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The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of Volato, in which event the market price of the Common Stock of Volato Group could decline, and you could lose part or all of your investment.
−Removed: Risks Related to Our Business and Industry
+Added: Risks Related to Our Limited Operating History, Business and Industry
We have a limited operating history and history of net losses, and may continue to experience net losses in the future.
You should consider our business and prospects in light of the risks, expenses, and difficulties encountered by companies in their early stage of development.
−Removed: We launched our business on January 7, 2021.
+Added: We launched our business through Volato, Inc.
+Added: on January 7, 2021.
Accordingly, we have limited operating history upon which to base an evaluation of our business and prospects.
−Removed: While we seek to differentiate our private aviation services by using a cost-effective fleet and offering different products to meet customers’ individual needs, including (i) our ownership program, (ii) our potential jet card customers’ ability to purchase a block of flight hours, and (iii) deposit program products, we may not be successful in attracting or retaining customers.
−Removed: Ours Jet Share customers’ ability to earn charter income on unused hours may not be realized by our customers to the extent anticipated, or at all.
−Removed: Even if these benefits are realized as anticipated, our competitors may offer directly competing services or other features that customers find more attractive.
−Removed: We have experienced significant net losses since our inception and, given our limited operating history and the significant operating and capital expenditures associated with our business plan, it may experience continuing net losses in the future and may never become profitable (as determined by U.S.
−Removed: Generally Accepted Accounting Principles or otherwise).
−Removed: If we achieve profitability, we cannot be certain that it will be able to sustain or increase profitability.
+Added: The Company’s current and proposed operations are subject to all business risks associated with newer enterprises.
+Added: These include likely fluctuations in operating results as the Company reacts to developments in its markets, difficulty in managing its growth and the entry of competitors into the market.
+Added: We have experienced significant net losses since our inception and, given our limited operating history, we may experience continuing net losses for the foreseeable future and may never become profitable (as determined by U.S.
+Added: Generally Accepted Accounting Principles (“GAAP”) or otherwise).
+Added: We may not accurately anticipate how quickly we might use our funds and whether such funds are sufficient to bring the business to profitability and pay our liabilities.
+Added: Even if we achieve profitability, we cannot be certain that we will be able to sustain or increase profitability.
To achieve and sustain profitability, we must accomplish numerous objectives, including broadening and stabilizing our sources of revenue and increasing the number of customers that utilize our service.
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We cannot assure you that we will be able to achieve these objectives.
−Removed: Significant reliance on HondaJet and Gulfstream aircraft and parts poses risks to our business and prospects.
−Removed: As part of our business strategy, we have historically flown HondaJet aircraft and are expanding to fly Gulfstream aircraft.
−Removed: If either Honda Aircraft Company or Gulfstream fails to adequately fulfill our obligations towards us or experiences interruptions or disruptions in production or provision of services due to, for example, bankruptcy, natural disasters, labor strikes, or disruption of their supply chain, we may experience a significant delay in the delivery of or fail to receive previously ordered aircraft and parts, which would adversely affect our revenue and results of operations and could jeopardize our ability to meet the demands of our customers.
−Removed: Although we could choose to operate aircraft of other manufacturers, such a change would involve substantial expense to us and could disrupt our business activities.
−Removed: Additionally, the issuance of FAA or manufacturer directives restricting or prohibiting the use of either HondaJet or Gulfstream aircraft would have a material adverse effect on our business, results of operations, and financial condition.
+Added: The Company may not be able to continue to operate its business if it is not successful in securing additional sources of capital and, as a result, may not be able to continue as a going concern.
+Added: The Company is dependent on funds from its operations, proceeds from its financing arrangements and additional fundraising in order to sustain its ongoing operations.
+Added: The Company has suffered recurring losses from operations and has a significant accumulated deficit.
+Added: As a result of these recurring losses from operations, negative cash flows from operating activities and the need for additional capital there is substantial doubt of the Company’s ability to continue as a going concern.
+Added: Therefore, our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt about the Company’s ability to continue as a going concern in its report on the Company’s audited financial statements for the year ended December 31, 2024.
+Added: The financial statements have been prepared in accordance with GAAP, which contemplate that the Company will continue to operate as a going concern.
+Added: The Company’s financial statements do not contain any adjustments that might result if it is unable to continue as a going concern.
+Added: There are no assurances that management will be able to raise capital on terms acceptable to the Company.
+Added: If the Company is unable to obtain sufficient amounts of additional capital, 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.
+Added: In such circumstances, the Company may have to significantly reduce its operations or delay, scale back or discontinue the development of one or more of its products, seek alternative financing arrangements, declare bankruptcy or terminate its operations entirely.
+Added: Significant reliance on Gulfstream aircraft and parts poses risks to our business and prospects.
+Added: As part of our business strategy, we have historically flown HondaJet aircraft, manufactured by Honda Aircraft Company (“Honda”).
+Added: The purchase agreement between the Company and Honda was terminated on September 10, 2024.
+Added: We expect to take delivery of and sell Gulfstream aircraft, manufactured by Gulfstream Aerospace, LP (“Gulfstream”).
+Added: If Gulfstream experiences interruptions or disruptions in production or provision of services due to, for example, bankruptcy, natural disasters, labor strikes, or disruption of their supply chain, we may experience a significant delay in the delivery of or fail to receive previously ordered aircraft and parts, which would adversely affect our revenue and results of operations and could jeopardize our ability to meet the demands of our customers.
+Added: If we cannot internally or externally finance our aircraft or generate sufficient funds to make payments to external financing sources, we may not succeed.
+Added: As is customary in the aviation industry, we are reliant on external financing for the acquisition of aircraft, and we are likely to need additional financing in the future in order to acquire aircraft.
+Added: If we are unable to generate sufficient revenue or other funding to make payments on these financing arrangements, the lender may default us under the financing arrangement, which would have a material adverse effect on our business and reputation.
+Added: Furthermore, if we do not have access to external financing for future aircraft, for whatever reason, including reasons relating to our business or prospects or the broader economy, we may not be in a position to grow and/or operate as a going concern.
We may not be able to successfully implement our growth strategies.
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We face numerous challenges in implementing our growth strategies, including our ability to execute on market, business, product/service and geographic expansions.
−Removed: For example, our continued growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in hiring, training, and managing an increasing number of pilots and other employees.
+Added: For example, our continued growth could increase the strain on our resources, and we could experience operating difficulties, including difficulties in hiring, training, and managing an increasing number of employees.
These difficulties may result in the erosion of our brand image, divert the attention of our management and key employees, and impact our financial and operational results.
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Our financial results and our ability to maintain or improve our competitive position will depend on our ability to effectively gauge the direction of our key marketplaces and successfully identify, develop, market, and sell new or improved products and services in these changing marketplaces.
−Removed: Our inability to successfully implement our growth strategies could have a
−Removed: material adverse effect on our business, financial condition, and results of operations and any assumptions underlying estimates of expected cost savings or expected revenues may be inaccurate.
−Removed: If we are not able to successfully enter into new markets and services and enhance our existing products and services, our business, financial condition, and results of operations could be adversely affected.
−Removed: Our growth will depend in part on our ability to successfully enter new markets and offer new services and products.
+Added: Our inability to successfully implement our growth strategies could have a material adverse effect on our business, financial condition, and results of operations and any assumptions underlying estimates of expected cost savings or expected revenues may be inaccurate.
+Added: Our growth also depends in part on our ability to successfully enter new markets and offer new services and products.
Significant changes to our existing geographic coverage or the introduction of new and unproven markets may require us to obtain and maintain applicable permits, authorizations, or other regulatory approvals.
Developing and launching new or expanded locations involves significant risks and uncertainties, including risks related to the reception of such locations by existing and potential future customers, increases in operational complexity, unanticipated delays or challenges in implementing such new locations or enhancements, increased strain on our operational and internal resources (including an impairment of our ability to accurately forecast customer demand), and negative publicity in the event such new or enhanced locations are perceived to be unsuccessful.
−Removed: We have scaled our business rapidly, and significant new initiatives may result in operational challenges affecting our business.
−Removed: In addition, developing and launching new or expanded locations may involve significant upfront investment, such as additional marketing and terminal build out, and such expenditures may not generate a return on investment.
+Added: Significant new initiatives may result in operational challenges affecting our business.
+Added: In addition, developing and launching new or expanded service offerings may involve significant upfront investment, such as additional marketing and such expenditures may not generate a return on investment.
Any of the foregoing risks and challenges could negatively impact our ability to attract and retain customers.
−Removed: If these new or expanded locations are unsuccessful or fail to attract a sufficient number of customers to be profitable, or we are unable to bring new or expanded locations to market efficiently, our business, financial condition, and results of operations could be adversely affected.
+Added: If these new or expanded service offerings are unsuccessful or fail to attract a sufficient number of customers to be profitable, our business, financial condition, and results of operations could be adversely affected.
We are exposed to the risk of a decrease in demand for private aviation services.
Our business is concentrated on private aviation services, which are vulnerable to changes in consumer preferences, discretionary spending, and other market changes impacting luxury goods and discretionary purchases.
−Removed: The occurrence of geopolitical events such as war, including the current conflicts in Israel and Ukraine and Israel, terrorism, civil unrest, political instability, environmental or climatic factors, natural disaster, pandemic or epidemic outbreak, public health crisis and general economic conditions may have a significant adverse effect on our business.
−Removed: The global economy has in the past, and will in the future, experience recessionary periods and periods of economic instability such as the business disruption and related financial impact resulting from the global COVID-19 health crisis.
+Added: In addition, demand for private aviation services may be significantly and adversely impacted by factors affecting air travel generally, such as adverse weather changes, the occurrence of geopolitical events such as war, such as the current conflicts in Ukraine, terrorism, civil unrest, political instability, market volatility, environmental or climatic factors, natural disaster, pandemic or epidemic outbreak, public health crisis and general economic conditions.
+Added: The global economy has in the past, and may in the future, experience recessionary periods and periods of economic instability such as the business disruption and related financial impact resulting from the global COVID-19 health crisis.
During such periods, our current and future users may choose not to make discretionary purchases or may reduce overall spending on discretionary purchases.
These changes could result in reduced consumer demand for air transportation, including our private aviation services, or could shift demand from our private aviation services to other methods of air or ground transportation for which we do not offer a competing service.
+Added: Any of these factors that cause the demand for private aviation services to decline may also result in delays that could reduce the attractiveness of private air charter travel versus other means of transportation, particularly for shorter distance travel.
+Added: Delays could frustrate passengers, affecting our reputation and potentially reducing demand for our services as a result of flight cancellations and increased costs.
+Added: We may also experience decreased demand, as well as a loss of reputation, in the event of an accident involving one of its aircraft or an aircraft booked through our platform or any actual or alleged misuse of its platform or aircraft by customers in violation of law.
+Added: Any of the foregoing circumstances or events which reduced the demand for private jet charters could negatively impact the Company’s ability to establish its business and achieve profitability.
If we are unable to generate demand or there is a future shift in consumer spending away from private aviation services, our business, financial condition, and results of operations could be adversely affected.
−Removed: The private aviation industry is subject to competition.
−Removed: Many of the markets in which we operate are competitive as a result of, among other things, the expansion of existing private aircraft operators, expanding private aircraft ownership, and alternatives such as luxury commercial airline service as well as commercial carriers.
−Removed: We compete against several private aviation operators with different business models, and local and regional private charter operators.
−Removed: Although our business model significantly differs from commercial air carriers, we also compete with commercial air carriers who have larger operations and service areas and fixed routes, as well as access to financial resources not available to us.
−Removed: Factors that affect competition in the private aviation industry include price, reliability, safety, regulations, professional reputation, aircraft availability, equipment and quality, consistency, and ease of service, willingness and ability to serve specific airports or regions, and investment requirements.
−Removed: There can be no assurance that our competitors will not be successful in capturing a share of our present or potential customer base.
−Removed: The materialization of any of these risks could adversely affect our business, financial condition, and results of operations.
We may require substantial additional funding to finance our operations, but adequate additional financing may not be available when we need it, on commercially acceptable terms, or at all.
Our operations are capital intensive, and we require sufficient liquidity levels for our operations and strategic growth plans.
−Removed: We have financed our operations and capital expenditures primarily through private financing rounds, and through financing of aircraft pre-delivery payment obligations.
−Removed: In the future, we could be required to raise capital through public or private financing or other arrangements.
+Added: We have financed our operations and capital expenditures primarily through private financing rounds credit agreements, convertible debt, and through financing of aircraft pre-delivery payment obligations.
+Added: In the future, we expect to need to raise additional capital through public or private financing or other arrangements.
This financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business.
−Removed: Numerous factors may affect our ability to obtain financing or access the capital markets in the future on terms attractive to us, including our liquidity, operating cash flows, and the timing of
−Removed: capital requirements, credit status and any credit ratings assigned to us, market conditions in the private aviation industry, U.S.
+Added: Numerous factors may affect our ability to obtain financing or access the capital markets in the future on terms attractive to us, including our liquidity, operating cash flows, and the timing of capital requirements, credit status and any credit ratings assigned to us, market conditions in the private aviation industry, U.S.
and global economic conditions, and conditions in the capital markets generally, and the availability of our assets as collateral for future financings.
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The loss of key personnel upon whom we depend on to operate our business or the inability to attract additional qualified personnel could adversely affect our business.
−Removed: We believe that the future success of Volato Group will depend in large part on our ability to retain or attract highly qualified management, and technical and other personnel, particularly pilots and mechanics.
−Removed: We compete against commercial and private aviation operators, including the major U.S.
−Removed: airlines for pilots, mechanics and other skilled labor and some of the airlines may offer wage and benefit packages which exceed ours.
−Removed: As we grow our fleet and/or more pilots approach retirement age, we may be affected by a pilot shortage.
+Added: We believe that our future success will depend in large part on our ability to retain or attract highly qualified management, and technical and other personnel.
We may not be successful in retaining key personnel or in attracting other highly qualified personnel.
Any inability to retain or attract significant numbers of qualified management and other personnel would have a material adverse effect on our business, results of operations, and financial condition.
−Removed: The supply of pilots to the aviation industry is limited and may negatively affect our operations and financial condition.
−Removed: Increases in our labor costs, which constitute a substantial portion of our total operating costs, may adversely affect our business, results of operations, and financial condition.
−Removed: Our pilots are subject to stringent pilot qualification, including minimum flight time hour requirements, and training standards (“FAA Qualification Standards”).
−Removed: The existence of these requirements effectively limits the supply of qualified pilot candidates and increases pilot salaries and related labor costs.
−Removed: Additionally, our pilots are subject to strict rest and duty rules to minimize pilot fatigue.
−Removed: This limits the number of types of operations that our pilots can fly.
−Removed: If our attrition rates are higher than our ability to hire and retain replacement pilots, our operations and financial results could be materially and adversely affected.
−Removed: A shortage of pilots would require us to further increase our labor costs, which would result in a material reduction in our results of operations.
−Removed: These requirements also impact pilot scheduling, work hours, and the number of pilots required to be employed for our operations.
−Removed: In addition, our operations and financial condition may be negatively impacted if we are unable to train pilots in a timely manner.
−Removed: Due to an industry-wide shortage of qualified pilots, driven by the flight hours requirements under the FAA Qualification Standards and attrition resulting from the hiring needs of other industry participants, pilot training timelines have significantly increased and stressed the availability of flight simulators, instructors, and related training equipment.
−Removed: As a result, the training of our pilots may not be accomplished in a cost-efficient manner or in a manner timely enough to support our operational needs.
−Removed: We may be subject to unionization, work stoppages, slowdowns or increased labor costs, and the unionization of our employees could result in increased labor costs.
−Removed: Our business is labor-intensive and while our employees are not currently represented by labor unions, we may, in the future, experience union organizing activities by our employees.
−Removed: These union organization activities could lead to work slowdowns or stoppages, which could result in loss of business.
−Removed: In addition, union activity could result in demands that may increase our operating expenses and adversely affect our business, financial condition, results of operations, and competitive position.
−Removed: Any of the different crafts or classes of our crewmembers could unionize at any time, which would require us to negotiate in good faith with the crewmember group’s certified representative concerning a collective bargaining agreement.
−Removed: In addition, we may be subject to disruptions by unions protesting the non-union status of our other crewmembers.
−Removed: Any of these events would be disruptive to our operations and could harm our business.
−Removed: We are exposed to operational disruptions due to maintenance.
−Removed: Our fleet requires regular maintenance work, which may cause operational disruption.
−Removed: Our inability to perform timely maintenance and repairs can result in our aircraft being underutilized, which could have an adverse impact on our business, financial condition, and results of operations.
−Removed: On occasion, airframe manufacturers or regulatory authorities require mandatory or recommended modifications to be made across a particular fleet which may mean having to ground a particular type of aircraft.
−Removed: This may cause operational disruption to and impose significant costs on us.
−Removed: delivery of components and parts could take a significant period of time, which could result in delays in our ability to maintain and repair our aircraft.
−Removed: Any delays may pose a risk to our business, financial condition, and results of operations.
−Removed: These risks include the potential need to fly our customers on other operators’ equipment at our expense, which can result in additional costs that may be unpredictable.
Federal, state, and local tax rules can adversely impact our results of operations and financial position.
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jurisdictions.
−Removed: Volato Group seeks to directly or indirectly pass-through such taxes to our customers.
+Added: The Company seeks to directly or indirectly pass-through such taxes to our customers.
In the event we are not able to pass-through any such taxes, our results of operations, financial condition, and cash flows could be adversely impacted.
−Removed: We may not realize the tax benefits from our aircraft ownership program.
−Removed: We offer a Part 135 aircraft ownership program in which owners, through an LLC treated as a partnership for U.S.
−Removed: federal income tax purposes, can receive a revenue share of income from charter flights made by the aircraft as well as deductions for depreciation, including bonus depreciation under Section 168(k) of the IRC.
−Removed: If the aircraft is “listed property” within the meaning of Section 280F of the IRC, the LLC must maintain records to establish that the aircraft is predominantly used in a qualified business use to be eligible for bonus depreciation.
−Removed: We and the LLCs believe our position that the aircraft is not listed property is reasonable.
−Removed: However, the Internal Revenue Service may disagree with this position.
−Removed: If so, the LLC owners will not be able to claim a deduction for bonus depreciation unless the LLC is able to provide adequate substantiation demonstrating that the aircraft is predominantly used in a qualified business use.
−Removed: In addition, the bonus depreciation deduction provided by Section 168(k) of the IRC for aircraft placed in service after September 27, 2017, and before December 31, 2022 (December 31, 2023, with respect to certain long production property, including certain transportation property) is equal to 100% of the aircraft’s adjusted basis.
−Removed: With respect to aircraft placed in service thereafter, the bonus depreciation deduction phases down 20% per year, thus reducing the tax benefits of participating in our aircraft ownership program.
−Removed: This could result in lower participation in our aircraft ownership programs.
−Removed: Further, Congress could enact legislation that would more quickly eliminate bonus depreciation and the associated tax benefits.
−Removed: Significant increases in fuel costs could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Fuel is essential to the operation of our aircraft and to our ability to carry out our transport services.
−Removed: Fuel costs are a key component of the pricing of our charter services.
−Removed: We pass on fuel costs to our customers either directly or indirectly, and so we do not maintain hedging arrangements for the price of fuel.
−Removed: However, increased fuel costs may affect the demand for our charter service.
−Removed: Increases in fuel costs, including as a result of the current conflict in Ukraine and the measures governments and private organizations worldwide have implemented in response thereto, may have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Some of our business may become dependent on third-party operators to provide flights for our customers.
−Removed: If third-party operators’ flights, which are required to serve a substantial portion of our business, are not available or do not perform
−Removed: adequately, our costs may increase and our business, financial condition, and results of operations could be adversely affected.
−Removed: While we operate a significant portion of the flights for our customers, we are subject to the risk of not being able to support the charter demand from our customers.
−Removed: We offer unlimited guaranteed charter hour booking, with certain conditions, to those customers who are “owners”, meaning those customers are members of entities that own and lease HondaJet fleet aircraft to us.
−Removed: We are subject to variable and potentially surging demand from owners under these agreements, which could require us to find third-party operators to perform an unknown percentage of these flights.
−Removed: We face the risk of paying high prices for third-party operator flights, as we do not have third-party operator contracts in place.
−Removed: We face the risk that we may not be able to find third-party operators to perform services as needed.
−Removed: Our potential inability to meet customer charter demand could have a material adverse effect on our business.
−Removed: To the extent that we cannot find a third-party operator to provide a flight at the same rate we were charging the owner, we may actually lose money on these third-party flights.
−Removed: For the year ended December 31, 2022, approximately 1.0% of our flights were fulfilled by third-party aircraft operators on our behalf.
−Removed: We face the risk that this percentage may increase at any time.
−Removed: In addition, where we do rely on third-party operators due to our reliance on third-parties to supplement our capabilities, we are subject to the risk of disruptions to their operations, which has in the past and may in the future result from many of the same risk factors disclosed herein, such as the impact of adverse economic conditions and the inability of third-parties to hire or retain skilled personnel, including pilots and mechanics.
−Removed: As the private aviation market grows, we expect competition for third-party aircraft operators to increase.
−Removed: Further, we expect that as competition in the private aviation market grows, the use of exclusive contractual arrangements with third-party aircraft operators, sometimes requiring volume guarantees and prepayments or deposits, may increase.
+Added: For example, several tax proposals have been set forth that would, if enacted, make significant changes to U.S.
+Added: Such prior proposals have included an increase in the U.S.
+Added: income tax rate applicable to corporations (such as the Company) from 21% to 28%.
+Added: Congress may consider, and could include some or all of these proposals in connection with tax reform that may be undertaken.
+Added: It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect.
+Added: The passage of any legislation as a result of these proposals and other similar changes in U.S.
+Added: federal income tax laws could adversely affect the Company’s business and future profitability.
+Added: The Company may seek to expand its business operations, including to jurisdictions in which tax laws may not be favorable, its obligations may change or fluctuate, become significantly more complex or become subject to greater risk of examination by taxing authorities, any of which could adversely affect the Company’s after-tax profitability and financial results.
+Added: In the event that the Company’s business expands domestically or internationally, its effective tax rates may fluctuate widely in the future.
+Added: Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under GAAP, changes in deferred tax assets and liabilities, or changes in tax laws.
+Added: Factors that could materially affect the Company’s future effective tax rates include, but are not limited to:
+Added: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards or practices, (c) changes in the composition of operating income by tax jurisdiction and (d) pre-tax operating results of the Company’s business.
+Added: Additionally, the Company may be subject to significant income, withholding, and other tax obligations in the United States and may become subject to taxation in numerous additional U.S.
+Added: state and local and non-U.S.
+Added: jurisdictions with respect to income, operations and subsidiaries related to those jurisdictions.
+Added: The Company’s after-tax profitability and financial results could be subject to volatility or be affected by numerous factors, including (a) the availability of tax deductions, credits, exemptions, refunds and other benefits to reduce tax liabilities, (b) changes in the valuation of deferred tax assets and liabilities, if any, (c) the expected timing and amount of the release of any tax valuation allowances, (d) the tax treatment of stock-based compensation, (e) changes in the relative amount of earnings subject to tax in the various jurisdictions, (f) the potential business expansion into, or otherwise becoming subject to tax in, additional jurisdictions, (g) changes to existing intercompany structure (and any costs related thereto) and business operations, (h) the extent of intercompany transactions and the extent to which taxing authorities in relevant jurisdictions respect those intercompany transactions, and (i) the ability to structure business operations in an efficient and competitive manner.
+Added: Outcomes from audits or examinations by taxing authorities could have an adverse effect on the Company’s after-tax profitability and financial condition.
+Added: Additionally, the Internal Revenue Service and several foreign tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles.
+Added: Tax authorities could disagree with the Company’s intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes.
+Added: If the Company does not prevail in any such disagreements, the Company’s profitability may be affected.
+Added: The Company’s after-tax profitability and financial results may also be adversely affected by changes in relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect.
+Added: The Company’s ability to utilize its net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations.
+Added: In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change net operating loss carryforwards (“NOLs”) to offset future taxable income.
+Added: The limitations apply if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period.
+Added: If the Company has experienced an ownership change at any time since its incorporation, the Company may be subject to limitations on its ability to utilize its existing NOLs and other tax attributes to offset taxable income or tax liability.
+Added: In addition, future changes in the Company’s stock ownership, which may be outside of the Company’s control, may trigger an ownership change.
+Added: Similar provisions of state tax law may also apply to limit the Company’s use of accumulated state tax attributes.
+Added: As a result, even if the Company earns net taxable income in the future, its ability to use its pre-change NOL carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to the Company.
+Added: Our business is dependent on third-party operators to provide flights for our customers.
+Added: If third-party operators’ flights, which are required to serve a substantial portion of our business, are not available or do not perform adequately, our costs may increase and our business, financial condition, and results of operations could be adversely affected.
+Added: We rely on flyExclusive as a third-party operator to provide flights for our Vaunt product.
+Added: As such, we are subject to the risk of disruptions to their operations, which has in the past and may in the future result from many of the same risk factors disclosed in this Annual Report, such as the impact of adverse economic conditions and the inability of third parties to hire or retain skilled personnel, including pilots and mechanics.
+Added: We expect that as competition in the private aviation market grows, the use of exclusive contractual arrangements with third-party aircraft operators, sometimes requiring volume guarantees and prepayments or deposits, may increase.
This may require us to purchase or lease additional aircraft that may not be available or require us to incur significant capital or operating expenditures.
−Removed: If we face problems with any of our third-party service providers, our operations could be adversely affected.
−Removed: Our reliance upon others to provide essential services on behalf of our operations may limit our ability to control the efficiency and timeliness of contract services.
−Removed: We have entered into agreements with Honda Aircraft Company and third-party contractors to provide various facilities and services required for our operations, including aircraft maintenance, ground facilities, and technology services, and expect to enter into additional similar agreements in the future.
−Removed: In particular, we rely on Honda Aircraft Company and third-party providers for the procurement of replacement parts or to provide component exchange or repair services for our aircraft fleet.
−Removed: Our agreements with Honda Aircraft Company and other service providers are subject to termination after notice.
−Removed: If our third-party service providers terminate their contracts with us, or do not provide timely or consistently high-quality service, we may not be able to replace them in a cost-efficient manner or in a manner timely enough to support our operational needs, which would have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Our insurance may become too difficult or expensive for us to obtain.
−Removed: Increases in insurance costs or reductions in insurance coverage may materially and adversely impact our results of operations and financial position.
−Removed: Hazards are inherent in the aviation industry and may result in the loss of life and property, potentially exposing us to substantial liability claims arising from the operation of aircraft.
−Removed: We carry insurance for aviation hull, aviation liability, premises, hangar keepers, war risk, general liability, workers’ compensation, and other insurance customary in the industry in which we operate.
−Removed: We do not currently maintain cyber insurance.
−Removed: There can be no assurance that the insurance we carry will be sufficient to cover potential claims or that present levels of coverage will be available in the future at reasonable costs.
−Removed: Further, we expect our insurance costs to increase as we add locations, increase our fleet and passenger volumes, and expand into new markets.
−Removed: We also anticipate that recent events, such as the conflict in Ukraine and related international sanctions, will lead to industry-wide increases in aviation insurance costs due to the impact of those recent events on the aviation industry.
−Removed: While insurance underwriters are required by various federal and state regulations to maintain minimum levels of reserves for known and expected claims, there can be no assurance that underwriters have established adequate reserves to fund existing and future claims.
−Removed: The number of accidents, as well as the number of insured losses within the aviation and aerospace industries, and the impact of general economic conditions on underwriters may result in increases in premiums above the rate of inflation.
−Removed: To the extent that our existing insurance carriers are unable or unwilling to provide us with sufficient insurance coverage, and if insurance coverage is not available from another source, our insurance costs may increase, and we may result in being in breach of regulatory requirements or contractual arrangements requiring that specific insurance be maintained, which will have a material adverse effect on our business, financial condition, and results of operations.
−Removed: If our efforts to continue to build our strong brand identity and achieve high member satisfaction and loyalty are not successful, we may not be able to attract or retain customers, and our operating results may be adversely affected.
+Added: If our efforts to continue to build our strong brand identity and achieve high customer satisfaction and loyalty are not successful, we may not be able to attract or retain customers, and our operating results may be adversely affected.
+Added: Maintaining a good reputation globally is important to our business.
We must continue to build and maintain a strong brand identity for our products and services, which have expanded over time.
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With respect to our planned expansion into additional markets, we will also need to establish our brand, and to the extent it is not successful, our business in new markets would be adversely impacted.
−Removed: Any failure to offer high-quality customer support may harm our relationships with our customers and could adversely affect our reputation, brand, business, financial condition, and results of operations.
Through our marketing, advertising, and communications with our customers, we set the tone for the brand as aspirational but also within reach.
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The ease and reliability of our services, including our ability to provide high-quality customer support, helps us attract and retain customers.
−Removed: Customers depend on our team to resolve any issues relating to our products and services, such as scheduling changes and other updates to trip details and assistance with certain billing matters.
Our ability to provide effective and timely support is largely dependent on our ability to attract and retain skilled employees who can support our customers and are sufficiently knowledgeable about our product and services.
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Any failure to provide efficient customer support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation, brand, business, financial condition, and results of operations.
−Removed: Our business is affected by factors beyond our control including:
−Removed: air traffic congestion at airports;
−Removed: airport slot restrictions;
−Removed: air traffic control inefficiencies;
−Removed: natural disasters;
−Removed: adverse weather conditions, such as hurricanes or blizzards;
−Removed: increased and changing security measures;
−Removed: changing regulatory and governmental requirements;
−Removed: new or changing travel-related taxes;
−Removed: or the outbreak of disease;
−Removed: any of which could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: Factors that cause flight delays frustrate passengers and increase operating costs and decrease revenues, which in turn could adversely affect profitability.
−Removed: In the United States, the federal government singularly controls all U.S.
−Removed: airspace, and aviation operators are completely dependent on the FAA to operate that airspace in a safe, efficient, and affordable manner.
−Removed: The future expansion of our business into international markets would result in a greater degree of interaction with the regulatory authorities of the foreign countries in which we may operate.
−Removed: The air traffic control system, which is operated by the FAA, faces challenges in managing the growing demand for U.S.
−Removed: and foreign air-traffic controllers often rely on outdated technologies that routinely overwhelm the system and compel aviation operators to fly inefficient, indirect routes resulting in delays and increased operational cost.
−Removed: In addition, there have been proposals before Congress that could potentially lead to the privatization of the United States’ air traffic control system, which could adversely affect our business.
−Removed: Further, implementation of the Next Generation Air Transport System by the FAA would result in changes to aircraft routings and flight paths that could lead to increased noise complaints and lawsuits, resulting in increased costs.
−Removed: Adverse weather conditions and natural disasters, such as hurricanes, winter snowstorms, or earthquakes, can cause flight cancellations or significant delays.
−Removed: Cancellations or delays due to adverse weather conditions or natural disasters, air traffic control problems or inefficiencies, breaches in security, or other factors may affect us to a greater degree than our competitors who may be able to recover more quickly from these events, and therefore could have a material adverse effect on our business, results of operations, and financial condition to a greater degree than other air carriers.
−Removed: Any general reduction in passenger traffic could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: Our business is primarily focused on certain targeted geographic markets, making us vulnerable to risks associated with having geographically concentrated operations.
−Removed: Our customer base is currently concentrated in the southeastern, southwestern, and southcentral regions of the United States.
−Removed: As a result, our business, financial condition, and results of operations are susceptible to regional economic downturns and other regional factors, including natural disasters, outbreaks and pandemics, economic, social, weather, growth constraints, and regulatory conditions or other circumstances in each of these metropolitan areas.
−Removed: A significant
−Removed: service interruption or disruption at a terminal where we have a significant flight volume could result in the cancellation or delay of a significant portion of our flights and, as a result, could have a severe impact on our business, results of operations, and financial condition.
−Removed: In addition, any changes to local laws or regulations within these key metropolitan areas that affect our ability to operate or increase our operating expenses in these markets would have an adverse effect on our business, financial condition, and operating results.
−Removed: The operation of aircraft is subject to various risks, and failure to maintain an acceptable safety record may have an adverse impact on our ability to obtain and retain customers.
−Removed: The operation of aircraft is subject to various risks, including catastrophic disasters, crashes, mechanical failures, and collisions, which may result in loss of life, personal injury, or damage to property and equipment.
−Removed: We may experience accidents in the future.
−Removed: These risks could endanger the safety of our customers, our personnel, third parties, equipment, cargo and other property (both Volato Group’s and that of third parties), as well as the environment.
−Removed: If any of these events were to occur, we could experience loss of revenue, termination of customer contracts, higher insurance rates, litigation, regulatory investigations and enforcement actions (including potential grounding of our fleet and suspension or revocation of our operating authorities), and damage to our reputation and customer relationships.
−Removed: In addition, to the extent an accident occurs with an aircraft we operate or charter, we could be held liable for resulting damages, which may involve claims from injured passengers and survivors of deceased passengers.
−Removed: There can be no assurance that the amount of our insurance coverage available in the event of these losses would be adequate to cover the losses, or that we would not be forced to bear substantial losses from such events, regardless of our insurance coverage.
−Removed: Moreover, any aircraft accident or incident, even if fully insured, could create a public perception that it is less safe or reliable than other private aircraft operators, which could cause our customers to lose confidence in it and switch to other private aircraft operators or other means of transportation.
−Removed: In addition, any aircraft accident or incident, whether involving us or other private aircraft operators, could also affect the public’s view of industry safety, which may reduce the amount of trust by our customers.
−Removed: We incur considerable costs to maintain the quality of (i) our safety program, (ii) our training programs, and (iii) our fleet of aircraft.
−Removed: We cannot guarantee that these costs will not increase.
−Removed: Likewise, we cannot guarantee that our efforts will provide an adequate level of safety or an acceptable safety record.
−Removed: If we are unable to maintain an acceptable safety record, we may not be able to retain existing customers or attract new customers, which could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Failure to comply with regulatory requirements related to the maintenance of our aircraft and associated operations may result in enforcement actions, including revocation or suspension of our operating authorities in the United States and potentially other countries.
−Removed: We could suffer losses and adverse publicity stemming from any accident involving aircraft models operated by third parties.
−Removed: Aircraft models that we operate have experienced accidents while operated by third parties.
−Removed: If there is an accident involving aircraft models operated by us or third-party operators, it is unlikely but possible that the FAA could obligate us to ground our aircraft until the cause of the accident is determined and rectified.
−Removed: In that event, we might lose revenues and we might lose customers.
−Removed: It is also possible that the FAA or other regulatory body in another country could ground the aircraft and restrict us from operating that make and model of aircraft within our jurisdiction.
−Removed: In addition, safety issues experienced by a particular model of aircraft could result in customers refusing to use that particular aircraft model or a regulatory body grounding that particular aircraft model.
−Removed: The value of the aircraft model might also be permanently reduced in the secondary market if the model were to be considered less desirable for future service.
−Removed: Accidents or safety issues related to aircraft models that we operate could have a material adverse effect on our business, financial condition, and results of operations.
+Added: Our reputation or brand image also could be adversely impacted by, among other things, any failure to maintain high ethical, social, and environmental sustainability practices for all of our operations and activities, our impact on the environment, public pressure from investors or policy groups to change our policies, such as movements to institute a “living wage,” customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, customer perceptions of our use of social media, or customer perceptions of statements made by us, our employees and executives, agents or other third parties.
+Added: We operate in a highly visible industry that has significant exposure to social media.
+Added: Negative publicity, including as a result of misconduct by our customers, vendors, or employees, can spread rapidly through social media.
+Added: Should we not respond in a timely and appropriate manner to address negative publicity, our brand and reputation may be significantly harmed.
+Added: Damage to our reputation or brand image or loss of customer confidence in our services could adversely affect our business and financial results as well as require additional resources to rebuild or repair our reputation.
A delay or failure to identify and devise, invest in, and implement certain important technology, business, and other initiatives could have a material impact on our business, financial condition and results of operations.
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A prolonged interruption in the availability or reduction in the availability or other functionality of our platform could adversely affect our business and reputation and could result in negative publicity, customer dissatisfaction, or the loss of customers.
−Removed: We will rely on third parties maintaining open marketplaces to distribute our mobile and web applications and we currently rely on third parties to provide the software we use in certain of our products and services, including the provision of our flight management system.
+Added: We rely on third parties maintaining open marketplaces to distribute our mobile and web applications and we rely on third parties to provide the software we use in certain of our products and services, including the provision of our flight management system.
If these third parties interfere with the distribution of our products or services, with our use of the software, or with the interoperability of our platform with the software, our business would be adversely affected.
−Removed: We contemplated our platform’s mobile applications will rely on third parties maintaining open marketplaces, including the Apple App Store and Google Play, which make applications available for download.
+Added: Our platform’s mobile applications rely on third parties maintaining open marketplaces, including the Apple App Store and Google Play, which make applications available for download.
We additionally rely on such third-party marketplaces for access to certain third-party applications that we use to provide our services.
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Moreover, some of our competitors or technology partners may take actions which disrupt the interoperability of our products or services with their own products or services, or exert strong business influence on our ability to, and the terms on which we may, operate our platform and provide our products and services to customers.
−Removed: In addition, if any of our third-party providers cease to provide access to the third-party software that we use, do not provide access to such software on terms that we believe to be attractive or reasonable, do not provide
−Removed: us with the most current version of such software, modify their products, standards or terms of use in a manner that degrades the functionality or performance of our platform or is otherwise unsatisfactory to us, or give preferential treatment to competitive products or services, we may be required to seek comparable software from other sources, which may be more expensive or inferior, or may not be available at all.
+Added: In addition, if any of our third-party providers cease to provide access to the third-party software that we use, do not provide access to such software on terms that we believe to be attractive or reasonable, do not provide us with the most current version of such software, modify their products, standards or terms of use in a manner that degrades the functionality or performance of our platform or is otherwise unsatisfactory to us, or give preferential treatment to competitive products or services, we may be required to seek comparable software from other sources, which may be more expensive or inferior, or may not be available at all.
Any of these events could adversely affect our business, financial condition, and results of operations.
If we are unable to adequately protect our intellectual property interests or are found to be infringing on the intellectual property interests of others, we may incur significant expense, and our business may be adversely affected.
−Removed: We believe that our intellectual property plays an important role in protecting our brand and the competitiveness of our business.
+Added: We believe that our intellectual property, such as our trademarks, domain names, website, mobile and web-based applications, software, copyrights, trade secrets, and inventions, among others, plays an important role in protecting our brand and the competitiveness of our business.
If we do not adequately protect our intellectual property, our brand and reputation may be adversely affected, and our ability to compete effectively may be impaired.
−Removed: Volato Group protects its intellectual property through a combination of trademark, copyright, contracts, and policies.
+Added: The Company protects its intellectual property through a combination of trademark, copyright, contracts, and policies.
However, the steps we take to protect our intellectual property may be inadequate, and unauthorized parties may attempt to copy or reverse engineer aspects of our intellectual property or obtain and use information that we regard as proprietary and, if successful, may potentially cause us to lose market share, harm our ability to compete, and result in reduced revenue.
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Any intellectual property claims asserted against us, whether or not having any merit, could be time-consuming and expensive to settle or litigate.
−Removed: If we are unsuccessful in defending a claim, we may be required to pay substantial damages or could be subject to an injunction or agree to a settlement that may prevent us from using our intellectual property or making the Common Stock of Volato Group products or services available to customers.
+Added: If we are unsuccessful in defending a claim, we may be required to pay substantial damages or could be subject to an injunction or agree to a settlement that may prevent us from using our intellectual property or making our Common Stock, products, or services available to customers.
Some intellectual property claims may require us to seek a license to continue our operations, and those licenses may not be available on commercially reasonable terms or may significantly increase our operating expenses.
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Any of these events could adversely affect our business, financial condition, or operations.
−Removed: Any damage to our reputation or brand image could adversely affect our business or financial results.
−Removed: Maintaining a good reputation globally is important to our business.
−Removed: Our reputation or brand image could be adversely impacted by, among other things, any failure to maintain high ethical, social, and environmental sustainability practices for all of our operations and activities, our impact on the environment, public pressure from investors or policy groups to change our policies, such as movements to institute a “living wage,” customer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, customer perceptions of our use of social media, or customer perceptions of statements made by us, our employees and executives, agents or other third parties.
−Removed: In addition, we operate in a highly visible industry that has significant exposure to social media.
−Removed: Negative publicity, including as a result of misconduct by our customers, vendors, or employees, can spread rapidly through social media.
−Removed: Should we not respond in a timely and appropriate manner to address negative publicity, our brand and reputation may be significantly harmed.
−Removed: Damage to our reputation or brand image or loss of customer confidence in our services could adversely affect our business and financial results as well as require additional resources to rebuild or repair our reputation.
As part of our growth strategy, we may engage in future acquisitions that could disrupt our business and have an adverse impact on our financial condition.
−Removed: We have, and intend to continue, exploring potential strategic acquisitions of assets and businesses, including partnerships or joint ventures with third parties.
+Added: We have, and intend to continue to explore potential strategic acquisitions of assets and businesses, including partnerships or joint ventures with third parties.
Our management has limited experience with acquiring and integrating acquired strategic assets and companies into our business, and there is no assurance that any future acquisitions will be successful.
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We may have potential write-offs of acquired assets or an impairment of any goodwill recorded as a result of acquisitions.
−Removed: Furthermore, the integration of any acquisition may divert management’s time and resources from our core business and disrupt our operations or may result in conflicts with our
+Added: Furthermore, the integration of any acquisition may divert management’s time and resources from our core business and disrupt our operations or may result in conflicts with our business.
Any acquisition, partnership, or joint venture may reduce our cash reserves, may negatively affect our earnings and financial performance, and, to the extent financed with the proceeds of debt, may increase our indebtedness, and, to the extent acquired or financed through equity issuance, dilute our current investors.
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• the tax effects of any acquisitions.
−Removed: We are subject to risks associated with climate change, including the potential increased impacts of severe weather events on our operations and infrastructure.
−Removed: The potential physical effects of climate change, such as increased frequency and severity of storms, floods, fires, fog, mist, freezing conditions, sea-level rise, and other climate-related events, could affect our operations, infrastructure, and financial results.
−Removed: Operational impacts, such as the delay or cancellation of flights, could result in loss of revenue.
−Removed: In addition, certain of our operating locations are susceptible to the impacts of storm-related flooding and sea-level rise, which could result in costs and loss of revenue.
−Removed: We could incur significant costs to improve the climate resiliency of our infrastructure and otherwise prepare for, respond to, and mitigate the physical effects of climate change.
−Removed: We are not able to accurately predict the materiality of any potential losses or costs associated with the physical effects of climate change.
−Removed: In addition, climate change-related regulatory activity and developments may adversely affect our business and financial results by requiring us to reduce our emissions, make capital investments to modernize certain aspects of our operations, purchase carbon offsets, or otherwise pay for our emissions.
−Removed: Such activity may also impact us indirectly by increasing our operating costs.
−Removed: Terrorist activities or warnings have dramatically impacted the aviation industry and will likely continue to do so.
−Removed: The terrorist attacks of September 11, 2001, and their aftermath have negatively impacted the aviation business in general.
−Removed: If additional terrorist attacks are launched against the aviation industry, there will be lasting consequences of the attacks, which may include loss of life, property damage, increased security and insurance costs, increased concerns about future terrorist attacks, increased government regulation, and airport delays due to heightened security.
−Removed: We cannot provide any assurance that these events will not harm the aviation industry generally or our operations or financial condition in particular.
−Removed: Our operations in the private aviation sector may be subject to risks associated with protests targeting private aviation services.
−Removed: Our operations in the private aviation sector may be subject to risks associated with protests or vandalism targeting private aviation services.
−Removed: These protests or vandalism can lead to disruptions, damage, or loss of our aircraft, impacting our ability to conduct operations smoothly which may negatively impact our results of operations and financial condition.
−Removed: While, to date, our aircraft have not been affected by protests targeting private aviation, unforeseen circumstances could lead to our aircraft becoming involved in such events.
−Removed: Should our aircraft be affected by protests or related activities, it could result in operational disruptions, damage, or loss, and may adversely affect our reputation, hurt the market for our securities, and decrease demand for our aviation services.
+Added: We may never realize the full value of our intangible assets or our long-lived assets, causing us to record impairments that may materially adversely affect our financial conditions and results of operations.
+Added: In accordance with applicable accounting standards, we are required to test our indefinite-lived intangible assets for impairment on an annual basis, or more frequently where there is an indication of impairment.
+Added: In addition, we are required to test certain of our other assets for impairment where there is any indication that an asset may be impaired, such as our market capitalization being less than the book value of our equity.
+Added: We may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, unfavorable trends in historical or forecasted results of operations and cash flows, and an uncertain economic environment, as well as other uncertainties.
+Added: We can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period.
+Added: The value of our aircraft could also be impacted in future periods by changes in supply and demand for these aircraft.
+Added: Such changes in supply and demand for certain aircraft types could result from the grounding of aircraft.
+Added: An impairment loss could have a material adverse effect on our financial condition and results of operations.
Risks Related to Legal and Regulatory Matters
−Removed: We are subject to significant governmental regulation.
−Removed: All interstate air carriers, including us, are subject to regulation by the Department of Transportation (the “DOT”), the FAA, and other governmental agencies, including the Department of Homeland Security, the Transportation Security Administration (“TSA”), and Customs and Border Protection.
−Removed: We cannot predict whether we will be able to comply with all present and future laws, rules, regulations, and certification requirements or that the cost of continued compliance will not have a material adverse effect on our operations.
−Removed: We incur substantial costs in complying with the laws, rules, and regulations to which we are subject.
−Removed: A decision by the FAA to ground, or require time-consuming inspections of or maintenance on, all or any of our aircraft for any reason may have a material adverse effect on our operations.
−Removed: Changes to TSA rules that may result in additional screening or required TSA screening for private flights may have a material adverse change on our operations.
−Removed: In addition, we are also subject to restrictions imposed by federal law on foreign ownership of U.S.
−Removed: air carriers and oversight by the DOT in maintaining our status as a U.S.
−Removed: Citizen, as that term is defined by the DOT.
−Removed: The restrictions imposed by federal law currently require that no more than 25% of the Common Stock of Volato Group be voted, directly or indirectly, by persons who are not U.S.
−Removed: Citizens, and that our chief executive officer, president, at least two-thirds of our officers, and at least two-thirds of the members of our Board be U.S.
−Removed: Additionally, we must be under the actual control of U.S.
−Removed: A failure to comply with or changes to these restrictions may materially adversely affect our business.
−Removed: These restrictions may limit our ability to accept investment from one or more non-U.S.
Because our software could be used to collect and store personal information, privacy concerns in the territories in which we operate could result in additional costs and liabilities to us or inhibit sales of our software.
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As we expand our operations, compliance with privacy laws may increase our operating costs.
−Removed: We may become involved in litigation that may materially adversely affect us.
−Removed: From time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including but not limited to employment, commercial, product liability, class action, whistleblower, and other litigation and claims, and governmental and other regulatory investigations and proceedings.
−Removed: These matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability, and require us to change our business practices.
−Removed: Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we believe that we have meritorious claims or defenses.
−Removed: Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business, results of operations, and financial condition.
−Removed: We assess contingencies to determine the degree of probability and range of possible loss for potential accrual in our financial statements.
−Removed: We would accrue an estimated loss contingency in our financial statements if it were probable that a liability had been incurred and the amount of the loss could be reasonably estimated.
−Removed: Due to the unpredictable nature of
−Removed: litigation, assessing contingencies is highly subjective and requires judgments about future events.
−Removed: The amount of actual losses may differ from our current assessment.
−Removed: As a result of the costs and expenses of defending ourselves against lawsuits or claims, and risks and consequences of legal actions, regardless of merit, our results of operations and financial position could be adversely affected or cause variability in our results compared to expectations.
−Removed: We are subject to various environmental and noise laws and regulations, which could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: We are subject to increasingly stringent federal, state, local, and foreign laws, regulations, and ordinances relating to the protection of the environment and noise, including those relating to emissions to the air, discharges (including storm water discharges) to surface and subsurface waters, safe drinking water, and the use, management, disposal, and release of, and exposure to, hazardous substances, oils, and waste materials.
−Removed: We are or may be subject to new or proposed laws and regulations that may have a direct effect (or indirect effect through our third-party specialists or airport facilities at which we operate) on our operations.
−Removed: In addition, U.S.
−Removed: airport authorities are exploring ways to limit de-icing fluid discharges.
−Removed: Any changes to existing laws and regulations or the adoption of new laws and regulations could have an adverse impact on our business, results of operations, and financial condition.
−Removed: Similarly, we are subject to environmental laws and regulations that require us to investigate and remediate soil or groundwater to meet certain remediation standards.
−Removed: Under certain laws, generators of waste materials, and current and former owners or operators of facilities, can be subject to liability for investigation and remediation costs at locations that have been identified as requiring response actions.
−Removed: Liability under these laws may be strict, joint, and several, meaning that we could be liable for the costs of cleaning up environmental contamination regardless of fault or the amount of wastes directly attributable to us.
−Removed: We may incur substantial maintenance costs as part of our leased aircraft return obligations.
−Removed: Our aircraft lease agreements may contain provisions that require us to return aircraft airframes and engines to the lessor in a specified condition or pay an amount to the lessor based on the actual return condition of the equipment.
−Removed: These lease return costs are recorded in the period in which they are incurred.
−Removed: Our leased aircraft are maintained under maintenance contracts with relevant suppliers for the leased aircraft.
−Removed: Upon return of a leased aircraft, there is a risk that a maintenance issue will be identified that was not addressed under the applicable maintenance agreements.
−Removed: Any unexpected increase in maintenance return costs may negatively impact our financial position and results of operations.
−Removed: Environmental regulation and liabilities, including new or developing laws and regulations, or our initiatives in response to pressure from our stakeholders may increase our costs of operations and adversely affect us.
−Removed: In recent years, governments, customers, suppliers, employees, and other of our stakeholders have increasingly focused on climate change, carbon emissions, and energy use.
−Removed: Laws and regulations that curb the use of conventional energy or require the use of renewable fuels or renewable sources of energy, such as wind or solar power, could result in a reduction in demand for hydrocarbon-based fuels such as oil and natural gas.
−Removed: In addition, governments could pass laws, regulations, or taxes that increase the cost of such fuels, thereby decreasing demand for our services and also increasing the costs of our operations by our third-party aircraft operators.
−Removed: Other laws or pressure from our stakeholders may adversely affect our business and financial results by requiring, or otherwise causing, us to reduce our emissions, make capital investments to modernize certain aspects of our operations, purchase carbon offsets, or otherwise pay for our emissions.
−Removed: This activity may also impact us indirectly by increasing our operating costs.
−Removed: More stringent environmental laws, regulations, or enforcement policies, as well as motivation to maintain our reputation with our key stakeholders, could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: The issuance of operating restrictions applicable to one of the fleet types we operate could have a material adverse effect on our business, results of operations, and financial condition.
−Removed: Our owned and leased fleet is comprised of a limited number of aircraft types, including primarily the HondaJet HA-420.
−Removed: The issuance of FAA or manufacturer directives restricting or prohibiting the use of any one or more of the aircraft types we operate will have a material adverse effect on our business, results of operations, and financial condition.
Risks Related to Our Contractual Obligations
−Removed: Our obligations in connection with our contractual obligations, including long-term leases and debt financing obligations, could impair our liquidity and thereby harm our business, results of operations, and financial condition.
−Removed: We have significant long-term lease and debt financing obligations, and we may incur additional obligations as we expand our aircraft fleet and operations.
−Removed: As of December 31, 2023, all of our aircraft are wholly or majority-owned by third parties and leased to us.
+Added: Our obligations in connection with our contractual obligations, including debt financing obligations, could impair our liquidity and thereby harm our business, results of operations, and financial condition.
+Added: We have significant debt financing obligations, and we may incur additional obligations as we expand our operations.
On October 5, 2022, we entered into a Pre-Delivery Payment Agreement (“PDP Agreement”) with a Shearwater Global Capital entity for the financing of PDP Agreement payments on four Gulfstream G280s under four separate purchase agreements executed in March 2022 (“G280 Purchase Agreements”).
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The PDP Agreement provides for a Twelve and Half Percent (12.5%) interest rate on all PDP Agreement promissory notes (“PDP Notes”) issued by the lender for payments made under the PDP Agreement, for an aggregate principal balance of up to $40.5 million.
−Removed: As of December 31, 2023, there is a balance of $28.5 million in PDP Notes, with $2.0 million in letters of credit with Chase Bank that are secured with $2.1 million in restricted cash (interest-bearing).
−Removed: Additionally, the Company issued a promissory note to Dennis Liotta in the original principal amount of $1.0 million with a maturity date of March 31, 2024, and an interest rate of Ten Percent (10%).
−Removed: The ability to timely pay our existing or future contractual obligations, including our long-term lease obligations and required payments under the PDP Notes, will depend on the results of our operations, cash flow, liquidity, and ability to secure additional financing, which will in turn depend on, among other things, the success of our current business strategy, U.S.
+Added: The ability to timely pay our existing or future contractual obligations, including required payments under the PDP Notes and the Notes, will depend on the results of our operations, cash flow, liquidity, and ability to secure additional financing, which will in turn depend on, among other things, the success of our current business strategy, U.S.
and global economic and political conditions, the availability and cost of financing, and other factors that may be beyond our control.
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Agreements governing our debt obligations include financial and other covenants that provide limitations on our business and operations under certain circumstances, and failure to comply with any of the covenants in such agreements could adversely impact us.
−Removed: Our financing agreements, including those in connection with the PDP Notes and other financing agreements that we may enter into from time to time, contain certain affirmative, negative, and financial covenants, and other customary events of default.
+Added: Our financing agreements, including those in connection with the PDP Notes, the Notes, and other financing agreements that we may enter into from time to time, contain certain affirmative, negative, and financial covenants, and other customary events of default.
Certain covenants in our financing agreements are subject to important exceptions, qualifications, and cure rights, including, under limited circumstances, the requirement to provide additional collateral or prepay or redeem certain obligations.
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In addition, any acceleration or actions to repossess or foreclose on collateral under our financing agreements could result in a downgrade of any credit ratings then applicable to us, which could result in additional events of default or limit our ability to obtain additional financing.
+Added: Stockholders may experience dilution of their ownership interest due to the issuance of additional shares of Common Stock upon the conversion of the Notes, especially since the Notes have fluctuating conversion rates that are set at a discount to market prices of our shares of Common Stock during the period immediately following conversion.
+Added: On December 4, 2024, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”).
+Added: Under the Securities Purchase Agreement, the Company has agreed to issue 10% original issue discount senior unsecured convertible promissory notes (“Notes”) in an aggregate original principal amount of up to $36,000,000, which will be convertible into shares of the Company’s common stock.
+Added: The closing of the first tranche was consummated on December 4, 2024, and the Company issued the initial Note for an aggregate original principal amount of $4,500,000.
+Added: Issuances of additional Note are subject to the terms and conditions of the Securities Purchase Agreement.
+Added: The shares of Common Stock issuable upon full conversion of the Notes would result in significant dilution to existing stockholders.
+Added: The following table sets forth, for illustrative purposes only, the aggregate amount of our common stock issuable upon conversion of the notes that may be issued under the Securities Purchase Agreement at varying purchase prices and the percentage of outstanding common stock after giving effect to the applicable 4.99% or 9.99% Beneficial Ownership Limitation.
+Added: Assumed Average Price Per Share (1)
+Added: Number of Common Shares to be Issued, After Giving Effect to the 4.99% Beneficial Ownership Limitation
+Added: Percentage of Outstanding Common Stock After Giving Effect to the Issuance to the Investor, Subject to the 4.99% Beneficial Ownership Limitation (2)
+Added: Number of Common Shares to be Issued, After Giving Effect to the 9.99% Beneficial Ownership Limitation
+Added: Percentage of Outstanding Common Stock After Giving Effect to the Issuance to the Investor, Subject to the 9.99% Beneficial Ownership Limitation (3)
+Added: 210,975 9.99%
+Added: 210,975 9.99%
+Added: 210,975 9.99%
+Added: (1) For the avoidance of any doubt, this price reflects the purchase price after calculation (i.e.
+Added: after discounts to the market price of our shares) in accordance with the terms of the initial tranche Note and the Securities Purchase Agreement.
+Added: (2) The denominator is based on 1,900,893 shares of our common stock outstanding as of March 21, 2025, adjusted to include the issuance of the number of shares of common stock set forth in the second column which we would have issued to the investor based on the applicable assumed purchase price per share and assuming that (i) all Notes remain outstanding until their respective maturity dates and (ii) the Payment Premium (as defined in the Notes) and interest on the Notes are paid in shares of common stock subject to the limitation on issuance pursuant to the 4.99% Beneficial Ownership Limitation.
+Added: (3) The denominator is based on 1,900,893 shares of our common stock outstanding as of March 21, 2025, adjusted to include the issuance of the number of shares of common stock set forth in the second column which we would have issued to the Investor based on the applicable assumed purchase price per share and assuming that (i) all Notes remain outstanding until their respective maturity dates and (ii) the Payment Premium (as defined in the Notes) and interest on the Notes are paid in shares of common stock, subject to the limitation on issuance pursuant to the 9.99% Beneficial Ownership Limitation.
+Added: (4) Represents the initial Floor Price of the Note issued in the initial tranche, as adjusted pursuant to the 1-for-25 reverse stock split effected by the Company on February 24, 2025.
+Added: (5) Represents the midpoint between the initial Floor Price and current Conversion Price of the Note issued in the Initial Tranche, as adjusted pursuant to the 1-for-25 reverse stock split effected by the Company on February 24, 2025.
+Added: (6) Represents the current Conversion Price of the Note issued in the Initial Tranche, as adjusted pursuant to the 1-for-25 reverse stock split effected by the Company on February 24, 2025.
+Added: In addition, in order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock at prices that may not be the same as the price per share as prior issuances of Common Stock.
+Added: This includes, without limitation, consummating additional transactions involving the Notes.
+Added: We may not be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share previously paid by investors, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.
+Added: The price per share at which we sell additional shares of our Common Stock or securities convertible into Common Stock in future transactions may be higher or lower than the prices per share.
+Added: We cannot predict the effect, if any, that market sales of those shares of Common Stock or the availability of those shares for sale will have on the market price of our Common Stock.
Risks Related to Ownership of Our Securities and Being a Public Company
−Removed: Future sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for our common stock to decline.
−Removed: The sale of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock.
−Removed: These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
−Removed: Certain Volato stockholders, including certain existing stockholders of certain classes of Volato stock holding greater than 250,000 shares of our share capital as well as the officers and directors and certain additional management personnel of PACI and Volato, entered into a lock-up agreement (the “Stockholder Lock-up Agreement”) with PACI.
−Removed: Holders of Series A-1 stock, Series A-2 stock, and Series A-3 stock held by any stockholder will not be locked up.
−Removed: Under the terms of the Stockholder Lock-up Agreement, such stockholders, will each agree, subject to certain customary exceptions, that during the period that is the earlier of (i) the date that is 180 days following the Effective Time, and (ii) the date specified in a written waiver of the provisions of the Stockholder Lock-up Agreement duly executed by Sponsor and PACI, not to offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any Lock-up Shares, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such Lock-up Shares (whether any of these transactions are to be settled by delivery of any such Lock-up Shares, in cash or otherwise), publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, or any type of direct and indirect stock pledges, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), or sales or other transactions through non-US broker dealers or foreign regulated brokers.
−Removed: As used herein, “Lock-up Shares” means, in the case of Volato stockholders, those shares of Class A Common Stock of Volato Group received by such Volato stockholder as merger consideration in the Transactions and beneficially owned by such Volato stockholder as specified on the signature block of the Stockholder Lock-up Agreement.
−Removed: In the future, Volato Group may also issue our securities in connection with investments or acquisitions.
−Removed: The number of shares of our Common Stock issued in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares of our Common Stock.
−Removed: Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to our stockholders.
+Added: If we are unable to comply with the continued listing requirements of the NYSE American, including satisfying the obligations set forth in the Deficiency Letter with respect to our stockholders’ equity being below the NYSE American’s minimum level, then our Common Stock will be delisted from the NYSE American.
+Added: Our Common Stock is currently listed on the NYSE American under the symbol “SOAR”.
+Added: If we are unable to comply with the continued listing requirements of the NYSE American, our Common Stock will be delisted from the NYSE American, which will limit investors’ ability to effect transactions in our Common Stock and subject us to additional trading restrictions.
+Added: For example, in order to maintain our listing, we must maintain a minimum amount of stockholders’ equity.
+Added: In addition to this objective standard, NYSE American may delist the securities of any issuer for other reasons involving the judgment of NYSE American, including if our common stock sells at a low price per share for a substantial period of time.
+Added: In June 2024, the Company was notified by the NYSE American that the Company is not in compliance with NYSE American’s Minimum Stockholders’ Equity Requirements.
+Added: The Company submitted its Compliance Plan on July 18, 2024, to the NYSE American outlining certain actions the Company has taken and will take to regain compliance with the Minimum Stockholders’ Equity Requirements by December 18, 2025.
+Added: On September 5, 2024, NYSE American accepted the Compliance Plan and required quarterly updates from the Company on the progress that the Company has made regarding the Compliance Plan.
+Added: NYSE American also granted the Company through December 18, 2025, to regain compliance with the Minimum Stockholders’ Equity Requirements.
+Added: Until such date, the Company will be subject to quarterly review by NYSE American to determine if the Company is making progress consistent with the Compliance Plan.
+Added: If the Company does not regain compliance with the Minimum Stockholders’ Equity Requirements by December 18, 2025, or if the Company does not make sufficient progress consistent with its Compliance Plan, then the NYSE American may initiate delisting proceedings to delist the Company’s Common Stock from the NYSE American.
+Added: Although the Company believes it will be able to achieve compliance with the Minimum Stockholders’ Equity Requirements and other NYSE American listing requirements, there can be no assurance that the Company will be able to regain compliance with all applicable requirements or maintain compliance with any other listing requirements within the time frame required by NYSE American or at all.
+Added: NYSE American’s determination that we fail to meet the continued listing standards of NYSE American may result in our securities being delisted from NYSE American.
+Added: If our Common Stock is delisted from the NYSE American, then we could face significant and material adverse consequences as a result and our investors will experience limitations upon their ability to effect transactions in our Common Stock.
+Added: If the NYSE American delists our Common Stock from trading on its exchange, including if such delisting were to occur immediately without being able to submit a compliance plan or appeal such delisting, and we are not able to list our securities on another national securities exchange (though we expect the common stock would qualify to be quoted on an over-the-counter market), we could face significant material adverse consequences, including:
+Added: • a limited availability of market quotations for our securities;
+Added: • reduced liquidity for our securities;
+Added: • substantial impairment on our ability to raise additional funds;
+Added: • loss of institutional investor interest and a decreased ability to issue additional securities or obtain additional financing in the future;
+Added: • a determination that our Common Stock is a “penny stock,” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
+Added: • a limited amount of news and analyst coverage;
+Added: • potential breaches of representations or covenants of our agreements pursuant to which we made representations or covenants relating to our compliance with applicable listing requirements, which, regardless of merit, could result in costly litigation, significant liabilities and diversion of our management’s time and attention and could have a material adverse effect on our financial condition, business and results of operations.
+Added: The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our Common Stock is listed on the NYSE American, our Common Stock qualifies as a covered securities under such statute.
+Added: Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
+Added: If we were no longer listed on the NYSE American, our Common Stock would not be a covered security, and we would be subject to regulation in each state in which we offer our Common Stock and other Company securities.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, the market price of the Common Stock.
We are required to maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: As a newly public company, we continue to refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in filings with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers.
+Added: As a newly public company, we continue to refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in filings with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules, and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to our management, including our principal executive and financial officers.
We will continue to refine our internal control over financial reporting.
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Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of our financial statements and reports, which would likely adversely affect the market price of the Common Stock.
−Removed: In addition, we could be subject to sanctions or investigations by NYSE American, the SEC and other regulatory authorities.
+Added: In addition, we could be subject to sanctions or investigations by the NYSE American, the SEC and other regulatory authorities.
+Added: Sales of Common Stock, or the perception of such sales, by us in the public market or otherwise, could cause the market price for our Common Stock to decline.
+Added: The sale of Common Stock in the public market or otherwise, or the perception that such sales could occur, could harm the prevailing market price of our Common Stock.
+Added: These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
+Added: Resales of Common Stock may cause the market price of our securities to drop significantly, even if our business is doing well.
+Added: In the future, we may also issue securities in connection with investments or acquisitions.
+Added: The amount of shares of Common Stock issued in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares of Common Stock.
+Added: Ultimately, any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to stockholders.
+Added: Anti-takeover provisions contained in the Company’s Certificate of Incorporation and applicable laws could impair a takeover attempt.
+Added: The Company’s Certificate of Incorporation affords certain rights and powers to the Company’s board of directors (the “Board”) that could contribute to the delay or prevention of an acquisition that it deems undesirable, such as establishing a classified Board so that not all members of our Board are elected at one time.
+Added: Delaware law also permits the Company to take certain actions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by our Board, such as:
+Added: • authorizing the issuance of “blank check” preferred stock that could be issued by our Board to increase the number of outstanding shares and thwart a takeover attempt;
+Added: • requiring cause to remove directors;
+Added: • requiring all stockholder actions to be taken at a meeting of our stockholders;
+Added: • establishing advance notice and duration of ownership requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings;
+Added: • prohibiting the use of cumulative voting for the election of directors;
+Added: • limiting the ability of stockholders to call special meetings or amend our bylaws.
+Added: These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management to the extent permitted, whether by our Certificate of Incorporation or merely as a function of Delaware law.
+Added: Any provision of our Certificate of Incorporation, Delaware law, or otherwise that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Common Stock and could also affect the price that some investors are willing to pay for our Common Stock
+Added: Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
+Added: The Delaware General Corporation Law (the “DGCL”) empowers us to indemnify our directors and officers against expenses relating to certain actions, suits or proceedings as provided for therein.
+Added: In order for such indemnification to be available, the applicable director or officer must not have acted in a manner that constituted a breach of his or her fiduciary duties and involved intentional misconduct, fraud or a knowing violation of law, or must have acted in good faith and reasonably believed that his or her conduct was in, or not opposed to, our best interests.
+Added: In the event of a criminal action, the applicable director or officer must not have had reasonable cause to believe his or her conduct was unlawful.
+Added: We may indemnify each of our present and future directors, officers, employees or agents who becomes a party or is threatened to be made a party to any suit or proceeding, whether pending, completed or merely threatened, and whether said suit or proceeding is civil, criminal, administrative, investigative, or otherwise, except an action by or in the right of the Company, by reason of the fact that he is or was a director, officer, employee, or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including, but not limited to, attorneys’ fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit, proceeding or settlement, provided such person acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
+Added: The expenses of directors, officers, employees or agents of the Company incurred in defending a civil or criminal action, suit, or proceeding may be paid by the Company as they are incurred and in advance of the final disposition of the action, suit, or proceeding, if and only if the director, officer, employee or agent undertakes to repay said expenses to the Company if it is ultimately determined by a court of competent jurisdiction, after exhaustion of all appeals therefrom, that he is not entitled to be indemnified by the corporation.
+Added: No indemnification shall be applied, and any advancement of expenses to or on behalf of any director, officer, employee or agent must be returned to us, if a final adjudication establishes that the person’s acts or omissions involved a breach of any fiduciary duties, where applicable, intentional misconduct, fraud or a knowing violation of the law which was material to the cause of action.
+Added: The DGCL further provides that a corporation may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the corporation has the authority to indemnify him against such liability and expenses.
+Added: We have secured a directors’ and officers’ liability insurance policy.
+Added: We expect that we will continue to maintain such a policy.
Our Certificate of Incorporation designates specific courts as the exclusive forum for substantially all stockholder litigation matters, which could limit the ability of our Stockholders to obtain a favorable forum for disputes with us or our directors, officers or employees.
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If a court were to find the exclusive forum provision contained in our Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, prospects, financial condition and operating results.
−Removed: Because there are no current plans to pay cash dividends on the Common Stock for the foreseeable future, you may not receive any return on investment unless you sell the Common Stock at a price greater than what you paid for it.
−Removed: We may retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future.
−Removed: Any decision to declare and pay dividends in the future will be made by the Board and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant.
−Removed: In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness Volato Group or our subsidiaries incur.
−Removed: As a result, you may not receive any return on an investment in Common Stock unless you sell your shares of Common Stock for a price greater than that which you paid for it.
−Removed: The market price of the Common Stock may be volatile, which could cause the value of your investment to decline.
−Removed: The market price of the Common Stock has been and may continue to be volatile and subject to wide fluctuations depending on a number of factors, including those described in this “ Risk Factors ” section, many of which are beyond our control and may not be related to our operating performance.
−Removed: These fluctuations could cause you to lose all or part of your investment in the Common Stock.
−Removed: Factors affecting the trading price of the Common Stock may include:
−Removed: • market conditions in our industry or the broader stock market;
−Removed: • actual or anticipated fluctuations in our financial and operating results;
−Removed: • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally;
−Removed: • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections;
−Removed: • changes in financial estimates prepared by and recommendations provided by securities analysts concerning us or the market in general;
−Removed: • the perceived success of the Business Combination;
−Removed: • the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
−Removed: • announced or completed acquisitions of businesses, commercial relationships, products, services or technologies by us or our competitors;
−Removed: • changes in laws and regulations affecting our business;
−Removed: • changes in accounting standards, policies, guidelines, interpretations or principles;
−Removed: • commencement of, or involvement in, litigation involving us;
−Removed: • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
−Removed: • sales, or anticipated sales, of large blocks of the Common Stock;
−Removed: • any major change in the composition of the Board or our management;
−Removed: • general economic and political conditions such as recessions, interest rates, fuel prices, trade wars, pandemics (such as COVID-19), currency fluctuations and acts of war or terrorism;
−Removed: • other risk factors listed under this “ Risk Factors ” section.
−Removed: Broad market and industry factors may materially harm the market price of the Common Stock, regardless of our actual operating performance.
−Removed: The stock markets have, from time to time, experienced significant price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
−Removed: Stock prices of many companies have fluctuated in a manner often unrelated to the operating performance of those companies.
−Removed: Shareholder activism, which could take many forms or arise in a variety of situations, has been increasing recently.
−Removed: Volatility in the market price of the Common Stock or other reasons may in the future cause us to become the target of securities litigation or shareholder activism.
−Removed: Shareholder activism or securities litigation could give rise to perceived uncertainties regarding the future of our business and it could subject us to substantial costs, divert resources and the attention of management from our business and adversely affect relationships with suppliers and other parties.
+Added: Our management team has limited experience managing a public company.
+Added: Although during the period prior to the Business Combination we expended a significant amount of time, money, and effort on preparing to be a public company, our management team has limited experience managing a publicly traded company, interacting with public company investors and research analysts, and complying with the increasingly complex laws and requirements pertaining to public companies, including those related to timely public disclosures, financial reporting, internal controls, and enterprise risk management.
+Added: As a result, our management team may not efficiently manage our responsibilities as a public company.
+Added: As a public company, we are subject to significant regulatory oversight, reporting obligations under U.S.
+Added: securities laws, and the continuous scrutiny of securities analysts and investors.
+Added: These obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could result in less time being devoted to management and the achievement of our growth strategy and operational goals.
+Added: Failure to adequately comply with the requirements of being a public company, including deficiencies in financial reporting or ineffective disclosure controls and procedures and internal control over financial reporting, could cause investors to lose confidence in our reported financial and other information and materially adversely affect our business, financial condition, and results of operation, as well as severely negatively affect the price of the Common Stock.
The requirements of being a public company may strain our resources, divert our management’s attention, and affect our ability to attract and retain qualified board members.
1 unchanged sentence
The requirements of these rules and regulations increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources.
+Added: These laws, regulations, and standards are subject to varying interpretations and may evolve over time as new guidance is provided by regulatory and governing bodies.
+Added: This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls for financial reporting.
4 unchanged sentences
The increased costs of compliance with public company reporting requirements and our potential failure to satisfy these requirements can have a material adverse effect on our operations, business, financial condition, or results of operations.
−Removed: We may never realize the full value of our intangible assets or our long-lived assets, causing us to record impairments that may materially adversely affect our financial conditions and results of operations.
−Removed: In accordance with applicable accounting standards, we are required to test our indefinite-lived intangible assets for impairment on an annual basis, or more frequently where there is an indication of impairment.
−Removed: In addition, we are required
−Removed: to test certain of our other assets for impairment where there is any indication that an asset may be impaired, such as our market capitalization being less than the book value of our equity.
−Removed: We may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, unfavorable trends in historical or forecasted results of operations and cash flows, and an uncertain economic environment, as well as other uncertainties.
−Removed: We can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period.
−Removed: The value of our aircraft could also be impacted in future periods by changes in supply and demand for these aircraft.
−Removed: Such changes in supply and demand for certain aircraft types could result from the grounding of aircraft.
−Removed: An impairment loss could have a material adverse effect on our financial condition and results of operations.
We may be subject to securities litigation, which is expensive and could divert our management’s attention.
2 unchanged sentences
Any adverse determination in litigation could also subject us to significant liabilities.
−Removed: An active market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
−Removed: The price of our securities may vary significantly due to factors specific to us as well as to general market or economic conditions.
−Removed: Furthermore, an active trading market for our securities may never develop, or if developed, it may not be sustained.
−Removed: We may be unable to sell our securities unless a market can be established and sustained.
+Added: Because we became a publicly traded company by means other than a traditional underwritten initial public offering, our stockholders may face additional risks and uncertainties.
+Added: Because we became a publicly traded company by means of consummating the Business Combination rather than by means of a traditional underwritten initial public offering, there was no independent third-party underwriter selling the shares of our common stock, and, accordingly, our stockholders did not have the benefit of an independent review and investigation of the type normally performed by an unaffiliated, independent underwriter in a public security offering.
+Added: Due diligence reviews typically include an independent investigation of the background of the company, any advisors, and their respective affiliates, review of the offering documents and independent analysis of the plan of business and any underlying financial assumptions.
+Added: Although PACI performed a due diligence review and investigation of Volato in connection with the Business Combination, the lack of an independent due diligence review and investigation increases the risk of investment in us because PACI’s due diligence review and investigation may not have uncovered facts that would be important to a potential investor that may have been uncovered by a third-party investigation.
+Added: If we became a public company through an underwritten public offering, the underwriters would be subject to liability under Section 11 of the Securities Act for material misstatements and omissions in the initial public offering registration statement.
+Added: In general, an underwriter is able to avoid liability under Section 11 if it can prove that it “had, after reasonable investigation, reasonable grounds to believe and did believe, at the time the registration statement became effective, that the statements therein (other than the audited financial statements) were true and that there was no omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading.”
+Added: The amount of due diligence conducted by PACI and its advisors in connection with the Business Combination may not be as high as would have been undertaken by an underwriter in connection with an initial public offering of Volato.
+Added: Accordingly, it is possible that defects in our business operations or problems with our management that would have been discovered if we had conducted an underwritten public offering will not be discovered in connection with the Business Combination, which could adversely affect the market price of our common stock.
+Added: In addition, because we did not become a publicly traded company by means of a traditional underwritten initial public offering, security or industry analysts may not provide, or be less likely to provide, coverage of us.
+Added: Investment banks may also be less likely to agree to underwrite secondary offerings on behalf of us than they might otherwise be if we had become a publicly traded company by means of a traditional underwritten initial public offering because they may be less familiar with us as a result of more limited coverage by analysts and the media.
+Added: The failure to receive research coverage or support in the market for our common stock could have an adverse effect on our ability to develop a liquid market for our common stock.
+Added: The lack of a liquid market for our common stock will adversely affect the stock price.
If securities or industry analysts do not publish research or reports about our business, if they change their recommendations regarding our Common Stock, or if our operating results do not meet their expectations, our Common Stock price and trading volume could decline.
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If any equity research analysts cease coverage of us or fail to publish reports on us regularly, demand for our Common Stock could decrease, which could cause the price and trading volume of our Common Stock to decline.
+Added: The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.
+Added: We qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act.
+Added: As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including (a) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (b) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (c) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
+Added: As a result, our stockholders may not have access to certain information they deem important.
+Added: We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year (i) following December 3, 2026, the fifth anniversary of our initial public offering, which closed on December 3, 2021, (ii) in which we have total annual gross revenue of at least $1.235 billion (as adjusted for inflation pursuant to SEC rules from time to time) or (iii) in which we are deemed to be a large accelerated filer, which means the market value of shares of our Common Stock that are held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three year period.
+Added: In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company.
+Added: An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
+Added: The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable.
+Added: We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
+Added: This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
+Added: We cannot predict if investors will find our Common Stock less attractive because we will rely on these exemptions.
+Added: If some investors find our Common Stock less attractive as a result, there may be a less active trading market for our Common Stock and our share price may be more volatile.
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.