What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-15 · 91 added, 76 removed, 121 unchanged (58% of the section changed)

5 unchanged sentences

Overview of Our Business

Our mission is to provide our customers more time for the rest of their lives by providing convenient and high-quality travel by using the right aircraft for the mission and by developing proprietary technology designed to make the travel experience more seamless.

Our historical mission has been to provide our customers more time for the rest of their lives by providing convenient and high-quality travel by using the right aircraft for the mission and by developing proprietary technology designed to make the travel experience more seamless.

Our revenue is generated through airplane sales and software-as-a-service subscriptions.

In September 2024, we entered into an agreement with flyExclusive, a leading provider of private jet charter services, to transition our aircraft ownership program fleet operations to flyExclusive.

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

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

This move was intended to bring substantial cost savings and provide Volato with the opportunity to focus on what it believes to be its high-growth areas, including aircraft sales and products and services utilizing our proprietary software.

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 such flight operations.

Items related to our aircraft ownership program fleet operations are now included in discontinued operations.

Financial highlights for the quarter ended March 31, 2025 include:

• We generated total revenue of $25.5 million, an increase of $25.4 million compared to 2024, primarily related to an increase in aircraft sales of $25.1 million as we took delivery of our second Gulfstream G280;

• Net income from continuing operations was $0.4 million compared to a net loss of $5.7 million in the first quarter of 2024.

The decrease in net loss from continuing operations was the result of higher plane sale revenue mentioned above, and;

• We generated a net income of $0.5 million, representing a $17.8 million improvement over the same quarter of the prior year.

Financial highlights for the three months ended June 30, 2025 include:

• We generated total revenue of $24.9 million, an increase of $24.7 million compared to the 2024 period, primarily related to an increase in aircraft sales of $24.5 million as we took delivery of our third Gulfstream G280;

• Net income from continuing operations was $2.7 million compared to a net loss of $7.5 million in the second quarter of 2024.

Net income during the 2025 period was the result of higher plane sale revenue mentioned above, and

• We generated total net income of $3.6 million, representing a $20.5 million improvement over the same quarter of the prior year.

Financial highlights for the six months ended June 30, 2025 include:

• We generated total revenue of $50.3 million, an increase of $50.1 million compared to the 2024 period, primarily related to an increase in aircraft sales of $49.6 million as we took delivery of our second and third Gulfstream G280.

• Net income from continuing operations was $3.0 million compared to a net loss of $13.2 million in the second quarter of 2024.

The decrease in net loss from continuing operations was the result of higher plane sales revenue as mentioned above, and

• We generated a net income of $4.1 million, representing a $38.4 million improvement over the same period in the prior year.

Recent Developments

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 various other customary closing conditions.

M2i’s business focuses on providing its partners with access to turnkey solutions, facilitating expanded business opportunities, securing offtake agreements, influencing strategic government policy, and engaging with aligned organizations and laboratories.

M2i specializes in the development and execution of a complete global value supply chain for critical minerals, including the creation of a U.S.

Strategic Mineral Reserve, a Public/Private Partnership to collaborate with the U.S.

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

Key Factors Affecting Results of Operations

3 unchanged sentences

Our first Gulfstream G280 was delivered and sold to a third party in the third quarter of 2024.

In February 2025, our second GulfStream G280 was delivered and sold to a third party.

In February 2025, our second GulfStream G280 was delivered and sold to a third party and in June 2025 our third Gulfstream G280 was delivered and sold to a third party.

We expect to take delivery of our fourth Gulfstream G280 in the fourth quarter of 2025.

Costs and Expense Management

2 unchanged sentences

This move has resulted in substantial cost savings and provides us with the opportunity to focus on what we believe to be our high-growth areas, including aircraft sales and proprietary software.

We will continue to take delivery of and sell new aircraft.

We expect to benefit from the margins on aircraft sales without the burden of operational costs, while also generating revenue from its proprietary software, including the Vaunt platform, our successful empty leg consumer app.

Economic Conditions

3 unchanged sentences

Results of Operations

Comparison of three months ended March 31, 2025 and 2024

The following table sets forth our results of operations for the three months ended March 31, 2025 and 2024 (in thousands, except percentages):

Three Months Ended March 31, Change In

Comparison of three and six months ended June 30, 2025 and 2024

The following table sets forth our results of operations for the three and six months ended June 30, 2025 and 2024 (in thousands, except percentages):

Three Months Ended June 30, Change In Six Months Ended June 30, Change In

2025 2024 $ % 2025 2024 $ %

Revenue $ 25,483 $ 48 $ 25,435 N/M

Revenue $ 24,855 $ 181 $ 24,674 N/M $ 50,338 $ 229 $ 50,109 N/M

Costs and expenses:

Cost of revenue 20,987 52 20,935 N/M

Cost of revenue 21,088 34 $ 21,054 N/M 42,075 86 $ 41,989 N/M

Selling, general and administrative 2,895 3,798 $ (903) (24) % 4,865 8,128 $ (3,263) (40) %

2 unchanged sentences

Other income (expenses):

Other income, net 1,181 4 1,177 N/M

Loss from change in fair value of financial instruments (849) (227) (622) 274 %

Other income, net 3,130 154 $ 2,976 N/M 4,311 158 $ 4,153 N/M

Gain (loss) from change in fair value of financial instruments 99 (2,755) $ 2,854 (104) % (750) (2,982) $ 2,232 (75) %

Interest expense, net (1,229) (1,230) $ 1 — % (3,629) (2,368) $ (1,261) 53 %

Other expenses (2,068) (1,361) (707) 52 %

Other income (expenses), net 2,000 (3,831) $ 5,831 (152) % (68) (5,192) $ 5,124 (99) %

Income (loss) before provision for income taxes and discontinued operations 2,872 (7,482) $ 10,354 (138) % 3,330 (13,177) $ 16,507 (125) %

Provision for incomes taxes 98 6 92 N/M

Provision for incomes taxes 189 9 $ 180 N/M 287 15 $ 272 N/M

Net income (loss) from continuing operations 2,683 (7,491) $ 10,174 (136) % 3,043 (13,192) $ 16,235 (123) %

3 unchanged sentences

Revenue consists of the following (in thousands, except percentages):

Three Months Ended March 31, Change In

Three Months Ended June 30, Change In Six Months Ended June 30, Change In

2025 2024 $ % 2025 2024 $ %

2 unchanged sentences

Total $ 24,855 $ 181 $ 24,674 13632 % $ 50,338 $ 229 $ 50,109 21882 %

Revenue increased by $25.4 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The increase in revenue was the result of an increase in aircraft sales of $25.1 million and subscription based revenue of $335 thousand during the three months ended March 31, 2025 compared to the prior year.

The increase in revenue from aircraft sales was the result of the delivery and sale of our second Gulfstream G280 during the quarter.

We have orders for two additional Gulfstream G280s and expect delivery in 2025.

The increase in subscription based revenues are attributable to our Vaunt platform which began to generate revenue during the 2024 fiscal year.

Revenue increased by $24.7 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase in revenue was the result of an increase in aircraft sales of $24.5 million and subscription based revenue of $174 thousand during the three months ended June 30, 2025 compared to the prior year period.

The increase in revenue from aircraft sales was the result of the delivery and sale of our third Gulfstream G280 during the quarter.

We have an order for one additional Gulfstream G280 and expect delivery in the fourth quarter of 2025.

The increase in subscription based revenues is attributable to our Vaunt platform which began to generate revenue during the 2024 fiscal year and continuing through the quarter ended June 20, 2025.

Revenue increased by $50.1 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase in revenue was the result of an increase in aircraft sales of $49.6 million and subscription based revenue of $509 thousand during the six months ended June 30, 2025 compared to the prior year.

The increase in revenue from aircraft sales was the result of the delivery and sale of our second and third Gulfstream G280 during the year.

We have an order for one additional Gulfstream G280 and expect delivery in the fourth quarter of 2025.

The increase in subscription based revenues is attributable to our Vaunt platform which began to generate revenue during the 2024 fiscal year and continuing through the quarter ended June 30, 2025.

Cost of Revenue

2 unchanged sentences

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

Subscription costs includes costs we incur related to our proprietary software, the Vaunt platform.

Costs of revenue consists of the following (in thousands, except percentages):

Three Months Ended March 31, Change In

Subscription cost include costs we incur related to our proprietary software, the Vaunt platform.

Cost of revenue consists of the following (in thousands, except percentages):

Three Months Ended June 30, Change In Six Months Ended June 30, Change In

2025 2024 $ % 2025 2024 $ %

2 unchanged sentences

Total $ 21,088 $ 34 $ 21,054 61924 % $ 42,075 $ 86 $ 41,989 48824 %

Cost of revenue increased by $20.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The increase in cost of revenue was primarily a result of an increase in aircraft sales as we took delivery of our second Gulfstream G280 aircraft during the quarter.

Cost of revenue increased by $21.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase in cost of revenue was primarily a result of an increase in aircraft sales as we took delivery of our third Gulfstream G280 aircraft during the first six months of 2025.

Cost of revenue increased by $42.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase in cost of revenue was primarily a result of an increase in aircraft sales as we took delivery of our second and third Gulfstream G280 aircraft during the year.

Selling, general and administrative

Selling, general and administrative expenses decreased by $2.4 million for the three months ended March 31, 2025 to $2.0 million, compared to the three months ended March 31, 2024.

The decrease in selling, general and administrative is primarily related to the cost savings initiatives implemented during 2024.

Selling, general and administrative expenses decreased by $0.9 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

The decrease in selling, general and administrative is primarily related to the cost savings initiatives implemented during the second half of 2024.

Selling, general and administrative expenses decreased by $3.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The decrease in selling, general and administrative is primarily related to the cost savings initiatives implemented during the second half of 2024.

Loss on change in fair value of financial instruments

The loss on change in fair value of financial instruments relates to the fair value adjustment on the 2024 Convertible Notes resulting in a non-cash loss of $0.8 million during the three months ended March 31, 2025.

For the three months ended March 31, 2024, the loss on change in fair value of $0.2 million was the result of the fair value adjustment on an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Agreement”).

For the three and six months ended June 30, 2025, the loss on change in fair value of financial instruments relates to the fair value adjustment on the 2024 Convertible Notes resulting in a non-cash gain of $99 thousand and a non-cash loss of $750 thousand, respectively.

For the three and six months ended June 30, 2024, the loss on change in fair value of $2.8 million and $3.0 million was the result of the fair value adjustment on an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Agreement”).

In July 2024, the Forward Purchase Agreement was terminated.

1 unchanged sentence

Interest expense primarily consists of interest related to our aircraft brokerage and services agreement with OgaraJets LLC and the pre-delivery payment agreement with SAC Leasing G280 LLC.

Interest expense increased $1.3 million during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 primarily as a result of the aircraft brokerage and services agreement with OgaraJets LLC.

Interest expense increased $1.3 million during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily as a result of interest related to the aircraft brokerage and services agreement with OgaraJets LLC, offset by the interest related to the pre-delivery payment agreement with SAC Leasing G280 LLC.

Liquidity and Capital Resources

Our principal sources of liquidity have historically consisted of financing activities, including proceeds from the issuance of stock, borrowings under our credit facilities, and capital raises from convertible debt and preferred stock.

We additionally managed liquidity through the aircraft sales.

As of March 31, 2025, we had $2.6 million of cash and cash equivalents.

We additionally generate revenue through aircraft sales and sales subscriptions to our software application.

As of June 30, 2025, we had $4.7 million of cash and cash equivalents.

Our primary needs for liquidity are to fund working capital, debt service requirements, and for general corporate purposes.

We believe factors that could affect our liquidity include the ability of Gulfstream to meet our delivery schedule and our ability to sell those aircraft, whether the closing conditions under the Securities Purchase Agreement are met (or waived) such that we are able to issue one or more additional convertible note under that arrangement, our ability to raise additional funds on favorable terms, the timing and extent of spending on software development and other growth initiatives, our ability to manage our expense, and overall economic conditions.

We believe the primary factors that could affect our liquidity include the ability of Gulfstream to meet our delivery schedule and our ability to sell those aircraft, whether the closing conditions under the Securities Purchase Agreement are met (or waived) such that we are able to issue one or more additional convertible note under that arrangement, our ability to raise additional funds on favorable terms, the timing and extent of spending on software development and other growth initiatives, our ability to manage our expense, and overall economic conditions.

To the extent that our current liquidity is insufficient to fund future activities, we will need to raise additional capital.

We may attempt to raise additional capital through the sale of equity securities, through debt financing arrangements, or both.

Raising additional capital by issuing equity securities will dilute the ownership of existing shareholders.

Raising additional capital by issuing equity securities will dilute the ownership of existing stockholders.

The occurrence of additional debt financing would result in debt service obligations, and any future instruments governing such debt could provide for operating and financing covenants that could restrict our operations.

In the event that additional capital is required from outside sources, we may not be able to raise it on terms acceptable to us or at all.

We have incurred negative cash flows from operating activities and significant losses from operations historically.

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.

We have historically incurred negative cash flows from operating activities and significant losses from operations historically.

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

1 unchanged sentence

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

The following table summarizes our cash flows for the three months ended March 31, 2025, and 2024 (in thousands):

Three Months Ended March 31,

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

The following table summarizes our cash flows for the six months ended June 30, 2025, and 2024 (in thousands):

Six Months Ended June 30,

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

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

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

Net decrease in cash and restricted cash $ (1,424) $ (8,436)

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

Net increase (decrease) in cash and restricted cash $ 707 $ (9,474)

Cash Flow from Operating Activities

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

The cash outflow from operating activities consisted of our net income of $0.5 million, non-cash items of $1.1 million, and a change in net operating assets and liabilities of $1.9 million.

The change in net operating assets and liabilities was primarily as a result of a decrease in customer deposits and deferred revenue of $2.1 million and a decrease in deposits of $1.8 million.

The change in net assets and liabilities for discontinued operations for the quarter ended March 31, 2025 was $1.6 million.

Net cash used in operating activities for the quarter ended March 31, 2024 was $7.7 million.

Net cash provided by operating activities for the six months ended June 30, 2025 was $0.5 million.

The cash inflow from operating activities consisted of our net income of $4.1 million, non-cash items of $2.4 million, and a change in net operating assets and liabilities of $2.6 million.

The change in net operating assets and liabilities was primarily as a result of a decrease in customer deposits and deferred revenue of $1.5 million and accounts payable and accrued liabilities of $0.9 million, offset by a decrease in deposits of $5.2 million.

The change in net assets and liabilities for discontinued operations for the six months ended June 30, 2025 was $3.7 million.

Net cash used in operating activities for the six months ended June 30, 2024 was $7.4 million.

The cash outflow from operating activities consisted of our net loss of $34.3 million, non-cash items of $3.5 million and a change in net operating assets and liabilities of $15.6 million.

The change in net assets and liabilities for discontinued operations for the quarter ended March 31, 2024 was $2.9 million.

The change in net assets and liabilities for discontinued operations for the six months ended June 30, 2024 was $7.8 million.

Cash Flow from Investing Activities

Net cash provided by investing activities for the quarter ended March 31, 2025 was $21 thousand.

Net cash provided by investing activities for the six months ended June 30, 2025 was $30 thousand.

The cash flow from investing activities consisted of the sale of property and equipment.

Net cash used in investing activities for the quarter ended March 31, 2024 was $56 thousand.

Net cash used in investing activities for the six months ended June 30, 2024 was $113 thousand.

Cash Flow from Financing Activities

Net cash used in financing activities for the quarter ended March 31, 2025 was $1.1 million.

Cash flow used in financing activities consisted of the repayment on loans of $1.1 million.

Net cash used in financing activities for the quarter ended March 31, 2024 was $0.7 million.

Net cash provided by financing activities for the six months ended June 30, 2025 was $141 thousand.

Cash flow used in financing activities consisted of the repayment on loans of $1.1 million and the proceeds from the second tranche of the convertible note of $1.4 million.

Net cash used in financing activities for the six months ended June 30, 2024 was $2.0 million.

Cash flow used in financing activities consisted of the repayment on loans of $1.7 million.

The cash used in financing from discontinued operations was $0.3 million for the quarter ended March 31, 2024.

The cash used in financing from discontinued operations was $0.4 million for the six months ended June 30, 2024.

Sources of Liquidity

To date, we have financed our operations primarily through the business combination, sale of preferred stock, borrowings of long-term and short-term debt, loans and convertible notes.

As of March 31, 2025, we had a working capital deficit of approximately $18.2 million.

As of March 31, 2025, our primary source of liquidity was cash totaling $2.6 million.

To date, we have financed our operations primarily as a result of the 2023 business combination, sales of preferred stock, borrowings of long-term and short-term debt, loans and convertible notes.

As of June 30, 2025, we had a working capital deficit of approximately $9.3 million.

As of June 30, 2025, our primary source of liquidity was cash totaling $4.7 million.

Based on our recent trends, we expect to fund our operations in 2025 from our cash on hand, cash from operations, one or more sales of convertible promissory notes in accordance with the Securities Purchase Agreement described in Note 2 and Note 10 to our unaudited financial statements in this quarterly report and potentially additional sales of equity or debt securities.

1 unchanged sentence

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.

The first Gulfstream G280 was delivered in the third quarter of 2024 and the second Gulfstream G280 was delivered in the first quarter of 2025.

As of March 31, 2025, total consideration due on the remaining two Gulfstream G280s was $41.7 million with expected deliveries in 2025.

The first Gulfstream G280 was delivered in the third quarter of 2024, the second Gulfstream G280 was delivered in the first quarter of 2025 and the third was delivered in second quarter of 2025.

As of June 30, 2025, total consideration due on the remaining Gulfstream G280 was $18.0 million with expected delivery in 2025.

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

The 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.

3 unchanged sentences

After the delivery of the second Gulfstream G280 and the deposit return related to the fourth Gulfstream G280, the outstanding balance of the credit facility from SAC Leasing was $8.5 million, net.

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

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

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

In the first quarter of 2025, the loan was repaid in full.

In the second quarter of 2025, with the delivery of the third G280, the remaining outstanding balance of the SAC Leasing credit facility was paid in full.

Contractual Obligations and Commitments

Our principal commitments consist of contractual cash obligations under our credit facilities, operating leases and the 2024 Convertible notes.

We have committed to acquire two (2) additional Gulfstream G-280 aircraft for total consideration of $41.7 million with expected deliveries in 2025, of which $15 million was funded and paid through March 31, 2025.

We have committed to acquire one (1) additional Gulfstream G-280 aircraft for total consideration of $21.0 million with expected delivery in 2025, of which $3 million was funded and paid through June 30, 2025.

Critical Accounting Policies and Estimates

19 unchanged sentences

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

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

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

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

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

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

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

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

Stock-Based Compensation

9 unchanged sentences

As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

The Company’s financial statements have not been impacted by the JOBS Act as of March 31, 2025.

The Company’s financial statements have not been impacted by the JOBS Act as of June 30, 2025.

We have chosen to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act.

6 unchanged sentences

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 2. Management’s Discussion and Analysis