What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-14 · 79 added, 79 removed, 133 unchanged (54% of the section changed)

12 unchanged sentences

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

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

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

• Net income from continuing operations was $2.3 million compared to a net loss of $1.1 million in the third quarter of 2024.

Net income from continuing operations was primarily the result of settlements of member deposits at a gain, that are reflected as other income in the statement of operations.

• We generated total net income of $7.1 million, representing a $11.6 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

Financial highlights for the nine months ended September 30, 2025 include:

• We generated total revenue of $50.7 million, an increase of $12.0 million compared to the 2024 period, primarily related to an increase in aircraft sales of $11.5 million as we took delivery of our second and third Gulfstream G280 during the 2025 period.

• Net income from continuing operations was $5.4 million compared to a net loss of $14.2 million in the third quarter of 2024.

The net income from continuing operations was the result of higher plane sales revenue as mentioned above.

• We generated a net income of $11.2 million, representing a $49.9 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”).

On July 28, 2025, the Company entered into the Merger Agreement with Merger Sub and M2i, pursuant to which Merger Sub will merge with and into M2i, with M2i surviving the Merger as a wholly-owned subsidiary of Volato.

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

3 unchanged sentences

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

In July 2025, the Company began development of an AI (“Artificial Intelligence”) based software platform designed to enhance the reliability of leading large language models (“LLM’s”) when analyzing contracts, SEC filings and other structured documents.

Key Factors Affecting Results of Operations

1 unchanged sentence

Airplane Sales

We expect to take delivery of three Gulfstream G280 aircraft manufactured by Gulfstream Aerospace Corporation (“Gulfstream”) and sell these airplanes to third parties in 2025.

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 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.

During 2024, we took delivery of one Gulfstream G280 aircraft, which was delivered and sold to a third party in the third quarter of 2024.

In January 2025, we took delivery of one Gulfstream G280 aircraft, which was delivered and sold to a third party in February 2025.

In April 2025, we took delivery of one Gulfstream G280 aircraft, which was delivered and sold to a third party in June 2025.

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

Costs and Expense Management

1 unchanged sentence

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

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 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 empty leg consumer app.

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

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

Economic Conditions

3 unchanged sentences

Results of Operations

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

Comparison of three and nine months ended September 30, 2025 and 2024

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

Three Months Ended September 30, Change In Nine Months Ended September 30, Change In

2025 2024 $ % 2025 2024 $ %

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

Revenue $ 381 $ 38,466 $ (38,085) N/M $ 50,719 $ 38,695 $ 12,024 31 %

Costs and expenses:

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

Cost of revenue 123 32,071 (31,948) N/M 42,198 32,157 10,041 31 %

Selling, general and administrative 2,822 4,262 (1,440) (34) % 7,687 12,390 (4,703) (38) %

Total costs and expenses 2,945 36,333 (33,388) (92) % 49,885 44,547 5,338 12 %

Operating income (loss) 872 (3,651) $ 4,523 (124) % 3,398 (7,985) $ 11,383 (143) %

Operating (loss) income (2,564) 2,133 (4,697) (220) % 834 (5,852) 6,686 (114) %

Other income (expenses):

Other income, net 5,679 56 5,623 N/M 9,990 214 9,776 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 %

Loss from change in fair value of financial instruments (539) — (539) N/M (1,289) (2,982) 1,693 (57) %

Interest income (expense), net 27 (3,234) 3,261 (101) % (3,602) (5,603) 2,001 (36) %

Other income (expenses), net 5,167 (3,178) 8,345 (263) % 5,099 (8,371) 13,470 (161) %

6 unchanged sentences

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

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

Three Months Ended September 30, Change In Nine Months Ended September 30, Change In

2025 2024 $ % 2025 2024 $ %

2 unchanged sentences

Total $ 381 $ 38,466 $ (38,085) (99) % $ 50,719 $ 38,695 $ 12,024 31 %

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.

Revenue decreased by $38.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The decrease in revenue was the result of a decrease in aircraft sales of $38.1 million, as we did not take delivery of an aircraft during the quarter (but did take delivery of an aircraft in the 2024 period), partially offset by an increase in subscription based revenue of $65 thousand during the three months ended September 30, 2025 compared to the prior year period.

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 September 30, 2025.

Revenue increased by $12.0 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The increase in revenue was the result of an increase in aircraft sales of $11.5 million and subscription based revenue of $0.6 million during the nine months ended September 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 2025 period.

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

4 unchanged sentences

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

Three Months Ended September 30, Change In Nine Months Ended September 30, Change In

2025 2024 $ % 2025 2024 $ %

2 unchanged sentences

Total $ 123 $ 32,071 $ (31,948) (100) % $ 42,198 $ 32,157 $ 10,041 31 %

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.

Cost of revenue decreased by $31.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The decrease in cost of revenue was primarily a result of a decrease in aircraft sales as we did not take delivery of aircraft during the third quarter of 2025.

Cost of revenue increased by $10.0 million for the nine months ended September 30, 2025 compared to the nine months ended September 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 $0.9 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Selling, general and administrative expenses decreased by $1.4 million for the three months ended September 30, 2025, compared to the three months ended September 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.

Selling, general and administrative expenses decreased by $4.7 million for the nine months ended September 30, 2025 compared to the nine months ended September 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

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”).

For the three and nine months ended September 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 loss of $384 thousand and a non-cash loss of $1.1 million, respectively.

The loss also includes a loss on the Investment in M2i share exchange of $155 thousand for the three and nine months ended September 30, 2025.

For the nine months ended September 30, 2024, the loss on change in fair value of $3.0 million was the result of the fair value adjustment on the Forward Purchase Agreement.

In July 2024, the Forward Purchase Agreement was terminated.

Interest Expense

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 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.

Interest Income (Expense), Net

Interest income (expense), net 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, offset by interest income on the note receivable related to our sale of GC Aviation, Inc.

in March 2025.

Interest income (expense), net decreased $2.0 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 primarily as a result of the interest related to the pre-delivery payment agreement with SAC Leasing G280 LLC in 2024.

Liquidity and Capital Resources

1 unchanged sentence

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.

As of September 30, 2025, we had $4.4 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 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.

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 notes 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.

4 unchanged sentences

We have historically 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 this Quarterly Report.

Management believes that its current cash position, along with its anticipated margin from one (or more) additional 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 this Quarterly Report.

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 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)

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

Nine Months Ended September 30,

Net cash used in operating activities $ (2,442) $ (10,491)

Net cash used in investing activities (39) (145)

Net cash provided by (used in) financing activities 2,831 (486)

1 unchanged sentence

Cash Flow from Operating Activities

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.

Net cash used in operating activities for the nine months ended September 30, 2025 was $2.4 million.

The cash outflow from operating activities consisted of our net income of $11.2 million, non-cash items of $7.4 million, and a change in net operating assets and liabilities of $3.2 million.

The change in net operating assets and liabilities was primarily a result of a decrease in customer deposits and deferred revenue of $0.9 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 nine months ended September 30, 2025 was $9.5 million.

Net cash used in operating activities for the nine months ended September 30, 2024 was $10.5 million.

The cash outflow from operating activities consisted of our net loss of $38.7 million, non-cash items of $3.2 million and a change in net operating assets and liabilities of $18.8 million.

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

The change in net assets and liabilities for discontinued operations for the nine months ended September 30, 2024 was $6.2 million.

Cash Flow from Investing Activities

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 six months ended June 30, 2024 was $113 thousand.

Net cash used in investing activities for the nine months ended September 30, 2025 was $39 thousand.

The cash flow from investing activities consisted of the sale of property and equipment, offset by the purchase of property and equipment.

Net cash used in investing activities for the nine months ended September 30, 2024 was $145 thousand.

Cash Flow from Financing Activities

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 $0.4 million for the six months ended June 30, 2024.

Net cash provided by financing activities for the nine months ended September 30, 2025 was $2.8 million.

Cash flow provided by financing activities consisted of the repayment on loans of $1.1 million, and the proceeds from the second and third tranche convertible notes totaling $4.1 million (as described in Notes 10).

Net cash used in financing activities for the nine months ended September 30, 2024 was $0.5 million.

Cash flow used in financing activities consisted of the repayment on loans of $3.9 million, offset by proceeds from the issuance of term loan of $4.0 million.

The cash used in financing from discontinued operations was $0.6 million for the nine months ended September 30, 2024.

Sources of Liquidity

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.

As of September 30, 2025, we had a working capital of approximately $1.9 million.

As of September 30, 2025, our primary source of liquidity was cash totaling $4.4 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.

The Company believes it has the ability to generate and obtain enough cash to meets its obligations for the next 12 months.

The Company believes it has the ability to generate and obtain enough cash to meet its obligations for the next 12 months.

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.

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.

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

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

In the third quarter of 2024, $9.0 million was repaid to SAC G280 LLC as a result of the delivery of the first Gulfstream G280.

In the first quarter of 2025, an additional $19.5 million was repaid to SAC G280 LLC as a result of the delivery of the second Gulfstream G280 and the return of $9.0 million in deposits related to the fourth Gulfstream G280.

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 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.

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

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

In the third quarter of 2024, $9.0 million was repaid to SAC Leasing G280 LLC as a result of the delivery of the first Gulfstream G280.

In the first quarter of 2025, an additional $19.5 million was repaid to SAC Leasing G280 LLC as a result of the delivery of the second Gulfstream G280 and the return of $9.0 million in deposits related to the fourth Gulfstream G280.

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 G280 was $8.5 million, net.

In the second quarter of 2025, with the delivery of the third G280, the remaining outstanding balance of the SAC Leasing G280 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 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.

Our principal commitments consist of contractual cash obligations under our credit facilities, operating leases and the Securities Purchase Agreement.

We have committed to acquire one (1) additional Gulfstream G280 aircraft for total consideration of $21.0 million with expected delivery in the fourth quarter of 2025, of which $3 million was funded and paid through September 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.

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

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

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

10 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 June 30, 2025.

The Company’s financial statements have not been impacted by the JOBS Act as of September 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