not be restricting our stockholders’ ability to vote all of their shares (including excess shares) for or

against the Company’s initial Business Combination.

In identifying, evaluating, and selecting a target business for our initial Business Combination, we may encounter intense competition from other

entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies, and operating businesses seeking strategic acquisitions.

Many of these entities are

well established and have extensive experience identifying and effecting Business Combinations directly or through affiliates.

Moreover, many of these competitors possess greater financial, technical, human, and other resources than us.

to acquire larger target businesses will be limited by our available financial resources.

This inherent limitation gives others an advantage in pursuing the acquisition of a target business.

Furthermore, our obligation to pay cash in connection

with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial Business Combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed

favorably by certain target businesses.

Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial Business Combination.

We currently have three executive officers:

Backus, Jr., Steven P.

Mullins, and Michael W.

These individuals are not obligated to

devote any specific number of hours to our business but they intend to devote as much of their time as they deem necessary to our business until we have completed our initial Business Combination.

The amount of time they will devote in any given

time period will vary based on whether a target business has been selected for our initial Business Combination and the stage of the Business Combination process we are in.

We do not intend to have any full-time employees prior to the completion

of our initial Business Combination.

Our mission is to empower people to live their best lives while creating more time for the rest of their lives by providing convenient and high-quality travel services.

Through our focus on the development of proprietary technology and evolution of aircraft ownership and use models, combined with our commitment to an exceptional customer experience using the “Right Aircraft for the Mission,” we are able to achieve a more efficient private jet experience, without sacrificing luxury.

Volato Group, Inc.

(“Volato Group” “we” or “us”) is a private aviation company founded in January 2021.

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

The HondaJet is manufactured by Honda Aircraft Company (“Honda”).

We took delivery of three HondaJets in 2021.

In 2022, we continued to build our fleet of HondaJets.

In March 2022, we acquired Gulf Coast Aviation, Inc., owner of G C Aviation, Inc., a Texas entity and Part 135 air carrier certificate holder.

This acquisition added personnel and facilities to support managed aircraft, sales, maintenance, and other operational functions.

Also in March 2022, we placed orders for four Gulfstream G280s for delivery in 2024 and 2025.

In August of 2022, we launched the Volato Stretch jet card, a differentiated jet card product that provides flight credits for customer itinerary flexibility.

In December of 2022, we signed a letter of intent for a multi-year fleet purchase of HondaJets with Honda.

In January 2023, we launched our automated dynamic pricing tool for the general charter market.

In March of 2023, we introduced the Insider Program, a deposit program for our charter services featuring HondaJet pricing caps in certain geographical areas.

In May 2023, we executed a firm order with Honda for 23 HondaJets to be delivered from 2023 through 2025.

On December 1, 2023, Volato, Inc., a Georgia corporation (“Volato”), PROOF Acquisition Corp I, a Delaware corporation (“PACI”) and PACI Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of PACI (“Merger Sub”), consummated the previously announced Business Combination Agreement, dated August 1, 2023 (the “Business Combination Agreement”).

Pursuant to the terms of the Business Combination Agreement, a business combination between PACI and Volato was effected through the merger of Merger Sub with and into Volato, with Volato surviving the merger as a wholly-owned subsidiary of PACI (the “Business Combination,” and together with the other transactions contemplated by the Business Combination Agreement and the other agreements contemplated thereby, the “Transactions”).

In connection with the consummation of the Business Combination (the “Closing”), PACI changed its name to “Volato Group, Inc.”.

Our Core Values

We are creating a culture of service, not just limited to interactions with our customers.

Our senior leadership team has implemented a structured management training program based on the Scaling Up framework and informed by our core values.

Our culture focuses on five core values:

Improve yourself and those around you.

Embrace opportunities to teach and discover.

Lead with encouragement and praise.

Listen with intent.

Be engaged and curious while seeking to understand others.

Have positive interactions.

Strengthen relationships by being humble and approachable

Be transparent.

Foster an environment of trust and lasting relationships.

Contribute and commit.

Embrace the conflict of ideas.

Participate and then fully support the decision.

The Private Aviation Industry:

Our Opportunity

The private aviation industry is large, resilient and growing.

In 2022, private aviation was a $29.0 billion-dollar market globally, and was forecasted to grow to $38.0 billion in 2029 4 .

Private aviation has traditionally served high net worth individuals and corporate customers, flying on a combination of owned and chartered aircraft.

In the United States, the market for private aircraft sales and charter totaled $25.1 billion in 2021 5 .

However, aircraft sales and private charter services are distinct markets, and our programs are designed to address both.

We sell aircraft to participants in our aircraft ownership program, and those aircraft are leased back to our air carrier subsidiary for providing charter services to both owners and the general charter market.

In this way, we build our fleet, and owners enjoy charter access to that fleet, rather than just the owners’ individual aircraft.

These are standard features of a functional aircraft program.

Uniquely, our aircraft ownership program provides revenue share and guaranteed availability to owners, coupled with higher utilization and efficiency rates.

https://www.fortunebusinessinsights.com/industry-reports/business-jet-market-101585

https://www.statista.com/statistics/1171101/charter-market-size-united-states/

The following factors are driving growth across the private aviation industry:

• The number of high-net-worth potential customers is growing.

This growth has resulted in an increased demand for exclusive and personalized travel experiences.

According to the Global Wealth Report conducted by Credit Suisse, as of the end of 2021 there were 24.48 million U.S.

millionaires.

This number is expected to rise by 13% to 27.66 by 2026 6 .

According to Forbes, the number of U.S.

billionaires rose from 724 in 2021 7 to 735 in 2023 8 .

• The market of potential private flyers is under-penetrated.

According to the New York Times, referencing a study from McKinsey & Company, there are 100,000 regular private jet fliers in the United States, out of some 1.5 million people who could afford to charter a plane 9 .

The private jet market remains under-penetrated.

We believe factors like a superior owner and customer experience will add to the well-recognized benefits of increased productivity and convenience that private flying offers, in drawing new demand.

• Highly regulated industry creates barriers to entry.

The private aviation market is complex and highly regulated, presenting barriers to scaling, therefore reducing competition, and decreasing price sensitivity.

The industry is also subject to significant regulatory oversight by numerous federal agencies.

However, Volato’s business model fits well within this regulatory environment.

• Commercial airline service is declining.

North American passenger satisfaction with commercial aviation is in decline across all three segments—first/business, premium economy, and economy/basic economy—down more than 29 points from 2021 to 791 (on a 1,000-point scale) 10 11 .

Passengers are responding negatively to increases in cost, flight crew performance, passenger loads, delays, and communication.

• The COVID-19 pandemic increased exposure to private aviation.

This led to more people experimenting with private aviation, increasing engagement with the category.

This was fueled by a lack of access to commercial travel, increased passenger sensitivity to traveling with unknown passengers, mask mandates, and general delays.

We expect interest in private aviation to continue to grow, with changes in how people work and live in a post-COVID pandemic environment bolstering foundational demand.

• New business models are introducing more people to the benefits of flying private.

Semi-private carriers are introducing a new category of fliers to the benefits of private travel.

These carriers provide access to smaller airports, offer reduced travel time, avoid checkpoints, and enable a less stressful customer experience 12 .

• Static industry with little innovation presents opportunities.

A lack of innovation in the industry has contributed to low asset utilization, poor operational and commercial technology, high operational complexity, and antiquated commercial practices, all of which stifle efficiency and scalability.

This leads to a lack of downward pressure on prices.

Through Volato’s unique business model, Volato believes there are significant opportunities to take advantage of the growth in the market and its current lack of innovation, low customer satisfaction and underutilization.

Volato believes it has the understanding, knowledge, experience, and capability to effectively address these market opportunities.

We are committed to prioritizing the satisfaction of our customers in an efficient and sustainable manner.

We strive to achieve this by utilizing innovative business models and technology to deliver a service that maximizes fleet utilization and profitability and improves customer satisfaction.

Credit Suisse Global Wealth Report 2022, Page 40, Table 1 (https://www.credituisse.com/media/assets/corporate/docs/aboutus/ research/publications/global-wealth-report-2022-en.pdf)

Forbes’ 35th Annual World’s Billionaires List:

Facts And Figures 2021 (https://www.forbes.com/sites/kerryadolan/2021/04/06/forbes-35thnnual-worlds-billionaires-list-facts-and-f

Forbes Billionaires 2023:

The Richest People In The World dated August 9, 2023 (https://www.forbes.com/sites/chasewithorn/2023/04/04/ forbes-37th-annual-worlds-billionaires-list-facts-and-figures-2023)

www.nytimes.com/2021/10/01/your-money/private-jets-demand.html

https://www.jdpower.com/business/press-releases/2021-north-america-airline-satisfaction-study

https://www.jdpower.com/business/press-releases/2023-north-america-airline-satisfaction-study

https://www.forbes.com/sites/suzannerowankelleher/2022/08/01/amid-airport-chaos-semi-private-jet-travel-emerges-ashegoldilocks- option/?sh=5abb9e8a11c7

Our private aviation offerings are designed with the goal of delivering exceptional value to our customers.

We achieve this by employing a strategy with objective and measurable performance metrics.

One of our key strategies is the “Right Plane for Right Mission” approach.

We have developed a core fleet of HondaJets that covers what management believes is the majority of private aviation missions in the markets in which we serve.

These missions generally involve up to four passengers and distances of less than 1,000 nautical miles.

We believe the HondaJet provides a best-in-class cabin experience, while also maintaining competitive operating costs.

We also place great importance on developing strong, positive relationships with Honda.

The following are certain benefits of the HondaJet that we believe make it the ideal aircraft for our fleet:

• The HondaJet is a revolutionary aircraft that combines superior performance, comfort, and efficiency.

Its innovative design features include a unique over-the-wing engine mount, natural laminar flow wing, and advanced flight deck technology.

• The HondaJet’s compact size and superior performance make it ideal for business and personal travel, with a range of up to 1,400 nautical miles and a top speed of 422 knots.

Its spacious cabin comfortably seats up to six passengers and offers a range of amenities, including a fully enclosed lavatory and Wi-Fi connectivity.

• The HondaJet’s advanced safety features include an all-glass cockpit with state-of-the-art avionics, automatic stability augmentation system, and enhanced flight vision system, making it one of the safest and most advanced light jets on the market.

We believe in maintaining an alignment of economic interests with our aircraft owners.

Through our program’s unique revenue sharing feature, we empower aircraft owners to share in eligible revenue generated from charter flights on their aircraft while maintaining preferred-rate access for their own flights on our fleet.

This, together with our proprietary software, allows us the flexibility needed to maximize fleet utilization.

To further maximize fleet utilization, we have developed a suite of products that target underserved market segments.

This commercial approach to fleet utilization allows us to offer a more comprehensive range of services to our customers, while also increasing our profitability.

Our business model has three main components:

1) our unique aircraft sales and ownership program, 2) our aircraft management services, and 3) our revenue from charter flights which includes owner flights, deposit product flights, and wholesale/retail charter flights.

The aircraft ownership program is an asset-lite model whereby we sell each fleet aircraft to a limited liability company.

The LLC, owned by third-party owners, leases the aircraft back to us for management and charter operation on behalf of the LLC under 14 C.F.R.

Each program participant separately contracts with us for charter on our HondaJet fleet on preferred terms, generally including a set monthly management fee and preferred charter rates.

For our second business model component, we provide aircraft management services to existing aircraft owners and help them monetize their aircraft through third-party charter activities.

Finally, our commercial services generate demand

for both the aircraft ownership program fleet and managed aircraft fleet through the operation of retail deposit programs and retail charter as well as wholesale charter through brokers.

Volato Aircraft Ownership Program – An Innovative Approach to Shared Aircraft Ownership

Traditional fractional private aviation programs have typically been operated under 14 C.F.R.

Subpart 91K, where fractional owners receive a block of entitled hours relative to the size of their fractional interest in the aircraft.

standard assumes 800 occupied flight hours is equal to a full interest, meaning a 1/8th share would be recommended for an owner looking at 100 hours of annual usage.

We believe there are several disadvantages with this traditional model that can negatively impact the fractional owner:

• Does not provide the primary benefits of full aircraft ownership.

Key benefits of owning an aircraft are the same basic “bundle of rights” that come along with ownership of any property, including the rights of possession, control, and enjoyment.

In a traditional fractional model, the owner must sacrifice both control over how much it flies as well as enjoyment of revenue generated from the asset.

• Hard for customers to forecast flight usage needs across multi-year programs.

Entitled hour programs require fractional owners to commit to an annual usage level for the length of the program.

It is challenging for owners to forecast this accurately resulting in either owners overflying and requiring additional hours that may not be available or only available at substantially increased prices, or under flying and the program being more expensive than originally forecast.

• Depreciation is only applicable for a percentage of flights deemed business use.

Many traditional fractional program owners who use their program for a mix of business and leisure travel are often disappointed to learn they may only be eligible for bonus depreciation on the percentage of their total usage that is deemed business use, and the leisure portion is not eligible.

Additionally, if an aircraft owner’s use is primarily personal, no depreciation is available.

• Lack of transparency into aircraft flight operations.

In the traditional program, fractional owners are often not provided detail into their aircraft’s flight operations, and it is generally not transparent how the aircraft is used or monetized outside of the fractional owner’s usage or if any of the owners benefit from that associated revenue generation.

• Fractional Owners traditionally accept operational control of their flights and the liability and risk associated with operational control.

Traditional fractional ownership programs require their owners to execute an acknowledgment of operational control, where the fractional owner agrees to accept liability and risk associated with their flights operated under 14 C.F.R.

Our solution provides an innovative and more financially viable model.

Our program is a more versatile and operationally efficient version of aircraft ownership that provides key benefits of full aircraft ownership to the program participants.

The program was designed to be more financially efficient by focusing on maximizing aircraft flight utilization while better aligning the interests of aircraft owners and us.

The program participants are building our fleet, secured on a long-term basis at a lower cost of capital than leasing or acquiring aircraft, with lower risk, as we only pay revenue share based on usage rather than a flat monthly rate.

Our revenue share payments to the LLCs that own the aircraft may reduce the pressure fractional owners often feel to fly a certain number of hours in a contract year.

As a result, we may generate additional capacity on the fleet for non-owner flights.

• Fractional owners participate in aircraft revenue share.

Our program participants enjoy a revenue share from eligible Volato revenue flights.

The revenue share is a set contracted amount per eligible occupied revenue-generating flight hour and is calculated and remitted monthly to each aircraft holding SPE, which then distributes on a pro-rata basis to its members, the aircraft owners.

• Unlimited flight hours regardless of fractional size .

By decoupling ownership and usage, and removing the concept of entitled hours, our HondaJet fractional owners can fly unlimited hours under the terms of the owner’s individual contracts with our air carrier subsidiary.

A 1/16 th owner can fly as much or as little as they wish and is not limited by the size of their share.

• Favorable tax treatment for owners.

Due to the unique nature of our aircraft ownership structure, our owners may be eligible for depreciation of their aircraft asset through their respective Plane Co LLC interests.

• Our unique program benefits influence purchase decision.

Traditional programs with entitled flight hours require customers to factor in anticipated flight hours into their fractional program purchase decisions.

In contrast, we believe our owners are basing their purchase decisions based on anticipated flight usage and their personal financial situation.

Our owners may buy a larger share based on their individual tax profile and depreciation benefits, or the larger revenue share they wish to receive as owners of larger shares enjoy preferential hourly rates and receive a larger revenue share based on the percentage of the owned aircraft.

• Transparency into Flight Operations.

Our software innovations allow for more transparency into its flight operations by providing program participants detailed information on their aircraft’s commercial activities and maintenance status.

• Transfer of Operational Control and Management .

Under 14 C.F.R.

Part 135, we assume operational control of aircraft we operate by way of a lease, which transfers responsibility for aircraft management and liability arising from the operation of the aircraft by us.

In contrast, under Part 91K fractional programs, the owners retain operational control of the aircraft and have potential liability exposure related to the aircraft operations.

Our Current Fleet

Together with the benefits of HondaJets, we are focused on bringing efficiencies to the private aviation market, eliminating unnecessary and expensive unused capacity from private flights.

The traditional route to cost reduction in private aviation has been either single-pilot operations or deploying turboprop aircraft instead of jets.

These methods are logical;

single-pilot operations save on personnel costs, and turboprop aircraft are cheaper to operate.

However, both measures have inherent downsides.

Single-pilot operations have safety implications due to increased pilot workload, while turboprops are generally slower and noisier than jet aircraft.

Recognizing the gap in the market for an economically efficient but uncompromised private jet experience, we have not adopted these conventional cost-cutting measures.

Instead, we are focusing on building a fleet of jet aircraft that meets the needs of our customers and is properly gauged for the majority of private aviation flights in the markets we serve.

The above concepts were central when considering and selecting aircraft for our fleet and unique business model.

Our fleet is primarily composed of the HondaJet HA-420, a jet in the Very Light Jet market segment, that is best suited for flights of four or fewer passengers and under three hours or 1,000 nautical miles.

Compared to the Phenom 300, we believe the HondaJet offers multiple advantages:

• Superior Operating Efficiency.

The HondaJet’s design and performance profile means it is not just less expensive to operate but also matches the fuel economy of a turboprop, maintaining the speed and quietness of a jet without incurring extra fuel costs.

This efficient operation enables us to offer cost savings to customers while preserving the jet experience.

• Superior Cabin Experience.

The over-the-wing engine mount design of the HondaJet decreases cabin noise, thus enhancing passenger comfort.

Despite its smaller size, it provides a comfortable cabin and a larger luggage compartment compared to other jets in its category.

• No Compromise.

While the HondaJet HA-420 is rated for single-pilot operations, all of our HondaJet commercial passenger flights are operated with two pilots.

This staffing includes safety and service benefits for our customers, while offering a more cost-effective solution.

Aircraft Ownership Program Revenue Streams

Our Aircraft Ownership Program has 3 revenue streams that are long-term (5-year contract), recurring in nature and predictable, which together provide a high level of revenue visibility for the business.

• Aircraft Sales Revenue.

We sell aircraft to the LLCs, and the aircraft are subject to a 5-year leaseback to us.

We believe that if we deliver on our brand and product promise then we should see a substantial renewal rate by program participants when the lease expires.

• Monthly Management Fee.

Program participants under our traditional pricing structure pay a set monthly management fee, which is subject to an annual increase.

Holders of smaller sizes (i.e., 1/8th and 1/16th) pay a premium.

Program participants under our low-use pricing structure do not pay a monthly management fee but pay a premium for their usage.

This revenue is included in “aircraft management revenue” in our MD&A.

• Charter Flight Revenue.

Program participants may book flights on the HondaJet fleet at preferential hourly rates.

Repositioning fees are waived for owner flights departing within an estimated two-hour flight time from select our bases.

Fuel is separately charged to the owner at our blended cost.

The total flight charge is invoiced after the flight is completed and the revenue is included in “charter flight revenue” as in our MD&A.

Commercial Strategy – Optimizing Fleet Utilization

We are developing commercial capabilities in the light jet market segment with our HondaJet fleet through a multi-channel, segmented product and pricing approach.

Under our ownership program, owners have guaranteed availability to our aircraft on an unlimited basis.

When owners are not flying, we have an opportunity to sell capacity that would otherwise remain unused as charter flights (“Charter”), which

is a non-guaranteed availability offering.

At all times, we maintain operational control over our aircraft (i.e., we assign aircraft to and accept flights at our discretion), without requiring any aircraft owner approval.

This provides us with the ability to schedule flights efficiently.

We take advantage of this Charter opportunity with dynamic pricing offered through a variety of options available simultaneously to our flight deposit program and general retail and wholesale customers.

We use a proprietary pricing tool to adjust pricing for any given flight based on factors such as forecasted demand, available aircraft, and booking dates.

In contrast, it is typical in private aviation for pricing to be set at fixed hourly rates that do not vary.

Through inventory management and pricing practices, we can offer Charter customers access to our fleet, depending upon demand and other criteria we set.

While we do not guarantee availability for any Charter customer at any time, we also do not require any long-term commitment or block access to our fleet during peak demand periods.

Revenue Streams from Fleet Optimization

All of the revenue described below in revenue streams from fleet optimization is included in “aircraft usage revenue” in Volato Group’s MD&A.

Deposit Products

We have created a complementary set of products with differentiable attributes beyond price.

For the HondaJet floating fleet, our service network for all Charter services is presently focused on domestic operations with limited access to Mexico, Canada, and the Caribbean.

Pricing for flight services on all Charter quotes, though determined dynamically, is fixed at the time of quoting.

Volato Insider

We introduced a deposit-based program in March 2023 to reduce the inefficiencies of booking and paying on a trip-by-trip basis while rewarding larger deposit customers with capped rates for HondaJet flights in certain geographical zones.

Deposit customers pay the lower of the then-current general charter rate or the capped rate.

Larger deposits in the program receive capped pricing in larger geographical zones.

Insider deposit customers have preferred access for charter requests over general charter, and the program is fully refundable for any unused balances during the term of the agreement, but are not refundable after the term of the agreement, except any incentive credits customers may have received.

Volato Stretch Jet Card

Launched in 2022, the Volato Stretch jet card is designed for price-conscious customers with high schedule flexibility.

We may make changes to itineraries under this program and compensate customers for eligible changes with non-cash credits towards future flights.

Unused balances may be refunded during the term of the agreement, but are not refundable after the term of the agreement;

incentive credits are not refundable.

Charter currently comprises approximately 40% of our revenue flight hours.

However, our strategy is to build our deposit program customer base, and reduce general Charter.

General Charter helps us increase our fleet utilization by filling in capacity remaining after the aircraft ownership program or deposit program customer flights.

To improve our general Charter capabilities, we are working on proprietary software to improve our quoting, pricing, and scheduling processes.

These capabilities are designed to improve the customer booking experience and increase the speed of transactions.

Volato Aircraft Management Services

Volato Aircraft Management Services (the “Volato AMS”) is a full-service management and charter operator line of business within Volato Group.

Under Volato AMS, owner aircraft are managed by and leased to Volato Group for both owner flights and third-party charter flights under our FAA Air Carrier Certificate, or managed by us for the owner’s exclusive use.

The benefits to the wider organization of the Volato AMS division include having additional aircraft which can be used by us for occasional charter capacity and for last-minute relief flights when our charter fleet planes become unavailable for scheduled flights.

Some aircraft also provide additional capabilities such as larger cabins and range.

By increasing the total aircraft available to us for Charter, Volato AMS also helps unlock economies of scale to the benefit of Volato Group and its aircraft ownership program participants.

The Volato AMS managed fleet includes a range of different aircraft that were primarily inherited as part of the Gulf Coast Aviation acquisition in March 2022.

Going forward the key focus is airframes which are part of our core fleet, currently HondaJets.

Volato AMS currently manages six aircraft on the FAA Air Carrier Certificate and one airplane is managed solely for owner use and is not on the Certificate.

Revenue Streams for Volato AMS

The two sources of revenue are aircraft management fees and Charter revenue sharing.

Aircraft management fees which are included in managed aircraft revenue in our MD&A are paid by aircraft owners to Volato AMS and include all operating expenses for the aircraft:

maintenance, crew hiring and management, flight operations, dispatch, hangar, fuel, cleaning, insurance, and aircraft Charter marketing.

Volato AMS typically receives 15% of the revenue per Charter trip and revenue from these charter trips are included in “charter flight revenue” in our MD&A.

Software Strategy

Following a thorough examination of off-the-shelf flight management systems, we identified that none could fully meet our current and projected needs.

Consequently, in September 2022, we made the decision to develop a custom flight management and marketing platform to meet our specific requirements.

Our cloud-based software, Mission Control, is a modern, API-first solution for the management of our business.

Mission Control provides a wide range of features, including Avinode data integration and synchronization, an internal/external-facing Charter pricing tool, and a Broker Rewards program, a voluntary program through which we pay a commission to third-party individual Charter brokers for eligible flights purchased through the brokers.

Our software also offers an Empty Leg Marketing module, which provides daily deals to customers, increasing their opportunities to save on Charter flights.

Mission Control's reporting dashboards provide real-time insights into daily Charter sales, fleet performance, and select key performance indicators (“KPIs”).

The platform's crew and aircraft scheduling tools enable the management of aircraft ownership, monthly flight hours, and owner flight activity.

The fleet map feature provides an interactive display of our entire fleet, allowing us to track aircraft locations in real-time via an ADS-B data provider.

Our Aircraft Owner Database feature includes a customer relations management tool, meet and greet alerts, an auto-generated weekly email newsletter, and automated billing and invoicing functionality.

The platform's Customer Flight Reviews feature, which includes Net Promotor Score metrics, allows us to collect valuable feedback from customers and make informed business decisions.

Our software solution improves transparency, operational efficiency, scalability, and customer satisfaction.

Additionally, it enhances our financial performance, by streamlining our flight management processes and reducing manual workloads.

Real-time updates to KPI dashboards and alert notifications, delivered over multiple communication channels and through multiple visualizations enable swift decision-making and greater oversight across our operations.

Flight reviews are output to a Microsoft Teams channel that is open to the entire company.

Aggregate NPS scores displayed in our proprietary Volato MissionControl application.

One of our core aims is to improve customer satisfaction by enabling real-time interactions across our entire enterprise.

Our platform enables greater transparency and visibility for our customers with the opportunity to follow their journey and receive updates at every stage.

This enables us to reduce customer complaints, boost retention rates, and enhance our reputation in the market.

Enhancing transparency by sending an automated weekly email to aircraft ownership program participants about their asset’s performance over time.

Volato Mission Control Aircraft Dashboard

Additionally, our proprietary software solutions enhance marketing capabilities by exposing features of the platform to potential customers, including charter brokers and retail customers which we believe will increase charter sales and create greater brand exposure.

Our proprietary instant-pricing system and e-signature platform reduces overhead while providing customers with improved service.

Currently, our reservation/flight operation team enters flight reservations, schedules, invoices, and quotes into a third-party system.

This data is, in turn, imported into Volato Mission Control in near-real time.

Mission Control Flight Scheduling

With Mission Control, we have access to a sophisticated tool for managing our business, providing real-time access to essential data, streamlining operations, and enhancing the customer experience.

Our software is designed to drive our productivity, resulting in reduced costs, and increased operational efficiency and revenue.

Social Impact Initiatives

As a growing company, we have an opportunity to build an aviation company for tomorrow.

Our business model, fleet, people, and culture have all been influenced by our awareness of our social impact and place as a good corporate citizen in our community.

We prioritize environmental responsibility and operate a fleet of efficient aircraft.

Lower fuel burn and operating costs are key selection criterion in evaluating prospective airframes for our fleet.

Aircraft that match these criteria, in addition to being financially efficient, reduce the carbon footprint.

We believe that sustainability is a critical aspect of our business and offset 100% of the CO2 generated by our HondaJet core fleet’s flight operations (which excludes any HondaJets that are managed by us) through our participation in the 4AIR offset program by purchasing carbon offsets for all fuel used by the fleet;

however, we cannot provide assurance that such 4AIR offset program will achieve its stated goal.

Although we do not perform any independent monitoring, 4AIR’s carbon offset program is quantified and verified by several leading carbon offset registries which issue serial numbers to us for each retirement of the carbon offset.

Through this offset program, we are actively taking steps to reduce our impact on the environment.

We also strongly believe in creating a diverse, equitable, and inclusive workplace that values and celebrates all employees.

We recognize the importance of promoting diversity in the aviation industry, and as of 15 April 2023, we actively support organizations such as Women in Aviation, the Organization of Black Aerospace Professionals, National Gay Pilot Association, Latino Pilots Association, Professional Asian Pilots Association, and the U.S.

We invest in our employees and provide a range of competitive benefits.

We offer comprehensive healthcare including dental and vision, a matching 401k program, paid time off, life insurance, and short-term disability.

We invest in our team through training and mentorship.

Our commitment to sustainability and diversity is just one aspect of our overall mission to provide the best possible experience for our customers.

By prioritizing the needs of our employees, we are able to create a positive and welcoming environment that translates into an exceptional aviation experience for all our clients.

We are dedicated to setting high standards and providing our customers with a truly exceptional experience.

Flight Operations

Within our organization, we have a dedicated Flight Operations team that is responsible for the safety and efficiency of our aviation operations.

This team is comprised of various sub-teams, including our Safety team, Operations Control Center (OCC), Experience Concierge (EC), maintenance team, aircraft management team, and training team.

Our safety team is tasked with implementing and maintaining our safety standards in all aspects of our operations.

They continuously monitor and evaluate our safety protocols, with an emphasis on applying industry best practices and regulatory compliance.

The Operations Control Center (OCC) team is responsible for overseeing and managing our daily operations.

They monitor flights, manage schedules, and make real-time decisions to support flight operations.

Our Experience Concierge (EC) team focuses on providing our aircraft ownership program, jet card, and charter deposit program customers with a first-class travel experience.

They work closely with these customers to understand their needs and preferences, and EC’s goal is to deliver seamless and enjoyable travel experiences.

Volato’s hospitality-oriented Experience Concierge account management team is central to our focus on Customer Experience (CX).

This is the reason why our HondaJet fleet aircraft have the tail signifier of “CX”.

The maintenance team is responsible for maintaining the airworthiness of our aircraft.

They conduct regular inspections, repairs, and maintenance to keep our aircraft in condition and meeting required safety standards.

They also work with our maintenance program vendors to schedule third-party maintenance.

Our aircraft management team is responsible for overseeing the overall management and operations of our aircraft fleet.

They work closely with our maintenance team to keep our aircraft ready to operate on schedule.

Finally, our training team is responsible for training our pilots and other staff members.

They also continuously monitor and evaluate our training programs.

Our Flight Operations staff is located in numerous states in the U.S., including locations in all continental time zones.

While many of our employees work remote-first, we have concentrated groups of personnel in the Houston, Texas and

Saint Augustine, Florida areas.

Our pilots are not “home-based” like traditional airlines/fractional jet operators, allowing them to work from any U.S.

state and travel to their assigned aircraft at the start of their scheduled work rotation.

This approach provides significant advantages over legacy physical operations centers, as it allows us to operate more efficiently and effectively and increase recruiting opportunities, while also reducing our environmental footprint.

Air Carrier Operations

We provide our passenger air carrier services through G C Aviation, Inc.

d/b/a Volato, a wholly-owned subsidiary and Part 135 certificate entity.

G C Aviation is our exclusive Part 135 operator and provides flight services, aircraft management, private aircraft charter services, and maintenance support.

At Volato Group, we pride ourselves on our commitment to safety.

We believe that safety is not only a fundamental aspect of our organizational culture, but also a cornerstone of the aviation industry.

As such, we view compliance with the Federal Aviation Administration (FAA) regulations as merely the baseline for our safety commitment.

To further reinforce our dedication to safety, we have gone above and beyond the minimum FAA requirements by establishing higher safety standards across a range of critical areas such as pilot experience, certification, training, and safety programs.

We have implemented Safety Management Systems (SMS) for our air carrier subsidiary that surpasses the FAA regulatory requirements.

Our SMS is a valuable tool for identifying potential hazards, assessing and mitigating risks associated with those hazards, collecting safety data and, most importantly, acting on that data to improve operations.

The SMS is managed by our Director of Safety.

One of the key components of our SMS is the Flight Risk Assessment Tool (FRAT), which is used on every flight operated by Volato Group to quantify the flight’s level of risk.

Every flight has some level of risk, so the FRAT is important to help distinguish, in advance, between a lower-risk flight and a higher-risk flight.

Once identified, higher-risk flights can be assessed for potential mitigation.

Aside from our internal safety management efforts, we are also proud voluntary participants in audits from various third-party safety organizations, including ARGUS and IS-BAO.

These audits provide us with an opportunity to have external experts review and enhance the continuous improvement of our SMS.

We believe that our commitment to safety is the cornerstone of our organizational culture.

Through our Safety Management Systems and voluntary participation in third-party safety audits, we remain committed to all aspects of safety across our operation.

Volato’s Pilots

All of our commercial passenger flights are operated with two trained and qualified pilots.

Our pilot requirements exceed the Federal Aviation Administration's (“FAA”) requirements and training criteria outlined in the Federal Aviation Regulations.

Each of our pilots is required to hold an appropriate FAA-required FAA pilot certificate and FAA medical certificate, as well as the necessary type rating for the aircraft they will be flying.

In addition to meeting these essential requirements, our pilot selection process also includes a comprehensive screening process that considers a candidate's professional background, customer service skills, and safety record.

This process includes both technical and customer service interviews, allowing us to identify candidates who possess the necessary skills and traits to provide our customers with a superior travel experience.

Once selected, our pilots undergo mandatory advanced aircraft ground and flight training in a full-motion simulator, as well as recurrent training on the relevant aircraft.

Through this comprehensive training regimen, our pilots are prepared to handle a challenging situation that may arise during a flight.

Aircraft Maintenance and Repairs

As an aviation company, safety is our utmost priority.

We have established a maintenance program that covers all types of maintenance and repairs that occur on different schedules.

This includes line maintenance, which involves scheduled maintenance inspections, routine repairs, and unscheduled items as needed.

Additionally, we perform scheduled airframe maintenance inspections and engine overhauls at appropriate intervals for any given airframe or engine.

maintenance is scheduled to prioritize the least disruption and downtime, ending mission proximity to a service center, and compliance with maintenance program requirements.

We also conduct unscheduled and “airplane on ground” (“AOG”) repairs as necessary, and as soon as possible, to return the aircraft to service in a timely fashion.

We have two maintenance facilities, one located in St.

Augustine, FL and one in Houston, TX.

We use third-party maintenance providers to perform substantially all scheduled maintenance work.

We have contracts with airframe manufacturers to provide parts and maintenance labor for our aircraft at pre-negotiated pricing and rates.

Additionally, we have agreements with select airframe and engine manufacturers whereby they provide maintenance services for various aircraft on our certificate.

These services are primarily focused on scheduled airframe maintenance inspections, engine inspections, and engine overhauls, in exchange for an hourly rate per flight hour or engine cycle charge.

Furthermore, we have pricing agreements with various fuel providers across the United States, which provide us with pre-negotiated pricing for fuel, as well as handling and facility fees at each location.

We have entered into agreements with a well-known third-party supplier for factory-authorized pilot training, which includes fixed price training slots throughout the year for both initial and recurrent pilot training.

Government Regulation

Primary Domestic Regulators

The subsequent paragraphs provide a brief overview of the roles of some of the most notable domestic regulators relevant to our business operations.

It is important to note that this summary is not intended to be comprehensive, as it does not encompass every regulator or rule governed by these regulators.

The Department of Transportation (“DOT”) serves as the primary regulator of economic matters within the aviation industry.

Specifically, with respect to our business operations, DOT oversees our subsidiary that operates as an air taxi under Part 298 (14 C.F.R.

Part 298, referred to herein as “Part 298”).

This includes the economic authority to conduct business as a type of air carrier, as well as consumer protection and insurance requirements applicable to such business.

Furthermore, DOT regulates our advertising and service offering under Part 295 (14 C.F.R.

Part 295, referred to herein as “Part 295”).

As a statutorily-defined “ticket agent” and “air charter broker” under Part 295, we are subject to DOT jurisdiction in offering and selling our charter programs and in arranging flights on behalf of our customers.

In all aspects of our business operations that fall under DOT's purview, we are obligated to comply with its statutory and regulatory authorities to prevent and redress “unfair” or “deceptive” practices.

We are also subject to DOT's consumer protection regulations, which cover various areas, such as data reporting, recordkeeping, advertising, ticket sales, and ensuring equal access to air transportation for disabled passengers.

Additionally, DOT enforces U.S.

laws governing the citizenship of air carriers.

This includes requirements that air carriers be under the actual control of U.S.

citizens and satisfy certain other criteria, including having a U.S.

citizen as our president/chief executive officer and at least two-thirds of our Board, and other managing officers must be U.S.

citizens, and that at least seventy-five percent of our voting stock must be owned and controlled, directly and indirectly, by U.S.

The amount of non-voting stock that may be owned or controlled by non-U.S.

citizens is limited as well.

The Federal Aviation Administration (“FAA”) is the primary governing body responsible for overseeing safety matters in the aviation industry.

Its regulatory framework encompasses various facets of civil aviation, including the design and manufacture of aircraft and their components, inspection, maintenance, repair and registration of aircraft, as well as the training, licensing, and performance of duties by pilots, flight attendants, and maintenance technicians.

The FAA also regulates safety-sensitive personnel for prohibited drug use or alcohol consumption, and oversees the design, construction, and maintenance of runways and airport facilities.

Furthermore, the FAA is tasked with managing air traffic control systems and the complex air traffic at busy airport facilities.

It certifies and monitors air carriers, establishes Safety Management Systems, promotes voluntary data disclosure systems that aid in enhancing safety, and oversees and controls the operations of air carriers by their accountable managers, directors of operations, and directors of maintenance, among other key personnel.

The FAA's regulatory framework is comprised of several parts found in Title 14 of the U.S.

Code of Federal Regulations.

For instance, Part 91 contains the general rules for flight safety, while Part 135 contains additional rules that apply to commercial on-demand operations.

In the event of a security threat, environmental risk, or other emergency, the FAA holds the power to shut down segments of airspace or even the entire U.S.

airspace to civilian use, as demonstrated on September 11, 2001.

As an agency of the Department of Homeland Security (“DHS”), the U.S.

Transportation Security Administration (“TSA”) is the primary regulatory body responsible for security matters in the aviation industry.

The TSA's oversight extends to standard security programs in use by U.S.

airports and air carriers, which cover areas such as flight crew training, passenger identity and screening, security watchlists, and cooperation in threat assessments and responses.

Customs and Border Protection (“CBP”), also an agency of DHS, plays a crucial role as the primary regulator of customs, immigration, and public health matters affecting the aviation industry.

Whenever our air carrier operations involve international flight segments, we are required to provide CBP with advanced disclosure of passenger information, facilitate the inspection of baggage, including prohibited substances or invasive species of plants or animals, and ensure proper disposal of any foreign-originating refuse on the aircraft.

The Environmental Protection Agency (“EPA”) is the primary federal environmental regulator, responsible for promulgating new rules relating to greenhouse emissions from carbon fuels used in aircraft engines in January 2021.

These rules are expected to bring about changes in future aircraft engine designs and approvals, leading to a turnover in which engines may remain in use in the coming years.

However, this area of regulation remains subject to change based on domestic and international pressures to address the perceived needs of our global environment, making it difficult to predict how these developments might impact our business in the future.

The vast majority of airports where we operate are owned and operated by state and local government entities, which have the right to impose safety, security, and other regulations as long as they do not conflict with federal law.

Airport authorities also have extensive property rights, enabling them to impose conditions on leasing and using airport facilities.

The terms on which an airport authority might lease or allow use of its property may be less favorable than customary for real estate transactions outside of an airport environment.

These regulatory authorities possess the power to suspend or revoke our certifications or authorizations, impose monetary fines and other civil penalties, and refer cases for criminal prosecution, which could halt our business and flight operations.

These actions may occur with or without an opportunity for us to present our defense before action is taken by the regulator.

Even if our position is potentially reasonable, we may not prevail in an appeal because of the regulators' significant discretion and the deference given to their interpretation of the facts and law during the appeal process.

The National Transportation Safety Board (“NTSB”) is an independent agency that is responsible for oversight of aircraft accident investigations.

NTSB regulations that govern accident notification are contained in 14 CFR Part 830.

NTSB has the authority to issue subpoenas in conjunction with accident investigations.

NTSB may elect to delegate accident investigation duties to the FAA.

Privacy and Data Protection

Compliance with laws governing the collection, use, transfer, security, storage, destruction, and other processing of personally identifiable information and other data relating to individuals is important for our business.

As our technology platform is an integral part of our operations, adherence to federal, state, local, municipal, and foreign laws and regulations, as well as industry standards, is necessary to enhance the user experience of our mobile application and marketing site relevant to our business.

We receive, collect, store, process, transmit, share, and use personal information, and other customer data, including health information.

We also rely on third parties to manage certain aspects of these operations and to receive, collect, store, process, transmit, share, and use such personal information, including payment information.

The collection, storage, processing, sharing, use, retention, and security of this information are governed by various laws and regulations.

The California Consumer Privacy Act (“CCPA”) establishes a privacy framework for covered businesses regarding data privacy rights for California residents.

Compliance with the CCPA is necessary for businesses to provide certain disclosures to California residents, respond to their requests for disclosures regarding their personal information, and offer them the right to opt out of sales of personal information.

The CCPA also provides for severe statutory damages for noncompliance and private rights of action for certain breaches of personal information resulting from a covered business's

failure to implement reasonable security procedures and practices.

Furthermore, the California Privacy Rights Act, which took effect on January 1, 2023, expands California residents' rights under the CCPA.

Given that we collect personal information from California residents through the air transportation services we have offered in California in the past and direct marketing to California residents for those services, as well as our plans to offer future services in California, we believe that we are subject to compliance with California's privacy laws.

Our employees are central to our and our customers’ success.

As of December 31, 2023, we have 229 employees, including 116 pilots and no part-time employees.

In addition, we engage a number of contractors and consultants to supplement our workforce.

All full-time employees are located within the United States and fulfill a range of roles, including non-exempt and exempt positions in corporate functions, pilots, and maintenance personnel.

To date, Volato Group and our affiliates have not experienced any work stoppages.

Furthermore, none of our employees are currently represented by a labor organization or subject to collective bargaining agreements.

Our human capital objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.

The principal purposes of our incentive plans are to attract, retain and motivate selected employees and consultants through the granting of stock-based compensation awards.

We are a remote-first company, founded during the COVID-19 crisis.

Our physical operations are located primarily at three locations:

Augustine, Florida;

Houston, Texas;

and Atlanta, Georgia.

All our facilities are located on land that is leased from third parties.

We believe that these facilities meet our current and future anticipated needs.

In addition, primarily for aircraft ownership program participants’ flight pricing, we designate a few other physical locations as operational bases, which may or may not have personnel or facilities, but which our owners are not charged repositioning fees to fly from.

Due to operating a floating fleet, our core fleet of charter aircraft do not return to our facilities or a designated airport each night, but over-night throughout the country based on their flight schedule.

Our managed aircraft, which are operated primarily for the benefit of the aircraft owners, typically return to a single, “home” airport, but will occasionally overnight at other airports.

Intellectual Property

Safeguarding our proprietary technology and other intellectual property is important for our business.

We employ a combination of strategies, including trademarks, contractual commitments and security procedures to protect our intellectual property.

We require our employees and relevant consultants to sign confidentiality agreements and certain third parties to sign nondisclosure agreements.

We routinely evaluate our technology development initiatives and branding strategy to identify potential new intellectual property.

We have pending U.S.

and certain foreign trademark applications, including the “Volato” word mark and Dragonfly design mark.

Presently, we own the Internet domain “flyvolato.com.” The regulation of domain names in the United States is subject to change, and regulatory authorities may create additional top-level domains, appoint additional domain name registrars, or change the prerequisites for holding domain names.

As a result, we may not be able to acquire or maintain all domain names that incorporate the name “Volato” or are otherwise relevant to or descriptive of our business.

Although software can be protected by copyright law, we have chosen to rely primarily on trade secret law to protect our proprietary software and have chosen not to register any copyrights in these works.

In the United States, copyright law requires registration to bring a claim for infringement and to obtain certain types of remedies.

However, even if we decide to register a copyright in our software to bring an infringement action, the remedies and damages available to us for unauthorized use of our software may be limited.

It is important to note that intellectual property laws, contractual commitments, and security procedures provide only limited protection, and our intellectual property rights may be challenged, invalidated, circumvented, infringed upon, or misappropriated.

Furthermore, trade secrets, know-how, and other proprietary materials may be independently developed by our competitors or revealed to the public or our competitors, and may no longer provide protection for the related intellectual property.

Additionally, intellectual property laws vary from country to country, and we have not sought trademark registrations in every foreign jurisdiction in which we have or may operate.

As a result, we may be unable to protect certain aspects of our brands or other intellectual property in other jurisdictions.

AVAILABLE INFORMATION

We are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events ( e.g., changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business and bankruptcy) in a Current Report on Form 8-K.

The SEC maintains an Internet

website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.

The SEC’s Internet website is located at http://www.sec.gov .

In addition, the Company will

provide copies of these documents without charge upon request from us in writing at 11911 Freedom Drive, Suite 1080, Reston, VA 20190 or by telephone at (571) 310-4949.

Our Internet address is www.flyvolato.com.

At our Investor Relations website, www.ir.flyvolato.com, we make available free of charge a variety of information for investors.

Our goal is to maintain the Investor Relations website as a portal through which investors can easily find or navigate to pertinent information about us, including:

• Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file that material with or furnish it to the Securities and Exchange Commission (“SEC”) at www.sec.gov.

• Information on our business strategies, financial results, and metrics for investors.

• Announcements of investor conferences, speeches, and events at which our executives talk about our product, service, and competitive strategies.

Archives of these events are also available.

• Press releases on quarterly earnings, product and service announcements, legal developments, and international news.

• Corporate governance information including our governance guidelines, committee charters, codes of conduct and ethics, and other governance-related policies.

• Other news and announcements that we may post from time to time that investors might find useful or interesting.

• Opportunities to sign up for email alerts to have information pushed in real time.

In addition to our website, the public may read or copy any document we file with the SEC at the SEC’s website, http://www.sec.gov (File No.

The information found on our websites is not part of, or incorporated by reference into, this or any other report we file with, or furnish to, the SEC.

In addition to these channels, we use social media to communicate to the public.

It is possible that the information we post on social media could be deemed to be material to investors.

We encourage investors, the media, and others interested in Volato to review the information we post on the social media channels listed on our Investor Relations website.

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-K

Item 1. Business