What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-19 · 415 added, 472 removed, 355 unchanged (71% of the section changed)

3 unchanged sentences

(Amounts in thousands, except par value amounts)

September 30, 2024

March 31, 2025

Current assets:

3 unchanged sentences

Deposits 15,000 36,000

Note receivable, current 56 —

Prepaid expenses and other current assets 1,122 1,031

4 unchanged sentences

Deposits 1 300

Forward purchase agreement — 2,982

Restricted cash — 2,237

Intangibles, net 1,345 1,391

Goodwill 635 635

Note receivable, non-current 1,748 —

Non-current assets - discontinued operations — 1,838

Total assets $ 23,408 $ 46,299

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES AND SHAREHOLDERS’ DEFICIT

Current liabilities:

Accounts payable and accrued liabilities $ 5,509 $ 5,452

Loan from related party — 1,000

Convertible notes, net 4,899 4,050

Operating lease liability 40 39

Merger transaction costs payable in shares — 4,250

Credit facility and other loans 8,315 28,855

2 unchanged sentences

Total current liabilities 39,123 62,200

Deferred income tax liability 305 305

Operating lease liability, non-current 118 128

Credit facility, non-current — 8,054

Non-current liabilities - discontinued operations — 305

Total liabilities $ 39,241 $ 62,633

COMMITMENTS AND CONTINGENCIES

Shareholders’ equity:

COMMITMENTS AND CONTINGENCIES (Note 15)

Shareholders’ deficit:

Common Stock Class A, $ 0.0001 par value;

200,000,000 authorized;

29,534,339 and 28,043,449 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

1,900,893 and 1,843,852 shares issued and outstanding as of March 31, 2025 and December 31,2024, respectively

Additional paid-in capital 88,014 87,968

Accumulated deficit ( 103,852 ) ( 104,307 )

Total shareholders’ equity ( 19,634 ) 14,751

Total liabilities and shareholders’ equity $ 47,934 $ 71,712

Total shareholders’ deficit ( 15,833 ) ( 16,334 )

Total liabilities and shareholders’ deficit $ 23,408 $ 46,299

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)

For the Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

(Amounts in thousands, except share data)

Three Months Ended March 31,

Revenue $ 25,483 $ 48

5 unchanged sentences

Other income (expenses):

Gain from sale of consolidated entity — — — 387

Other income 56 76 214 243

Loss from change in fair value forward purchase agreement — — ( 2,982 ) —

Other income, net 1,181 4

Loss from change in fair value of financial instruments ( 849 ) ( 227 )

Interest expense, net ( 2,400 ) ( 1,138 )

Other income (expenses) ( 3,178 ) ( 729 ) ( 8,371 ) ( 1,797 )

Loss before provision for income taxes and discontinued operations ( 1,326 ) ( 2,562 ) ( 14,801 ) ( 6,279 )

Other expenses ( 2,068 ) ( 1,361 )

Income (loss) before provision for income taxes and discontinued operations 458 ( 5,695 )

Provision for incomes taxes 98 6

Net loss from continuing operations ( 1,337 ) ( 2,562 ) ( 14,827 ) ( 6,279 )

Net loss from discontinued operations ( 3,098 ) ( 9,263 ) ( 23,917 ) ( 22,924 )

Net loss $ ( 4,435 ) $ ( 11,825 ) $ ( 38,744 ) $ ( 29,203 )

Basic and diluted net loss per share:

Net loss per share from continuing operations, basic and diluted $ ( 0.05 ) $ ( 0.15 ) $ ( 0.50 ) $ ( 0.48 )

Net loss per share from discontinued operations, basic and diluted $ ( 0.10 ) $ ( 0.55 ) $ ( 0.81 ) $ ( 1.74 )

Net loss per share, basic and diluted $ ( 0.15 ) $ ( 0.71 ) $ ( 1.32 ) $ ( 2.22 )

Net income (loss) from continuing operations 360 ( 5,701 )

Net income (loss) from discontinued operations, net of taxes 95 ( 11,689 )

Net income (loss) $ 455 $ ( 17,390 )

Basic and diluted net income (loss) per share

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

$ 0.19 $ ( 4.90 )

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

$ 0.03 $ ( 4.90 )

Net income (loss) per share from discontinued operations, basic $ 0.05 $ ( 10.04 )

Net income (loss) per share from discontinued operations, diluted $ 0.01 $ ( 10.04 )

Net income (loss) per share, basic $ 0.24 $ ( 14.93 )

Net income (loss) per share, diluted $ 0.03 $ ( 14.93 )

Weighted average common shares outstanding:

Basic and diluted

1,862,438 1,164,648

Diluted 14,180,389 1,164,648

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

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(Amounts in thousands, except shares)

4 unchanged sentences

Stock-based compensation — — 83 — 83

Net loss — — — — ( 7,515 ) ( 7,515 )

Balance at March 31, 2023 11,268,877 $ 1 $ 5,193 $ ( 15 ) $ ( 18,355 ) $ ( 13,176 )

Stock-based compensation — — 15 — — 15

Issuance of common stock 48,327 — — — —

Net loss — — — — ( 9,862 ) ( 9,862 )

Balance at June 30, 2023 11,462,040 $ 1 $ 5,230 $ ( 15 ) $ ( 28,217 ) $ ( 23,001 )

Stock-based compensation

— — 40 — — 40

Issuance of common stock 11,097 — 1 — — 1

Common stock and warrant reclass from in-kind liability to APIC — — 4,250 — 4,250

Net loss — — — ( 17,390 ) ( 17,390 )

Balance at September 30, 2023 11,473,137 $ 1 $ 5,271 $ ( 15 ) $ ( 40,042 ) $ ( 34,785 )

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

Class A Common Stock

1 unchanged sentence

Shares Amount

Balance December 31, 2023 28,043,449 $ 3 $ 78,410 $ ( 63,662 ) $ 14,751

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

Stock-based compensation — — 46 — 46

Issuance of common stock 57,041 — —

Warrant reclass from in-kind liability to APIC — — 4,250 — 4,250

Net loss — — — ( 17,390 ) ( 17,390 )

Net income — — — 455 455

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

Stock-based compensation — — 185 — 185

Issuance of common stock 266,102 — 36 — 36

Net Loss — — — ( 16,918 ) ( 16,918 )

Balance at June 30, 2024 29,517,731 $ 3 $ 82,964 $ ( 97,970 ) $ ( 15,003 )

Stock-based compensation — — ( 199 ) — ( 199 )

Issuance of common stock 16,608 — 3 — 3

Net Loss — — — ( 4,435 ) ( 4,435 )

Balance at September 30, 2024 29,534,339 $ 3 $ 82,768 $ ( 102,405 ) $ ( 19,634 )

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

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

VOLATO GROUP, INC.

1 unchanged sentence

(Amounts in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities:

Net loss from continuing operations $ ( 14,827 ) ( 6,279 )

Net loss from discontinued operations ( 23,917 ) ( 22,924 )

Adjustments to reconcile net loss to cash used in operating activities:

Net income (loss) from continuing operations $ 360 $ ( 5,701 )

Net income (loss) from discontinued operations 95 ( 11,689 )

Adjustments to reconcile net income (loss) to cash used in operating activities:

Depreciation and amortization expense 85 65

Stock compensation expense 46 83

(Loss) Gain from sale of consolidated entity — ( 387 )

Gain from sale of property and equipment ( 6 ) —

Loss from sale of consolidated entity 35 —

Amortization right-of-use asset 9 —

1 unchanged sentence

Change in fair value forward purchase agreement — 227

Change in fair value of convertible notes 849 —

Changes in assets and liabilities:

3 unchanged sentences

Account payable and accrued liabilities 40 2,736

Operating lease liability 176 —

Customer deposits and deferred revenue 8,943 4,662

Change in assets and liabilities of discontinued operations 6,073 3,925

Customers’ deposits and deferred revenue ( 2,063 ) 3,478

Net cash provided by operating activities from continuing operations 1,162 1,055

Net cash (used in) operating activities from discontinued operations ( 1,474 ) ( 8,752 )

Net cash used in operating activities ( 312 ) ( 7,697 )

1 unchanged sentence

Cash payment for property and equipment — ( 56 )

Proceeds from the sale of consolidated entity — 350

Net cash provided by discontinued operations — 1,907

Proceeds from the sale of property and equipment 21 —

Cash from investing activities - discontinued operations — —

Net cash provided by (used in) investing activities 21 ( 56 )

Financing activities:

Proceeds from lines of credit $ — $ 1,000

Proceeds from issuance of term loan 4,000 —

Repayments of lines of credit ( 1,000 ) —

Proceeds from issuance of convertible notes — 12,670

Proceeds from the sale of preferred stock — 12,050

Principal payment on lease obligations ( 9 ) —

Repayment on loans ( 1,124 ) ( 387 )

Proceeds from exercise of stock options 39 23

Net cash provided by financing activities $ 136 $ 24,958

Net increase (decrease) in cash ( 11,124 ) 2,275

Cash and restricted cash, beginning of year 16,723 7,879

Cash used in financing activities - discontinued operations — ( 296 )

Net cash used in financing activities ( 1,133 ) ( 683 )

Net decrease in cash ( 1,424 ) ( 8,436 )

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

Cash and restricted cash, end of period $ 2,576 $ 8,287

1 unchanged sentence

Cash paid for interest $ 1,224 $ 1,119

Cash paid for income taxes — —

Non-Cash Investing and Financing Activities:

Note receivable from sale of GC Aviation, Inc.

Non-cash interest $ 1,176 $ —

Credit facility for the aircraft deposits $ ( 19,500 ) $ 6,000

Conversion of line of credit to convertible note with related party $ — $ 6,001

Original debt discount $ — $ ( 45 )

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

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

Financing for aircraft purchase $ 19,629 $ —

Payment on liability for aircraft purchase $ ( 19,718 ) $ —

Deposits on aircraft $ 21,000 $ —

There were no investing activities related to discontinued operations in the three months ended March 31, 2025 or 2024, respectively.

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

VOLATO GROUP, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

March 31, 2025

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Volato Group, Inc.

(f/k/a PROOF Acquisition Corp I) (“we”, “us”, “the Company”, or “Volato”) was incorporated as a Delaware corporation on March 16, 2021 for the purpose of effecting a merger, capital stock or share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

Volato, Inc., a Georgia corporation (“Legacy Volato”) was incorporated on January 7, 2021.

On December 1, 2023, the Company consummated a business combination transaction (the “Business Combination”) pursuant to a business combination agreement (the “Business Combination Agreement”), dated August 1, 2023 between the Company, PACI Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of the Company (“Merger Sub”), and Legacy Volato.

Pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into Legacy Volato, with Legacy Volato surviving the merger as a wholly-owned subsidiary of the Company.

In connection with the consummation of the Business Combination (the “Closing”), the Company changed its name from “PROOF Acquisition Corp I” to “Volato Group, Inc.”.

Legacy Volato was deemed the accounting acquirer in the Business Combination.

Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Volato issuing stock for the net assets of the Company, accompanied by a recapitalization.

Under this method of accounting, the Company who was the legal acquirer, is treated as the “acquired” company (“accounting acquiree”) for financial reporting purposes.

The net assets of the Company are stated at historical cost, with no goodwill or other intangible assets recorded.

The equity structure has been restated in all comparative periods up to the closing date to reflect the number of shares of the Company’s Class A common stock, $ 0.0001 par value per share (“Common Stock”), issued to Legacy Volato stockholders in connection with the Business Combination.

As a result of the Business Combination, the shares and corresponding capital amounts and earnings per share related to Legacy Volato’s common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination.

Stock was retroactively adjusted, converted into Common Stock, and reclassified to permanent as a result of the reverse recapitalization.

In September 2024, we announced an agreement with flyExclusive, Inc.

(“flyExclusive”), a leading provider of private jet charter services, to transition our fleet operations to flyExclusive.

This move is expected to bring substantial cost savings and provide Volato with the opportunity to focus on what it believes to be its high-growth areas, including aircraft sales and proprietary software.

We will continue to take delivery of new aircraft, and these aircraft may become part of flyExclusive's managed fleet.

Volato will benefit from the margins on aircraft sales without the burden of operational costs, while also generating revenue from our proprietary software, including the Vaunt program, Volato’s successful empty leg consumer app.

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

and GC Aviation, Inc.

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

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

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

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

In September 2022, the Company started internal development on its full suite Flight Management Software platform Mission Control, and on October 4, 2023 the Company announced the commercial launch of Vaunt, our proprietary consumer facing empty leg platform.

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

This move is expected to bring substantial cost savings and provide Volato with the opportunity to focus on its high-growth areas, including aircraft sales and proprietary software.

The Company will continue to take delivery of new aircraft while also generating revenue from its proprietary software, including the Vaunt platform, its empty leg consumer app.

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

The Company has retained insider card liabilities of $ 4.7 million that is included in discontinued operations as of March 31, 2025.

On February 12, 2025, the Board unanimously approved a reverse stock split of the Company’s Common Stock, at a ratio of 1-for-25 (the “Reverse Stock Split”).

The Reverse Stock Split became effective on February 24, 2025, with no change in par value.

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

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

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going concern, liquidity, and capital resources

The Company has limited operating history, has recorded a net loss of $ 38.7 million for the nine months ended September 30, 2024, has a negative working capital of $ 22.6 million, and has an accumulated deficit of $ 102.4 million as of September 30, 2024.

Net cash used in operating activities for the nine months ended September 30, 2024, was $ 11.1 million.

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

During the next twelve months, the Company intends to fund its operations through a combination of issuing debt and equity as well as the sale of aircraft at a premium to cost.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

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

The Company has limited operating history, has recorded a net income of approximately $ 0.5 million for the three months ended March 31, 2025, has a negative working capital of approximately $ 18.2 million, and has an accumulated deficit of approximately $ 103.9 million as of March 31, 2025.

Net cash used in operating activities for the three months ended March 31, 2025, was approximately $ 0.3 million.

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

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

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

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

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

The balance sheet does not include any adjustments that might result from these uncertainties.

On June 18, 2024, the Company received a notice (the “notice”) from the NYSE American LLC (the “NYSE American”) advising the Company that it is not in compliance with the NYSE American continued listing standards, requiring a company to have stockholders equity of at least $2.0 million if it has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years and Section 1003(a)(ii) of the Company Guide requiring a company to have stockholders’ equity of at least $4.0 million if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years.

The Company submitted a plan (the “plan”) to the NYSE American LLC on July 18, 2024 outlining actions the Company will take to regain compliance by December 18, 2025.

On September 5, 2024, the Company received notice from the NYSE American that it had accepted the Company's plan and granted a plan period through December 18, 2025.

During the plan period the Company will be subject to quarterly review to determine if it is making progress consistent with the plan.

If the Company does not regain compliance with the NYSE American listing standards by December 18, 2025, or if the Company does not make sufficient progress consistent with its plan, then the NYSE American may initiate delisting proceedings.

The notice does not affect the Company's ongoing business operations or its reporting requirements with the United States Securities and Exchange Commission (the “SEC”).

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

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

Basis of presentation

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP” or “GAAP”) on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

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

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

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

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

GAAP for complete financial statements.

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

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

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

Reclassifications

Certain amounts in 2023 have been reclassified to conform with the current year’s presentation, primarily to reflect discontinued operations.

Principles of Consolidation

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

Principles of consolidatio n

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

All intercompany transactions and balances have been eliminated.

One of the components of the Company’s business model included the sale of aircraft and ownership program.

The aircraft ownership program is a model whereby the Company sold each floating fleet aircraft to a limited liability company, (each a “Plane Co”).

Each Plane Co, which are owned by third-party owners, leased the aircraft back to the Company for management and charter operations on behalf of the Plane Co under a 14 C.F.R.

Part 135 certificate.

In September 2024, we announced an agreement with flyExclusive to transition our fleet operations to flyExclusive.

Fly Dreams LLC, (“Fly Dreams”) held the Federal Aviation Agency (“FAA”) certificate and conducts air carrier operations through an aircraft charter Management and Dry Lease Agreement with each Plane Co.

On March 3, 2023, Legacy Volato transferred its Fly Dreams operation to its wholly-owned subsidiary Gulf Coast Aviation (“GCA”) and sold all of its membership interest in Fly Dreams, including Fly Dreams’ FAA part 135 certificate.

Legacy Volato now conducts its operations under GCA’s FAA Part 135 certificate.

The selling price was $ 550 thousand, which resulted in the recognition of $ 387 thousand in gain, which is presented in other income (expense) in the consolidated statement of operations for the nine months ended September 2023.

The Company only held de minimis interest in one Plane Co as of September 30, 2024.

In October 2024, as part of the agreement with flyExclusive, Volato sold its interests in the Plane Co to flyExclusive.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

Use of estimates

4 unchanged sentences

• Useful lives of property, plant, and equipment.

• Assumptions used in valuing equity instruments.

• Assumptions used in valuing debt or equity instruments.

• Deferred income taxes and related valuation allowance.

• Assessment of long-lived assets impairment.

• Assumptions used in the valuation of the forward purchase agreement.

• Assumptions used in the valuation of the forward purchase agreement and notes receivable.

Cash and restricted cash

2 unchanged sentences

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

At September 30, 2024 and December 31, 2023, the Company had no cash equivalents besides what was in the cash balance as of this date.

The Company has $ 1.8 million and $ 2.2 million of restricted cash at September 30, 2024 and December 31, 2023, respectively, which serves as collateral for the credit facility with SAC Leasing G280 LLC (“SAC Leasing G280”).

Investment - Equity Method

The Company accounts for its equity method investment at cost, adjusted for the Company’s share of the investee’s earnings or losses, which is reported under other income (expense) in the consolidated statement of operations.

The Company periodically reviews its investment for other than temporary declines in fair value below cost and more frequently when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

As of September 30, 2024, and December 31, 2023, the only equity-method investment was Volato 158 LLC with a 3.13 % equity interest.

In October 2024, Volato sold the interest in Volato 158 LLC to flyExclusive and recorded a loss of $ 162 thousand in the three and nine months ended September 30, 2024.

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

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

Accounts receivable

5 unchanged sentences

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

The Company recognized zero bad debt expense during the three and nine months ended September 30, 2024 and $ 51 thousand and $ 106 thousand of bad debt expense during the three and nine months ended September 30, 2023.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

The Company recognized approximately $ 24 thousand and zero of bad debt expense during the three months ended March 31, 2025 and 2024, respectively.

Fixed assets are stated at cost, less accumulated depreciation.

6 unchanged sentences

Computer software development

Software development costs are accounted for in accordance with ASC 350-40, Internal Use Software .

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

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

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

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

The Company capitalized zero and $ 241 thousand of internal software development costs during the nine months ended September 30, 2024 and twelve months ended December 31, 2023, respectively.

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

The Company capitalized zero and $ 142 thousand of internal software development costs incurred during the three months ended March 31, 2025 and twelve months ended December 31, 2024, respectively.

The Company recognized $ 48 thousand and $ 26 thousand of amortization expense related to computer software development during the three months ended March 31, 2025 and 2024, respectively.

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

Website development cost

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

The Company capitalized $ 142 thousand and $ 323 thousand of website development costs during the nine months ended September 30, 2024 and twelve months ended December 31, 2023, respectively.

The Company recognized $ 26 thousand and $ 44 thousand of amortization expense for the three months ended September 30, 2024 and 2023, respectively.

The Company recognized $ 77 thousand and $ 86 thousand of amortization expense during the nine months ended September 30, 2024 and 2023, respectively.

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

The Company capitalized zero of website development costs during three months ended March 31, 2025 and twelve months ended December 31, 2024, respectively.

The Company recognized approximately $ 24 thousand and $ 25 thousand of amortization expense related to website development costs during the three months ended March 31, 2025 and 2024, respectively.

Valuation of long-lived assets

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

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

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

1 unchanged sentence

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

No impairment was recognized during the nine months ended September 30, 2024 and 2023.

No impairment was recognized during the three months ended March 31, 2025 and 2024, respectively.

Fair value of financial instruments

6 unchanged sentences

Inputs to the valuation methodology include:

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

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

4 unchanged sentences

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

The fair value of the Company’s recorded Forward Purchase Agreement (as defined in Note 7) is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification.

The fair value of the Company’s recorded forward purchase agreement (“FPA”) is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification.

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

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

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

The following table presents changes of the Forward Purchase Agreement for the nine months ended September 30, 2024, in thousands:

Forward Purchase

Balance December 31, 2023 $ 2,982

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

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

A loss of $ 3.0 million was recorded due to the cancellation of the FPA in the third quarter of 2024.

In December 2024, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”).

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

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

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

Any issuances of additional convertible promissory notes are subject to the terms and conditions of the Security Purchase Agreement.

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

During the three months ended March 31, 2025, the Company recorded a loss of $ 849 thousand on the change in the fair value of the 2024 Convertible note, recorded in other income (expense) on the consolidated statements of operations.

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

Fair Value Measurements as of March 31, 2025

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

Observable Inputs (Level 2) Significant Unobservable

Inputs (Level 3) Total

2024 Convertible Note $ — $ — $ 4,899 $ 4,899

Total $ — $ — $ 4,899 $ 4,899

Fair Value Measurements as of December 31, 2024

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

Observable Inputs (Level 2) Significant Unobservable

Inputs (Level 3) Total

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

Total $ — $ — $ 4,050 $ 4,050

The following table presents changes of the 2024 Convertible note with significant unobservable inputs (Level 3) for the three months ended March 31, 2025, in thousands:

2024 Convertible Notes

Balance at December 31, 2024 $ 4,050

Change in fair value 849

Balance September 30, 2024 $ —

Balance at March 31, 2025 $ 4,899

The Company measured the 2024 Convertible note using a Monte Carlo simulation valuation model using the following assumptions:

Three months ended March 31, 2025

Volume Weighted average stock price ("VWAP") $ 1.69

Simulation Period 0.68 years

Expected Volatility 128.5 %

Credit risk-adjusted rate 18.2 %

Risk-free Rate 4.2 %

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

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

The Company’s credit facility and other loans approximate the fair value of such liabilities based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements and due to the short-term maturity of these instruments at September 30, 2024 and December 31, 2023, respectively.

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

Commitments and contingencies

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

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

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

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

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

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

Revenue recognition

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The Company generates revenue primarily through:

(i) the sale of aircraft, and (ii) aircraft management services.

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

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

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

For certain services provided to the customer, primarily in our aircraft management services revenue stream, the Company directs third-party providers to assist in our fulfillment of the performance obligation in contracts with our customers.

Any cost reimbursements and third-party costs are recognized in revenue on a gross basis as Volato has pre-negotiated these costs and takes a certain amount of risk that it will not fully recover the costs incurred.

In such circumstances, the Company is primarily responsible for satisfying the overall performance obligation with the customer and is considered the principal in the relationship because the Company has the ability to direct the third parties to provide services to our customers.

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

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

The Company’s contracts for managing aircraft provide for fixed monthly management fees and reimbursement of operating expenses at a predetermined margin.

Generally, contracts require two months advance deposit of estimated expenses.

In accordance with ASC 606, contract assets are to be recognized when an entity has the right to receive consideration in exchange for goods or services that have been transferred to a customer.

Also, in accordance with ASC 606, contract liabilities are to be recognized when an entity is obligated to transfer goods or services for which consideration has already been received.

Contract liabilities consist of customer prepayments and the aircraft deposits referred to above.

Total contract liabilities were $ 11.8 million and $ 2.8 million as of September 30, 2024 and December 31, 2023, respectively.

The Company generated revenue during the three and nine months ended September 30, 2024 and 2023, broken down as follows, in thousands:

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

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

2024 2023 2024 2023

The Company has generated revenue during the three months ended March 31, 2025 and 2024, broken down as follows, in thousands:

Three Months Ended March 31,

Aircraft sales $ 25,100 $ —

Aircraft management revenue 1,803 3,646 6,171 10,215

Subscription 383 48

Total $ 25,483 $ 48

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

The following tables provide a rollforward of deferred revenue for the three months ended March 31, 2025:

Balance as of December 31, 2024 $ 696

Revenue recognized ( 383 )

Revenue deferred 389

Balance as of March 31, 2025 $ 702

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

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

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

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

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

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

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

The Company estimates the fair value of equity-based payment awards subject to performance-based market conditions on the date of grant using a Monte-Carlo valuation simulation.

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

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

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The Company accounts for forfeitures as they occur.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

The grant date fair value of options with performance-based market conditions is determined using a Monte-Carlo valuation simulation.

For awards that vest based on service conditions and market conditions, we use the straight-line method to recognize compensation expense over the respective service period.

For awards that contain performance conditions, we determine the appropriate amount to expense based on the anticipated achievement of performance targets, which requires judgment, including forecasting the achievement of future specified targets.

At the date performance conditions are determined to be probable of achievement, we record a cumulative expense catch-up, with remaining expense amortized over the remaining service period.

Throughout the performance period, we re-assess the estimated performance and update the number of performance-based awards that we believe will ultimately vest.

Net loss per share

Net income (loss) per share

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

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

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

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

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

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

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

Securities that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive for the three and nine months ended September 30, 2024, include stock options and restricted stock units.

The Company has 1,607,534 outstanding stock options and 1,238,873 restricted stock units to purchase an equivalent number of common stock at September 30, 2024.

The Company also has 29,026,000 outstanding warrants to purchase an equivalent number of shares of common stock as of September 30, 2024 and 2023, respectively at a weighted average strike price of $ 11.50 .

Securities that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive for the three months ended March 31, 2025, include stock options and convertible debt.

The Company had 18,048 and 78,937 outstanding stock options to purchase an equivalent number of common stock at March 31, 2025, and 2024, respectively.

The Company also had 1,161,195 outstanding warrants to purchase an equivalent number of shares of common stock as of March 31, 2025 and 2024, respectively at a weighted average strike price of $ 287.50 .

Concentration of credit risk

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Intangible assets

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

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

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

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

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

There was no impairment loss recognized for the intangible assets for the nine months ended September 30, 2024 and 2023, respectively.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

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

There was no impairment loss for the three months ended March 31, 2025 or 2024, respectively.

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

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

The Company tests for goodwill impairment annually during its fourth quarter on October 1.

There was no impairment of goodwill for the nine months ended September 30, 2024 and 2023, respectively.

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

In March 2025, the Company sold GC Aviation, Inc and the Part 135 air carrier certificate.

In connection with that sale, the Company recorded an impairment on goodwill of $ 35

thousand for the three months ended March 31, 2025.

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

There was no impairment loss recorded for the three months ended March 31, 2024.

Segment reporting

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

The chief operating decision maker is the Company’s chief executive officer.

We determined that the Company operates in a single operating and reportable segment, private aviation services, as the chief operating decision maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue and cost of revenue for purposes of making operating decisions, allocating resources, and assessing performance.

The chief operating decision maker is the chief executive officer.

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

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

and revenue from private aviation services is substantially earned from flights throughout the U.S.

Cost of revenue

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

Cost of revenue includes expenses incurred to provide flight services and facilitate operations, including aircraft lease costs, fuel, crew travel, maintenance, compensation expenses and related benefits for employees that directly facilitate flight operations including crew and pilots and certain aircraft operating costs such as landing fees and parking.

Cost of revenue for aircraft sales revenue includes cost of the aircraft.

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

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

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

Advertising costs

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

Such advertising amounted to $ 236 thousand and $ 806 thousand for the three months ended September 30, 2024 and 2023, respectively and $ 3.4 million and $ 1.4 million for the nine months ended September 30, 2024 and 2023, respectively.

Variable Interest Entity (VIE) Accounting

The Company evaluates its ownership, contractual relationships, and other interests in entities to determine the nature and extent of the interests, whether such interests are variable interests and whether the entities are VIEs in accordance with ASC 810, Consolidations .

These evaluations can be complex and involve judgment of the Company’s management as well as the use of estimates and assumptions based on available historical information, among other factors.

Based on these evaluations, if the Company determines that it is the primary beneficiary of a VIE, this VIE entity is consolidated into the consolidated financial statements.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES –(CONTINUED)

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

Such advertising amounted to $ 137 thousand and $ 2.2 million for the three months ended March 31, 2025 and 2024, respectively.

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

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

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

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

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

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Recent accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

The amendments included in ASU 2016-13 require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

Although the new standard, known as the current expected credit loss (“CECL”) model, has a greater impact on financial institutions, most other organizations with financial instruments or other assets (trade receivables, contract assets, lease receivables, financial guarantees, loans and loan commitments, and held-to-maturity (HTM) debt securities) are subject to the CECL model and will need to use forward-looking information to better evaluate their credit loss estimates.

Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses.

In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration.

ASU 2016-13 was originally effective for public companies for fiscal years beginning after December 15, 2019.

In November of 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

Effective Dates, which delayed the implementation of ASU 2016-13 to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years for smaller reporting companies.

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

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

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

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

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

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

Early adoption is permitted.

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

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

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

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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

The Company has evaluated all the recent accounting pronouncements and determined that there are no accounting pronouncements that will have a material effect on the Company’s consolidated financial statements.

NOTE 3 – BUSINESS COMBINATION

As discussed in Note 1, on December 1, 2023, the Company consummated the Business Combination pursuant to the Business Combination Agreement.

The Business Combination was accounted for as a reverse recapitalization in accordance with GAAP.

Under this method of accounting, the Company, who was the legal acquirer, was treated as the “acquired” company for financial reporting purposes.

Accordingly, the Business Combination was treated as the equivalent of Legacy Volato issuing stock for the net assets of the Company, accompanied by a recapitalization.

NOTE 3 – BUSINESS COMBINATION (CONTINUED)

Upon the Closing, holders of Legacy Volato common stock received shares of Common Stock of Volato Group, Inc.

in an amount determined by application of the exchange ratio of 1.01508 (the “exchange ratio”).

For periods prior to the Business Combination, the reported share and per share amounts have been retroactively converted by applying the exchange ratio.

The consolidated assets, liabilities and results of operations prior to the Business Combination are those of Legacy Volato.

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

Disaggregation of Income Statement

Expenses (“ASU 2024-03”).

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

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

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

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

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

Early adoption is permitted.

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

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

NOTE 3 – DISCONTINUED OPERATIONS

In September 2024, we announced an agreement with flyExclusive to transition our fleet operations to flyExclusive.

We will continue to take delivery of new aircraft, and these aircraft may become part of flyExclusive's managed fleet.

Major classes of line items constituting loss from discontinued operations is as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

This move is expected to provide Volato with the opportunity to focus on what it believes to be its high-growth areas, including aircraft sales and proprietary software.

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

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

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

Three Months Ended March 31,

Revenue - Aircraft usage $ 56 $ 11,469

Revenue - Managed aircraft — 1,695

Costs of Revenue - Aircraft usage 38 15,929

Cost of Revenue - Managed aircraft — 1,510

Selling, general and administrative 207 7,414

Gain (loss) from sale of equity method investment ( 165 ) — ( 165 ) 883

Other Income from discontinued operations 4,312 — 4,312 —

Loss from discontinued operations $ ( 3,098 ) $ ( 9,263 ) $ ( 23,917 ) $ ( 22,924 )

Carrying amounts of major classes of assets included as part of discontinued operations is a follows:

September 30, 2024 December 31, 2023

Accounts receivable $ 582 $ 2,548

Other income (loss) from discontinued operations ( 59 ) —

Loss from discontinued operations before provision for taxes ( 130 ) ( 11,689 )

Benefit for taxes from discontinued operations ( 225 ) —

Net income (loss) from discontinued operations, net $ 95 $ ( 11,689 )

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

2025 December 31,

Accounts receivable, net $ 987 $ 1,027

Prepaid and other assets 1,180 1,254

Operating lease, right-of-use assets 1,061 1,278

Equity-method investment — 154

Property and equipment, net — 3

Intangibles, net — 1,200

Goodwill — 635

Total assets associated with discontinued operations $ 2,167 $ 4,119

Carry amounts of major classes of liabilities included as part of discontinued operations is as follows:

September 30, 2024 December 31, 2023

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

2025 December 31,

Accounts payable and accrued liabilities $ 5,365 $ 6,344

Operating lease liability 1,078 1,291

Credit facility and other loans 918 918

Customer deposits and deferred revenue 4,754 5,156

Deferred income tax liability — 305

Total liabilities associated with discontinued operations $ 11,037 $ 12,723

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Finite-Lived Intangible Assets

The following is a summary of finite-lived intangible assets, in thousands:

September 30, 2024

Cost Accumulated

Amortization Net

Customer relationships $ 301 $ ( 156 ) $ 145

$ 301 $ ( 156 ) $ 145

December 31, 2023

Cost Accumulated

Amortization Net

Customer relationships $ 301 $ ( 110 ) $ 191

$ 301 $ ( 110 ) $ 191

Intangible asset amortization expense was $ 15 thousand for the three months ended September 30, 2024 and 2023, respectively.

Intangible asset amortization expense was $ 45 thousand for the nine months ended September 30, 2024, and 2023, respectively.

As of September 30, 2024, future amortization expense is expected to be as follows, in thousands:

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

Intangible asset amortization expense was zero and $ 15 thousand for the three months ended March 31, 2025 and 2024, respectively.

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

Indefinite - Lived Intangible Assets

The following table summarizes the balances of the indefinite-lived intangible assets, in thousands:

September 30, 2024 December 31, 2023

Intangible asset - Part 135 air carrier certificate $ 1,200 $ 1,200

The FAA Part 135 air carrier certificate for a total amount of $ 1.2 million relates to the certificate acquired in connection with the GCA acquisition.

During the year ended December 31, 2023, the Company transferred its Fly Dreams operations to GCA and sold its membership interest in Fly Dreams, including the Fly Dreams FAA Part 135 air carrier certificate, with a carrying balance of $ 163 thousand, for a selling price of $ 550 thousand, which resulted in a gain in the amount of $ 387 thousand, which was reported in other income in the consolidated statement of operations for the year ended December 31, 2023.

The Company did not recognize any impairment of the GCA FAA Part 135 air carrier certificate as of September 30, 2024 and December 31, 2023.

The following table summarizes the balances of the indefinite-lived intangible assets as of March 31, 2025 and December 31, 2024, in thousands:

March 31, 2025 December 31, 2024

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

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

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

The Company did not recognize any impairment of the Part 135 certificate during the three months ended March 31, 2025 and 2024, respectively.

NOTE 5 - MERGER TRANSACTION COSTS PAYABLE

Merger transaction cost payable consist of the following, in thousands:

December 31, 2023

Transaction costs payable in common stock $ 4,250

Total $ 4,250

In connection with the Business Combination, the Company entered into three agreements with financial institutions, in which the Company agreed to pay a success fee in the aggregate amount of $ 4.25 million to the financial institutions in case the Company consummated the acquisition.

The success fees were to be paid in shares of common stock and warrants.

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

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

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

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

In January 2024, the Company issued 1,208,180 shares of Common Stock and 100,000 warrants in full settlement of the merger transaction costs in the amount of $ 4.25 million which was payable to three ( 3 ) financial institutions.

Such liability was accrued for and reported under merger transaction costs payable in shares in the consolidated balance sheet as of December 31, 2023.

In January 2024, the Company issued an aggregate number of 48,342 shares of common stock and 4,000 warrants in full settlement of the merger transactions costs of $ 4.25 million which was payable to three financial institutions.

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

NOTE 6 – FORWARD PURCHASE AGREEMENT

On November 28, 2023, the Company, Legacy Volato and Vellar Opportunities Fund Master, Ltd.

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

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

and Vellar Opportunities Fund Master, Ltd.

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

Pursuant to the terms of the Forward Purchase Agreement, the Seller could purchase, prior to the closing, up to 2.0 million shares (the “Maximum Number of Shares”) of the Company from third parties through a broker in the open market.

The Number of Shares (as defined in the Forward Purchase Agreement) subject to the Forward Purchase Agreement could be reduced following a termination of the Forward Purchase Agreement with respect to such shares as described under “Optional Early Termination” in the Forward Purchase Agreement.

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

During the year ended December 31, 2023, the Company paid an aggregate amount of $ 18.9 million in connection with the Forward Purchase Agreement.

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

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

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

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

2 unchanged sentences

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

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

NOTE 8– FIXED ASSETS

Fixed assets consist of the following, in thousands:

September 30,

In the three months ended March 31, 2025 and 2024, the Company recognized a loss on the change in fair value of zero and $ 227 thousand, respectively, reported in other expenses in the consolidated statement of operations.

NOTE 7– PROPERTY AND EQUIPMENT, NET

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

2025 December 31,

5 unchanged sentences

Less accumulated depreciation ( 520 ) ( 454 )

During the three months ended September 30, 2024 and 2023, the Company recognized $ 65 thousand and $ 83 thousand of depreciation, respectively.

During the nine months ended September 30, 2024 and 2023, the Company recognized $ 194 thousand and $ 162 thousand, respectively.

Property and equipment, net $ 579 $ 680

During the three months ended March 31, 2025 and 2024, the Company recognized $ 85 thousand and $ 65 thousand of depreciation and amortization, respectively.

NOTE 8 – DEPOSITS

Deposits consist of the following, in thousands:

September 30, 2024 December 31, 2023

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

March 31, 2025 December 31, 2024

Deposits on aircraft $ 15,000 $ 36,000

3 unchanged sentences

Total deposits, non-current $ 1 $ 300

Below is a breakdown of the deposits on aircraft, in thousands:

September 30,

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

2025 December 31,

Gulfstream aircraft deposits $ 15,000 $ 36,000

Honda aircraft deposits — 1,300

Total deposits on aircraft 15,000 36,000

2 unchanged sentences

Gulfstream Aerospace, LP

In 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G280 aircraft for total consideration of $ 79.0 million.

The first Gulfstream G280 was delivered in the third quarter of 2024 with the remaining three Gulfstream G280s expected to be delivered throughout fiscal year 2025.

The Company has funded an aggregate amount of $ 48.0 million and $ 39.0 million towards the acquisition price of the four Gulfstream G280 aircraft in accordance with the scheduled payment terms of the agreements as of September 30, 2024, and December 31, 2023, respectively.

During the nine months ended September 30, 2024, the Company funded an additional amount of $ 9.0 million, which was funded through the SAC Leasing G280 line of credit.

During the nine months ended September 30, 2023, the Company funded $ 18.0 million pursuant to the terms of the executed purchase agreements, of which $ 15.0 million was funded through the SAC Leasing G280 line of credit and $ 3.0 million was paid directly by the Company.

In the third quarter of 2024, in connection with the delivery of the Gulfstream G280, $ 9.0 million in deposits were paid to SAC Leasing G280 and $ 3.0 million in deposits were paid to the Company.

Deposits for the remaining three Gulfstream G280’s is $ 36.0 million as of September 31, 2024.

In 2022, the Company entered into aircraft purchase agreements with Honda Aircraft Company LLC (“Honda Aircraft”), under which it paid $ 1.3 million of deposits for aircraft not yet delivered at December 31, 2023.

In May 2023, the Company and Honda Aircraft entered into a HondaJet Fleet Purchase Agreement (the “Honda FPA”) for the acquisition of twenty-three ( 23 ) HondaJet HA-420 Aircraft for a total aggregate purchase price of $ 161.1 million for delivery between the fourth fiscal quarter of 2023 and the fourth fiscal quarter of 2025.

The Company took delivery of two aircraft related to this agreement.

On September 10, 2024 the Company received notice from Honda Aircraft that the Honda FPA was terminated.

Pursuant to the terms of the agreement, Honda Aircraft will retain the deposits that have previously been paid by the Company and the Company has to enter into individual purchase agreements for each aircraft for which a deposit had previously been paid.

During the three and nine months ended September 30, 2024 the Company wrote-off the remaining deposit balance of $ 1.0 million and is recorded in selling, general, and administrative expenses.

NOTE 10 – EQUITY-METHOD INVESTMENT

The Company has the following equity method investments, in thousands:

September 30,

2024 December 31,

Investment in Volato 158 LLC $ — $ 154

The Company had one equity-method investment as of September 30, 2024 and December 31, 2023:

Volato 158 LLC, with a membership interest of 3.125 %.

The balance of the equity method investment as of December 31, 2023, is now included in discontinued operations on the balance sheet.

Volato 158 LLC

In August 2021, the Company executed an aircraft purchase agreement with Volato 158 LLC (“158 LLC”) and contributed an aircraft with a carrying amount of $ 4.2 million to 158 LLC for a 100 % membership interest in 158 LLC.

The investment in 158 LLC was initially consolidated as the Company had a controlling financial interest in 158 LLC.

As of September 30, 2024, and December 31, 2023, the Company had a remaining 3.125 % interest in 158 LLC.

In October 2024, the Company sold the interest in 158 LLC to flyExclusive.

Based on its equity investment, the Company recorded a loss from its equity-method investment of $ 162 thousand and zero for the three months ended September 30, 2024 and 2023, respectively.

The Company recorded a loss from its equity method invest of $ 154 thousand and $ 2 thousand for the nine months ended September 30, 2024 and 2023, respectively.

NOTE 11 – REVOLVING LOAN AND PROMISSORY NOTE- RELATED PARTY

Revolving loan and promissory note with a related party consisted of the following, in thousands:

September 30,

2024 December 31,

Dennis Liotta, March 2023 – 10 % interest – promissory note due March 2024

Total notes from related party - current $ — $ 1,000

Dennis Liotta – December 2021 note

On December 9, 2021, the Company entered into a revolving loan agreement with Dennis Liotta, an affiliate of the Company, for a total amount of $ 8.0 million that matured on January 1, 2023 (“December 2021 note”).

The Company was required to make monthly payments of interest at a fixed rate of 4.0 % per annum.

The Company was required to make principal repayments at fixed scheduled dates.

In conjunction with the execution of the December 2021 note, both parties executed a security agreement, under which the Company granted a continuing security interest in all of the assets of the Company.

The Company did not make its interest payments, thus triggering a default and increasing the interest rate to 9 % plus an additional 5 % on the missed payments.

The Company incurred $ 370 thousand in interest and penalties during the three months ended March 31, 2023.

In the first quarter of 2023, the Company converted the unpaid principal balance of this revolving note and accrued interest into a convertible note for total principal balance of $ 6.0 million.

In 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G 280 aircraft for total consideration of $ 79 million with expected delivery throughout fiscal year 2025.

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

The second Gulfstream G280 was delivered in January 2025.

The remaining two Gulfstream G280’s are expected to be delivered throughout fiscal year 2025.

The Company has fully funded an aggregate amount of $ 48.0 million in deposits towards the acquisition price of the four Gulfstream G 280 aircraft in accordance with the scheduled payment terms of the agreements as of March 31, 2025,

and December 31, 2024, respectively.

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

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

Additionally, in March 2025, GulfStream notified the Company that the fourth Gulfstream G280 would be delayed from the original timeline with delivery now expected in Q4 2025.

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

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

During the three months ended March 31, 2024, the Company funded $ 6.0 million pursuant to the terms of the executed purchase agreements, of which $ 6.0 million was funded through SAC leasing G 280 Line of credit.

NOTE 9 – PROMISSORY NOTE- RELATED PARTY

Dennis Liotta - March 2023 note

On March 15, 2023, the Company entered into a promissory note agreement with Dennis Liotta, an affiliate of the Company, for a total amount of $ 1 million, with an effective date of February 27, 2023, which matured on March 31, 2024 (“March 2023 note”).

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

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

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

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

Promissory note from related party was zero as of September 30, 2024, and $ 1.0 million as of December 31, 2023, respectively.

The Company incurred zero and $ 25 thousand of interest expense during the three months ended September 30, 2024 and 2023, respectively.

The Company incurred $ 23 thousand and $ 60 thousand of interest expense during the nine months ended September 30, 2024 and 2023, respectively.

Accrued interest was zero as of September 30, 2024.

Promissory note from related party was zero as of March 31, 2025, and December 31, 2024, respectively.

The Company incurred zero and $ 23 thousand of interest on the March 2023 note during the three months ended March 31, 2025 and 2024, respectively.

NOTE 10 – UNSECURED CONVERTIBLE NOTES

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

2025 December 31,

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

$ 4,899 $ 4,050

Less current portion ( 4,899 ) ( 4,050 )

Total unsecured convertible note, long term $ — $ —

2024 unsecured convertible notes due December 2025 - 2024 Convertible note

During the year ended December 31, 2024, the Company entered into the Securities Purchase Agreement as described in Note 2 above.

Under the Securities Purchase Agreement, the Company may issue a series of convertible notes for an aggregate principal not to exceed $ 36.0 million.

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

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

(ii) paid-in-kind in shares of common stock;

or (iii) compound and become additional principal outstanding.

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

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

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

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

NOTE 11 – CREDIT FACILITY AND OTHER LOANS

Credit facility and other loans consisted of the following, in thousand:

September 30,

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

2025 December 31,

1 unchanged sentence

$ 8,500 $ 28,000

Term Loan — 1,102

Less discounts ( 185 ) ( 247 )

Total credit facility, net of discount $ 28,193 27,374

Total credit facility, net of discount and deposits $ 8,315 $ 28,855

SAC Leasing G280 LLC Line of credit

In 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G-280 aircraft for total consideration of $ 79.0 million.

The first Gulfstream G280 was delivered in the third quarter of 2024 with the remaining three Gulfstream G280s expected to be delivered throughout fiscal year 2025.

An aggregate amount of $ 48.0 million was funded and paid as of September 30, 2024, partially through a credit facility from SAC Leasing G280.

The Company entered into the pre-delivery payment agreement with SAC Leasing G280 on October 5, 2022, to obtain loans in the aggregate amount of $ 40.5 million for the purchase of the aircraft.

The Company’s board of directors consented to the participation of Coastal States Bank, as a syndicate lender in the financing of additional aircraft by SAC Leasing G280.

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

As of September 30, 2024, the Company had an aggregate amount of $ 25.5 million in promissory notes, of which 60 % was solely to Coastal States Bank pursuant to the first amendment.

During the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G-280 aircraft for total consideration of $ 79.0 million with expected deliveries in 2024 and 2025, of which an aggregate amount of $ 48.0 million was funded and paid as of December 31, 2024, partially through a credit facility from SAC leasing G 280.

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

During the three months ended March 31, 2025, the Company decreased its SAC leasing G280 line of credit by $ 19.5 million which was a combination of a repayment in the amount of $ 10.5 million, with the sale of the second G280 in February 2025 and the deposit release and corresponding pay down of the G280 line of credit of $ 9.0 million with the delay of the fourth G280 until Q4 2025, which brings the carrying balance to $ 8.5 million as of March 31, 2025.

In April 2025, the Company repaid the remaining $ 8.5 million SAC leasing G280 line of credit.

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

During the three months ended March 31, 2025 and 2024, the Company amortized to interest expense $ 62 thousand and $ 47 thousand of debt discount, respectively.

The maturity date is the earlier of the delivery date of the aircraft or September 14, 2025, which is thirty-five ( 35 ) months from the date of funding.

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

During the nine months ended September 30, 2024, the Company funded an additional $ 9.0 million and paid down $ 9.0 million through the SAC Leasing G280 line of credit through the sale of the first GulfStream G280 which brings the carrying balance to $ 28.5 million as of September 30, 2024.

The Company incurred $ 68 thousand and $ 548 thousand of incremental closing costs, which are reported as debt discount against the liability in the consolidated balance sheets as of September 30, 2024, and December 31, 2023, respectively.

During the three months ended September 30, 2024 and 2023 the Company amortized to interest expense $ 45 thousand and $ 45 thousand of debt discount, respectively.

During the nine months ended September 30, 2024 and 2023, the Company amortized to interest expense $ 137 thousand and $ 147 thousand of debt discount, respectively.

During the three months ended September 30, 2024 and 2023, the Company incurred $ 1.0 million and $ 607 thousand of interest under this facility, respectively.

During the nine months ended September 30, 2024 and 2023 the Company incurred $ 3.3 million and $ 1.3 million, respectively.

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

Net proceeds of $ 3.8 million were received by the Company and used to fund operations.

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

During the three months ended March 31, 2025 and 2024, the Company incurred approximately $ 641 thousand and $ 1.1 million of interest under this facility, respectively.

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

The Board of Directors consented to the participation of Coastal States Bank, as a syndicate lender in the financing of additional aircraft by SAC Leasing G280 LLC.

On August 25, 2023, the Company and SAC Leasing V280, LLC entered into the first amendment to pre-delivery payment agreement.

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

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

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

All transactions occurred during the first quarter of 2025.

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

Net proceeds of $ 3.9 million were received by the

Company and used to fund operations.

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

The Loan provides for events of default customary for term loans.

As of September 30, 2024 the Company was in compliance with all covenants.

As of December 31, 2024, the Company was in compliance with all covenants.

The Loan is collateralized by all assets of the Company with the exception of the purchase agreements of G280 aircraft or any collateral pledged to SAC Leasing G280.

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

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

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

The Company amortized $ 36 thousand and zero of financing fees in the three months ended March 31, 2025 and 2024, respectively.

The Company recorded $ 107 thousand of interest expense related to the Loan in the three months ended March 31, 2025.

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

As of December 31, 2024 in accordance with the agreement, the Company issued 639,720 shares of common stock for the payment of $ 1.475 million of principal and interest due to the Lender under the Loan and $ 725 thousand of payables related to a separate vendor.

The Company recorded a $ 2.8 million loss on extinguishment of debt upon the settlement of each issuance equal to the payables less the fair value of the shares calculated as of the closing stock price on the date of settlement.

In February 2025, the Company paid the remaining principal balance due on the Loan of $ 1.1 million and outstanding interest of $ 107 thousand.

NOTE 12 – RELATED PARTIES

Liotta Family Office, LLC

Liotta Family Office, LLC (“LFO”) is 20 % owned by the Company’s Chief Executive Officer, 60 % owned by the father of the Company’s Chief Executive Officer, and 20 % owned by the brother of the Company’s Chief Executive Officer.

LFO currently owns 1,859,288 shares of Common Stock, which represents 6.3 % of the Company’s issued and outstanding Common Stock as of September 30, 2024.

During the year ended December 31, 2023, LFO entered into an unsecured promissory note for a total amount of $ 1.0 million (Note 11).

The Company incurred $ 23 thousand of interest during the nine months ended September 30, 2024.

In April 2024, the promissory note and accrued interest was paid in full.

The Company facilitated the formation of limited liability Plane Co’s, which are then funded by third party members prior to the sale and delivery of an aircraft purchased from Honda Aircraft that entered into the Company’s fractional program.

Liotta Family Office, LLC (“LFO”) is owned 20 % by the Company’s Chief Executive Officer (“CEO”), 60 % owned by the father of the Company’s Chief Executive Officer, and 20 % owned by the brother of the CEO.

LFO currently owns 74,372 Shares of Common Stock which represents 3.9 % of the Company’s issued and outstanding Common Stock as of March 31, 2025.

During the year ended December 31, 2023, Liotta Family Office, LLC (“LFO”) entered into an unsecured promissory note for a total amount of $ 1.0 million (Note 9).

The Company incurred approximately $ 23 thousand of interest during the three months ended March 31, 2024.

In April 2024, the promissory note and interest was paid in full.

The Company facilitated the formation of limited liability companies (“Plane Co’s”), which are then funded by third party members prior to the sale and delivery of an aircraft purchased from Honda Aircraft that entered into the Company’s fractional program.

In October 2024, as part of the agreement with flyExclusive, Volato sold all of its interest in the Plane Co’s to flyExclusive.

The aggregate amount of revenue included in loss from discontinued operations generated from the Plane Co’s totaled $ 0.8 million and $ 1.1 million for the three months ended September 30, 2024 and 2023, respectively.

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled $ 3.1 million and $ 3.3 million for the nine months ended September 30, 2024 and 2023, respectively.

Expenses charged to the Company by Plane Co’s and included in loss from discontinued operations totaled $ 0.9 million and $ 0.9 million for the three months ended September 30, 2024 and 2023, respectively.

Expenses charged to the Company by Plane Co’s and included in loss from discontinued operations totaled $ 2.8 million and $ 2.9 million for the nine months ended September 30, 2024 and 2023, respectively.

Balance due to Plane Co’s amounted to $ 48 thousand and $ 259 thousand as of September 30, 2024 and December 31, 2023, respectively.

Aircraft Lease and Charter Services

As part of Volato’s aircraft ownership program, Volato leases a HondaJet HA-420 aircraft from the Company’s equity-method investment, which is 25 % owned by DCL H&I, LLC (“DCL”).

Dennis Liotta, an affiliate of the Company, and his spouse own 100 % of DCL.

Under the terms of an aircraft dry lease, 158 LLC pays Volato a monthly management fee of $ 38 thousand, and Volato AMS pays 158 LLC an hourly rental rate of $ 1 thousand per revenue flight hour.

The lease expires on August 20, 2026.

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled zero and $ 1.2 million for the three months ended March 31, 2025 and 2024, respectively.

Expenses charged to the Company by Plane Co’s and included in loss from discontinued operations, totaled zero and $ 1.2 million for the three months ended March 31, 2025 and 2024, respectively.

Balance due to Plane Co’s amounted to $ 4 thousand and $ 4 thousand as of March 31, 2025 and December 31, 2024, respectively.

NOTE 13 – INCOME TAXES

Management has determined that the Company does not have any uncertain tax positions and associated unrecognized benefits that would impact the consolidated financial statements or related disclosures.

The effective tax rate was zero percent for the three and nine months ended September 30, 2024 and 2023, respectively.

Our effective tax rate for the three and six months ended September 30, 2024 differs from the federal statutory rate of 21%, primarily due to a change in the valuation allowance for deferred assets as of September 30, 2024.

NOTE 15 – SHAREHOLDERS’ EQUITY (DEFICIT)

On December 1, 2023, the Company filed its Second Amended and Restated Articles of Incorporation (the “Certificate of Incorporation”) with the Secretary of State of the State of Delaware.

Our Certificate of Incorporation previously authorized the issuance of 81,000,000 shares, consisting of 80,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, $ 0.0001 par value per share (“Preferred Stock”).

The effective tax rate was negative 39.00 % and zero percent for the three months ended March 31, 2025 and 2024, respectively.

Our effective tax rate for the three months ended March 31, 2025 differs from the federal statutory rate of 21%, and was negative as a result of the valuation allowance on the deferred tax benefit due to the disposition of GC Aviation, Inc.

and the Part 135 FAA Certificate intangible asset.

NOTE 14 – SHAREHOLDERS’ DEFICIT

On December 1, 2023, the Company filed its Second Amended and Restated Certificate of Incorporation with the State of Delaware.

Our Certificate of Incorporation initially authorized the issuance of 81,000,000 shares, consisting of 80,000,000 shares of Class A Common Stock, $ 0.0001 par value per share, and 1,000,000 shares of Preferred Stock, $ 0.0001 par value per share.

On October 28, 2024, the Company filed an amendment to the Certificate of Incorporation to increase the number of authorized shares to 201,000,000 shares consisting of 200,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock.

The outstanding shares of Common Stock are duly authorized, validly issued, fully paid and non-assessable.

On February 12, 2025, the Board unanimously approved the Reverse Stock Split of the Company’s Common Stock, at a ratio of 1-for-25.

The Reverse Stock Split became effective on February 24, 2025, with no change in par value.

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

The Reverse Stock Split did not have an effect on the Authorized Common Stock.

Preferred Stock

No shares of Preferred Stock have been issued as of September 30, 2024 and December 31, 2023.

Equity Incentive Plans

Summary of the 2021 Plan

The 2021 Equity Incentive Stock Plan (as amended, the “2021 Plan”) became effective on August 13, 2021, and will remain in effect until August 12, 2031, unless terminated earlier by the Company’s board of directors.

In connection with the consummation of the Business Combination, the 2021 Plan was amended and restated to reflect the effect of the Closing.

As of the effective date of the Business Combination, each then-outstanding unexercised option (whether vested or unvested) to purchase shares of Legacy Volato common stock granted under the 2021 Plan was assumed by the Company and was converted into a stock option to acquire shares of Common Stock in accordance with the Business Combination Agreement.

No shares remained available for the grant of awards.

No shares of preferred stock have been issued as of March 31, 2025 and December 31, 2024.

Stock Options - Equity Incentive Plans

Summary of the 2023 Plan

The 2023 Stock Incentive Plan (the “2023 Plan”) was approved at the special meeting of the shareholders of the Company on November 28, 2023.

The 2023 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options) stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and

other stock- and cash-based awards.

The 2023 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock- and cash-based awards.

The Company has reserved a pool of shares of Common Stock for issuance pursuant to awards under the 2023 Plan equal to 224,348 shares.

As of September 30, 2024 the Company had 3,128,555 shares available for issuance.

As of March 31, 2025 the Company had 230,424 shares a vailable for issuance.

Stock option activity for the periods presented, is as follows:

2 unchanged sentences

Per Share Weighted

Term (years) Aggregate Intrinsic Value (thousands)

Outstanding at December 31, 2024 18,614 $ 5.59 7.5

Granted 859,250 $ 0.51 —

Cancelled ( 566 ) 26.11

Exercised — —

Outstanding at September 30, 2024 1,607,534 $ 0.38 4.6 $ 322

Exercisable as of September 30, 2024 1,325,404 $ 0.28 3.8 320

The aggregate intrinsic value represents the difference between the exercise price and the fair value of the shares underlying common stock.

Outstanding as of March 31, 2025 18,048 $ 5.54 7.2

Exercisable as of March 31, 2025 15,813 $ 1.44

The Black-Scholes option pricing model is used by the Company to determine the weighted-average fair value of share-based payments.

The Company’s recognizes forfeitures as they occur.

The related stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the awards, which is generally four years .

The Black-Scholes option pricing model assumptions used in evaluating our option awards to employees is as follows:

Nine Months ending September 30,

Expected term 6.05 years

Expected volatility 68 %

Risk-free interest rate 3.9 %

Dividend yield —

The Company recognizes forfeitures as they occur.

There were no stock options issued in the three months ended March 31, 2025.

Restricted Stock

In June, 2024 the Company issued time-based restricted stock units and performance-based restricted stock units with market conditions that vest upon the Company’s Common Stock achieving a specific price per share.

In the first quarter of 2025, the Company issued time-based restricted stock units.

Restricted stock unit activity for the period presented is as follows:

4 unchanged sentences

Forfeited — —

Outstanding at September 30, 2024 1,238,873 0.75

The performance-based restricted stock units with market conditions was determined using a Monte Carlo simulation model.

Stock based compensation expense was negative $ 199 thousand and $ 40 thousand for the three months ended September 30, 2024 and 2023, respectively.

Stock based compensation expense was $ 69 thousand and $ 63 thousand for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, there were 13,800,000 public warrants and 15,226,000 private placement warrants issued and outstanding.

Outstanding at March 31, 2025 32,789 $ 16.07

Stock based compensation expense was $ 46 thousand and $ 83 thousand for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, there were 552,000 public warrants and 609,195 private placement warrants issued and outstanding.

Private placement warrants

Simultaneously with the closing of the Company’s initial public offering in 2021, (the “Initial Public Offering”) the Company consummated the private placement of 15,226,000 private placement warrants at a price of $ 1.00 per private placement warrant to the sponsor and Blackrock, Inc.

Each private placement warrant is exercisable for one whole share of Common Stock at a price of $ 11.50 per share.

Such private placement warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are not be redeemable by the Company.

The private placement warrants are all exercisable as of September 30, 2024.

There was no activity during the period ended September 30, 2024.

The Company has 609,195 private placement warrants outstanding.

Each private placement warrant is exercisable for one whole share of Class A common stock at a price of $ 287.50 per share.

Such private placement warrants are exercisable for cash or on a cashless basis, at the holder’s option, and will not be redeemable by the Company.

The private placement warrants are all exercisable as of March 31, 2025.

There was no activity during the three months ended March 31, 2025.

Public warrants

Pursuant to the Initial Public Offering, the Company sold 27,600,000 units (the “Units”) at a price of $ 10.00 per Unit.

Each Unit consisted of one share of Common Stock and one-half of one redeemable warrant.

Each whole public warrant entitles the holder to purchase one share of Common Stock at a price of $ 11.50 per share, subject to adjustment.

There are 13,800,000 public warrants outstanding as of September 30, 2024.

On September 9, 2024, the Company received a written notice (the “Delisting Notice”) from the staff of NYSE Regulation (the “Staff”) of the NYSE American indicating that the Staff determined that the Company’s public warrants were no longer suitable for listing on the NYSE American based on “abnormally low” price levels, pursuant to Section 1001 of the NYSE American Company Guide.

As a result, the Staff determined to commence proceedings to delist the public warrants from the NYSE American.

Effective September 10, 2024, trading in the public warrants on the NYSE American was suspended.

Subsequent to the delisting, the public warrants began trading on OTC Markets Group Inc.

under the trading symbol “SOARW”.

The public warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

The public warrants are all exercisable as of September 30, 2024.

There was no activity during the period ended September 30, 2024.

Pursuant to the Initial Public Offering (“IPO”) by Proof Acquisition Corp I (“PACI”) in 2021, the Company sold 1,104,000 Units at a price of $ 250.00 per Unit.

Each Unit consists of one share of Class A common stock and one-half of one redeemable warrant.

Each whole public warrant entitles the holder to purchase one share of Class A common stock at a price of $ 287.50 per share, subject to adjustment.

A majority of the shares were redeemed before the merger transaction, but the warrants remain.

As a result there are 552,000 warrants outstanding as of March 31, 2025.

The public warrants became exercisable on the later of (a) 30 days after the completion of a business combination and (b) 12 months from the closing of the IPO.

The public warrants expire five years after the completion of a business combination or earlier upon redemption or liquidation.

The public and private warrants expire on December 1, 2028.

The public warrants are all exercisable as of March 31, 2025.

There was no activity during the three months ended March 31, 2025.

NOTE 15 – COMMITMENT AND CONTINGENCIES

Honda Aircraft May 2023 Purchase Agreement

On May 5, 2023, the Company entered into the Honda FPA for the purchase and delivery of twenty-three ( 23 ) HondaJet HA-420 Aircraft for a total estimated purchase price of $ 161.1 million with expected delivery between the fourth fiscal quarter of 2023 and the fourth fiscal quarter of 2025.

The Company took delivery and sold two aircrafts related to this agreement.

On September 10, 2024, the Company received notice from Honda Aircraft that the Honda FPA was terminated.

Pursuant to the terms of the agreement, Honda Aircraft will retain the deposits that have been previously paid by the Company and the Company has to enter into individual purchase agreements for each aircraft for which a deposit had previously been paid.

During the three and nine months ended the Company recorded a charge for the remaining deposit balance of $ 1.0 million which is recorded in selling general and administrative expenses.

Gulfstream Aerospace, LP

During the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G280 aircraft for total consideration of $ 79.0 million.

The first Gulfstream G280 was delivered in the third quarter of 2024 with the remaining three Gulfstream G280’s expected to be delivered throughout fiscal year 2025.

The Company made prepayments totaling $ 48.0 million and $ 39.0 million as of September 30, 2024, and December 31, 2023, respectively, of which the $ 36.0 million remaining is non-refundable, except in some specific circumstances, and would serve as consideration for liquidated damages of $ 3.0 million per aircraft should the purchase agreement be terminated by the Company.

During the nine months ended September 30, 2024, the Company made additional payments of $ 9.0 million towards these agreements, of which $ 9.0 million was funded through the SAC Leasing G280 line of credit (Note 12) and zero was paid by the Company.

During the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G-280 aircraft for total consideration of $ 79.0 million and with expected deliveries in 2024 through 2025, for which the Company made prepayments totaling $ 48.0 million and $ 45.0 million as of March 31, 2025, and March 31, 2024, respectively.

The $ 48.0 million is non-refundable, except in some specific circumstances, and would serve as consideration for liquidated damages of $ 3.0 million per aircraft should the purchase agreement be terminated by the Company.

In September 2024, the Company took delivery of one Gulfstream G280 and received $ 12.0 million in deposits related to the aircraft, of which $ 9.0 million paid down the SAC Leasing G280 line of credit and $ 3.0 million was retained by the Company.

Future minimum payments under the purchase agreements with Gulfstream Aerospace, LP at September 30, 2024, are as follows, in thousands:

In the first quarter of 2025, an additional $ 12 million in deposits was received as a result of the delivery of the second Gulfstream G280 and the return of $ 9 million in deposits related to the fourth Gulfstream G280.

The $ 9 million in returned deposits were used to pay down the SAC Leasing G280 line of credit.

Future minimum payments under the purchase agreements with Gulfstream Aerospace, LP at March 31, 2025, are as follows, in thousands:

2025 $ 26,720

Total expected contractual payments $ 26,720

The Company has a credit facility in place with SAC Leasing G280 under which it has funded $ 40.5 million of the original $ 79.0 million due under these purchase agreements with Gulfstream Aerospace LP.

The remaining balance to be funded by SAC Leasing G280 is zero as of September 30, 2024.

The Company has a credit facility in place with SAC Leasing G280 LLC to fund $ 40.5 million of the original $ 79.0 million due under these purchase agreements with Gulfstream Aerospace LP.

The remaining balance to be funded by SAC Leasing G280 LLC is zero as of March 31, 2025.

Operating Leases

The Company leases property under operating leases.

The Company leases property and equipment under operating leases.

For leases with terms greater than 12 months, the Company records the related assets and obligations at the present value of the lease payments over the lease term.

4 unchanged sentences

During 2023, the Company began leasing an aircraft with a term of five years which has fixed lease payments.

The Company recognized an operating lease liability in the amount of the net present value of the future minimum lease payments, and a right-of-use asset.

The Company recognized an operating lease liability in the amount of the net present value of the future minimum lease payments, and a ROU asset.

The discount rate used for this lease was 12 %, which was determined to be the incremental borrowing rate based on comparative secured financing in the marketplace at the inception of the fixed lease payments.

Lease expense was recognized on a straight-line basis over the lease term.

Lease expense related to this lease consisting of fixed and variable lease costs was $ 78 thousand and $ 117 thousand for the three months ended September 30, 2024 and 2023, respectively.

Lease expense was $ 312 thousand and $ 351 thousand for the nine months ended September 30, 2024 and 2023, respectively.

Lease expense is recognized on a straight-line basis over the lease term.

Lease expense related to this lease consisting of fixed and variable lease costs was zero and $ 117 thousand for the three months ended March 31, 2025 and 2024, respectively.

Additionally, the Company leases other aircraft under operating leases with remaining terms ranging from one to five years .

4 unchanged sentences

The Company has made a policy election to classify lease agreements with a lease term of 12 months or less as short-term leases.

Accordingly, the Company has not recognized right-of-use assets or lease liabilities related to these lease agreements pursuant to the short-term election.

Accordingly, the Company has not recognized ROU assets or lease liabilities related to these lease agreements pursuant to the short-term election.

The Company recognizes short-term lease costs on a straight-line basis over the lease term and accrues the difference each period between the amount expensed and the amount paid.

Variable leases costs associated with the aircraft operating leases were $ 1.9 million and $ 6.6 million for the three months ended September 30, 2024 and 2023, respectively.

Variable lease costs associated with the aircraft operating leases were $ 7.7 million and $ 12.0 million for the nine months ended September 30, 2024, and 2023, respectively.

Short-term lease costs on the aircraft leases were $ 40 thousand and $ 183 thousand for the three months ended September 30, 2024 and 2023, respectively.

Short-term lease costs on the aircraft leases were $ 196 thousand and $ 513 thousand for the nine months ended September 30, 2024, and 2023, respectively.

In September, 2024 the Company began terminating the aircraft leases as part of the flyExclusive agreement .

Variable lease costs associated with the aircraft operating leases were zero and $ 2.9 million for the three months ended March 31, 2025, and 2024, respectively.

Short-term lease costs on the aircraft leases were zero and $ 15 thousand for the three months ended March 31, 2025, and 2024, respectively.

As of December 31, 2024, the Company had terminated all the aircraft leases as part of the flyExclusive agreement.

Airport Facilities

2 unchanged sentences

The leases have lease terms of 12 months or less.

Accordingly, the Company has not recognized right-of-use assets or lease liabilities related to these lease agreements pursuant to the short-term lease election.

Accordingly, the Company has not recognized ROU assets or lease liabilities related to these lease agreements pursuant to the short-term lease election.

The Company has made a policy election to not separate lease and non-lease components for these facility leases.

Short-term lease costs related to these leases were $ 21 thousand and $ 16 thousand for the three months ended September 30, 2024, and 2023, respectively.

Short-term lease costs were $ 57 thousand and $ 54 thousand for the nine months ended September 30, 2024 and 2023, respectively.

Short-term lease costs related to these leases were $ 3 thousand and $ 18 thousand for the three months ended March 31, 2025, and 2024, respectively.

In January 2024, the Company began leasing space for aircraft with a term of 5 years with fixed lease payments.

The Company recognized an operating lease liability in the amount of the net present value of the future minimum lease payments, and a right-of-use asset.

The Company recognized an operating lease liability in the amount of the net present value of the future minimum lease payments, and a ROU asset.

Customer Deposits and Deferred Revenue

Customer deposits and deferred revenue consisted of deposits from customers for the purchase of aircraft of $ 8.6 million and $ 10.7 million as of March 31, 2025 and December 31, 2024, respectively, as well as deferred revenue of $ 702 thousand and $ 696 thousand as of March 31, 2025 and December 31, 2024, respectively.

Legal Contingencies

3 unchanged sentences

Such litigation could be costly and time consuming and could divert or distract Company management and key personnel from its business operations.

The Company does not currently believe that any of its outstanding litigation will have a material adverse effect on its financial statements or business.

Outstanding litigation related to vendor or customer disputes have been fully accrued in the financial statements at the disputed amount.

The Company is currently the defendant in suits brought by vendors, customers and suits related to the transfer of the flight operations and leases to flyExclusive and does not currently believe that any of its outstanding litigation will have a material adverse effect on its financial statements or business.

However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s business, results of operations, financial position, or cash flows.

2 unchanged sentences

Newsteder, LouAnn Gray, and those similarly situated (the “Plaintiffs”) filed suit against the Volato Group, Inc.

and Volato, Inc.(the “Defendants”) citing various allegations including that the termination of employment of 230 employees that occurred on August 30, 2024 violated requirements of the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C.

(“WARN Act”) (collectively, the “Dispute”).

and Volato, Inc.(together, the “Defendants”) citing various allegations including that the termination of employment of 230 employees that occurred on August 30, 2024 violated requirements of the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C.

Plaintiffs are seeking unpaid wages or salary, benefits and other relief deemed by the court as just and proper.

Volato Group, Inc.

and Volato, Inc.

The Defendants.

deny all allegations.

Current range of loss can not be estimated.

NOTE 16 – SEGMENT INFORMATION

The Company has one reportable segment, private aviation services, managed on a consolidated basis by the CEO who is the chief operating decision maker (“CODM”).

The private aviation services segment provides airplane sales and software-as-a-service subscriptions.

The Company derives revenue primarily in North America and manages the business activities on a consolidated basis.

The accounting policies of the segment are the same as those described in the summary of significant accounting policies.

The CODM assesses performance and decides how to allocate resources based on net income (loss) from continuing operations before income taxes that is also reported on the consolidated statements of operations.

The measure of segment assets is reported on the consolidated balance sheets as consolidated total assets.

The CODM allocates resources and evaluates performance based on net income (loss) from continuing operations before income taxes, which is the Company’s measure of segment profit or loss.

The CODM considers year-over-year variances for net income (loss) from continuing operations before taxes when making decisions about how to utilize the company’s resources.

The components of segment profit or loss were as follows:

Three Months Ended

Revenue $ 25,483 $ 48

Cost of revenue 20,987 52

Selling, general and administrative (1)

Loss on fair value adjustment of financial instruments 849 227

Interest Expense 2,400 1,138

Net income (loss) from continuing operations before income taxes $ 458 $ ( 5,695 )

(1) Includes amounts for depreciation and amortization expense.

(2) Other includes gains of $ 1.5 million for settlements of deposits and other liabilities at a discount for the three months ended March 31, 2025.

NOTE 17 – BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted net income (loss) per share attributable to common stockholders (in thousands, except share and per share amounts):

Three Months ended March 31,

Net income (loss) from continuing operations $ 360 $ ( 5,701 )

stock based compensation expense, net of tax 43 —

loss on convertible note, net of tax 838 —

Net income (loss) attributable to common stockholders from continuing operations, dilutive 1,241 ( 5,701 )

Net income (loss) from discontinued operations 95 ( 11,689 )

Weighted-average common shares outstanding, basic 1,862,438 1,164,648

options and restricted stock units 22,869 —

2024 convertible note on as-converted basis 12,295,082 —

Weighted-average shares outstanding, dilutive 14,180,389 1,164,648

The following securities were excluded due to their anti-dilution effect on net loss per share attributable to common stockholders recorded in each of the periods:

As of March 31,

Warrants to purchase common stock 1,161,195 1,161,195

Stock options outstanding 17,003 85,382

Restricted stock units with performance and market conditions 10,964 —

Total 1,189,162 1,246,577

NOTE 18 – SUBSEQUENT EVENTS

In October 2024, we released additional customer deposits related to Insider membership program and stretch card agreements as part of the agreement with flyExclusive.

On November 4, 2024, the Company entered into a Settlement Agreement and Stipulation (the "Settlement Agreement”) with Sunpeak Holdings Corporation ("SHC”), which became effective on November 6, 2024, to settle outstanding claims owed to SHC.

Pursuant to the Settlement Agreement, SHC has agreed to purchase certain outstanding payables between the Company and designated vendors of the Company totaling approximately $ 4.7 million (the "Claims”) and will exchange such Claims for a settlement amount payable in shares of common stock of the Company (the "Settlement Shares”).

The Settlement Shares shall be priced at the closing price of the Company’s common stock on November 4, 2024, subject to adjustment pursuant to the terms of the Settlement Agreement.

The Company shall also issue to SHC, on the issuance date(s), 100,000 freely trading shares pursuant to the agreement.

Management has evaluated events that have occurred subsequent to the date of these consolidated financial statements and has determined that no such reportable subsequent events exist through the date the consolidated financial statements were issued in accordance with FASB ASC Topic 855, “Subsequent Events.”

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements