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Item 8. Financial Statements and Supplementary Data

2026-03-12 compared with 2025-03-31 · 586 added, 556 removed, 454 unchanged (72% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

To the Shareholders and the Board of Directors

Volato Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Volato Group, Inc.

and Subsidiaries (the Company) as of December 31, 2024, and 2023 and the related statements of operations, shareholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has incurred significant operating losses and negative cash flows from operations, and has limited positive working capital.

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

We have audited the accompanying consolidated balance sheet of Volato Group, Inc.

and its subsidiaries (the “Company”) as of December 31, 2025, and the related consolidated statements of operations, changes in shareholders’ equity (deficit) and cash flows for the year then ended, and the related notes to the consolidated financial statements (collectively, the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We have also audited the adjustments to the December 31, 2024 consolidated financial statements to retrospectively apply the adjustments to the reporting of discontinued operations related to GC Aviation, Inc.

for the year ended December 31, 2024, as described in Notes 2 and 3.

In our opinion, such adjustments are appropriate and have been properly applied.

We were not engaged to audit, review, or apply any procedures to the December 31, 2024 consolidated financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the December 31, 2024 consolidated financial statements taken as a whole.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has an accumulated deficit and a working capital deficit.

These conditions raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Elliott Davis, PLLC

We have served as the Company’s auditor since 2025.

Elliott Davis

Charlotte, North Carolina

March 12, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Volato Group, Inc.

Opinion on the Financial Statements

We have audited, before the effects of the adjustments to apply the accounting for discontinued operations of GC Aviation, Inc.

described in Note 3, the accompanying consolidated balance sheets of Volato Group, Inc.

and Subsidiaries (the Company) as of December 31, 2024, and the related statements of operations, shareholders’ equity (deficit), and cash flows for the year ended December 31, 2024, and the related notes to the consolidated financial statements (collectively referred to as the consolidated financial statements).

The 2024 consolidated financial statements before the effects of the adjustments for discontinued operations of GC Aviation, Inc.

discussed in Note 3 are not presented herein.

In our opinion, the consolidated financial statements, before the effects of the adjustments to apply the accounting for discontinued operations of GC Aviation, Inc.

described in Note 3, present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

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Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provides a reasonable basis for our opinion.

We were not engaged to audit, review, or apply any procedures to adjustments to apply the accounting for discontinued operations of GC Aviation, Inc.

described in Note 3 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied.

Those adjustments were audited by Elliott Davis, PLLC.

We have served as the Company’s auditor since 2022.

Rose, Snyder & Jacobs LLP

We served as the Company’s auditor from 2022 to 2025.

Encino, California

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Accounts receivable, net 101 2

Contract assets, net 636 —

Deposits 70 36,000

Note receivable, current 206 —

Investment in M2i 1,197 —

Investment in flyExclusive 1,739 —

Aviation asset option 324 —

Prepaid expenses and other current assets 572 1,031

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Deposits — 300

Forward purchase agreement — 2,982

Restricted cash — 2,237

Intangibles, net 1,200 1,391

Goodwill 635 635

Note receivable, non-current 1,693 —

Non-current assets - discontinued operations — 1,838

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Accounts payable and accrued liabilities $ 3,394 $ 5,452

Loan from related party — 1,000

Dividend payable 1,637 —

Convertible notes, net 4,230 4,050

Operating lease liability 43 39

Merger transaction costs payable in shares — 4,250

Credit facility and other loans — 28,855

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Total current liabilities 13,718 62,200

Deferred income tax liability 305 305

Operating lease liability, non-current 85 128

Credit facility, non-current — 8,054

Non-current liabilities - discontinued operations — 305

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COMMITMENTS AND CONTINGENCIES (Note 15)

Shareholders’ equity (deficit):

Shareholders’ deficit:

Common Stock Class A, $ 0.0001 par value;

200,000,000 authorized;

1,843,852 and 1,121,738 shares issued and outstanding as of December 31, 2024 and 2023, respectively

9,510,784 and 1,843,852 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 98,917 87,968

Stock subscriptions receivable — —

Accumulated deficit ( 100,771 ) ( 104,307 )

Total shareholders’ equity (deficit) ( 16,334 ) 14,751

Total liabilities and shareholders’ equity (deficit) 46,299 $ 71,712

Total shareholders’ deficit ( 1,849 ) ( 16,334 )

Total liabilities and shareholders’ equity $ 11,954 $ 46,299

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

VOLATO GROUP, INC.

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(Amounts in thousands, except share data)

For the Years Ended

Twelve Months Ended December 31,

Revenue $ 78,559 $ 39,064

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Total costs and expenses 74,599 47,687

Operating Loss ( 9,365 ) ( 4,440 )

Operating income (loss) 3,960 ( 8,623 )

Other income (expenses):

Gain from sale of consolidated entity — 387

Other income 212 180

Loss from change in fair value forward purchase agreement ( 2,983 ) ( 13,403 )

Other income, net 10,139 212

Other expense ( 6,116 ) —

Loss from change in fair value of financial instruments ( 2,074 ) ( 2,983 )

Loss on extinguishment of debt — ( 2,804 )

Interest expense, net ( 4,848 ) ( 7,493 )

Other income (expenses) ( 13,068 ) ( 16,194 )

Loss before provision for income taxes and discontinued operations ( 22,433 ) ( 20,634 )

Provision for incomes taxes (benefit) ( 507 ) 2

Net loss from continuing operations ( 21,926 ) ( 20,636 )

Net loss from discontinued operations ( 18,719 ) ( 32,186 )

Net loss $ ( 40,645 ) $ ( 52,822 )

Other income (expenses), net ( 2,899 ) ( 13,068 )

Income (loss) before provision for income taxes and discontinued operations 1,061 ( 21,691 )

Provision for (benefit from) incomes taxes 207 ( 507 )

Net income (loss) from continuing operations 854 ( 21,184 )

Net income (loss) from discontinued operations, net of taxes 4,319 ( 19,461 )

Net income (loss) $ 5,173 $ ( 40,645 )

Basic and diluted net loss per share:

Net loss per share from continuing operations, basic and diluted

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

$ 0.19 $ ( 12.73 )

Net loss per share from discontinued operations, basic and diluted $ ( 11.25 ) $ ( 52.78 )

Net loss per share, basic and diluted $ ( 24.42 ) $ ( 86.62 )

Weighted average common share outstanding:

Basic and diluted

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

$ 0.19 $ ( 12.73 )

Net income (loss) per share from discontinued operations, basic $ 0.98 $ ( 11.69 )

Net income (loss) per share from discontinued operations, diluted $ 0.98 $ ( 11.69 )

Net income (loss) per share, basic $ 1.18 $ ( 24.42 )

Net income (loss) per share, diluted $ 1.18 $ ( 24.42 )

Weighted average common shares outstanding:

4,386,829 1,664,502

Diluted 4,386,829 1,664,502

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

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Shareholders’

Equity (Deficit)

Shares Amount

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

Cash collected from subscription receivable — — — 15 — 15

Stock-based compensation

Issuance of common stock to employees 378 — 94 — — 94

Reverse capitalization, net of transaction costs 346,039 1 10,461 — — 10,462

Exercise of stock options 8,294 — 23 — — 23

Issuance of Preferred series A-1 shares, converted to Class A common stock following business combination 97,898 — 24,204 — — 24,204

Issuance of Preferred series A-2 and A-3 shares from conversion of notes payable, converted to Class A common stock following business combination 218,375 1 38,361 — — 38,362

Net loss — — — — ( 52,822 ) ( 52,822 )

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

Class A Common Stock

Shareholders’

Shares Amount

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

Stock-based compensation — — 211 — 211

— — 211 — 211

Exercise of stock options 34,052 — 94 — 94

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

48,342 — 4,250 — 4,250

Net loss — — — ( 40,645 ) ( 40,645 )

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

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

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

Stock-based compensation

— — 605 — 605

Issuance of common stock

7,666,932 — 10,344 — 10,344

Dividends payable — — — ( 1,637 ) ( 1,637 )

Net income — — — 5,173 5,173

Balance at December 31, 2025 9,510,784 $ 5 $ 98,917 $ ( 100,771 ) $ ( 1,849 )

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

VOLATO GROUP, INC.

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(Amounts in thousands)

For the Years ended

Twelve Months Ended December 31,

Operating activities:

Net loss from continuing operations ( 21,926 ) ( 20,636 )

Net loss from discontinued operations ( 18,719 ) ( 32,186 )

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

Net income (loss) from continuing operations $ 854 $ ( 21,184 )

Net income (loss) from discontinued operations 4,319 ( 19,461 )

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

Loss on G280 option from flyExclusive amendment 6,116 —

Depreciation and amortization expense 297 341

Non-monetary exchange 238 —

Stock compensation expense 605 211

Fair value of common stock issued to employees — 94

Gain from sale of property and equipment ( 2 ) —

Loss (gain) from sale of property and equipment 6 ( 2 )

Loss on extinguishment of debt — 2,804

Loss on impairment of intangible assets — 130

Gain from sale of consolidated entity — ( 387 )

Loss from sale of consolidated entity 35 —

Gain on settlement of liabilities ( 10,049 )

Amortization right-of-use asset 39 34

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Change in fair value forward purchase agreement — 2,983

Change in fair value of convertible notes 1,488 —

Loss on investment in M2i 869 —

Loss on investment in flyExclusive 41 —

Gain on aviation asset option ( 324 ) —

Changes in assets and liabilities:

Accounts receivable ( 199 ) —

Contract assets, net ( 636 ) —

Prepaid and other current assets 459 751

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Customers’ deposits and deferred revenue 38 9,137

Change in assets and liabilities of discontinued operations 52 9,067

Net cash used in operating activities ( 16,919 ) ( 30,393 )

Net cash provided by operating activities from continuing operations 8,287 2,642

Net cash used in operating activities from discontinued operations ( 4,795 ) ( 19,561 )

Net cash provided by (used in) operating activities 3,492 ( 16,919 )

Investing activities:

Payoff of liability issued for flyExclusive investment ( 7,796 )

Cash payment for property and equipment ( 211 ) ( 145 )

Proceeds from the sale of property and equipment 30 33

Cash from investing activities - discontinued operations — 2,413

Net cash (used in) provided by investing activities ( 115 ) 1,776

Interests on Note receivable ( 99 ) —

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

Net cash used in investing activities ( 8,076 ) ( 115 )

Financing activities:

Proceeds from lines of credit — 1,000

Principal payment on lease obligations ( 39 ) —

Repayments of lines of credit — ( 1,000 )

Collection on subscription receivable — 15

Proceeds from issuance of term loan — 4,000

Proceeds from issuance of convertible notes, net 6,048 4,050

Purchase of forward purchase agreement — ( 18,911 )

Proceeds from forward purchase agreement — 2,525

Proceeds from issuance of shares under at-the-market sales plan 463

Costs of share issuance ( 66 ) —

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

Proceeds from business combination — 19,081

Business combination closing costs — ( 2,359 )

Proceeds from the sale of preferred stock — 24,204

Proceeds from exercise of stock options — 94

Cash provided by financing activities - discontinued operations — 95

Net cash provided by financing activities 5,282 4,311

Net (decrease) increase in cash ( 12,723 ) 8,844

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

Net increase (decrease) in cash 698 ( 12,723 )

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

Cash and restricted cash, end of period $ 4,698 $ 4,000

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Cash paid for interest $ 989 $ 5,640

Cash paid for income taxes $ 497 $ —

Non-Cash Investing and Financing Activities:

Note receivable from sale of GC Aviation, Inc.

Non-cash interest $ 3,981 $ —

Credit facility for the aircraft deposits $ ( 28,500 ) $ —

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

Original debt discount — 230

Conversion of preferred stock to common stock class A — 62,565

Merger transaction cost payable in stock — 4,250

Liabilities assumed in merger transaction unpaid at 12/31/2023 — 1,722

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

In-kind dividend payable $ 1,637 $ —

Issuance of shares for convertible notes $ 7,356 $ —

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

Investment in flyExclusive $ ( 1,780 ) $ —

Liability issued for flyExclusive investment $ 7,796 $ —

Financing for aircraft purchase $ 55,861 $ —

Settlement on liability for aircraft purchase $ ( 55,950 ) $ —

Financed deposits on aircraft $ 28,500 $ —

Issuance of shares in exchange for debt reduction $ 523 $ —

Release of receivable via investment in flyExclusive $ 100

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

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

VOLATO GROUP, INC.

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Volato Group, Inc.

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

and GC Aviation.

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

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

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

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

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

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

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.

On December 1, 2023, Volato, Inc.

(“Legacy Volato”), a Georgia corporation, PROOF Acquisition Corp I, a Delaware corporation (“PACI”) and PACI Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of PACI (“Merger Sub”), consummated the business combination pursuant to the Business Combination Agreement, dated August 1, 2023 (the “Business Combination Agreement”).

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

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

Legacy Volato was deemed the accounting acquirer in the business combination.

This determination was primarily based on Legacy Volato’s stockholders prior to the business combination having a majority of the voting power in the combined company, Legacy Volato having the ability to appoint a majority of the board of directors of the combined company (the “Board”), Legacy Volato’s existing management comprising the senior management of the combined company, Legacy Volato comprising the ongoing operations of the combined company, Legacy Volato being the larger entity based on historical revenues and business operations, and the combined company assuming Legacy Volato’s name.

Accordingly, for accounting purposes, the business combination was treated as the equivalent of Legacy Volato issuing stock for the net assets of PACI, accompanied by a recapitalization.

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

The net assets of PACI 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 Common Stock, $ 0.0001 par value per share, issued to Legacy Volato stockholders in connection with the business combination.

As such, 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 of approximately 1.01508 pursuant to the terms of the business combination.

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

In September 2024, the Company entered into an agreement with flyExclusive, Inc., 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.

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.

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

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

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

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

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

The Company has retained insider card liabilities of $ 0.3 million that is included in discontinued operations as of December 31, 2025.

On February 24, 2025, the Company effected a reverse stock split of its issued and outstanding Class A common stock (also referred to as “common stock” in this Annual Report), at a ratio of 1-for-25 (the “Reverse Stock Split”) 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 its former subsidiary GC Aviation, Inc., which holds the FAA Part 135 certificate for $ 2.0 million, of which $ 1.8 million was a note receivable.

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

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

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

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

On October 1, 2025, the Company entered into a Fourth Amendment (the “Amendment”) to Aircraft Management Services Agreement (as amended the “Agreement”) with flyExclusive to bring the Agreement in line with Company’s anticipated shift in operations, new business directives, and to better accommodate the proposed Merger with M2i.

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

(ii) grant flyExclusive, subject to certain terms and conditions, the right to purchase certain aviation-related assets from the Company and assume certain obligations of the Company (the “flyExclusive Asset Option”);

(iii) grant the Company, subject to certain terms and conditions, the right to sell certain aviation-related assets to flyExclusive and assign certain obligations of the Company to flyExclusive (the “Company Asset Option,” and collectively with the flyExclusive Asset Option, the “Asset Options”);

(iv) obligate flyExclusive to pay the Company $ 100,000 upon execution of the Amendment as settlement of net payables owed by flyExclusive to the Company under the terms of the Agreement (the “Net Payables Obligation”);

and (v) modify the material terms of flyExclusive’s right to cause the Company to merge with and into a wholly owned subsidiary of flyExclusive (the “flyExclusive Merger Option”), including that the flyExclusive Merger Option is to be only exercisable in the event that the Company and M2i terminate the Merger Agreement.

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

As consideration for the execution of the Amendment, flyExclusive agreed to pay $ 2,000,000 to the Company, in cash or shares of flyExclusive Class A common stock, in exchange for the right to receive either (i) the net proceeds that the Company receives from the sale of a certain G280 aircraft, or (ii) if, and only if, Gulfstream provides written consent, assignment of the G280 Agreement from the Company to flyExclusive subject to the execution of an asset purchase agreement relating solely to the transfer of the G280 Agreement.

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

flyExclusive elected to pay all of the $ 2,000,000 in shares of its Class A common stock and issued an aggregate of 411,523 shares of its Class A common stock to the Company, which occurred in Q4 2025.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going concern, liquidity, and capital resources

The Company has only recently been formed, has limited operating history, has recorded a net loss of approximately $ 40.6 million for the year ended December 31, 2024, has a negative working capital of approximately $ 18.8 million, and has an accumulated deficit of approximately $ 104.3 million as of December 31, 2024.

Net cash used in operating activities for the year ended December 31, 2024, was approximately $ 16.9 million.

The Company has limited operating history, and although the Company has realized net income of approximately $ 5.2 million for the twelve months ended December 31, 2025, the Company has a working capital deficit of approximately $ 3.9 million and an accumulated deficit of approximately $ 100.8 million as of December 31, 2025.

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

During the next twelve months, the Company intends to fund its operations through the issuance of financial instruments including debts or equity, extend the use of its line of credit 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 lease one year from the date of issuance of these financial statements.

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

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

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

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

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

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 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”).

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.

The accompanying consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, Volato, Inc., a company incorporated in the State of Georgia, Gulf Coast Aviation, Inc.

renamed Volato Aircraft Management Service (“VAMS”), a company incorporated in the State of Texas, GC Aviation, Inc., a company incorporated in the State of Texas, Fly Vaunt, LLC, a company incorporated in the State of Georgia, and Fly Dreams LLC, until March 3, 2023.

The Company’s consolidated subsidiaries were as follows:

Name of Consolidated Subsidiaries or Entities State or Other

Jurisdiction of

Incorporation

Organization Attributable

(Legacy Volato) Georgia 100 %

Gulf Coast Aviation, Inc.

G C Aviation, Inc.

Fly Vaunt, LLC Georgia 100 %

Fly Dreams, LLC (until March 3, 2023) Georgia 100 %

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

The aircraft ownership program was a model whereby the Company sold each fleet aircraft to a limited liability company, which was previously referred to as “Plane Co”.

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

Part 135 certificate.

The Company does not hold any controlling interest in any Plane Co as of December 31, 2024, or 2023.

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

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 of the Plane Co’s.

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

Legacy Volato now conducts its operations under GCA 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 year ended December 31, 2023.

The Company does not hold any controlling interest in any limited liability companies as of December 31, 2024 and 2023.

Use of estimates

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• 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 aviation asset put/call option.

Cash and restricted cash

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

At December 31, 2024 and 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 December 31, 2024, and 2023, respectively, which serves as collateral for the credit facility with SAC Leasing G280 LLC.

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 December 31, 2023, the only equity-method investment was Volato 158 LLC with a 3.13 % equity interest.

As of December 31, 2023, management believes the carrying value of its equity method investments was recoverable in all material respects.

In October 2024, the Company sold the interest in Volato 158 LLC to flyExclusive and recorded a loss of $ 162 thousand in the year ended December 31, 2024.

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

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

Accounts receivable

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

The Company recognized approximately zero and $ 106 thousand of bad debt expense during the years ended December 31, 2024 and 2023, respectively.

During the twelve months ended December 31, 2025 and 2024, the Company recognized $ 147 thousand and zero of bad debt expense, respectively.

Fixed assets are stated at cost, less accumulated depreciation.

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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 $ 142 thousand and $ 323 thousand of internal software development costs incurred during the year ended December 31, 2024 and 2023, respectively.

The Company recognized $ 132 thousand and $ 25 thousand of amortization expense during the year ended December 31, 2024 and December 31, 2023, respectively.

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

The Company capitalized $ 211 thousand and $ 142 thousand and of internal software development costs during the twelve months ended December 31, 2025 and 2024, respectively.

The Company recognized $ 158 thousand and $ 132 thousand of amortization expense related to computer software development during the twelve months ended December 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.

During the twelve months ended December 31, 2025, the Company reduced the value of software development cost by $ 238 thousand, related to a non-monetary exchange with a third party and their use of our mission control software.

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

Website development cost

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

The Company capitalized approximately zero and $ 241 thousand of website development costs during the year ended December 31, 2024 and December 31, 2023, respectively.

The Company recognized approximately $ 97 thousand and $ 56 thousand of amortization expense during the year ended December 31, 2024 and December 31, 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 the twelve months ended December 31, 2025 and 2024, respectively.

The Company recognized $ 97 thousand and $ 97 thousand of amortization expense during the twelve months ended December 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.

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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 years ended December 31, 2024 and 2023.

No impairment was recognized during the twelve months ended December 31, 2025 and 2024, respectively.

Fair value of financial instruments

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

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

GAAP, and expands disclosures about fair value measurements.

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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 (“FPA”) is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification.

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

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

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

The Company 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.

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

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

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 the “2024 Convertible note” 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 an aggregate 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 initial note was recognized at initial fair value as of the issuance date.

The value of the convertible note issued in December 2024 at issuance approximated fair value as of December 31, 2024.

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

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

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

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

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

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

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

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

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

under the symbol “MTWO”.

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

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

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

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

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

During the twelve months ended December 31, 2025, the Company recorded a loss of $ 753 thousand related to the change in fair value of the Investment in M2i.

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

As part of the amendment, flyExclusive agreed to pay $ 2.1 million in cash or shares of common stock to the Company for the net payables option and the proceeds from the sale of the fourth G280.

flyExclusive issued the Company 432,099 shares of Class A common stock (the “Investment in flyExclusive”) in the fourth quarter of 2025.

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

During the twelve months ended December 31, 2025 the Company recorded a loss of $ 41 thousand related to the change in the fair value of the Investment in flyExclusive.

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

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

Additionally, with the signing of the Amendment with flyExclusive, as described in Note 1, it granted flyExclusive the right to purchase certain aviation-related assets from the Company and assume certain obligations of the Company and granted the Company the right to sell certain obligations of the Company to flyExclusive.

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

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

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

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

Fair Value Measurements as of December 31, 2025

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Inputs (Level 3) Total

Forward Purchase Agreement $ — $ — $ — $ —

2024 Convertible Notes — — 4,050 4,050

Financial liabilities:

Third Tranche Note $ — $ — $ 3,148 $ 3,148

Fourth Tranche Note — — 1,082 1,082

Total financial liabilities $ — $ — $ 4,230 $ 4,230

Financial assets:

Investment in M2i $ — $ 1,197 $ — $ 1,197

Investment in flyExclusive 1,739 — — 1,739

Aviation asset option — — 324 324

Total financial assets $ 1,739 $ 1,197 $ 324 $ 3,260

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 forward purchase agreement with significant unobservable inputs (Level 3) for the year ended December 31, 2024 and 2023, in thousand:

Forward Purchase

The following table presents changes of all convertible notes issued under the Securities Purchase Agreement (see Note 10) with significant unobservable inputs (Level 3) for the twelve months ended December 31, 2025, in thousands:

2024 Convertible Note

Balance at December 31, 2024 $ 4,050

Cash funded 18,911

Proceeds ( 2,525 )

Change in fair value $ 1,488

Balance December 31, 2023 $ 2,983

Cash funded —

Change in fair value ( 2,983 )

Balance December 31, 2024 $ —

The Company measured the forward purchase agreement using a Monte Carlo simulation valuation model using the following assumptions:

For the Year Ended

December 31, 2023

Conversions $ ( 7,356 )

Additions $ 6,048

Balance as of December 31, 2025 $ 4,230

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

Twelve months ended December 31, 2025

Third Tranche Note Fourth Tranche Note

Volume Weighted average stock price ("VWAP") 0.65 0.65

Initial Price $ 10.81

Simulation Period 0.56 0.79

Expected Volatility 114.0 % 119.7 %

Credit risk-adjusted rate 20.9 % 20.9 %

Risk-free Rate 3.58 % 3.53 %

The following table presents changes of the Convertible Notes with significant unobservable inputs (Level 3) for the year ended December 31, 2024, in thousand:

Convertible Notes

The following table represents the change in the Aviation asset option for the twelve months ended, December 31, 2025:

Aviation asset option

Balance at December 31, 2024 $ —

Fair value at issuance 4,050

Change in fair value 324

Balance at December 31, 2025 $ 324

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

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

The Company measured fair value of the aviation asset option using a Black-Scholes model with the following assumption:

As of December 31, 2025

Strike price 2,000,000

Expected term 0.67

Expected volatility 88.44 %

Risk fee rate 3.49 %

Dividend 0.00 %

There were no transfers between fair value levels during the period.

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

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

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

The Company determines revenue recognition pursuant to Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, through the following steps:

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

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

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

Recognize revenue when or as the entity satisfies a performance obligation.

The Company generates revenue primarily through:

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

(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.

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

Total contract liabilities were $ 11.5 million and $ 2.8 million as of December 31, 2024 and 2023, respectively.

The Company has generated revenue during the year ended December 31, 2024 and December 31, 2023, broken down as follows, in thousands:

Year ended December 31,

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

Twelve Months Ended December 31,

Aircraft sales $ 77,100 $ 38,150

Managed Aircraft 7,224 14,107

Subscription 1,459 914

Total $ 78,559 $ 39,064

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

The following table provides a rollforward of deferred revenue, recorded in customer deposits and deferred revenue in the consolidated balance sheets, for the twelve months ended December 31, 2025:

Balance as of December 31, 2024 $ 696

Revenue recognized ( 1,459 )

Revenue deferred 3,485

Balance as of December 31, 2025 $ 2,722

Assets Recognized from the Costs to Obtain Revenue Contracts

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

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

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

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

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

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

Beginning Balance Amount Capitalized Amortization Ending Balance

Contract assets $ — $ 935 $ ( 299 ) $ 636

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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Stock-based compensation

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

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

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

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The Company accounts for forfeitures as they occur.

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 year ended December 31, 2024, include stock options and convertible debt.

The Company has 18,614 and 94,767 outstanding stock options to purchase an equivalent number of common stock at December 31, 2024, and 2023, respectively.

The Company also has 1,161,195 outstanding warrants to purchase an equivalent number of shares of common stock as of December 31, 2024 and 2023 at a weighted average strike price of $ 287.50 .

Securities that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive for the twelve months ended months ended December 31, 2025, include stock options, restricted stock units and warrants.

The Company had 17,703 and 18,614 outstanding stock options to purchase an equivalent number of shares of common stock at December 31, 2025, and 2024, respectively.

The Company had 10,964 and 29,080 outstanding restricted stock units to purchase an equivalent number of shares of common stock at December 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 December 31, 2025 and 2024, respectively at a weighted average strike price of $ 287.50 .

Concentration of credit risk

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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.

For the years ended December 31, 2024 and 2023, there was no material impairment loss recognized for the intangible assets.

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 twelve months ended December 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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The Company tests for goodwill impairment annually during its fourth quarter.

There was no impairment of goodwill for the year ended December 31, 2024 and 2023.

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 twelve months ended December 31, 2025.

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

There was no impairment loss recorded for the twelve months ended December 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 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 Company identifies operating segments as components of the Company for which discrete financial information is available and is regularly reviewed by the chief operating decision maker (“CODM”), or decision-making group, in making decisions regarding resource allocation and performance assessment.

The CODM is the chief executive officer.

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

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

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 sales, managed aircraft, and subscription based revenue.

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.

Managed aircraft cost of revenue includes all costs incurred in our managed aircraft including the cost of flight crews, fuel, maintenance, and landing and other airport fees.

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 $ 4.5 million and $ 2.8 million for the years ended December 31, 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 Management judgment 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.

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

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

Such advertising amounted to $ 1.0 million and $ 4.5 million for the twelve months ended December 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.

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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.

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

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

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 merger agreement.

The business combination was accounted for as a reverse recapitalization in accordance with GAAP.

Under this method of accounting, Proof Acquisition Corp I or PACI, 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 PACI, accompanied by a recapitalization.

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 approximately 1.01508 (the “exchange ratio”), prior to the effect of the 1-25 Reverse Stock Split.

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 connection with the business combination, approximately $ 5.7 million of transaction related expenses and other costs were incurred.

NOTE 3 – BUSINESS COMBINATION – (CONTINUED)

The following table reconciles the elements of the business combination to the consolidated statement of cash flows and the consolidated statement of changes in equity:

(In thousands) Year Ended

December 31, 2023

Cash - PACI trust and cash (net of redemptions) $ 19,081

Gross Proceeds $ 19,081

Less Transaction related expenses and other costs ( 6,898 )

Less Net liabilities assumed from PACI ( 1,722 )

Net proceeds from the business combination $ 10,461

The number of shares of Common Stock outstanding immediately following the closing was as follows:

PACI public shareholders 70,696

PACI's sponsors 275,343

Company's employees 378

Legacy Volato shareholders (1) 297,397

Legacy Volato Series Preferred investors 477,924

Total shares of Common Stock immediately after closing 1,121,738

(1) The number of Legacy Volato shares was determined from the shares of Legacy Volato shares outstanding immediately prior to the closing converted at the exchange ratio of approximately 1.01508 .

NOTE 4 – INITIAL PUBLIC OFFERING AND PRIVATE PLACEMENT

Pursuant to the Initial Public Offering (“IPO”) in December of 2021, Proof Acquisition Corp I or PACI 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 (“Public 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 (see Note 17).

At the effective date of the merger on December 1, 2023, 70,696 shares were outstanding and not redeemed and were converted into an equivalent number of Class A shares of common stock of Volato Group, Inc.

At the time of the merger, 275,343 founders’ shares (formerly PACI’s Class B common stock shares) were also outstanding and were converted into an equivalent number of Class A shares of common stock of Volato Group, Inc.

Simultaneously with the closing of the IPO in 2021, PACI consummated the private sale to the Sponsor and BlackRock of an aggregate of 609,195 private placement warrants.

Each private placement warrant is exercisable to purchase one share of Class A common stock at a price of $ 287.50 per share, subject to adjustment.

These warrants are outstanding as of December 31, 2024 and 2023.

Adoption of the standard will be applied on a prospective basis and retrospective application to all periods presented is permitted.

We adopted ASU 2023-09 this Annual Report on Form 10-K using the prospective approach.

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, 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 successful empty leg consumer app.

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

Year Ended December 31,

During 2024 and 2025 we continued to take delivery of new aircraft, while also generating revenue from our proprietary software, including the Vaunt platform, Volato’s empty leg consumer app.

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

Twelve Months Ended December 31,

Revenue - Aircraft usage $ 89 $ 32,546

Revenue - Managed aircraft — 7,224

Costs of Revenue - Aircraft usage 65 43,488

Cost of Revenue - Managed aircraft — 6,610

Selling, general and administrative 406 19,035

Gain (loss) from sale of equity method investment — 886

Other income from discontinued operations 5,530 9,902

Loss from discontinued operations $ ( 18,719 ) $ ( 32,186 )

As part of the agreement with flyExclusive they assumed liabilities for insider cards generating a gain of $ 10.0 million for the Company that is included in discontinued operations.

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

Income (loss) from discontinued operations before provision for taxes 5,148 $ ( 19,461 )

Benefit for taxes from discontinued operations 829 —

Net income (loss) from discontinued operations, net $ 4,319 $ ( 19,461 )

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

2025 December 31,

Accounts receivable $ 1,027 $ 2,548

Accounts receivable, net $ 13 $ 1,027

Prepaid and other assets 254 1,254

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

Equity-method investment — 154

Deposits — 441

Property and equipment, net — 3

Intangibles, net — 1,200

Goodwill — 635

Total assets associated with discontinued operations $ 267 $ 4,119

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

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

2025 December 31,

Accounts payable and accrued liabilities $ 1,307 $ 6,344

Operating lease liability — 1,291

Credit facility and other loans — 918

Customer deposits and deferred revenue 284 5,156

Deferred income tax liability — 305

Total liabilities associated with discontinued operations $ 1,591 $ 12,723

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Finite-Lived Intangible Assets

The following is a summary of finite-lived intangible assets as of December 31, 2024 and 2023, in thousands:

December 31, 2024

Cost Accumulated

Amortization Net

Customer relationships $ — $ — $ —

December 31, 2023

Cost Accumulated

Amortization Net

Customer relationships $ 301 $ ( 110 ) $ 191

$ 301 $ ( 110 ) $ 191

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

Intangible asset amortization expense was $ 61 thousand and $ 61 thousand for the years ended December 31, 2024 and 2023, respectively.

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 $ 61 thousand for the twelve months ended December 31, 2025 and 2024, respectively.

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

Indefinite - Lived Intangible Assets

The following table summarizes the balances as of December 31, 2024 and 2023, of the indefinite-lived intangible assets, in thousand:

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

December 31, 2025 December 31, 2024

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

The FAA Part 135 certificate for a total amount of $ 1.2 million relates to the certificate acquired from the GCA acquisition.

During the year ended December 31, 2023, the Company transferred its Fly Dreams LLC operations to GCA and sold its membership interest in Fly Dreams LLC, including Fly Dreams FAA Part 135 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 Part 135 certificates as of December 31, 2024, and 2023.

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 twelve months ended December 31, 2025 and 2024, respectively.

NOTE 5 - MERGER TRANSACTION COSTS PAYABLE

Merger transaction cost payable consist of the following as of December 31, 2024 and 2023, in thousand:

December 31, 2024 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 (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.

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

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

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

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

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

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

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

As of December 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 Vellar Opportunities Fund Master, Ltd.

(“Seller”), entered into an agreement (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 reduction following a termination of the Forward Purchase Agreement with respect to such shares as described under “Optional Early Termination” in the respective 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.

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

and Vellar Opportunities Fund Master, Ltd.

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

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

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

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

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

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

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

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

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

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

In the nine months ended September 30, 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 9– FIXED ASSETS

Fixed assets consist of the following at December 31, 2024 and 2023, in thousand:

In the twelve months ended December 31, 2025 and 2024, the Company recognized a loss on the change in fair value of zero and $ 3.0 million, respectively, reported in other expenses in the consolidated statement of operations.

NOTE 7– PROPERTY AND EQUIPMENT, NET

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

2025 December 31,

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Less accumulated depreciation ( 718 ) ( 454 )

During the years ended December 31, 2024 and 2023, the Company recognized $ 193 thousand and $ 140 thousand of depreciation and amortization, respectively.

Property and equipment, net $ 323 $ 680

During the twelve months ended December 31, 2025 and 2024, the Company recognized $ 297 thousand and $ 193 thousand of depreciation and amortization, respectively.

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

NOTE 8 – DEPOSITS

Deposits consist of the following at December 31, 2024 and 2023, in thousand:

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

December 31, 2025 December 31, 2024

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Total deposits, non-current $ — $ 300

Below is a breakdown of the deposits on aircraft as of December 31, 2024 and 2023, in thousand:

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

2025 December 31,

Gulfstream aircraft deposits $ — $ 36,000

Honda aircraft deposits — 1,300

Total deposits on aircraft — 36,000

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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 funded an aggregate amount of $ 48.0 million and $ 39.0 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 December 31, 2024, and December 31, 2023, respectively.

The third Gulfstream G280 was delivered in April 2025.

The remaining Gulfstream G280 was delivered in the fourth quarter of 2025.

The Company fully funded an aggregate amount of $ 48.0 million in deposits towards the acquisition price of the four Gulfstream G280 aircraft in accordance with the scheduled payment terms of the agreements as of December 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.

During the year ended December 31, 2024, the Company funded $ 9.0 million, which was funded through the SAC Leasing G 280 line of credit.

During the year ended December 31, 2023, the Company funded $ 27.0 million pursuant to the terms of the executed purchase agreements, of which $ 24.0 million was funded through SAC leasing G 280 Line of credit and $ 3.0 million was paid directly by the Company.

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

During the year ended December 31, 2023, the Company took delivery of three aircraft for a purchase price of $ 17.9 million.

In May 2023, the Company and Honda Aircraft Company, LLC entered into a HondaJet Fleet Purchase Agreement 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 2024 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 year ended December 31, 2024 the Company wrote-off the remaining deposit balance of $ 1.0 million and is recorded in selling, general, and administrative expenses.

NOTE 11 – EQUITY-METHOD INVESTMENT

The Company has the following equity method investments at December 31, 2023, in thousand:

Investment in Volato 158 LLC $ 154

The Company had one equity-method investment as of December 31, 2023:

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

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 until 2022 when the Company’s interest was reduced to 3.125 %.

As of 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 $ 3 thousand for the year ended December 31, 2024 and 2023, respectively.

NOTE 12 – REVOLVING LOAN AND PROMISSORY NOTE- RELATED PARTY

Revolving loan and promissory note with a related party consisted of the following at December 31, 2024 and December 31, 2023, in thousand:

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 2022 note”).

The Company is 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 the event of default, the entire unpaid principal balance together with all accrued but unpaid interest would become due and payable regardless of the maturity date.

If the default occurs and remains uncured beyond the applicable grace period, then the entire unpaid principal balance shall bear interest at a default interest of 500 basis points ( 5 %) over the regular interest or nine percent ( 9 %).

Events of default include the failure to make principal or interest payments when due, any judgement in excess of $ 500 , indebtedness cross default, or bankruptcy proceedings.

In conjunction with the execution of the revolving 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 approximately $ 370 thousand of 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 bearing interest at 4 % and maturing on March 31, 2024.

The notes were converted as part of the business combination.

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

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

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

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

In November 2025, the fourth G280 was delivered and the remaining deposit was applied toward the purchase price of the airplane.

During the twelve months ended December 31, 2024, the Company funded $ 9.0 million pursuant to the terms of the executed purchase agreements, of which $ 9.0 million was funded through the SAC Leasing G280 line of credit further described in Note 11.

NOTE 9 – PROMISSORY NOTE- RELATED PARTY

Dennis Liotta - March 2023 note

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

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

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 and $ 1.0 million as of December 31, 2024, and December 31, 2023, respectively.

The Company incurred $ 23 thousand and $ 25 thousand of interest during the year ended December 31, 2024 and 2023, respectively.

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

The Company incurred zero and $ 23 thousand of interest expense during the twelve months ended December 31, 2025 and 2024, respectively.

NOTE 10 – UNSECURED CONVERTIBLE NOTES

Unsecured convertible notes consisted of the following at December 31, 2024 and December 31, 2023, in thousand:

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

2025 December 31,

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

Less unamortized debt discounts ( 450 ) —

Total unsecured convertible notes, net of discount $ 4,050 $ —

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

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

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

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

Less current portion ( 4,230 ) ( 4,050 )

Total unsecured convertible notes, net of discount non-current $ — $ —

2024 unsecured convertible notes due December 2025 - 2024 Convertible note

During the year ended December 31, 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 the “2024 Convertible note” for an aggregate principal not to exceed $ 36.0 million.

During the year ended December 31, 2024, the Company issued convertible notes in an aggregate 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.

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

Total unsecured convertible note, long term $ — $ —

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

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

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

Unsecured convertible note due December 2025 - 2024 Convertible Note

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

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

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.

or (iii) compound and become additional principal outstanding.

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

In conjunction with the issuance of the notes, the Company incurred $ 450 thousand of closing financing costs, which are presented as an offset to the convertible notes in the consolidated balance sheets as of December 31, 2024.

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

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

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

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

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

The Company recognized a loss of $ 626 thousand related to the change in the fair value of the 2024 Convertible Note recorded in Loss from change in fair value of financial instruments on the consolidated statements of operations for the twelve months ended December 31, 2025, respectively.

Unsecured convertible note due June 2026 - Second Tranche Note

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

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

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

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

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

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

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

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

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

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

Unsecured convertible note due July 2026 - Third Tranche Note

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

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

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

Unsecured convertible note due October 2026 - Fourth Tranche Note

In October 2025, the Company issued a fourth convertible note, (the “Fourth Tranche Note”) in accordance with the Securities Purchase Agreement, in the principal amount of $ 2.2 million, for a purchase price of $ 2.0 million, representing an original issue discount of ten percent, which matures on October 16, 2026.

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

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

In December 2025, $ 1.2 million of the outstanding principal and accrued interest of the Fourth Tranche Note was converted into 1,604,091 shares of the Company’s common stock.

Immediately prior to the conversions, the Company remeasured the liability to its fair value as of the conversion date and recorded a gain of $ 10 thousand related to the change in fair value as of the conversion date.

The Company recorded a loss of $ 272 thousand on the change in fair value for the twelve months ended December 31, 2025.

NOTE 11 – CREDIT FACILITY AND OTHER LOANS

Credit facility and other loans consisted of the following at December 31, 2024 and December 31, 2023, in thousand:

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

2025 December 31,

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

$ 28,000 $ 27,750

Term Loan — 1,102

Less discounts — ( 247 )

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SAC Leasing G280 LLC Line of credit

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

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

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

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

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

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

During the year ended December 31, 2023, the Company funded an aggregate amount of $ 27.0 million, of which $ 24.0 million was funded through a credit facility from SAC leasing and $ 3.0 million was paid in cash.

During the year ended December 31, 2024, the Company increased its SAC leasing G280 line of credit by $ 9.0 million offset by a repayment in the amount of $ 9.0 million, which brings the carrying balance at $ 28.0 million as of December 31, 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 December 31, 2024, and December 31, 2023, respectively.

During the year ended December 31, 2024 and 2023, the Company amortized to interest expense $ 197 thousand and $ 146 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 G280 LLC as collateral on this credit facility.

During the year ended December 31, 2024 and 2023, the Company incurred approximately $ 4.2 million and $ 2.2 million of interest under this facility, respectively.

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.

As of December 31, 2024, the Company had an aggregate amount of $ 28.5 million in promissory notes, of which 60 % was solely to Coastal States Bank pursuant to the first amendment.

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 $ 3.9 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 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 $ 164 thousand of financing fees in the year ended December 31, 2024.

The Company recorded $ 1.7 million of interest expense related to the Loan in the year ended December 31, 2024.

During the twelve months ended December 31, 2025, the Company decreased its SAC leasing G280 line of credit by $ 28.0 million which was a combination of a repayment in the amount of $ 10.5 million, with the sale of the second G280 in February 2025 and the deposit release and corresponding pay down of the G280 line of credit of $ 9.0 million with the delay of the fourth G280 until Q4 2025.

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

The line of credit balance was zero as of December 31, 2025.

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

During the twelve months ended December 31, 2025 and 2024, the Company amortized to interest expense $ 247 thousand and $ 197 thousand of debt discount, respectively.

During the twelve months ended December 31, 2025 and 2024, the Company incurred $ 641 thousand and $ 4.2 million of interest, respectively.

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

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

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

All transactions occurred during the first quarter of 2025.

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

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

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

All transactions occurred during the second quarter of 2025.

In connection with the purchase and sale of the fourth G280, the Company entered into a financing agreement with Ogara Jets.

The Company borrowed $ 18.4 million from OgaraJets to facilitate the delivery and subsequent sale of the fourth G280.

Upon the sale of the fourth G280, in December 2025, $ 18.4 million was repaid to Ogara Jets.

All transaction occurred during the fourth quarter of 2025.

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

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

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

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

The Company amortized $ 36 thousand and $ 164 thousand of financing fees in the twelve months ended December 31, 2025 and 2024, respectively.

The Company recorded $ 107 thousand and $ 1.7 million of interest expense related to the Loan in the twelve months ended December 31, 2025 and 2024, respectively.

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

As of December 31, 2024 in accordance with the agreement, the Company issued 639,720 shares 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 fair value of the shares less the value of the shares calculated as of the closing stock price on the date of settlement.

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

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

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

NOTE 12 – RELATED PARTIES

Liotta Family Office, LLC

Liotta Family Office, LLC (“LFO”) is owned 20 % by the Company’s Chief Executive officer, 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, 74,372 Shares of Common Stock which represents 4 % of the Company’s issued and outstanding Common Stock as of December 31, 2024.

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 12).

The Company incurred approximately $ 23 thousand of interest during the year ended December 31, 2024.

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

LFO currently owns 74,372 Shares of the Company’s issued and outstanding common stock which represents less than 1 % of the Company’s issued and outstanding common stock as of December 31, 2025.

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

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

In April 2024, the promissory note and 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.

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

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

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled $ 3.1 million and $ 4.5 million for the year ended December 31, 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 $ 3.9 million for the year ended December 31, 2024 and 2023, respectively.

Balance due to Plane Co’s amounted to $ 4 thousand and $ 202 thousand as of December 31, 2024 and 2023, respectively.

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled zero and $ 3.1 million for the twelve months ended December 31, 2025 and 2024, respectively.

Expenses charged to the Company by Plane Co’s and included in loss from discontinued operations, totaled zero and $ 2.8 million for the twelve months ended December 31, 2025 and 2024, respectively.

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

NOTE 13 – INCOME TAXES

The Company is subject to U.S.

federal, state, and local income taxes.

The Components of income tax expense for the year ended December 31, 2025 are as follows:

Year Ended December 31,

Federal $ 737

Total income taxes $ 1,037

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.

Deferred income tax assets and liabilities are computed annually for differences between financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are

established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company operated at a loss and the deferred tax asset is offset by a corresponding valuation allowance.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company has historically operated at a loss without enough historical evidence of positive income from operations.

As a result, the deferred tax asset is offset by a corresponding valuation allowance.

The net deferred tax assets and liabilities consist of the following amounts at December 31, 2025 and 2024, in thousands:

Deferred Tax Assets

Allowance for doubtful Accounts $ — $ 1

Investment in Plane Cos LLC — 44

Loss carryforwards 18,398 11,521

Capital loss carryover $ 140 $ —

Net operating loss carryforwards 17,774 18,398

Intangible 462 530

1 unchanged sentence

Total deferred tax assets 21,138 21,459

Valuation Allowance ( 20,699 ) ( 21,738 )

Total net deferred tax assets 439 ( 279 )

Deferred Tax Liabilities

Property and equipment depreciation ( 9 ) ( 25 )

Valuation allowance ( 21,738 ) ( 13,096 )

flyExclusive investment ( 16 ) —

Installment sale deferred tax liability ( 414 ) —

Total deferred tax liabilities ( 439 ) ( 25 )

Net deferred tax assets (liabilities) $ — $ ( 305 )

The Company has federal operating losses carryforward of approximately $ 73 million and $ 47 million available as of December 31, 2024 and 2023, respectively, to reduce future taxable income at the federal level, and it has net operating losses of approximately $ 68 million and $ 38 million at the state level, to offset $ 68 million and $ 38 million of future state taxable income, respectively.

A reconciliation from the statutory federal income tax rate to the effective income tax rate is as follows:

Expected federal income taxes at statutory rate 21.00 % 21.00 %

State and local income taxes 4.54 % 4.54 %

Permanent differences ( 3.76 ) % ( 6.79 ) %

Change in valuation allowance ( 21.35 ) % ( 18.18 ) %

The Company has federal operating losses carryforward of approximately $ 70 million and $ 73 million available as of December 31, 2025 and 2024, respectively, to reduce future taxable income at the federal level, and it has net operating losses of approximately $ 67 million and $ 68 million at the state level, to offset future state taxable income, respectively.

The effective tax rate on income differed from the federal statutory rate of 21% for the years ended December 31, 2025 and 2024, for the following reasons:

Year Ended December 31,

Federal tax/(benefit) at statutory rate $ 1,304 21.00 % $ ( 8,500 ) 21.00 %

State and local income taxes, net of federal income tax effects * 300 4.83 % $ 22 ( 0.05 ) %

Changes in valuation allowance ( 1,108 ) ( 17.84 ) % $ 7,257 ( 17.93 ) %

Non-deductible items:

Other 117 1.89 % $ 714 ( 1.76 ) %

Convertible note fair value adjustment 424 6.83 % $ — — %

Effective income tax rate $ 1,037 16.71 % $ ( 507 ) 1.25 %

The primary differences between income tax expense attributable to continuing operations and the amount of income tax expense that would result from applying domestic federal statutory rates to income (loss) before income taxes relate to state income taxes, and the recognition of a valuation allowance for deferred income tax assets.

The net deferred tax liabilities relate to long lived assets with an indefinite life.

_____________________________

* State tax expense is primarily attributable to South Carolina and Florida, which represented approximately 83.7 % and 13.5 % respectively, of total state and local income tax expense for the period.

State income tax expense attributable to all other jurisdictions was not individually material.

The Company’s U.S.

tax returns are subject to examination by federal and state taxing authorities.

The years open to examination by Federal, state, local and foreign government authorities vary by jurisdiction, but the statute of limitation is generally three years from the date the tax return is filed.

For jurisdictions, including Federal, that have generated net operating losses, carryovers may be subject to the statute of limitations applicable for the year those carryovers are utilized.

In these cases, the period for which the losses may be adjusted will extend to conform with the statute of limitations for the year in which the losses are utilized.

In most circumstances, this is expected to increase the length of time that the applicable taxing authority may examine the carryovers by one year or longer, in limited cases.

We have not recorded any amount related to uncertainty in income taxes pursuant to ASC Topic 740, as we believe all tax positions are more likely than not to be sustained upon examination by the taxing authorities.

NOTE 14 – SHAREHOLDERS’ EQUITY (DEFICIT)

On December 1, 2023, the Company filed its Second Amended and Restated Articles 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.

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.

On October 28, 2024, the Company filed an amendment to its Amended and Restated Certificate of Incorporation to increase the number of authorized shares to 201,000,000 shares consisting of 200,000,000 shares of common stock and 1,000,000 shares of preferred stock.

On February 24, 2025, the Company effected the Reverse Stock Split described elsewhere in this Annual Report.

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

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

The Company has authorized stock which have been designated as follows:

Number of Shares

Number of Shares Outstanding As of December 31, 2024

Class A Common Stock 200,000,000 1,843,852 $ 0.0001

Preferred Stock 1,000,000 — $ 0.0001

The Reverse Stock Split did not have an effect on the number of authorized shares of common stock.

Common stock at the market sales agreement

On December 5, 2025, the Company entered into an ATM Sales Agreement (the “Agreement”) with Virtu Americas LLC (the “Agent”) pursuant to which the Agent will act as the Company’s sole sales agent or principal with respect to the offer and sale from time-to-time of shares of the Company’s Class A Common Stock, par value $ 0.0001 per share, having an aggregate gross sales price of an aggregate of up to $ 9.3 million.

The Company issued 436,757 shares of common stock for proceeds of $ 463 thousand in the twelve months ended December 31, 2025.

Preferred Stock

No shares of preferred stock have been issued as of December 31, 2024 and 2023.

Class A Common Stock

Conversion of preferred stock shares (Series Seed, Series A-1, Series A-2 and Series A-3) into the Company’s Class A Common Stock.

Series A-1 Preferred Stock (Legacy Volato)

During the year ended December 31, 2023, the Company issued 96,443 shares of Series A-1 for a total cash consideration of $ 24.2 million.

Following the business combination, the Company converted its 96,443 shares of Series A-1 preferred stock issued and outstanding into 97,898 shares of Class A Common Stock of Volato Group, Inc.

based on an exchange ratio of 1.01508 .

Series A-2 Preferred Stock (Legacy Volato)

During the year ended December 31, 2023, the Company issued 133,105 Series A-2 shares of preferred stock from the conversion of the 2022 convertible notes in the aggregate principal amount of $ 19.1 million and $ 0.8 million of accrued but unpaid interest based on an effective conversion price of $ 149.55 .

Following the business combination, the Company converted the 133,105 shares of Series A-2 preferred stock issued and outstanding into 135,112 shares of Class A Common Stock of Volato Group, Inc.

based on an exchange ratio of 1.01508 .

Series A-3 Preferred Stock (Legacy Volato)

During the year ended December 31, 2023, the Company issued 82,025 Series A-3 shares of preferred stock from the conversion of the 2023 convertible notes in the aggregate principal amount of $ 18.4 million and $ 0.1 million of accrued but unpaid interest based on an effective conversion price of $ 225.00 .

Following the business combination, the Company converted the 82,025 shares of Series A-3 preferred stock into 83,262 shares of Class A Common Stock of Volato Group, Inc.

based on an exchange ratio of 1.01508 .

Conversion of PACI Class B Founder Shares into the Company’s Class A common stock

The shares of Class B common stock automatically converted into Class A common stock at the time of the closing of the business combination.

Upon the business combination, the Company converted 275,343 shares of Class B common stock into an equivalent number of the Company’s shares of Class A common stock.

Conversion of PACI Class A Public Shares into the Company’s Class A common stock.

The Company converted 70,696 shares of non-redeemed PACI public shares into an equivalent number of Shares of Class A Common Stock of the Company following the business combination.

Issuance of Class A common Stock

As of December 31, 2024 in accordance with the agreement, the Company issued 639,720 shares for the payment of $ 2.2 million of outstanding payables.

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

Stock Options - Equity Incentive Plans

Summary of the 2025 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 2025 Stock Incentive Plan (the “2025 Plan”) was approved at the annual meeting of the shareholders of the Company on July 21, 2025.

The 2025 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock- and cash-based awards.

2 unchanged sentences

Summary of the 2023 Plan

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 Volato Group and shall be converted into a stock option (a “Volato Group option”) to acquire shares of Class A Common Stock of Volato Group, par value $ 0.0001 per share, in accordance with the business combination agreement.

The 2021 Plan became effective on August 13, 2021, and was in effect until November 20, 2023.

No awards were granted under the 2021 Plan after the 2023 Plan Effective Date.

Awards granted under the 2021 Plan that will be outstanding on the 2023 Plan Effective Date will be accelerated or continued in accordance with their terms subject to vesting schedules pursuant to the applicable restricted stock award agreement or option agreement.

The balance and activity of all stock options outstanding as of December 31, 2024, and 2023, is as follows:

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 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 December 31, 2025 the Company had 21,855 shares available for issuance.

Stock option activity for the periods presented is as follows:

Options Weighted

2 unchanged sentences

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

Granted 15,309 $ 205.25

Cancelled ( 911 ) 20.30

Exercised — —

Outstanding at December 31, 2023 94,767 $ 35.75 8.8

Granted 34,370 $ 12.76

Cancelled ( 77,910 ) $ 43.57

Exercised ( 32,613 ) $ 3.63

Outstanding as of December 31, 2025 17,703 $ 4.94 6.5

5 unchanged sentences

$ 12.50 2,430 8.4

$ 177.75 44 0.0

$ 210.00 15 5.4

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

The weighted average grant date fair value of stock options issued during the year ended December 31, 2024 and 2023, was $ 6.57 and $ 95.25 per share, respectively.

The Company’s recognizes forfeitures as they occur.

The fair value of stock options on the grant date was determined using the following weighted-average assumptions during the year ended December 31, 2024 and 2023:

The Company recognizes forfeitures as they occur.

There were no stock options granted in the twelve months ended December 31, 2025.

For The Year Ending

Expected term 5.8 - 6.25 years

Expected term 5.8 - 6.25

Expected volatility 68 %

Expected dividends None None

Expected dividends None

Risk-free interest rate 3.8 % - 4.5 %

Forfeitures None None

As of December 31, 2024, the unrecognized compensation cost related to non-vested awards was $ 0.2 million and is expected to be recognized over a weighted average period of 1.9 years.

Forfeitures None

As of December 31, 2025, the unrecognized compensation cost related to non-vested awards was $ 144 thousand and is expected to be recognized over a weighted average period of 0.13 years.

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.

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

4 unchanged sentences

Forfeited — —

Outstanding at December 31, 2024 29,080 $ 13.64

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

As of December 31, 2024, unrecognized compensation expense for time based restricted stock units was $ 241 thousand and is expected to be recognized over the next 2.45 years.

Stock based compensation expense was $ 211 thousand and $ 82 thousand for the year ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, there were 552,000 public warrants (note 4) and 609,195 private placement warrants issued and outstanding.

Outstanding as of December 31, 2025 10,964 $ 6.64

Stock based compensation expense was $ 605 thousand and $ 211 thousand for the twelve months ended December 31, 2025 and 2024, respectively.

As of December 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 Initial Public Offering by PACI in 2021, the Company f/k/a Proof Acquisition Corp I consummated the private placement of 609,195 private placement warrants at a price of $ 25.00 per private placement warrant to the sponsor and Blackrock.

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

The private warrants are all exercisable as of December 31, 2024.

There was no activity during the years ended December 31, 2024 and 2023.

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

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

There was no activity during the twelve months ended months ended December 31, 2025.

Public warrants

Pursuant to the Initial Public Offering by 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.

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 consisted of one share of Class A common stock and one-half of one redeemable warrant.

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

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 December 31, 2023.

The public warrants will become exercisable on the later of (a) 30 days after the completion of a business combination and (b) 12 months from the closing of the Initial Public Offering.

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

A majority of the shares were redeemed before the December 2023 merger transaction, but the warrants remain.

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

There was no activity during the years ended December 31, 2023 and 2022.

The following table is a summary of the Company’s warrant activity during the years ended December 31, 2024:

Warrants Weighted

Exercise Price

Outstanding as of January 1, 2023 1,161,195 $ 287.50 5

Outstanding as of December 31, 2024 1,161,195 $ 287.50 3.92 years

Exercisable as of December 31, 2024 1,161,195

There was no activity during the twelve months ended December 31, 2025.

NOTE 15 – COMMITMENT AND CONTINGENCIES

Honda May 2023 Purchase Agreement

On May 5, 2023, the Company entered into a HondaJet Fleet Purchase Agreement with Honda Aircraft Company.

LLC, 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 2024 and the fourth fiscal quarter of 2025.

The Company took delivery and sold 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 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 year ended December 31, 2024, 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 and with expected deliveries in 2024 through 2025, for which the Company made prepayments totaling $ 48.0 million and $ 48.0 million as of December 31, 2025, and December 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.

During the year ended December 31, 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 LLC credit facility.

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

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

In the first quarter of 2025, an addition $ 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.

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 December 31, 2024, are as follows, in thousands:

For the twelve months ended December 31, Gulfstream

Total expected contractual payments $ 26,270

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 December 31, 2024.

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.

In October 2025, the fourth Gulfstream G280 was delivered and $ 3.0 million of the deposits were applied to the purchase price of the airplane.

There are no future minimum payments due under the purchase agreements with Gulfstream Aerospace, LP at December 31, 2025.

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

In April 2025, the Company paid the remaining balance and terminated the credit facility.

Operating Leases

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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 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 $ 78 thousand and $ 469 thousand for the years ended December 31, 2024 and 2023, respectively.

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

These leases require lease payments that are variable and are dependent on flight hours that generate charter revenues, with no minimum lease payment commitments.

Because of the variable nature of the lease payments, these leases are not recorded on our consolidated balance sheets as ROU assets and lease liabilities.

Certain leases have renewal options to extend lease terms for additional periods ranging from three to twelve months .

Some of the aircraft leases have lease terms of 12 months or less.

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

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

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

Variable lease costs associated with the aircraft operating leases were $ 7.7 million and $ 12.9 million for the years ended December 31, 2024, and 2023, respectively.

Short-term lease costs on the aircraft leases were $ 196 thousand and $ 617 thousand for the years ended December 31, 2024, and 2023, respectively.

Lease expense was zero and $ 78 thousand for the twelve months ended December 31, 2025 and 2024, respectively.

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

These leases required lease payments that were variable and were dependent on flight hours that generate charter revenues, with no minimum lease payment commitments.

Because of the variable nature of the lease payments, these leases were not recorded on our consolidated balance sheets as ROU assets and lease liabilities.

Certain leases had renewal options to extend lease terms for additional periods ranging from three to twelve months .

Some of the aircraft leases had lease terms of 12 months or less.

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

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

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

Variable lease costs associated with the aircraft operating leases were zero and $ 7.7 million for the twelve months ended December 31, 2025 and 2024, respectively.

Short-term lease costs on the aircraft leases were zero and $ 196 thousand for the twelve months ended December 31, 2025 and 2024, respectively.

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

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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 $ 70 thousand and $ 71 thousand for the years ended December 31, 2024, and 2023, respectively.

Short term lease costs related to these leases were $ 3 thousand and $ 70 thousand for the twelve months ended December 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.

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For the years ended December 31, Operating

2025 $ 56,533

TOTAL 207,288

Sale-Leaseback Transactions

The Company entered into $ 15.7 million of sales-leaseback transactions related to aircraft during the years ended December 31, 2023.

No sales-leaseback transactions occurred in 2024.

The Company recorded gains of $ 3.4 million associated with these transactions, for the years ended December 31, 2023.

Gains are recorded in gross profit in the consolidated statements of operations.

The leases of the aircraft assets are operating leases which incur variable lease costs based upon usage as described above.

These lease costs are expensed as incurred.

Thereafter $ —

Customer Deposits and Deferred Revenue

Customer deposits and deferred revenue consisted of deposits from customers for the purchase of aircraft of $ 0.1 million and $ 10.7 million as of December 31, 2025 and December 31, 2024, respectively, as well as deferred revenue of $ 2.7 million and $ 696 thousand as of December 31, 2025 and December 31, 2024, respectively.

Legal Contingencies

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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”).

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.

deny all allegations.

(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.

The Defendants deny all allegations.

Current range of loss can not be estimated.

NOTE 16 – SEGMENT INFORMATION

The Company has one reportable segment, private aviation services, managed on a consolidated basis by the CEO who is the CODM.

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

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

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

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

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

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

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

The components of segment profit or loss were as follows:

Twelve Months Ended

Revenue $ 78,559 $ 39,064

Cost of revenue 63,871 32,181

Selling, general and administrative (1)

10,728 15,506

Loss on fair value adjustment of financial instruments 2,074 2,983

Interest expense, net 4,848 7,493

Loss on debt extinguishment — 2,804

Net income (loss) from continuing operations before income taxes $ 1,061 $ ( 21,691 )

(1) Includes amounts for depreciation and amortization expense.

(2) Other includes gains of $ 10.0 million for settlements of deposits and other liabilities at a discount for the twelve months ended December 31, 2025, offset by a loss on the flyExclusive fourth amendment of $ 6.1 million for the twelve months ended December 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):

Twelve Months Ended December 31,

Net income (loss) from continuing operations $ 854 $ ( 21,184 )

Net income (loss) from discontinued operations $ 4,319 $ ( 19,461 )

Weighted-average common shares outstanding, basic and diluted 4,386,829 1,664,502

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

As of December 31,

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

2024 convertible note and second, third and fourth tranche notes on an-converted basis 2,522,355 —

Stock options outstanding 17,703 18,614

Restricted stock units with performance and market conditions 14,601 10,964

Total 3,715,854 1,190,773

NOTE 18 – SUBSEQUENT EVENTS

Management has evaluated events that have occurred subsequent to the date of these consolidated financial statements and has determined that, other than those listed below, no such reportable subsequent events exist through March 31, 2025, the date the consolidated audited financial statements were issued in accordance with FASB ASC Topic 855, “Subsequent Events.”

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 affect on the Authorized Common Stock.

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 is a note receivable.

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

In January 2026, the remaining $ 1.0 million of principal and interest on the Fourth Tranche note was converted into 1,926,618 shares of common stock.

On January 19, 2026, the Company entered into the first Amendment to the merger agreement with M2i Global Inc, to extend the end date to March 31, 2026.

Through March 10, 2026, $ 2.5 million of principal and interest on the Third Tranche note was converted into 7,406,489 shares of common stock.

On March 6, 2026, the Company signed amendment number five to the Agreement with flyExclusive, pursuant to which the Company sold certain unused intellectual property assets for $ 1.3 million payable in cash or shares of flyExclusive’s Class A common stock.

Such assets represent a portion of the total assets which were anticipated to be sold under one of the Asset Options as described in Note 1.

Following the sale of the intellectual property assets pursuant to the fifth amendment, there is $ 700,000 in remaining assets that may be sold to flyExclusive under the terms of the Agreement, as amended.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data