Volato Group, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS VOLATO GROUP, INC. Audited Consolidated Financial Statements Report of Independent Registered Public Accounting Firm ( PCAOB ID 149 ) 47 Consolidated Balance Sheets as of December 31, 202 5 and 202 4 49 Consolidated Statements of Operations for the years ended December 31, 202 5 and 202 4 50 Consolidated Statements of Shareholders’ Equity (Deficit) for the years ended December 31, 202 5 and 202 4 51 Consolidated Statements of Cash Flows for the years ended December 31, 202 5 and 202 4 52 Notes to the Consolidated Financial Statements 54 46 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors Volato Group, Inc. Opinion on the Financial Statements 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 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 47 Table of Contents 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. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. 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 the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits 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 consolidated 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 audits, 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. 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 March 31, 2025 48 Table of Contents VOLATO GROUP, INC. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except par value amounts) December 31, 2025 December 31, 2024 ASSETS Current assets: Cash $ 4,698 $ 2,161 Restricted cash — 1,839 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 Current assets - discontinued operations 267 2,281 Total current assets 9,810 43,314 Property and equipment, net 323 680 Operating lease, right-of-use assets 128 167 Deposits — 300 Note receivable, non-current 1,693 — Non-current assets - discontinued operations — 1,838 Total assets $ 11,954 $ 46,299 LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued liabilities $ 3,394 $ 5,452 Dividend payable 1,637 — Convertible notes, net 4,230 4,050 Operating lease liability 43 39 Credit facility and other loans — 28,855 Customer deposits and deferred revenue 2,823 11,386 Current liabilities - discontinued operations 1,591 12,418 Total current liabilities 13,718 62,200 Operating lease liability, non-current 85 128 Non-current liabilities - discontinued operations — 305 Total liabilities $ 13,803 $ 62,633 COMMITMENTS AND CONTINGENCIES (Note 15) Shareholders’ deficit: Common Stock Class A, $ 0.0001 par value; 200,000,000 authorized; 9,510,784 and 1,843,852 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively $ 5 $ 5 Additional paid-in capital 98,917 87,968 Accumulated deficit ( 100,771 ) ( 104,307 ) 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 . 49 Table of Contents VOLATO GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share data) Twelve Months Ended December 31, 2025 2024 Revenue $ 78,559 $ 39,064 Costs and expenses: Cost of revenue 63,871 32,181 Selling, general and administrative 10,728 15,506 Total costs and expenses 74,599 47,687 Operating income (loss) 3,960 ( 8,623 ) Other income (expenses): 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), 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 income (loss) per share from continuing operations, basic $ 0.19 $ ( 12.73 ) 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: Basic 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 . 50 Table of Contents VOLATO GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (Amounts in thousands, except shares) Class A Common Stock Additional Paid-in Capital Retained Deficit Total Shareholders’ Equity (Deficit) Shares Amount Balance as of December 31, 2023, as adjusted 1,121,738 $ 3 $ 78,410 $ ( 63,662 ) $ 14,751 Stock-based compensation — — 211 — 211 Exercise of stock options 34,052 — 94 — 94 Issuance of common stock 639,720 2 5,003 — 5,005 Common stock and warrant reclass from in-kind liability to APIC 48,342 — 4,250 — 4,250 Net loss — — — ( 40,645 ) ( 40,645 ) 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 . 51 Table of Contents VOLATO GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) Twelve Months Ended December 31, 2025 2024 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 Loss (gain) from sale of property and equipment 6 ( 2 ) Loss on extinguishment of debt — 2,804 Loss on impairment of intangible assets — 130 Loss from sale of consolidated entity 35 — Gain on settlement of liabilities ( 10,049 ) Amortization right-of-use asset 39 34 Amortization of debt discount 283 301 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 Deposits 8,237 4,325 Account payable and accrued liabilities ( 110 ) 2,845 Operating lease liability — ( 34 ) Customers’ deposits and deferred revenue 38 9,137 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 Interests on Note receivable ( 99 ) — Cash used in investing activities - discontinued operations — ( 3 ) Net cash used in investing activities ( 8,076 ) ( 115 ) Financing activities: Principal payment on lease obligations ( 39 ) — Repayments of lines of credit — ( 1,000 ) Proceeds from issuance of term loan — 4,000 Proceeds from issuance of convertible notes, net 6,048 4,050 52 Table of Contents 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 exercise of stock options — 94 Cash provided by financing activities - discontinued operations — 95 Net cash provided by financing activities 5,282 4,311 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 Supplemental disclosure of cash flow information: 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. $ 1,800 $ — Non-cash interest $ 3,981 $ — Credit facility for the aircraft deposits $ ( 28,500 ) $ — 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 . 53 Table of Contents VOLATO GROUP, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Volato Group, Inc. (“we”, “us”, “the Company”, or “Volato”) is a holding company for several wholly owned subsidiaries, including Volato, Inc., Fly Vaunt, LLC, Gulf Coast Aviation, LLC (f/k/a Gulf Coast Aviation, Inc.), Volato Merger Subsidiary, Inc., and Parslee, LLC. The Company’s primary operating subsidiary was founded in 2021. That year, the Company entered the private jet charter and fractional ownership market with its Part 135 HondaJet ownership program, taking delivery of its first jet in August 2021 and completing its first Part 135 charter flight in October of 2021. In March 2022, the Company acquired Gulf Coast Aviation, Inc. (n/k/a Gulf Coast Aviation, LLC), owner of G C Aviation, Inc., a Texas entity and Part 135 air carrier certificate holder. In March 2022, the Company placed orders for four Gulfstream G280s for delivery in 2024 and 2025. In September 2022, the Company started internal development on its full suite Flight Management Software platform Mission Control, and in the fourth quarter of 2023 the Company commercially launched Vaunt, our proprietary consumer facing empty leg platform. In September 2024, the Company entered into an agreement with flyExclusive, Inc., (“flyExclusive”) a leading provider of private jet charter services, to transition the management of its aircraft ownership fleet operations to flyExclusive. This move was intended to bring substantial cost savings and allow Volato to focus on its potential high-growth areas, including aircraft sales and proprietary software products. The Company has continued to take delivery of new aircraft and also generate revenue from its proprietary software, including the Vaunt platform, its empty leg consumer app. In the fourth quarter of 2024, we transferred our aircraft lease agreements to flyExclusive and have no further obligations under the aircraft lease agreements or control over flight operations. The Company has retained insider card liabilities of $ 0.3 million that is included in discontinued operations as of 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. 54 Table of Contents 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 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 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 sheets do not include any adjustments that might result from these uncertainties. Basis of presentation 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 2024 have been reclassified to conform with the current period’s presentation to reflect discontinued operations. 55 Table of Contents 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. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Such estimates include: • Useful lives of property, plant, and equipment. • Assumptions used in valuing debt or equity instruments. • Deferred income taxes and related valuation allowance. • Assessment of long-lived assets impairment. • Assumptions used in the aviation asset put/call option. Cash and restricted cash Cash consists primarily of cash on hand and bank deposits. The Company maintains cash deposits with financial institutions that may exceed federally insured limits at times. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At 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 Accounts receivables are reported on the consolidated balance sheets at the outstanding principal amount adjusted for any allowance for credit losses and any charge offs. The Company provides an allowance for credit losses to reduce trade receivables to their estimated net realizable value equal to the amount that is expected to be collected. This allowance is estimated based on historical collection experience, the aging of receivables, specific current and expected future macro-economic and market conditions, and assessments of the current creditworthiness and economic status of customers. The Company considers a receivable delinquent if it is unpaid after the term of the related invoice has expired. Balances that are still outstanding after management has used reasonable collection efforts are written off. The Company reviews its allowance for credit losses on a quarterly basis. During the twelve months ended December 31, 2025 and 2024, the Company recognized $ 147 thousand and zero of bad debt expense, respectively. Fixed assets Fixed assets are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, which range from three to seven years : Classification Life Machinery and equipment 3 - 7 years Automobiles 5 years Computer and office equipment 5 years Website development costs 3 years 56 Table of Contents Computer software development Software development costs are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40, Internal Use Software . Internal software development costs are capitalized from the time the internal use software is considered probable of completion until the software is ready for use. Business analysis, system evaluation and software maintenance costs are expensed as incurred. The capitalized computer software development costs are reported under the section “Property and equipment, net” in the consolidated balance sheets and are amortized using the straight-line method over the estimated useful life of the software, generally three years from when the asset is placed in service. The Company capitalized $ 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 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 FASB ASC 360, property, plant, and equipment, and long-lived assets are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. No impairment was recognized during the twelve months ended December 31, 2025 and 2024, respectively. Fair value of financial instruments The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements. The Company measures fair value under a framework that utilizes a hierarchy prioritizing the inputs to relevant valuation techniques. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of inputs used in measuring fair value are: ▪ Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company as the ability to access. ▪ Level 2: Inputs to the valuation methodology include: • Quoted prices for similar assets or liabilities in active markets. • Quoted prices for identical or similar assets or liabilities in inactive markets. • Inputs other than quoted prices that are observable for the asset or liability. • Inputs that are derived principally from or corroborated by observable market date by correlation or other means; and • If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. ▪ Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. 57 Table of Contents On November 28, 2023, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”). The fair value of the Company’s recorded Forward Purchase Agreement was determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification. A Monte Carlo simulation model was used to determine the fair value as of December 31, 2023 . The Company recorded the Forward Purchase Agreement at fair value on the consolidated balance sheets with changes in fair value recorded in the consolidated statements of operations. On July 23, 2024, the Company received notice of termination of the Forward Purchase Agreement and recognized an impairment in the value of the Forward Purchase Agreement in the second quarter of 2024 due to receipt of the termination notice. A loss of $ 3.0 million was recorded due to the cancellation of the Forward Purchase Agreement in 2024. In December 2024, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) pursuant to which the Company may issue a series of convertible notes for an aggregate principal amount not to exceed $ 36.0 million. During the year ended December 31, 2024, the Company issued a single convertible note in the principal amount of $ 4.5 million, (the “2024 Convertible Note”), of which $ 4.1 million was funded as of December 31, 2024, representing an original issue discount of ten percent. The Company elected the fair value guidance under ASC 825-10 and the 2024 Convertible Note was recognized at initial fair value as of the issuance date. 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. 58 Table of Contents 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 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total 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 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 Change in fair value $ 1,488 Conversions $ ( 7,356 ) Additions $ 6,048 Balance as of December 31, 2025 $ 4,230 59 Table of Contents 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 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 represents the change in the Aviation asset option for the twelve months ended, December 31, 2025: Aviation asset option Balance at December 31, 2024 $ — Additions — Change in fair value 324 Balance at December 31, 2025 $ 324 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. 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, 2025 and December 31, 2024. Commitments and contingencies The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred, and the amount of the assessment can be reasonably estimated. 60 Table of Contents Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480 Distinguishing Liabilities from Equity (“ASC 480”) and FASB ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. All of the Company’s warrants have met the criteria for equity treatment. Revenue recognition Revenues are recognized on a gross basis and presented on the consolidated statements of operations net of rebates, discounts, and taxes collected concurrent with revenue-producing activities. The transaction price in the Company’s contracts with its customers is fixed at the time control of goods and services are transferred to the customer. Therefore, the Company does not estimate variable consideration or perform a constraint analysis for our contracts. The Company determines revenue recognition pursuant to ASC 606, Revenue from Contracts with Customers, through the following steps: 1. Identification of the contract, or contracts, with a customer. 2. Identification of the performance obligation(s) in the contract. 3. Determination of the transaction price. 4. Allocation of the transaction to the performance obligation(s) in the contract. 5. Recognize revenue when or as the entity satisfies a performance obligation. The Company generates revenue primarily through: (i) the sale of aircraft, and (ii) our Vaunt software-as-a-subscription product. Revenue is recognized when control of the promised service is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies, as a performance obligation, each promise to transfer a good or service to a customer that is distinct. To identify its performance obligations, the Company considers all of the goods and services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. For each revenue stream, we evaluate whether our obligation is to provide the good or service itself, as the principal or to arrange for the good or service to be provided by the other party, as the agent, using the control model. In such circumstances, the Company is primarily responsible for satisfying the overall performance obligation with the customer and is considered the principal in the relationship. Revenue from aircraft sales is recognized upon the delivery of the aircraft. The Company generated revenue during the twelve months ended December 31, 2025 and 2024, broken down as follows, in thousands: Twelve Months Ended December 31, 2025 2024 Aircraft sales $ 77,100 $ 38,150 Subscription 1,459 914 Total $ 78,559 $ 39,064 61 Table of Contents 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: Amount 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 Income taxes The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company follows the guidance of 740-10-25 of the FASB ASC (“Section 740-10-25”) with regards to uncertainty in income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its assets and/or liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25. The Company is subject to tax in the United States (“U.S.”) and files tax returns in the U.S. Federal jurisdiction, and state jurisdictions. The Company is subject to U.S. Federal, state, and local income tax examinations by tax authorities. The Company currently is not under examination by any tax authority. 62 Table of Contents Stock-based compensation 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. The Company estimates the fair value of each equity-based payment award on the date of grant using the Black-Scholes pricing model. The Black-Scholes model determines the fair value of equity-based payment awards based on the fair value of the underlying common stock on the date of grant and requires the use of estimates and assumptions, including the fair value of the Company’s common stock, exercise price of the stock option, expected volatility, expected life, risk-free interest rate and dividend rate. The Company estimates the expected volatility of its stock options by taking the average historical volatility of a group of comparable publicly traded companies over a period equal to the expected life of the options; it is not practical for the Company to estimate its own volatility due to the lack of historical prices. The expected term of the options is determined in accordance with existing equity agreements as the underlying options are assumed to be exercised upon the passage of time. The risk-free interest rate is the estimated average interest rate based on U.S. Treasury zero-coupon notes with terms consistent with the expected life of the awards. The expected dividend yield is zero as the Company does not anticipate paying any recurring cash dividends in the foreseeable future. The Company accounts for forfeitures as they occur. Net income (loss) per share The Company computes basic and diluted earnings per share amounts pursuant to section 260-10-45 of the FASB ASC. Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially dilutive debt or equity. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Securities that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive for the 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 The Company maintains its cash with a major financial institution located in the United States of America which it believes to be creditworthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits. Intangible assets Intangible assets other than goodwill consists of acquired finite-lived customer relationships and acquired indefinite-lived Part 135 air carrier certificate. At initial recognition, intangible assets acquired in a business combination are recognized at their fair value as of the date of acquisition. Following initial recognition, finite-lived intangible assets are carried at cost less accumulated amortization and impairment losses, if any, and are amortized on a straight-line basis over the estimated useful life of the asset, which was determined based on management’s estimate of the period over which the asset will contribute to our future cash flows. 63 Table of Contents The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale, or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the fair value. There was no impairment loss for the twelve months ended December 31, 2025 or 2024, respectively. Goodwill Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The Company tests for goodwill impairment annually during its fourth quarter. 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 (“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. Cost of 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. Subscription costs includes costs of our proprietary software, the Vaunt platform. Advertising costs Advertising costs are expensed as incurred and included in selling, general and administrative expenses on the statements of operations. Such advertising amounted to $ 1.0 million and $ 4.5 million for the twelve months ended December 31, 2025 and 2024, respectively. Leases ASC Topic 842, “Leases” (“ASC 842”) requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset (“ROU asset”). ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease. The right-of-use asset and lease liability are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. ROU asset is evaluated for impairment using the long-lived asset impairment guidance. 64 Table of Contents Leases will be classified as financing or operating, which will drive the expense recognition pattern. The Company elects to exclude short-term leases when recording a ROU asset and lease liability if and when the Company has them. Recent accounting pronouncements In November 2023, the FASB issued Accounting Standards Update “ASU” 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker “CODM” and included within each reported measure of segment profit and loss. The amendments also require disclosure of all other segment items by reportable segment and a description of its composition. Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. 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): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2025. 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. 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. 65 Major classes of line items constituting net income (loss) from discontinued operations are as follows: Twelve Months Ended December 31, 2025 2024 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 Other income from discontinued operations 5,530 9,902 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: December 31, 2025 December 31, 2024 Accounts receivable, net $ 13 $ 1,027 Prepaid and other assets 254 1,254 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 are as follows: December 31, 2025 December 31, 2024 Accounts payable and accrued liabilities $ 1,307 $ 6,344 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 66 Table of Contents NOTE 4– INTANGIBLES Finite-Lived Intangible Assets As of December 31, 2024, the Company impaired the remaining value of the customer relationships asset and recorded a loss on the impairment of $ 130 thousand which was recorded in selling, general and administrative expenses . Intangible asset amortization expense was zero and $ 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 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 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 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 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, 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. 67 Table of Contents 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 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: December 31, 2025 December 31, 2024 Machine and equipment $ 186 $ 188 Automobiles — 72 Website development costs 290 290 Computer and office equipment 12 5 Software development costs 553 579 1,041 1,134 Less accumulated depreciation ( 718 ) ( 454 ) 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. 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. NOTE 8 – DEPOSITS Deposits consist of the following at December 31, 2025 and December 31, 2024, in thousands: December 31, 2025 December 31, 2024 Deposits on aircraft $ — $ 36,000 Other deposits 70 300 Total deposits 70 36,300 Less current portion ( 70 ) ( 36,000 ) Total deposits, non-current $ — $ 300 Below is a breakdown of the deposits on aircraft as of December 31, 2025 and December 31, 2024, in thousands: December 31, 2025 December 31, 2024 Gulfstream aircraft deposits $ — $ 36,000 Total deposits on aircraft — 36,000 Less current portion — ( 36,000 ) Total deposits on aircraft non-current $ — $ — 68 Table of Contents Gulfstream Aerospace, LP In 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G280 aircraft for total consideration of $ 79 million with expected delivery throughout fiscal year 2025. The first Gulfstream G280 was delivered in the third quarter of 2024. The second Gulfstream G280 was delivered in January 2025. The third Gulfstream G280 was delivered in April 2025. The remaining Gulfstream G280 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. 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 and which matured on March 31, 2024 (“March 2023 note”). The entire outstanding principal balance together with accrued but unpaid interest were due at the maturity date. The March 2023 note included a ten percent ( 10 %) interest rate per annum. On April 1, 2024, the March 2023 note was paid in full. Promissory note from related party was zero as of 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, 2025 and December 31, 2024, in thousands: December 31, 2025 December 31, 2024 2024 unsecured convertible note, 4 % coupon, due December 2025 $ — $ 4,050 Unsecured convertible note, 4 % coupon, due June 2026* — — Unsecured convertible note, 4 % coupon, due July 2026** 3,148 — Unsecured convertible note, 4 % coupon, due October 2026*** 1,082 — Less current portion ( 4,230 ) ( 4,050 ) 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) 69 Table of Contents 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. The Company recorded $ 14 thousand of accrued interest expense in the year ended December 31, 2024. During the three months ended March 31, 2025 the $ 14 thousand of paid-in-kind interest was rolled into the principal balance of the 2024 Convertible note. The 2024 Convertible Note is accounted for as a single liability measured at fair value in accordance with ASC 825-10. At March 31, 2025, the Company valued the 2024 Convertible Note using the Monte-Carlo valuation model. See Note 2. 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. 70 Table of Contents 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, 2025 and December 31, 2024, in thousands: December 31, 2025 December 31, 2024 SAC Leasing G280 LLC credit facility, 12.5 % interest, net of deposits $ — $ 28,000 Term Loan — 1,102 Less discounts — ( 247 ) Total credit facility, net of discount and deposits $ — $ 28,855 SAC Leasing G280 LLC Line of credit The Company entered into the pre-delivery payment agreement on October 5, 2022, with SAC Leasing G280, LLC to obtain loans in the aggregate amount of $ 40.5 million for the purchase of four ( 4 ) Gulfstream G280 aircraft to be delivered in 2024 and 2025. On August 25, 2023, the Company and SAC Leasing G280, LLC entered into the first amendment to pre-delivery payment agreement. The maturity date of amounts drawn under the SAC Leasing G280 credit facility is the earlier of the delivery date of the aircraft or September 14, 2025, which is thirty-five ( 35 ) months from the date of funding. The purchase agreement contracts were assigned to SAC G280 LLC as collateral on this credit facility. During the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G280 aircraft for total consideration of $ 79.0 million with expected deliveries in 2024 and 2025, of which an aggregate amount of $ 48.0 million was funded and paid as of December 31, 2024, partially through a credit facility from SAC Leasing G280. During the year ended December 31, 2024, the Company funded an additional $ 9.0 million through the SAC Leasing G280 credit facility. During the 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. 71 Table of Contents OgaraJets 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. Term Loan 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 of common stock for the payment of $ 1.475 million of principal and interest due to the Lender under the Loan and $ 725 thousand of payables related to a separate vendor. The Company recorded a $ 2.8 million loss on extinguishment of debt upon the settlement of each issuance equal to the payables less the fair value of the shares calculated as of the closing stock price on the date of settlement. In February 2025, the Company paid the remaining principal balance due on the Loan of $ 1.1 million and outstanding interest of $ 107 thousand. NOTE 12 – RELATED PARTIES Liotta Family Office, LLC Liotta Family Office, LLC (“LFO”) is owned 20 % by the Company’s Chief Executive Officer (“CEO”), 60 % owned by the father of the Company’s Chief Executive Officer, and 20 % by the brother of the CEO. LFO currently owns 74,372 Shares of the Company’s issued and outstanding common stock which represents 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. 72 Table of Contents Plane Co’s The Company historically facilitated the formation of limited liability companies (“Plane Co’s”), which were then funded by third party members prior to the sale and delivery of an aircraft purchased from Honda Aircraft that entered into the Company’s fractional program. In October 2024, as part of the agreement with flyExclusive, Volato sold all of its interest in the Plane Co’s to flyExclusive. The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled zero and $ 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, 2025 Current Federal $ 737 State 300 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 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: 73 Table of Contents 2025 2024 Deferred Tax Assets Capital loss carryover $ 140 $ — Net operating loss carryforwards 17,774 18,398 Intangible 462 530 Interest expense limitations 2,702 2,484 Other 60 47 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 ) 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 $ 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, 2025 2024 U.S. 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 % _____________________________ * 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. 74 Table of Contents NOTE 14 – SHAREHOLDERS’ EQUITY (DEFICIT) On October 28, 2024, the Company filed an amendment to its Amended and Restated Certificate of Incorporation to increase the number of authorized shares to 201,000,000 shares consisting of 200,000,000 shares of common stock and 1,000,000 shares of preferred stock. On February 24, 2025, the Company effected the Reverse Stock Split described elsewhere in this 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 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, 2025 and December 31, 2024. Stock Options - Equity Incentive Plans Summary of the 2025 Plan The 2025 Stock Incentive Plan (the “2025 Plan”) was approved at the annual meeting of the shareholders of the Company on July 21, 2025. The 2025 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock- and cash-based awards. The Company has reserved a pool of shares of common stock for issuance pursuant to awards under the 2025 Plan equal to 415,584 shares. As of December 31, 2025 the Company had 89,060 shares a vailable for issuance. Summary of the 2023 Plan The 2023 Stock Incentive Plan (the “2023 Plan”) was approved at the special meeting of the shareholders of the Company on November 28, 2023. The 2023 Plan provides for the grant of stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other stock- and cash-based awards. 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 Average Exercise Price Per Share Weighted Average Remaining Contractual Term (years) Outstanding at December 31, 2024 18,614 $ 5.59 7.5 Granted — — Cancelled ( 911 ) 20.30 Exercised — — Outstanding as of December 31, 2025 17,703 $ 4.94 6.5 Exercisable as of December 31, 2025 16,200 $ 4.24 75 Table of Contents The following table summarizes the range of exercise price, weighted average remaining contractual life (“Life”) and weighted average exercise price (“Price”) for all stock options outstanding as of December 31, 2025: Options Outstanding Exercise Price Shares Life (in years) $ 3.00 1,763 5.6 $ 3.50 13,510 6.2 $ 12.50 2,430 8.4 17,703 6.5 The Black-Scholes option pricing model is used by the Company to determine the weighted-average fair value of share-based payments. The Company recognizes forfeitures as they occur. There were no stock options granted in the twelve months ended December 31, 2025. For The Year Ending December 31, 2024 Expected term 5.8 - 6.25 Expected volatility 68 % Expected dividends None Risk-free interest rate 3.8 % - 4.5 % 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 Restricted stock unit activity for the period presented is as follows: Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2024 29,080 $ 18.75 Granted 470,175 1.80 Vested ( 488,291 ) 2.50 Forfeited — — 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. Warrants As of December 31, 2025, there were 552,000 public warrants and 609,195 private placement warrants issued and outstanding. 76 Table of Contents Private placement warrants The Company has 609,195 private placement warrants outstanding. Each private placement warrant is exercisable for one whole share of Class A common stock at a price of $ 287.50 per share. Such private placement warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are not redeemable by the Company. The private placement warrants are all exercisable as of 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 (“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 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 twelve months ended December 31, 2025. NOTE 15 – COMMITMENT AND CONTINGENCIES Gulfstream Aerospace, LP During the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four ( 4 ) Gulfstream G280 aircraft for total consideration of $ 79.0 million and with expected deliveries in 2024 through 2025, for which the Company made prepayments totaling $ 48.0 million and $ 48.0 million as of December 31, 2025, and December 31, 2024, respectively. 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 additional $ 12 million in deposits was received as a result of the delivery of the second Gulfstream G280 and the return of $ 9 million in deposits related to the fourth Gulfstream G280. The $ 9 million in returned deposits were used to pay down the SAC Leasing G280 line of credit. In April 2025, the third Gulfstream G280 was delivered and $ 12.0 million of the deposits were applied toward the purchase price of the airplane. 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 The Company leases property and equipment under operating leases. For leases with terms greater than 12 months, the Company records the related assets and obligations at the present value of the lease payments over the lease term. Many of the leases contain renewal options and/or termination options that are factored into our determination of lease payments when appropriate. The Company uses its incremental borrowing rate to discount lease payments to present value, as the rates implicit in its leases are not readily determinable. The incremental borrowing rate is based on the estimated interest rate for collateralized borrowing over a similar term of the lease at the commencement date. 77 Table of Contents Aircraft Leases During 2023, the Company began leasing an aircraft with a term of five years which has fixed lease payments. The Company recognized an operating lease liability in the amount of the net present value of the future minimum lease payments, and a ROU asset. The discount rate used for this lease was 12 %, which was determined to be the incremental borrowing rate based on comparative secured financing in the marketplace at the inception of the fixed lease payments. Lease expense is recognized on a straight-line basis over the lease term. Lease expense 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. Airport Facilities Our facilities leases are for space at airports throughout the south with remaining terms ranging from one to eleven months . These leases consist of hangar space and office space. The leases have lease terms of 12 months or less. Accordingly, the Company has not recognized ROU assets or lease liabilities related to these lease agreements pursuant to the short-term lease election. The Company has made a policy election to not separate lease and non-lease components for these facility leases. Short term lease costs related to these leases were $ 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 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. Future estimated minimum lease payments by year and in aggregate, under the Company’s fixed payment operating lease consisted of the following at December 31, 2025: For the years ended December 31, Operating Leases 2026 $ 57 2027 $ 57 2028 $ 38 Thereafter $ — TOTAL $ 152 78 Table of Contents 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 From time to time, the Company receives claims of and becomes subject to consumer protection, employment, intellectual property and other commercial litigation related to the conduct and operation of the Company’s business. In connection with such litigation, the Company may be subject to significant damages. We may also be subject to equitable remedies and penalties. Such litigation could be costly and time consuming and could divert or distract Company management and key personnel from its business operations. The Company is currently the defendant in suits brought by vendors, customers and suits related to the transfer of the flight operations and leases to flyExclusive and does not currently believe that any of its outstanding litigation will have a material adverse effect on its financial statements or business. However, due to the uncertainty of litigation and depending on the amount and the timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s business, results of operations, financial position, or cash flows. In the Tampa Division of the U.S. District Court, in and for the Middle District of Florida on September 12, 2024, Joshua G. Newsteder, LouAnn Gray, and those similarly situated (the “Plaintiffs”) filed suit against the Volato Group, Inc. and Volato, Inc. (together, the “Defendants”) citing various allegations including that the termination of employment of 230 employees that occurred on August 30, 2024 violated requirements of the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C. § 2101 et. seq. 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. 79 Table of Contents 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 December 31, 2025 2024 Revenue $ 78,559 $ 39,064 Less: 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 Add: Other (2) 4,023 212 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. 80 Table of Contents 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, 2025 2024 Numerator: Net income (loss) from continuing operations $ 854 $ ( 21,184 ) Net income (loss) from discontinued operations $ 4,319 $ ( 19,461 ) Denominator: 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, 2025 2024 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 81 Table of Contents NOTE 18 – SUBSEQUENT EVENTS 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. 82 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.