What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 239 added, 171 removed, 599 unchanged (41% of the section changed)

3 unchanged sentences

(Amounts in thousands, except par value amounts)

March 31, 2025

2025 December 31,

Current assets:

2 unchanged sentences

Accounts receivable, net 32 2

Contract assets, net 211 —

Deposits 3,000 36,000

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200,000,000 authorized;

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

4,622,737 and 1,843,852 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 93,181 87,968

6 unchanged sentences

(Amounts in thousands, except share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenue $ 24,855 $ 181 $ 50,338 $ 229

6 unchanged sentences

Other income, net 3,130 154 4,311 158

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

Gain (loss) from change in fair value of financial instruments 99 ( 2,755 ) ( 750 ) ( 2,982 )

Interest expense, net ( 1,229 ) ( 1,230 ) ( 3,629 ) ( 2,368 )

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

Other income (expenses), net 2,000 ( 3,831 ) ( 68 ) ( 5,192 )

Income (loss) before provision for income taxes and discontinued operations 2,872 ( 7,482 ) 3,330 ( 13,177 )

3 unchanged sentences

Net income (loss) $ 3,602 $ ( 16,918 ) $ 4,057 $ ( 34,308 )

Basic and diluted net income (loss) per share

Basic and diluted net loss per share:

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

22 unchanged sentences

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

Stock-based compensation

— — 185 — 185

Issuance of common stock 10,644 — 36 — 36

Net loss — — — ( 16,918 ) ( 16,918 )

Balance as of June 30, 2024, as adjusted 1,180,709 $ 3 $ 82,964 $ ( 97,970 ) $ ( 15,003 )

Class A Common Stock

6 unchanged sentences

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

Stock-based compensation

— — 557 — 557

Issuance of common stock

2,721,844 — 4,610 — 4,610

Net income — — — 3,602 3,602

Balance at June 30, 2025 4,622,737 $ 5 $ 93,181 $ ( 100,250 ) $ ( 7,064 )

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

2 unchanged sentences

(Amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

1 unchanged sentence

Net income (loss) from discontinued operations 1,014 ( 21,116 )

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

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

Depreciation and amortization expense 169 130

Non-monetary exchange 54 $ —

Stock compensation expense 603 268

Gain from sale of property and equipment ( 6 ) —

Loss from sale of property and equipment 6 —

Loss from sale of consolidated entity 35 —

Gain on settlement of liabilities ( 4,324 )

Amortization right-of-use asset 19 —

4 unchanged sentences

Accounts receivable ( 30 ) ( 1 )

Contract assets, net ( 211 ) —

Prepaid and other current assets 73 495

4 unchanged sentences

Net cash used in operating activities from discontinued operations ( 2,746 ) ( 13,282 )

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

Net cash provided by (used in) operating activities 536 ( 7,367 )

Investing activities:

1 unchanged sentence

Proceeds from the sale of property and equipment 30 —

Cash from investing activities - discontinued operations — —

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

Net cash provided by (used in) investing activities 30 ( 113 )

1 unchanged sentence

Principal payment on lease obligations ( 19 ) —

Repayments of lines of credit — ( 1,000 )

Proceeds from issuance of convertible notes, net 1,350 —

Costs of share issuance ( 66 )

Repayment on loans ( 1,124 ) ( 668 )

Proceeds from exercise of stock options — 36

Cash used in financing activities - discontinued operations — ( 362 )

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

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

Net cash provided by (used in) financing activities 141 ( 1,994 )

Net increase (decrease) in cash 707 ( 9,474 )

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

2 unchanged sentences

Cash paid for interest $ 1,652 $ 2,318

Cash paid for income taxes $ 165 $ —

Non-Cash Investing and Financing Activities:

2 unchanged sentences

Credit facility for the aircraft deposits $ ( 28,000 ) $ 9,000

Issuance of shares for convertible notes $ 4,676 $ —

Original debt discount $ — $ 68

2 unchanged sentences

Deposits on aircraft $ 28,500 $ —

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

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

1 unchanged sentence

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 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, Inc.

and GC Aviation, Inc.

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

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

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

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

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

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.

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

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

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

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

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

The Company has retained insider card liabilities of $ 4.1 million that is included in discontinued operations as of June 30, 2025.

On February 24, 2025, the Company effected a reverse stock split of its issued and outstanding common stock, 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 GC Aviation, Inc., which holds the FAA Part 135 certificate for $ 2.0 million, of which $ 1.8 million was a note receivable.

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.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going concern, liquidity, and capital resources

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

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

The Company has limited operating history, and although the Company has realized net income of approximately $ 4.1 million for the six months ended June 30, 2025, it has a working capital deficit of approximately $ 9.3 million and has an accumulated deficit of approximately $ 100.3 million as of June 30, 2025.

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

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

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

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

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

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

The results of operations for the three and six months June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other interim period or for any other future year.

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

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• Assessment of long-lived assets impairment.

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

• Assumptions used in the valuation notes receivable.

Cash and restricted cash

2 unchanged sentences

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

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

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

At June 30, 2025 and December 31, 2024, the Company had no cash equivalents besides what was in the cash balance as of this date.

The Company had zero and $ 1.8 million of restricted cash at June 30, 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

5 unchanged sentences

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

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

The Company recognized approximately $ 123 thousand and zero of bad debt expense during the three months ended June 30, 2025 and 2024, respectively.

During the six months ended June 30, 2025 and 2024, the Company recognized $ 147 thousand and zero bad debt expense, respectively.

Fixed assets are stated at cost, less accumulated depreciation.

10 unchanged sentences

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

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

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

The Company capitalized no internal software development costs during the six months ended June 30, 2025 and 2024.

The Company recognized $ 48 thousand and $ 26 thousand of amortization expense related to computer software development during the three months ended June 30, 2025 and 2024, respectively.

The Company recognized $ 96 thousand and $ 52 thousand of amortization expense related to computer software development during the six months ended June 30, 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 three and six months ended June 30, 2025, the Company reduced the value of software development cost by $ 54 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 three months ended March 31, 2025 and twelve months ended December 31, 2024, respectively.

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

The Company capitalized zero and $ 110 thousand of website development costs during six months ended June 30, 2025 and 2024, respectively.

The Company recognized approximately $ 24 thousand and $ 26 thousand of amortization expense related to website development costs during the three months ended June 30, 2025 and 2024, respectively.

The company recognized $ 48 thousand and $ 51 thousand of amortization expense during the six months ended June 30, 2025 and 2024, respectively.

Valuation of long-lived assets

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

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

No impairment was recognized during the six months ended June 30, 2025 and 2024, respectively.

Fair value of financial instruments

17 unchanged sentences

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

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

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

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

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.

2 unchanged sentences

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

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

Fair Value Measurements as of March 31, 2025

In June 2025, the outstanding principal and accrued 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 under 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 gain of $ 223 thousand related to the change in the fair value of the 2024 Convertible Note recorded in other income expense on the consolidated statements of operations.

In June 2025, pursuant to the Securities Purchase Agreement, the Company issued a second convertible note (the “Second Tranche Note”) 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 and six months ended June 30, 2025.

The following table presents balances of the fair value instruments as of June 30, 2025 and December 31, 2024, in thousands:

Fair Value Measurements as of June 30, 2025

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

1 unchanged sentence

Inputs (Level 3) Total

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

Second Tranche Note $ — $ — $ 1,474 $ 1,474

Total $ — $ — $ 1,474 $ 1,474

5 unchanged sentences

Total $ — $ — $ 4,050 $ 4,050

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

2024 Convertible Notes

The following table presents changes of all convertible notes issued under the Securities Purchase Agreement with significant unobservable inputs (Level 3) for the three and six months ended June 30, 2025, in thousands:

2024 Convertible Note

Balance at December 31, 2024 $ 4,050

1 unchanged sentence

Balance at March 31, 2025 $ 4,899

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

Three months ended March 31, 2025

Change in fair value ( 99 )

Conversions ( 4,676 )

Additions 1,350

Balance at June 30, 2025 $ 1,474

The Company measured the Second Tranche Note using a Monte Carlo simulation valuation model using the following assumptions:

Three and Six months ended June 30, 2025

Volume Weighted average stock price ("VWAP") $ 1.28

5 unchanged sentences

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

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

Commitments and contingencies

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

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

Three Months Ended March 31,

The Company generated revenue during the three and six months ended June 30, 2025 and 2024, broken down as follows, in thousands:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Aircraft sales $ 24,500 $ — $ 49,600 $ —

1 unchanged sentence

Total $ 24,855 $ 181 $ 50,338 $ 229

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

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

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 for the six months ended June 30, 2025:

Balance as of December 31, 2024 $ 696

1 unchanged sentence

Revenue deferred 1,129

Balance as of March 31, 2025 $ 702

Balance as of June 30, 2025 $ 1,087

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 six months ended June 30, 2025

Beginning Balance Amount Capitalized Amortization Ending Balance

Contract assets $ — $ 242 $ ( 31 ) $ 211

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

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

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

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

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

Securities that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive for the three and six months ended June 30, 2025, include stock options, restricted stock units and warrants.

The Company had 17,857 and 80,928 outstanding stock options to purchase an equivalent number of shares of common stock at June 30, 2025, and 2024, respectively.

The Company had 15,706 and 60,253 outstanding restricted stock units to purchase an equivalent number of shares of common stock at June 30,2025 and 2024, respectively.

The Company also had 1,161,195 outstanding warrants to purchase an equivalent number of shares of common stock as of June 30, 2025 and 2024, respectively at a weighted average strike price of $ 287.50 .

Concentration of credit risk

9 unchanged sentences

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

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

There was no impairment loss for the three and six months ended June 30, 2025 or 2024, respectively.

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

5 unchanged sentences

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

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

thousand for the three months ended March 31, 2025.

In connection with that sale, the Company recorded an impairment on goodwill of $ 35 thousand for the six months ended June 30, 2025.

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

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

There was no impairment loss recorded for the six months ended June 30, 2024.

Segment reporting

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

The chief operating decision maker is the chief executive officer.

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

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, the CODM reviews financial information including total assets from continuing operations and net income from continuing operations presented on a consolidated basis for purposes of making operating decisions, allocating resources, and assessing performance.

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

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

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

Such advertising amounted to $ 207 thousand and $ 1.0 million for the three months ended June 30, 2025 and 2024, respectively and $ 344 thousand and $ 3.2 million for the six months ended June 30, 2025 and 2024, respectively.

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

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

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

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.

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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”).

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.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenue - Aircraft usage $ 24 $ 12,276 $ 80 $ 23,745

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

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

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

Intangible asset amortization expense was zero and $ 15 thousand for the three months ended June 30, 2025 and 2024, respectively.

Intangible asset amortization expense was zero and $ 30 thousand for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 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 as of March 31, 2025 and December 31, 2024, in thousands:

March 31, 2025 December 31, 2024

The following table summarizes the balances of the indefinite-lived intangible assets as of June 30, 2025 and December 31, 2024, in thousands:

June 30, 2025 December 31, 2024

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

1 unchanged sentence

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

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

The Company did not recognize any impairment of the Part 135 certificate during the three or six months ended June 30, 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 (the “Agreements”) with financial institutions, in which the Company agreed to pay a success fee in the aggregate amount of $ 4.25 million to the financial institutions in case the Company consummates the acquisition.

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 consummates certain acquisition(s).

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

1 unchanged sentence

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

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

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

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 June 30, 2025 and December 31, 2024 the merger transaction costs payable were zero .

NOTE 6 – FORWARD PURCHASE AGREEMENT

1 unchanged sentence

and Vellar Opportunities Fund Master, Ltd.

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

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

The Number of Shares (as defined in the Forward Purchase Agreement) subject to the Forward Purchase Agreement could be 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.

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

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

1 unchanged sentence

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

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

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

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

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

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

In the six months ended June 30 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 March 31, 2025 and December 31, 2024, in thousands:

Property and equipment, net consist of the following at June 30, 2025 and December 31, 2024, in thousands:

2025 December 31,

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Property and equipment, net $ 422 $ 680

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

During the three months ended June 30, 2025 and 2024, the Company recognized $ 83 thousand and $ 65 thousand of depreciation and amortization, respectively.

During the six months ended June 30, 2025 and 2024, the Company recognized $ 169 thousand and $ 130 thousand of depreciation and amortization, respectively.

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

NOTE 8 – DEPOSITS

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

March 31, 2025 December 31, 2024

Deposits consist of the following at June 30, 2025 and December 31, 2024, in thousands:

June 30, 2025 December 31, 2024

Deposits on aircraft $ 3,000 $ 36,000

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Total deposits, non-current $ 63 $ 300

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

Below is a breakdown of the deposits on aircraft as of June 30, 2025 and December 31, 2024, in thousands:

2025 December 31,

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The second Gulfstream G280 was delivered in January 2025.

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

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

and December 31, 2024, respectively.

The third Gulfstream G280 was delivered in April 2024.

The remaining one Gulfstream G280 is expected to be delivered in the fourth quarter of 2025.

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.

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

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

During the six months ended June 30, 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 G 280 line of credit further described in Note 11.

NOTE 9 – PROMISSORY NOTE- RELATED PARTY

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

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

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

Promissory note from related party was zero as of June 30, 2024, and December 31, 2024, respectively.

The Company incurred zero and zero thousand of interest on the March 2023 note during the three months ended June 30, 2025 and 2024, respectively.

The Company incurred zero and $ 23 thousand of interest expense during the six months ended June 30, 2025 and 2024, respectively.

NOTE 10 – UNSECURED CONVERTIBLE NOTES

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

Unsecured convertible notes consisted of the following at June 30, 2025 and December 31, 2024, in thousands:

2025 December 31,

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

$ 4,899 $ 4,050

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

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

Less current portion ( 1,474 ) ( 4,050 )

Total unsecured convertible note, long term $ — $ —

2024 unsecured convertible notes due December 2025 - 2024 Convertible note

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

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

* Represents the Second Tranche Note (as described in Note 2 and this Note 10)

Unsecured convertible note due December 2025 - 2024 Convertible Note

During the year ended December 31, 2024, the Company entered into the Securities Purchas 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.

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

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

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

The Company recognized a gain of $ 223 thousand and a loss of $ 626 thousand related to the change in the fair value of the 2024 Convertible Note recorded in other income expense on the consolidated statements of operations for the three and six months ended June 30, 2025, respectively.

Unsecured convertible note due June 2026 - Second Tranche Note

In June 2025, the Company issued 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 and six months ended June 30, 2025.

NOTE 11 – CREDIT FACILITY AND OTHER LOANS

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

Credit facility and other loans consisted of the following at June 30, 2025 and December 31, 2024, in thousands:

2025 December 31,

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

$ 8,500 $ 28,000

Term Loan — 1,102

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SAC Leasing G280 LLC Line of credit

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

During the six months ended June 30, 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 June 30, 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 June 30, 2025, and December 31, 2024, respectively.

During the three months ended June 30, 2025 and 2024, the Company amortized to interest expense $ 185 thousand and $ 45 thousand of debt discount, respectively.

During the six months ended June 30, 2025 and 2024, the Company amortized to interest expense $ 247 thousand and $ 92 thousand of debt discount, respectively.

During the three months ended June 30, 2025 and 2024, the Company incurred approximately zero and $ 1.2 million of interest under this facility, respectively.

During the six months ended June 30, 2025 and 2024, the Company incurred $ 641 thousand and $ 2.3 million of interest, respectively.

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

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

Net proceeds of $ 3.9 million were received by the

Company and used to fund operations.

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

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

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

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

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 are being amortized over the term of the Loan.

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

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

The Company amortized zero and zero of financing fees in the three months ended June 30, 2025 and 2024, respectively and $ 36 thousand and zero in the six months ended June 30, 2025 and 2024, respectively.

The Company recorded $ 107 thousand of interest expense related to the Loan in the six months ended June 30, 2025.

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

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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 % owned by the brother of the CEO.

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

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

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

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 1.6 % of the Company’s issued and outstanding Common Stock as of June 30, 2025.

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

The Company incurred approximately $ 23 thousand of interest during the six months ended June 30, 2024.

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

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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 $ 1.2 million for the three months ended March 31, 2025 and 2024, respectively.

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

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

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled zero and $ 1.1 million for the three months ended June 30, 2025 and 2024, respectively.

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled zero and $ 2.3 million for the six months ended June 30, 2025 and 2024, respectively.

Expenses charged to the Company by Plane Co’s and included in loss from discontinued operations, totaled zero and $ 1.0 million for the three months ended June 30, 2025 and 2024, respectively.

Expenses charged to the Company by Plane Co’s and included in loss from discontinued operations, totaled zero and $ 2.2 million for the six months ended June 30, 2025 and 2024, respectively.

Balance due to Plane Co’s amounted to zero and $ 4 thousand as of June 30, 2025 and December 31, 2024, respectively.

NOTE 13 – INCOME TAXES

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

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

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

The effective tax rate was 3.00 % and zero percent for the three and six months ended June 30, 2025, respectively.

The effective tax rate was zero percent for the three and six months ended June 30, 2024, respectively.

Our effective tax rate for the three and six months ended June 30, 2025 differs from the federal statutory rate of 21% and was a result of the valuation allowance on the deferred tax benefit due to the disposition of GC Aviation, Inc.

and the Part 135 FAA Certificate intangible asset.

NOTE 14 – SHAREHOLDERS’ DEFICIT

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

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

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

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

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

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

On February 24, 2025, the Company effected the Reverse Stock Split described elsewhere in this Quarterly 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 Authorized Common Stock.

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

Preferred Stock

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

No shares of preferred stock have been issued as of June 30, 2025 and December 31, 2024.

Stock Options - Equity Incentive Plans

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

As of June 30, 2025 the Company had 74,685 shares a vailable for issuance.

Stock option activity for the periods presented is as follows:

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Exercised — —

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

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

Outstanding as of June 30, 2025 17,857 $ 5.52 6.9

Exercisable as of June 30, 2025 16,121 $ 4.69

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 issued in the three months ended March 31, 2025.

There were no stock options granted in the three and six months ended June 30, 2025.

Restricted Stock

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

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

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Forfeited — —

Outstanding at March 31, 2025 32,789 $ 16.07

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

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

Outstanding as of June 30, 2025 15,706 $ 13.16

Stock based compensation expense was $ 557 thousand and $ 185 thousand for the three months ended June 30, 2025 and 2024, respectively.

Stock based compensation expense was $ 603 thousand and $ 268 thousand for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, there were 552,000 public warrants and 609,195 private placement warrants issued and outstanding.

Private placement warrants

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

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

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

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

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 June 30, 2025.

There was no activity during the three and six months ended June 30, 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 consists of one share of Class A common stock and one-half of one redeemable warrant.

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

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

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

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

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 June 30, 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.

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

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

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

The public warrants are all exercisable as of June 30, 2025.

There was no activity during the three and six months ended June 30, 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 G-280 aircraft for total consideration of $ 79.0 million and with expected deliveries in 2024 through 2025, for which the Company made prepayments totaling $ 48.0 million and $ 45.0 million as of March 31, 2025, and March 31, 2024, respectively.

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

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

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

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.

Future minimum payments under the purchase agreements with Gulfstream Aerospace, LP at June 30, 2025, are as follows, in thousands:

2025 $ 18,038

Total expected contractual payments $ 18,038

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

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

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.

The remaining balance to be funded by SAC Leasing G280 LLC is zero as of June 30, 2025.

Operating Leases

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

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

Lease expense related to this lease consisting of fixed and variable lease costs was zero and $ 117 thousand for the three months ended June 30, 2025 and 2024, respectively.

Lease expense was zero and $ 234 thousand for the six months ended June 30, 2025 and 2024, respectively.

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

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

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

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

Variable lease costs associated with the aircraft operating leases were zero and $ 3.0 million for the three months ended June 30, 2025, and 2024, respectively.

Variable lease costs associated with the aircraft operating leases were zero and $ 5.7 million for the six months ended June 30, 2025 and 2024, respectively.

Short-term lease costs on the aircraft leases were zero and $ 141 thousand for the three months ended June 30, 2025, and 2024, respectively.

Short-term lease costs on the aircraft leases were zero and $ 156 thousand for the six months ended June 30, 2025 and 2024, respectively.

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

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The 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 $ 18 thousand for the three months ended March 31, 2025, and 2024, respectively.

Short-term lease costs related to these leases were zero and $ 18 thousand for the three months ended June 30, 2025, and 2024, respectively.

Short term lease costs related to these leases were $ 3 thousand and $ 36 thousand for the six months ended June 30, 2025 and 2024, respectively.

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

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Customer Deposits and Deferred Revenue

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

Customer deposits and deferred revenue consisted of deposits from customers for the purchase of aircraft of $ 5.6 million and $ 10.7 million as of June 30, 2025 and December 31, 2024, respectively, as well as deferred revenue of $ 1.1 million and $ 696 thousand as of June 30, 2025 and December 31, 2024, respectively.

Legal Contingencies

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

and Volato, Inc.(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.

and Volato, Inc.

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

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

The Defendants.

deny all allegations.

The Defendants deny all allegations.

Current range of loss can not be estimated.

NOTE 16 – SEGMENT INFORMATION

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

The 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.

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The components of segment profit or loss were as follows:

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2025 2024 2025 2024

Revenue $ 24,855 $ 181 $ 50,338 $ 229

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Selling, general and administrative (1)

Loss on fair value adjustment of financial instruments 849 227

2,895 3,798 4,865 8,128

(Gain) Loss on fair value adjustment of financial instruments ( 99 ) 2,755 750 2,982

Interest Expense 1,229 1,230 3,629 2,368

3,130 154 4,311 158

Net income (loss) from continuing operations before income taxes $ 2,872 $ ( 7,482 ) $ 3,330 $ ( 13,177 )

(1) Includes amounts for depreciation and amortization expense.

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

(2) Other includes gains of $ 3.1 million and $ 4.3 million for settlements of deposits and other liabilities at a discount for the three and six months ended June 30, 2025, respectively.

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

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

Three Months ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income (loss) from continuing operations $ 2,683 $ ( 7,491 ) $ 3,043 $ ( 13,192 )

stock based compensation expense, net of tax — — 43 —

loss on convertible note, net of tax 838 —

(gain) loss on convertible note, net of tax ( 99 ) — 750 —

Net income (loss) attributable to common stockholders from continuing operations, dilutive 2,584 ( 7,491 ) 3,836 ( 13,192 )

1 unchanged sentence

Weighted-average common shares outstanding, basic 2,592,878 1,174,385 2,229,573 1,169,319

options and restricted stock units 22,869 —

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

2024 convertible note and second tranche note on as-converted basis 2,068,223 — 2,276,803 —

Weighted-average shares outstanding, dilutive 4,661,101 1,174,385 4,506,376 1,169,319

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

As of March 31,

As of June 30,

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

3 unchanged sentences

NOTE 18 – SUBSEQUENT EVENTS

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

On July 21, 2025, pursuant to the Securities Purchase Agreement the Company issued a third tranche convertible note (in the principal amount of $ 3.0 million, for a purchase price of $ 2.7 million, representing an original issue discount of 10 %, which note matures on July 21, 2026.

On July 29, 2025, the Company entered into an Agreement and Plan of Merger and Reorganization with M2i Global (“M2i”), pursuant to which a subsidiary formed by the Company for purposes of effecting the transaction will merge with M2i, with M2i surviving the merger as a wholly-owned subsidiary of Volato (the “Merger”).

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

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

What changed 10-Q

Item 1. Financial Statements