SOAR 10-K & 10-Q changes, risk factors and insider trading
Volato Group, Inc. (also SOARW) · NYSE · Air Transportation, Nonscheduled · CIK 1853070 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our Parslee platform depends on third-party artificial intelligence services, and our business could be adversely affected by changes in the availability, pricing, or performance of those services.”
New heading “We are subject to the Telephone Consumer Protection Act and similar state laws in connection with our marketing activities, and noncompliance could result in significant financial exposure.”
New heading “The Company has identified material weaknesses in its internal control over financial reporting, which could, if not remediated, adversely affect its ability to report its financial condition and results of operations in a timely and accurate manner. If the Company fails to comply with requirements relating to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, the business could be harmed and its stock price could decline.”
New heading “Issuances of our Common Stock in the future could dilute existing stockholders and adversely affect the market price of our Common Stock.”
Removed heading “Significant reliance on Gulfstream aircraft and parts poses risks to our business and prospects.”
Removed heading “If we cannot internally or externally finance our aircraft or generate sufficient funds to make payments to external financing sources, we may not succeed.”
Removed heading “If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, the market price of the Common Stock.”
Largest changes
“In connection with our marketing efforts, including those related to our Vaunt subscription program and other consumer-facing products and services, we engage in various outbound communications to prospective and existing customers, including telephone calls, text messages, and email campaigns. These activities are subject to the Telephone Consumer Protection Act of 1991, as amended (the “TCPA”), and its implementing regulations, as well as analogous state consumer protection statutes. …”see in full comparison
“As part of our business strategy, we have historically flown HondaJet aircraft, manufactured by Honda Aircraft Company (“Honda”). The purchase agreement between the Company and Honda was terminated on September 10, 2024. We expect to take delivery of and sell Gulfstream aircraft, manufactured by Gulfstream Aerospace, LP (“Gulfstream”). …”see in full comparison
“Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of our financial statements and reports, which would likely adversely affect the market price of the Common Stock. In addition, we could be subject to sanctions or investigations by the NYSE American, the SEC and other regulatory authorities.”see in full comparison
“The Company has identified material weaknesses in its internal control over financial reporting, which could, if not remediated, adversely affect its ability to report its financial condition and results of operations in a timely and accurate manner. If the Company fails to comply with requirements relating to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, the business could be harmed and its stock price could decline.”see in full comparison
“As is customary in the aviation industry, we are reliant on external financing for the acquisition of aircraft, and we are likely to need additional financing in the future in order to acquire aircraft. If we are unable to generate sufficient revenue or other funding to make payments on these financing arrangements, the lender may default us under the financing arrangement, which would have a material adverse effect on our business and reputation. …”see in full comparison
“We will continue to refine our internal control over financial reporting. We will be required to make a formal assessment of the effectiveness of our internal control over financial reporting and once we cease to be an emerging growth company, we will be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. …”see in full comparison
Full comparison: every changed paragraph (54)
Unless the context otherwise requires, all references in this subsection to “we” and “our” refers to the business the business of Volato Group and our consolidated subsidiaries. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on the business, financial condition, results of operations, cash flows and future prospects of Volato, in which event the market price of the Common Stock of Volato Group could decline, and you could lose part or all of your investment.
We have experienced significant net losses since our inception and, given our limited operating history, we may experience continuing net losses for the foreseeable future and may never become profitable (as determined by U.S. Generally Accepted Accounting Principles (“GAAP”) or otherwise). We may not accurately anticipate how quickly we might use our funds and whether such funds are sufficient to bring the business to profitability and pay our liabilities. Even if we achieve profitability, we cannot be certain that we will be able to sustain or increase profitability. To achieve and sustain profitability, we must accomplish numerous objectives, including broadening and stabilizing our sources of revenue and increasing the number of customers that utilize our service.services. Accomplishing these objectives may require significant capital investments. We cannot assure you that we will be able to achieve these objectives.
Significant reliance on Gulfstream aircraft and parts poses risks to our business and prospects.
As part of our business strategy, we have historically flown HondaJet aircraft, manufactured by Honda Aircraft Company (“Honda”). The purchase agreement between the Company and Honda was terminated on September 10, 2024. We expect to take delivery of and sell Gulfstream aircraft, manufactured by Gulfstream Aerospace, LP (“Gulfstream”). If Gulfstream experiences interruptions or disruptions in production or provision of services due to, for example, bankruptcy, natural disasters, labor strikes, or disruption of their supply chain, we may experience a significant delay in the delivery of or fail to receive previously ordered aircraft and parts, which would adversely affect our revenue and results of operations and could jeopardize our ability to meet the demands of our customers.
If we cannot internally or externally finance our aircraft or generate sufficient funds to make payments to external financing sources, we may not succeed.
As is customary in the aviation industry, we are reliant on external financing for the acquisition of aircraft, and we are likely to need additional financing in the future in order to acquire aircraft. If we are unable to generate sufficient revenue or other funding to make payments on these financing arrangements, the lender may default us under the financing arrangement, which would have a material adverse effect on our business and reputation. Furthermore, if we do not have access to external financing for future aircraft, for whatever reason, including reasons relating to our business or prospects or the broader economy, we may not be in a position to grow and/or operate as a going concern.
Any of these factors that cause the demand for private aviation services to decline may also result in delays that could reduce the attractiveness of private air charter travel versus other means of transportation, particularly for shorter distance travel. Delays could frustrate passengers, affecting our reputation and potentially reducing demand for our services as a result of flight cancellations and increased costs. We may also experience decreased demand, as well as a loss of reputation, in the event of an accident involving one of its aircraft or an aircraft booked through our platform or any actual or alleged misuse of itsour platform or aircraft booked through our platform by customers in violation of law. Any of the foregoing circumstances or events which reduced the demand for private jet charters could negatively impact the Company’s ability to establish its business and achieve profitability. If we are unable to generate demand or there is a future shift in consumer spending away from private aviation services, our business, financial condition, and results of operations could be adversely affected.
For example, several tax proposals have been set forth that would, if enacted, make significant changes to U.S. tax laws. Such prior proposals have included an increase in the U.S. income tax rate applicable to corporations (such as the Company) from 21% to 28%. Congress may consider, and could include some or all of these proposals in connection with tax reform that may be undertaken. It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect. The passage of any legislation as a result of these proposals and other similar changes in U.S. federal income tax laws could adversely affect the Company’s business and future profitability.
In the event that the Company’s business expands domestically or internationally, its effective tax rates may fluctuate widely in the future. Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under GAAP, changes in deferred tax assets and liabilities, or changes in tax laws. Factors that could materially affect the Company’s future effective tax rates include, but are not limited to: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards or practices, (c) changes in the composition of operating income by tax jurisdictionjurisdiction, and (d) pre-tax operating results of the Company’s business.
Our aviation business is dependent on third-party operators to provide flights for our customers. If third-party operators’ flights, which are required to serve a substantial portion of our business, are not available or do not perform adequately, our costs may increase and our business, financial condition, and results of operations could be adversely affected.
Our business and the aircraft we operate areis characterized by changing technology, introductions and enhancements of models of aircraft and services, and shifting customer demands, including technology preferences. Our future growth and financial performance will depend in part upon our ability to develop, market, and integrate new services and to accommodate the latest technological advances and customer preferences. In addition, the introduction of new technologies or services that compete with our products and services could result in our revenues decreasing over time. If we are unable to upgrade our operations or fleet with the latest technological advances in a timely manner, or at all, our business, financial condition, and results of operations could suffer.
Our Parslee platform depends on third-party artificial intelligence services, and our business could be adversely affected by changes in the availability, pricing, or performance of those services.
Our Parslee platform relies on large language model APIs provided by third-party vendors, including Microsoft Azure OpenAI, to deliver its core functionality. We do not develop or operate our own large language models. As a result, our ability to deliver Parslee's products and services is dependent on the continued availability, reliability, and performance of these third-party services on commercially reasonable terms. These vendors may change their pricing, modify or discontinue their APIs, impose usage restrictions, degrade service quality, or experience outages, any of which could disrupt Parslee's functionality, increase our operating costs, or require us to identify and integrate alternative providers, which we may be unable to do in a timely manner or at all.
All customer data requiring LLM operations through Parslee is transmitted to these third-party large language model providers. Although we rely on contractual and technical safeguards to protect customer data, a security incident, data breach, or unauthorized use of customer data by a third-party provider could expose us to regulatory action, litigation, reputational harm, and loss of customer confidence. We do not control the data handling practices of these third-party providers, and their practices may change in ways that are inconsistent with our contractual commitments to our customers or with applicable law.
Large language models may generate inaccurate, incomplete, or misleading outputs. Parslee is designed for use in enterprise environments involving complex documents such as contracts and regulatory filings, where accuracy is important. If a customer relies on Parslee's output and that output contains errors attributable to the underlying language model, we could face claims of liability, loss of customers, or damage to our reputation, regardless of whether the error originated with our platform or the third-party model.
The regulatory landscape governing artificial intelligence is evolving rapidly at the federal, state, and international levels. A number of jurisdictions have enacted or proposed legislation addressing AI use in commercial settings, including requirements related to transparency, automated decision-making, data governance, and the use of personal information in AI systems. As our AI-related product offerings develop, we may become subject to additional or changing regulatory requirements. The costs of compliance, or our failure to comply, could have a material effect on our business, financial condition, and results of operations.
Parslee is in an early stage of commercial development, with all current products in beta. Parslee entered its first paying pilot programs in the third quarter of 2025. There is no assurance that Parslee will achieve broader commercial adoption or generate material revenue. Our ability to grow Parslee's business will depend on, among other things, our ability to retain and expand customer relationships, maintain reliable access to third-party AI services, and adapt to a rapidly changing competitive and regulatory environment.
We have,have and intend to continue to explore potential strategic acquisitions of assets and businesses, including partnerships or joint ventures with third parties. Our management has limited experience with acquiring and integrating acquired strategic assets and companies into our business, and there is no assurance that any future acquisitions will be successful. We may not be successful in identifying appropriate targets for transactions. In addition, we may not be able to continue the operational success of acquired businesses or successfully finance or integrate any assets or businesses that we acquire or with which we form a partnership or joint venture. We may have potential write-offs of acquired assets or an impairment of any goodwill recorded as a result of acquisitions. Furthermore, the integration of any acquisition may divert management’s time and resources from our core business and disrupt our operations or may result in conflicts with our business. Any acquisition, partnership, or joint venture may reduce our cash reserves, may negatively affect our earnings and financial performance, and, to the extent financed with the proceeds of debt, may increase our indebtedness, and, to the extent acquired or financed through equity issuance, dilute our current investors. We cannot ensure that any acquisition, partnership, or joint venture we make will not have a material adverse effect on our business, financial condition, and results of operations.
We may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, unfavorable trends in historical or forecasted results of operations and cash flows, and an uncertain economic environment, as well as other uncertainties.
We can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period. The value of our aircraft could also be impacted in future periods by changes in supply and demand for these aircraft. Such changes in supply and demand for certain aircraft types could result from the grounding of aircraft. An impairment loss could have a material adverse effect on our financial condition and results of operations.
We are subject to the Telephone Consumer Protection Act and similar state laws in connection with our marketing activities, and noncompliance could result in significant financial exposure.
In connection with our marketing efforts, including those related to our Vaunt subscription program and other consumer-facing products and services, we engage in various outbound communications to prospective and existing customers, including telephone calls, text messages, and email campaigns. These activities are subject to the Telephone Consumer Protection Act of 1991, as amended (the “TCPA”), and its implementing regulations, as well as analogous state consumer protection statutes. The TCPA imposes significant restrictions on the use of autodialed and prerecorded telephone calls and text messages to wireless numbers, and requires prior express written consent for certain marketing communications. Violations of the TCPA may be enforced through private class action lawsuits and by the Federal Communications Commission and state attorneys general, with statutory damages ranging from $500 to $1,500 per violation. Because each unsolicited call or text message to a single recipient may constitute a separate violation, aggregate exposure in class action litigation can be substantial.
Although we have implemented policies and procedures designed to comply with the TCPA and similar laws, the legal landscape surrounding the TCPA continues to evolve, including ongoing judicial and regulatory developments regarding the definition of an "automatic telephone dialing system," the scope of consent requirements, and the FCC's one-to-one consent rules. There can be no assurance that our compliance measures, or those of third-party vendors conducting outreach on our behalf, will be deemed adequate under current or future interpretations of the law. To the extent any third-party vendor uses methods or contacts individuals in a manner that does not satisfy applicable consent requirements, we could face vicarious liability for such conduct. Any actual or alleged noncompliance with the TCPA or similar laws could result in costly litigation, significant settlement payments or judgments, reputational harm, and increased compliance costs, any of which could have a material adverse effect on our business, financial condition, and results of operations.
We have significant debt financing obligations, and we may incur additional obligations as we expand our operations. On October 5, 2022, we entered into a Pre-Delivery Payment Agreement (“PDP Agreement”) with a Shearwater Global Capital entity for the financing of PDP Agreement payments on four Gulfstream G280s under four separate purchase agreements executed in March 2022 (“G280 Purchase Agreements”). The PDP Agreement is secured by all of our rights in the G280 Purchase Agreements, all of the reserves under the PDP Agreement, each of the Aircraft, and all present or future additions, attachments, or accessories thereto and replacements thereof, all engines and avionics, all tools, manuals, service records, software, and similar information and materials related to each G280, all payments, amounts, refunds, rebates, and all other amounts of any kind whatsoever relating to any or all of the Purchase Agreements and/or any or all of the aircraft, and the products, proceeds, rents, and profits therefrom or thereof. The PDP Agreement provides for a Twelve and Half Percent (12.5%) interest rate on all PDP Agreement promissory notes (“PDP Notes”) issued by the lender for payments made under the PDP Agreement, for an aggregate principal balance of up to $40.5 million.
We have significant debt financing obligations, and we may incur additional obligations as we expand our operations. The ability to timely pay our existing or future contractual obligations, including required payments under the PDPConvertible Notes and(as thedescribed Notes,below), will depend on the results of our operations, cash flow, liquidity, and ability to secure additional financing, which will in turn depend on, among other things, the success of our current business strategy, U.S. and global economic and political conditions, the availability and cost of financing, and other factors that may be beyond our control. If our liquidity is materially diminished, our cash flow available to fund our working capital requirements, debt service obligations, capital expenditures, and strategic initiatives may be materially and adversely affected, or we may not be able to realize the benefits of, or otherwise maintain, certain relationships with our business partners. We cannot be assured that our operations will generate sufficient cash flow to make any required payments, or that we will be able to obtain financing to make expenditures in pursuit of our strategic initiatives. The amount of our contractual obligations and timing of required payments could have a material adverse effect on our business, results of operations, and financial condition.
Our financing agreements, including those in connection with the PDPConvertible Notes,Notes the(as Notes,defined below), and other financing agreements that we may enter into from time to time, contain certain affirmative, negative, and financial covenants, and other customary events of default. Certain covenants in our financing agreements are subject to important exceptions, qualifications, and cure rights, including, under limited circumstances, the requirement to provide additional collateral or prepay or redeem certain obligations. In addition, certain of our financing agreements are or may be cross-collateralized, such that an event of default or acceleration of indebtedness under one agreement could result in an event of default under other financing agreements. If we fail to comply with such covenants, if any other events of default occur for which no waiver or amendment is obtained, or if we are unable to timely refinance the debt obligations subject to such covenants or take other mitigating actions, the holders of our indebtedness could, among other things, declare outstanding amounts immediately due and payable and, subject to the terms of relevant financing agreements, repossess or foreclose on collateral, including certain of our aircraft or other assets used in our business. The acceleration of significant indebtedness or actions to repossess or foreclose on collateral may cause us to renegotiate, repay, or refinance the affected obligations, and there is no assurance that such efforts would be successful or on terms we deem attractive. In addition, any acceleration or actions to repossess or foreclose on collateral under our financing agreements could result in a downgrade of any credit ratings then applicable to us, which could result in additional events of default or limit our ability to obtain additional financing.
Stockholders may experience dilution of their ownership interest due to the issuance of additional shares of Common Stock upon the conversion of thecertain Notes,convertible notes, especially since the Notesnotes have fluctuating conversion rates that are set at a discount to market prices of our shares of Common Stock during the period immediately following conversion.
On December 4, 2024, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”)., Underpursuant theto Securities Purchase Agreement,which the Company has agreed to issue 10% original issue discount senior unsecured convertible promissory notes (“Convertible Notes”) in an aggregate original principal amount of up to $36,000,000, which will beare convertible into shares of the Company’s common stock. The closing of the first tranche was consummated on December 4, 2024, and the Company issued the initial Convertible Note for an aggregate original principal amount of $4,500,000. The closing of the second tranche was consummated on June 13, 2025, and the Company issued the second tranche Convertible Note for an aggregate original principal amount of $1,500,000. The closing of the third tranche was consummated on July 21, 2025, and the Company issued the third tranche Convertible Note for an aggregate original principal amount of $3,000,000. The closing of the fourth tranche was consummated on October 16, 2025, and the Company issued the fourth tranche Convertible Note for an aggregate original principal amount of $2,220,000. Issuances of additional NoteConvertible Notes are subject to the terms and conditions of the Securities Purchase Agreement. The shares of Common Stock issuable upon full conversion of the Convertible Notes issued and issuable under the Securities Purchase Agreement would result in significant dilution to existing stockholders.
The following table sets forth, for illustrative purposes only, the aggregate amount of our common stock issuable upon conversion of the notes that may be issued under the Securities Purchase Agreement at varying purchase prices and the percentage of outstanding common stock after giving effect to the applicable 4.99% or 9.99% Beneficial Ownership Limitation.
—————— (1) For the avoidance of any doubt, this price reflects the purchase price after calculation (i.e. after discounts to the market price of our shares) in accordance with the terms of the initial tranche Note and the Securities Purchase Agreement.
(2) The denominator is based on 1,900,893 shares of our common stock outstanding as of March 21, 2025, adjusted to include the issuance of the number of shares of common stock set forth in the second column which we would have issued to the investor based on the applicable assumed purchase price per share and assuming that (i) all Notes remain outstanding until their respective maturity dates and (ii) the Payment Premium (as defined in the Notes) and interest on the Notes are paid in shares of common stock subject to the limitation on issuance pursuant to the 4.99% Beneficial Ownership Limitation.
(3) The denominator is based on 1,900,893 shares of our common stock outstanding as of March 21, 2025, adjusted to include the issuance of the number of shares of common stock set forth in the second column which we would have issued to the Investor based on the applicable assumed purchase price per share and assuming that (i) all Notes remain outstanding until their respective maturity dates and (ii) the Payment Premium (as defined in the Notes) and interest on the Notes are paid in shares of common stock, subject to the limitation on issuance pursuant to the 9.99% Beneficial Ownership Limitation.
(4) Represents the initial Floor Price of the Note issued in the initial tranche, as adjusted pursuant to the 1-for-25 reverse stock split effected by the Company on February 24, 2025.
(5) Represents the midpoint between the initial Floor Price and current Conversion Price of the Note issued in the Initial Tranche, as adjusted pursuant to the 1-for-25 reverse stock split effected by the Company on February 24, 2025.
(6) Represents the current Conversion Price of the Note issued in the Initial Tranche, as adjusted pursuant to the 1-for-25 reverse stock split effected by the Company on February 24, 2025.
In addition, in order to raise additional capital, we may in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our Common Stock at prices that may not be the same as the price per share as prior issuances of Common Stock. This includes, without limitation, consummating additional transactions involving the Notes. We may not be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share previously paid by investors, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our Common Stock or securities convertible into Common Stock in future transactions may be higher or lower than the prices per share. We cannot predict the effect, if any, that market sales of those shares of Common Stock or the availability of those shares for sale will have on the market price of our Common Stock.
If we are unable to comply with the continued listing requirements of the NYSE American, including satisfying the obligations set forth in the Deficiency Letter with respect to our stockholders’ equity being below the NYSE American’s minimum level, then our Common Stock will be delisted from the NYSE American.
In June 2024, the Company was notified by the NYSE American that the Company iswas not in compliance with NYSE American’s Minimum Stockholders’ Equity Requirements. The Company submitted its Compliance Plan on July 18, 2024, to the NYSE American outlining certain actions the Company has taken and will take to regain compliance with the Minimum Stockholders’ Equity Requirements by December 18, 2025. On September 5, 2024, NYSE American accepted the Compliance Plan and required quarterly updates from the Company on the progress that the Company has made regarding the Compliance Plan. NYSE American also granted the Company through December 18, 2025, to regain compliance with the Minimum Stockholders’ Equity Requirements. Until such date, the Company will bewas subject to quarterly review by NYSE American to determine if the Company iswas making progress consistent with the Compliance Plan. If the Company doesdid not regain compliance with the Minimum Stockholders’ Equity Requirements by December 18, 2025, or if the Company doesdid not make sufficient progress consistent with its Compliance Plan, then the NYSE American maycould initiatehave initiated delisting proceedings to delist the Company’s Common Stock from the NYSE American.
On December 18, 2025, the Company received a letter from NYSE Regulation confirming which stated that the Company had regained compliance with all the NYSE American continued listing standards set forth in Part 10 of the Company Guide. Specifically, the Company resolved the continued listing deficiencies with respect to the Minimum Stockholders’ Equity Requirements. The Company will be subject to NYSE American’s normal continued listing monitoring. However, if the Company fails to comply with any of the continued listing requirements within one year of the date of the Compliance Notice, NYSE American will examine the relationship between the two incidents of noncompliance and re-evaluate the Company’s method of financial recovery from the first incident. As a result, NYSE American could, depending on the circumstances, truncate the compliance procedures described in the Company Guide, or immediately initiate delisting proceedings.
The Company is committed to maintaining compliance with the continued listing requirements. Although the Company believes it will be able to maintain compliance with such requirements, there can be no assurance that it will be able to maintain compliance.
Although the Company believes it will be able to achieve compliance with the Minimum Stockholders’ Equity Requirements and other NYSE American listing requirements, there can be no assurance that the Company will be able to regain compliance with all applicable requirements or maintain compliance with any other listing requirements within the time frame required by NYSE American or at all. NYSE American’s determination that we fail to meet the continued listing standards of NYSE American may result in our securities being delisted from NYSE American.
The Company has identified material weaknesses in its internal control over financial reporting, which could, if not remediated, adversely affect its ability to report its financial condition and results of operations in a timely and accurate manner. If the Company fails to comply with requirements relating to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, the business could be harmed and its stock price could decline.
Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require the Company to assess its internal control over financial reporting annually. The rules governing the standards that must be met for management to assess its internal control over financial reporting are complex. They require significant documentation, testing, and possible remediation of any significant deficiencies in and/or material weaknesses of internal controls in order to meet the detailed standards under these rules. Additionally, it is necessary for us to maintain effective internal control over financial reporting to prevent fraud and errors and to maintain effective disclosure controls and procedures so that we can provide timely and reliable financial and other information. These obligations are intended, among other things, to ensure that information required to be disclosed by us in filings with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules, and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to our management, including our principal executive and financial officers. A failure to maintain adequate internal controls may adversely affect the Company’s ability to provide financial statements that accurately reflect its financial condition and report information on a timely basis. The Company has evaluated its internal control over financial reporting and determined that it was not effective as of December 31, 2025 and that material weaknesses existed as of that date, and the Company has also concluded that its disclosure controls and procedures were not effective as of December 31, 2025 due to material weaknesses in its internal control over financial reporting. See Item 9 – Controls and Procedures – Report of Management on Internal Control over Financial Reporting.
The Company has began, and will continue the process of remediating its identified material weakness. Management’s continuing evaluation and work to enhance the Company’s internal control over financial reporting has required and will continue to require the dedication of additional resources and management time and expense If the Company fails to maintain the effectiveness of its internal controls, including any failure to implement new or improved controls, or if the Company experiences difficulties in their implementation, the Company’s business and operating results could be harmed, and the Company could fail to meet its financial reporting obligations, which in turn could affect the market price of the Company’s securities. In addition, perceptions of the Company among customers, lenders, investors, securities analysts and others could also be adversely affected. The current material weaknesses or any weaknesses or deficiencies identified in the future could also hurt confidence in the Company’s business and the accuracy and completeness of the Company’s financial statements, and adversely affect the Company’s ability to do business with these groups.
The Company can give no assurances that the remediation measures it has implemented and will begin implementing, or any future measures it may take, will remediate the material weaknesses identified or that any additional material weaknesses will not arise or be identified in the future due to the Company’s failure to implement and maintain effective internal control over financial reporting. In addition, even if the Company is successful in strengthening its controls and procedures, those controls and procedures may not be effective to prevent or identify irregularities or ensure the fair and accurate presentation of the Company’s financial statements included in its periodic reports filed with the SEC.
Issuances of our Common Stock in the future could dilute existing stockholders and adversely affect the market price of our Common Stock.
We have the authority to issue up to 200,000,000 shares of Common Stock and 1,000,000 shares of preferred stock, and to issue options and warrants to purchase shares of our Common Stock without shareholder approval, subject to certain limitations imposed by applicable stock exchange rules. In addition, during 2025 we put an at-the-market (“ATM”) program in place to allow us to sell up to $9,300,000 in shares of our Common Stock under that program from time to time. Future issuances of our securities could be at prices substantially below the price paid for our Common Stock by our current stockholders. Issuances of our Common Stock could result in dilution of the ownership interests of existing stockholders, which may further dilute common stock book value, and that dilution may be material.
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, the market price of the Common Stock.
We are required to maintain effective disclosure controls and procedures and internal control over financial reporting. As a newly public company, we continue to refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in filings with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules, and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to our management, including our principal executive and financial officers.
We will continue to refine our internal control over financial reporting. We will be required to make a formal assessment of the effectiveness of our internal control over financial reporting and once we cease to be an emerging growth company, we will be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with these requirements within the prescribed time period, we have been engaging, and will continue to engage, in a process to document and evaluate our internal control over financial reporting. This process is both costly and challenging, and requires us to dedicate significant internal resources. We may also engage outside consultants and hire new employees with the requisite skill set and experience. We have assessed and documented the adequacy of our internal control over financial reporting, validated through testing that controls are functioning as documented and implemented a continuous reporting and improvement process for internal control over financial reporting. There is a risk that we will not be able to conclude, within the prescribed time period or at all, that our internal control over financial reporting is effective as required by Section 404 of the Sarbanes-Oxley Act. Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.
Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of our financial statements and reports, which would likely adversely affect the market price of the Common Stock. In addition, we could be subject to sanctions or investigations by the NYSE American, the SEC and other regulatory authorities.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management to the extent permitted, whether by our Certificate of Incorporation or merely as a function of Delaware law. Any provision of our Certificate of Incorporation, Delaware law, or otherwise that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Common Stock and could also affect the price that some investors are willing to pay for our Common StockStock.
Because we became a publicly traded company by means of consummating the Business Combination rather than by means of a traditional underwritten initial public offering, there was no independent third-party underwriter selling the shares of our common stock, and, accordingly, our stockholders did not have the benefit of an independent review and investigation of the type normally performed by an unaffiliated, independent underwriter in a public security offering. Due diligence reviews typically include an independent investigation of the background of the company, any advisors, and their respective affiliates, review of the offering documents and independent analysis of the plan of business and any underlying financial assumptions. Although PACI performed a due diligence review and investigation of VolatoVolato, Inc. in connection with the Business Combination, the lack of an independent due diligence review and investigation increases the risk of investment in us because PACI’s due diligence review and investigation may not have uncovered facts that would be important to a potential investor that may have been uncovered by a third-party investigation.
The amount of due diligence conducted by PACI and its advisors in connection with the Business Combination may not be as high as would have been undertaken by an underwriter in connection with an initial public offering of Volato.Volato, Inc. Accordingly, it is possible that defects in our business operations or problems with our management that would have been discovered if we had conducted an underwritten public offering willwere not be discovered in connection with the Business Combination, which could adversely affect the market price of our common stock.
Management's Discussion & Analysis (MD&A)
New heading “Recent Developments”
New heading “N/M - the percentage change is not meaningful”
Removed heading “Gain from sale of consolidated entity”
Removed heading “Loss on extinguishment of debt”
Removed heading “Intangible Assets”
Removed heading “Investment - Equity Method”
Largest changes
“On March 15, 2023, the Company entered into a promissory note agreement with Dennis Liotta, an affiliate of the Company, for a total amount of $1.0 million, with an effective date of February 27, 2023, which matures on March 31, 2024 (“March 2023 note”). The entire outstanding principal balance together with accrued but unpaid interest are due at the maturity date. The March 2023 note includes a ten percent (10%) interest rate per annum, which will be increased to twenty percent (20%) upon an event of default. …”see in full comparison
“During the year ended December 31, 2022, the Company did not remit its interest payments in connection with the December 2021 note to this related party, thus triggering a default and increasing the interest rate to 9% plus an additional 5% on the missed payments. The agreement stipulated that in the event of default, the entire unpaid principal balance together with all accrued but unpaid interest shall be due and payable regardless of the maturity date. …”see in full comparison
“Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in a business combination. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. …”see in full comparison
“We review the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale, or disposition of a significant portion of the business, or other factors. If the carrying amount of a long-lived asset or asset group is determined not to be recoverable, an impairment loss is recognized and a write-down to fair value is recorded.”see in full comparison
“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. The Loan provides for events of default customary for term loans. As of December 31, 2024 the Company was in compliance with all covenants. …”see in full comparison
“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 which provides up front deposits from our customers and aircraft usage. As of December 31, 2024, we had $2.2 million of cash and cash equivalents and $1.8 million in restricted cash which will become available in Q1 2025. …”see in full comparison
Full comparison: every changed paragraph (95)
The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes. This discussion contains forward-looking statements which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in “Risk Factors” starting on page 12section and elsewhere in this Annual Report. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section to “we,” “us,” “our,” and “the Company” are intended to mean the business and operations of Volato Group, Inc.
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.
Our revenue is generated through airplane sales and software-as-a-service subscriptions. Our aircraft ownership program was an asset-lite model whereby we sell each fleet aircraft to a limited liability company (LLC) and sell LLC membership interests to third-party owners. The LLC then leased the aircraft back to us for management and charter operation on behalf of the LLC under 14 C.F.R. Part 135. In turn, program participants (JetShare owners) invested in those special purpose entities to fund the aircraft purchase. We operated the aircraft on behalf of the special purpose entity and entered into charter agreements with the individual JetShare owners to provide preferential access and charter pricing for our HondaJet fleet.
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 iswas expectedintended 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 expectssought 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. 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 yeartwelve months ended December 31, 20242025 include:
•We generated total revenue of $46.3$78.6 millionmillion, an increase of $10.7$39.5 million, or 30%,101%, compared to the year ended December 31, 2023,2024, primarily related to an increase in aircraft sales of $16.7 million as we took delivery of our firstthree Gulfstream G280;G280’s in 2025 (whereas we took delivery of one aircraft in 2024).
•Operating income was $4.0 million compared to an operating loss of $8.6 million in 2024. Operating income was primarily the result of cost reductions implemented during 2024 that continued during 2025 together with the sale of three Gulfstream G280s during 2025.
•Net income was $5.2 million compared to a net loss of $40.6 million in 2024. Net income in 2025 was primarily the result of settlements of member deposits, insider deposits and liabilities at a gain, that are reflected as “Other income, net” or “Net income from discontinued operations, net of taxes” in the statements of operations.
Recent Developments
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. 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 private critical minerals reserve. 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 enterprise AI “Artificial Intelligence” platform that deploys autonomous agents within Microsoft 365 environments to automate workflows, synthesize information across systems, and execute multi-step business processes; the platform includes optional deterministic document processing capabilities for applications requiring enhanced reliability and auditability, such as contract analysis and regulatory filings.
On October 16, 2025, pursuant to the Securities Purchase Agreement the Company issued a fourth tranche Convertible Note in the principal amount of $2.2 million for a purchase price of $2.0 million, representing an original issue discount of ten percent (10%). The Convertible Note matures on October 16, 2026.
On October 1, 2025, the Company entered into a Fourth Amendment (the “Amendment”) to Aircraft Management Services Agreement (as amended the “Agreement”) with flyExclusive to bring the Agreement in line with Company’s anticipated shift in operations, new business directives, and to better accommodate the proposed Merger with M2i. The Amendment served to, (i) modify the term of the Agreement; (ii) grant flyExclusive, subject to certain terms and conditions, the right to purchase certain aviation-related assets from the Company and assume certain obligations of the Company (the “flyExclusive Asset Option”); (iii) grant the Company, subject to certain terms and conditions, the right to sell certain aviation-related assets to flyExclusive and assign certain obligations of the Company to flyExclusive (the “Company Asset Option,” and collectively with the flyExclusive Asset Option, the “Asset Options”); (iv) obligate flyExclusive to pay the Company $100,000 upon execution of the Amendment as settlement of net payables owed by flyExclusive to the Company under the terms of the Agreement (the “Net Payables Obligation”); and (v) modify the material terms of flyExclusive’s right to cause the Company to merge with and into a wholly owned subsidiary of flyExclusive (the “flyExclusive Merger Option”), including that the flyExclusive Merger Option is to be only exercisable in the event that the Company and M2i terminate the Merger Agreement. The purchase price for the Asset Options and the Net Payables Obligations may be paid by flyExclusive in cash or shares of flyExclusive Class A common stock, at the sole discretion of flyExclusive. flyExclusive elected to pay the Net Payables Obligation by issuing the Company 20,576 shares of Class A common stock.
As consideration for the execution of the Amendment, flyExclusive agreed to pay $2,000,000 to the Company, in cash or shares of flyExclusive Class A common stock, in exchange for the right to receive either (i) the net proceeds that the Company receives from the sale of a certain G280 aircraft, which is expected to be delivered to the Company pursuant to an existing agreement (the “G280 Agreement”) with Gulfstream Aerospace Corporation (“Gulfstream”), or (ii) if, and only if, Gulfstream provides written consent, assignment of the G280 Agreement from the Company to flyExclusive subject to the execution of an asset purchase agreement relating solely to the transfer of the G280 Agreement. flyExclusive elected to pay all of the $2,000,000 in shares of its Class A common stock and issued an aggregate of 411,523 shares of its Class A common stock to the Company.
On March 6, 2026, the Company signed amendment number five to the Agreement with flyExclusive, pursuant to which the Company sold certain unused intellectual property assets for $1.3 million payable in cash or shares of flyExclusive’s Class A common stock. Such assets represent a portion of the total assets which were anticipated to be sold under one of the Asset Options as described above. Following the sale of the intellectual property assets pursuant to the fifth amendment, there is $700,000 in remaining assets that may be sold to flyExclusive under the terms of the Agreement, as amended.
On December 16, 2025 the Company announced a stock dividend of shares of flyExclusive stock to Volato shareholders of record as of December 26, 2025. The dividend was effected in January 2026.
•Net loss from continuing operations was $21.9 million compared to $20.6 million in 2023. The decrease in net loss from continuing operations was the result of higher plane sale revenue mentioned above, and;
•We incurred a net loss of $40.6 million for the year ended December 31, 2024, representing a $12.2 million decrease in loss over the prior year.
We believe that the followingbelow key factors have affected our financial condition and results of operations and are expected tomay continue to have a significant effect:effect. In addition, upon closing the Merger our financial condition and results of operations will be impacted by those of M2i and its industry.
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 took delivery of the fourth Gulfstream G280 in October 2025 and sold to a third party in December 2025. We do not expect to take delivery of additional aircraft in 2026.
Historically, we have taken delivery of HondaJet aircraft, manufactured by Honda Aircraft Company (“Honda”) and Gulfstream G280 aircraft manufacture by Gulfstream Aerospace Corporation (“Gulfstream”) and sold these airplanes to third parties. Airplane manufacturing is subject to interruptions or supply chain disruption. The purchase agreement with Honda was terminated on September 10, 2024. Our revenue is subject to timing of delivery and sale of airplanes.
In 2022 and 2023, we invested in the core business systems, processes and people required to safely operate a growing, publicly traded private aviation company. 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 providesprovided us with the opportunity to focus on what we believe to be our high-growth areas, including aircraft sales and proprietary software. We willhave continue to take delivery of and sell new aircraft. We expect to benefitbenefited from the margins on aircraft sales without the burden of operational costs, while also generating revenue from itsour proprietary software, including the Vaunt platform, our successful empty leg consumer app.
The private aviation industry is volatile and affected by economic cycles and trends. Our financial performance is susceptible to economically driven changes in demand particularly for our discretionaryVaunt charterplatform. andHistorically, deposit products. Ourour cost structure and private aviation demand levels had been greatly impacted by the price of jet fuel, pilot salaries and availability, changes in government regulations, consumer confidence, safety concerns, and other factors.
Comparison of yeartwelve months ended December 31, 20242025 and 20232024
The following table sets forth our results of operations for the yearstwelve months ended December 31, 20242025 and 20232024 (in thousands, except percentages):
N/M - the percentage change is not meaningful
Revenue increased by $10.7 million$39.5 for the yeartwelve months ended December 31, 20242025, compared to the yeartwelve months ended December 31, 2023.2024. The increase in revenue was primarily the result of an increase in aircraft sales of $16.7$39.0 million, as we took delivery of three aircraft during the year, and an increase in subscription based revenue of $0.5 million during the yeartwelve months ended December 31, 20242025 compared to the prior year.year period. The increase in revenue from aircraft sales was the result of the delivery and sale of our first Gulfstream G280 in 2024. We have orders for three additional Gulfstream G280s and expect delivery in 2025. Our subscription based revenues areis attributable to our Vaunt platform which began to generate revenue during the 2024 fiscal year. The increase in aircraft salesyear and ourcontinuing subscriptionthroughout revenues year over year was partially offset by the approximately 49% decrease in our revenues from our managed aircraft operations.2025.
Cost of revenue comprises expenses tied to the associated revenue streams: aircraft sales, managed aircraftsales and subscription based revenue. Aircraft sales cost of revenue is ourthe purchase price of the aircraft. Managed aircraftSubscription cost of revenue includes all costs incurred in our managed aircraft including the cost of flight crews, fuel, maintenance, and landing and other airport fees. Subscription costs includesinclude costs we incur related to our proprietary software, the Vaunt platform.
CostsCost of revenue consists of the following (in thousands, except percentages):
Cost of revenue increased by $8.0$31.7 million for the yeartwelve months ended December 31, 20242025 compared to the yeartwelve months ended December 31, 2023.2024. The increase in cost of revenue was primarily a result of an increase in aircraft sales as we purchased and took delivery of our first Gulfstream G280three aircraft induring the yeartwelve months ended December 31, 2024. However, offsetting our increased costs attributable to our aircraft sales was the decrease in costs attributable to our managed aircraft which decreased approximately 49% year over year.2025.
Selling, general and administrative expenses decreased by $4.8 million for the twelve months ended December 31, 2025, compared to the twelve months ended December 31, 2024. The decrease in selling, general and administrative is primarily related to the cost savings initiatives implemented during 2024 and that continued through 2025.
Selling, general and administrative expenses increased by $7.6 million for the year ended December 31, 2024 to $16.9 million, compared to the year ended December 31, 2023. The increase in selling, general and administrative is primarily related to higher professional fees and other costs associated with the being a public company. Approximately $2.3 million of our general and administrative costs are attributable to costs to support and administer our public reporting and compliance obligations, such as legal fees, audit fees, fees owed to maintain our NYSE American listing, printing and SEC filing fees, and higher advertising and marketing fees of $1.3 million for our Vaunt platform. As a result of the transition of our flight operations to flyExclusive, we substantially reduced our projected costs and expect selling, general and administration costs to be approximately $1.9 million per quarter in 2025.
Gain from sale of consolidated entity
Gain on sale of consolidated entity consists of the gain on the sale of Fly Dreams LLC during 2023.
Loss on change in fair value of forwardfinancial purchase agreementinstruments
For the twelve months ended December 31, 2025, the loss on change in fair value of financial instruments relates to the fair value adjustments on the 2024 Convertible Notes resulting in a non-cash loss of $1.5 million. The loss also includes a loss on the Investment in M2i share exchange of $0.9 million, a loss on the Investment of flyExclusive of $41 thousand offset by a gain on the fair value of the aviation asset of $0.3 million for the twelve months ended December 31, 2025.
For the twelve months ended December 31, 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 (as defined below). In July 2024, the Forward Purchase Agreement was terminated.
As part of the Business Combination, we entered into an agreement for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Agreement”). We recorded a fair value adjustment on the Forward Purchase Agreement resulting in a $13.4 million loss on the change in fair value as of December 31, 2023. In July 2024, the Forward Purchase Agreement was terminated. As of December 31, 2024, we recorded a fair value adjustment on the Forward Purchase Agreement resulting a non-cash loss of $3.0 million for the year ended December 31, 2024.
Loss on extinguishment of debt
The loss on extinguishment of debt upon relates to the settlement of certain liabilities by the issuance of shares of common stock at a discount.
Interest ExpenseExpense, Net
Interest 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. Both agreements were terminated in 2025. Interest expense was offset by interest income on the note receivable related to our sale of GC Aviation, Inc. in March 2025.
Interest expense, net decreased $2.6 million during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 primarily as a result of the interest related to the pre-delivery payment agreement with SAC Leasing G280 LLC in 2024.
Interest expense primarily consists of interest related to our aircraft purchase and sale agreement with TVPX Aircraft Solutions, Inc., the business loan and security agreement with TVT Capital Source LLC, credit facilities and convertible notes and amortization of debt issuance costs. Interest expense increased $4.1 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily as a result of the aircraft purchase agreement and the business loan and security agreement.
Our principal sources of liquidity have historically consisted of financing activities, including proceeds from the issuance of stock, borrowings under our credit facilities, and proceeds from sales of debt and equity securities. We additionally generate revenue through aircraft sales and sales subscriptions to our software application. As of December 31, 2025, we had $4.7 million of cash and cash equivalents.
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 which provides up front deposits from our customers and aircraft usage. As of December 31, 2024, we had $2.2 million of cash and cash equivalents and $1.8 million in restricted cash which will become available in Q1 2025. During the year ended December 31, 2024, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”). Under the Securities Purchase Agreement, the Company has agreed to issue 10% original issue discount senior unsecured convertible promissory notes (“Notes”) in an aggregate original principal amount of up to $36.0 million, which will be convertible into shares of the Company’s Class A common stock. The closing of the first tranche was consummated on December 4, 2024, and the Company issued the initial Note for an aggregate original principal amount of $4.5 million (the “Initial Tranche”). The second Note is expected to be an aggregate original principal amount of $1.5 million, and will be issued after the satisfaction of certain conditions precedent, including the Company having an effective registration statement for the resale of the shares of common stock issuable pursuant to the Notes. Any additional Notes will be aggregate principal amounts agreed to by the parties; provided, that no additional Note will be in an amount in excess of $4.0 million, unless otherwise mutually agreed to by the Company and the investor. Further, no additional Notes will be issued at any time when the aggregate principal balance outstanding on all previously issued Notes is greater than $2.0 million. It is also a condition to closing of any additional Notes that during the twenty (20) trading days immediately preceding the most recent additional closing, a minimum of $500 thousand in shares of common stock has been traded and the daily VWAP (as defined in the Notes) of the common stock is greater than the Conversion Price (as defined in the Notes). Each Note will mature twelve (12) months after the issuance date.
During 2023, the pre-business combination Company closed a series of preferred stock subscriptions, raising a total of $24.2 million and converted $38.4 million of convertible promissory notes into shares of the Company’s preferred stock.
Our primary needs for liquidity are to fund working capital, acquisitions, debt service requirements, and for general corporate purposes.
We believe the primary factors that could affect our liquidity include whether the abilityclosing ofconditions Gulfstreamunder the Securities Purchase Agreement are met (or waived) such that we are able to meetissue ourone deliveryor schedulemore andadditional ourconvertible abilitynotes tounder sellthat those aircraft,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 funds.capital. We may attempt to raise additional capital through the sale of equity securities, through debt financing arrangements, or both. Raising additional fundscapital by issuing equity securities will dilute the ownership of existing shareholders.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 fundscapital areis required from outside sources, we may not be able to raise it on terms acceptable to us or at all.
Except for our 2025 fiscal year, we have historically incurred negative cash flows from operating activities and significant losses from operations. Management believes that its current cash position, along with 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 Annual Report. There are no assurances, however, that management will be able to raise capital or debt on terms acceptable to the Company. If the Company is unable to obtain sufficient additional capital or debt on terms acceptable to the Company, the Company may be required to reduce the near-term scope of its planned development and operations, which could delay implementation of the Company’s business plan and harm its business, financial condition, and operating results. These above matters raise substantial doubt about the Company's ability to continue as a going concern.
We have incurred negative cash flows from operating activities and significant losses from operations historically. We believe our cash on hand, together with our results of operations including our planned sale of aircraft during the year ending December 31, 2025, and any additional capital raise will be sufficient to meet our projected working capital and capital expenditure requirements for a period of at least 12 months from the date of this report.
Net cash used in operating activities for the yeartwelve months ended December 31, 20242025 was $16.9$3.5 million. The cash outflow from operating activities consisted of our net lossincome of $40.6$5.2 million, non-cash items of $6.8$0.4 million, and a change in net operating assets and liabilities of $16.9$7.8 million. The increasechange in net operating assets and liabilities was primarily as a result of an increase in customer deposits and deferred revenue of $8.7 million, a decrease in aircraftprepaid depositsand other current assets of $4.3$0.5 millionmillion, anda an increasedecrease in accounts payable and accrued liabilities of $2.6$0.1 million offset by a decrease in deposits of $8.2 million and an increase in contract assets of $0.6 million. The change in net assets and liabilities for discontinued operations for the twelve months ended December 31, 20242025 was $52$9.1 thousand.million.
Net cash used in operating activities for the yeartwelve months ended December 31, 20232024 was $30.4$16.9 million. The cash outflow from operating activities consisted of our net loss of $52.8$40.6 million andmillion, non-cash items of $13.6$6.8 million and a change in net operating assets and liabilities of $17.0 million. The increase in net operating assets and liabilities was primarily as a result of an increase in customer deposits and deferred revenue of $9.1 million, a decrease in aircraft deposits of $4.3 million and an increase in accounts payable and accrued liabilities of $2.8 million. The change in net assets and liabilities for discontinued operations for the twelve months ended December 31, 20232024 was $9.1$100 million.thousand.
Net cash used byin investing activities for the yeartwelve months ended December 31, 20242025 was $115$8.1 thousand.million. The cash flow from investing activities consisted primarilyof the payoff of the G280 liability issued for the flyExclusive investment, the purchase of property and equipment, offset by the sale of property and equipment.
Net cash providedused byin investing activities for the yeartwelve months ended December 31, 20232024 was $1.8$115 million.thousand. The cash flow from investing activities ofconsisted discontinued operationsprimarily of $2.4the million,purchase offsetof byproperty $0.6and million for capital expenditures.equipment.
Net cash fromprovided by financing activities for the yeartwelve months ended December 31, 20242025 was $4.3$5.3 million. Cash flow fromprovided by financing activities consisted of the proceeds of $7.9 million from the issuance of theconvertible termpromissory loannotes totaling $6.0 million (as described in Notes 10) and convertible$0.5 notes.million Thisfrom wasthe proceeds of common stock issued in our at-the-market offering program, offset by the paymentsrepayment on debtloans of $3.7$1.1 million.
Net cash providedused byin financing activities for the twelve months ended December 31, 20232024 was $37.5$4.3 million. Cash flow from financing activities consisted of proceeds of $24.2 million from the sale of preferred stock, $16.7 million from the Business Combination, net of closing costs, $12.7$8.1 million from the issuance of convertiblethe notes,term $2.5loan milliondescribed in proceedsNote from the forward purchase agreement11 and $1a millionconvertible from our line of credit.note. This was offset by the paymentpayments foron a forward purchase agreementdebt of $18.9$3.9 andmillion. $0.8The cash used in financing from discontinued operations was $0.1 million for the repaymenttwelve ofmonths aended loan.December 31, 2024.
To date, we have financed our operations primarily throughas a result of the 2023 business combination, salesales of preferred stock, borrowings of long-term and short-term debt, loans and convertible notes. As of December 31, 2024,2025, we had anegative working capital deficit of approximately $18.9$3.9 million.million As of December 31, 2024,and our primary sourcessource of liquidity werewas cash totaling approximately $2.2$4.7 million. Based on our recent trends, we expect to fund our operations in 20252026 from our cash on hand, cash from operations, one or more sales of Notesconvertible (aspromissory definednotes below)in accordance with the Securities Purchase Agreement described in Note 2 and Note 10 to our unaudited financial statements in this Annual Report and potentially additional sales of equity or debt securities.securities (including potential sales of common stock in our at-the-market sales program described below and elsewhere in this Annual report). The Company believes it has the ability to generate and obtain enough cash to meetsmeet 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 G-280 aircraft. The first Gulfstream G280 was delivered in the third quarter of 2024. As of December 31, 2024, total consideration due on the remaining three Gulfstream G280s was $62.6 million with expected deliveries in 2025. Deposits on the Gulfstream G280s of $36.0 million were funded and paid through December 31, 2024, through a credit facility from SAC leasing G 280 for $28.5 million and $7.5 million through cash deposits.
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 iswas 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$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 additionadditional $18$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$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 $9$8.5 million.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.
What changed in the latest 10-Q
Risk Factors
New heading “A key component of our business plan is to seek to effect one or more acquisitions, business combinations or strategic relationships to broaden our business operations, and we terminated the previously contemplated Merger with M2i. Future business combinations and acquisition transactions, if any, may not succeed in generating the intended benefits and may adversely affect our business.”
Largest changes
“A key component of our business plan is to seek to effect one or more acquisitions, business combinations or strategic relationships to broaden our business operations, and we terminated the previously contemplated Merger with M2i. Future business combinations and acquisition transactions, if any, may not succeed in generating the intended benefits and may adversely affect our business.”see in full comparison
“The Merger Agreement with M2i was terminated in June 2026. As a result, a key component of our go-forward strategy is to evaluate a potential alternative strategic transaction or relationship to expand our business and grow our operations. The inability of the Company to successfully identify and execute on a strategic transaction, or otherwise, integrate any acquired businesses or technologies, and any related diversion of management’s attention, could have a material adverse effect on our business, operating results and financial condition. …”see in full comparison
see in full comparisonThereExcept as set forth below there have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 12,2026.2026 (as amended, the “Form 10-K”). Investors should review the risks provided in the Form 10-K and in other reports we filed with the SEC prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Form 10-K, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.
Full comparison: every changed paragraph (3)
There
Except as set forth below there have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s
Annual Report on Form
10-K for the year ended December 31, 2025, filed with the SEC on March 12, 2026.2026 (as amended, the “Form 10-K”).
Investors should review the risks provided in the Form
10-K and in other reports we filed with the SEC prior to making an investment in
the Company. The business, financial condition and operating results of the Company can be affected
by a number of factors, whether currently
known or unknown, including but not limited to those described in the Form 10-K, any one or
more of which could, directly or indirectly,
cause the Company’s actual financial condition and operating results to vary materially
from past, or from anticipated future, financial
condition and operating results. Any of these factors, in whole or in part, could materially
and adversely affect the Company’s
business, financial condition, operating results and stock price.
A key component of our business plan is to seek to effect one or more acquisitions, business combinations or strategic relationships to broaden our business operations, and we terminated the previously contemplated Merger with M2i. Future business combinations and acquisition transactions, if any, may not succeed in generating the intended benefits and may adversely affect our business.
The Merger Agreement with M2i was terminated in June 2026. As a result, a key component of our go-forward strategy is to evaluate a potential alternative strategic transaction or relationship to expand our business and grow our operations. The inability of the Company to successfully identify and execute on a strategic transaction, or otherwise, integrate any acquired businesses or technologies, and any related diversion of management’s attention, could have a material adverse effect on our business, operating results and financial condition. Executing on any acquisitions or strategic transactions may require various closing conditions on the parties and may be subject to regulatory review and approval requirements by governmental entities, or, ultimately be prohibited. There is no assurance that we will be able to complete the transactions contemplated by any letters of intent that we have evaluated since the termination of the Merger Agreement in June 2026, or, otherwise execute on other strategic transactions of a similar nature.
Management's Discussion & Analysis (MD&A)
New heading “Gain from reversal of M2i Investment”
Largest changes
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.see in full comparisonM2i’sOnbusinessJunefocuses4,on2026,providingtheitsCompanypartnersdeliveredwithwrittenaccessnotice toturnkey solutions, facilitating expanded business opportunities, securing offtake agreements, influencing strategic government policy, and engaging with aligned organizations and laboratories.M2ispecializes in the development and execution of a complete global value supply chain for critical minerals, including the creation of a private critical minerals reserve. Upon consummation ofterminating the MergeritAgreementisandcurrently expected that M2i’s stockholders will own approximately 85% ofabandoning thecombinedtransactionscompany.contemplated thereby.
“In July 2025, the Company began development of an enterprise AI “Artificial Intelligence” platform that deploys autonomous agents within Microsoft 365 environments to automate workflows, synthesize information across systems, and execute multi-step business processes; the platform includes optional deterministic document processing capabilities for applications requiring enhanced reliability and auditability, such as contract analysis and regulatory filings.”see in full comparison
“On October 1, 2025, the Company entered into a Fourth Amendment (the “Amendment”) to Aircraft Management Services Agreement (as amended the “Agreement”) with flyExclusive to bring the Agreement in line with Company’s anticipated shift in operations, new business directives, and to better accommodate the proposed Merger with M2i. …”see in full comparison
“Volato is an aviation company advancing the industry with innovative solutions in aviation software and on-demand flight access. Historically, we generated revenue through our aircraft ownership program. This program was a focused commercial strategy including deposit products, charter flights, and aircraft management services. Our aviation experience led to the development of our proprietary software, products, and applications – “Mission Control”, “Vaunt”, and “Parslee”. …”see in full comparison
“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 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. …”see in full comparison
Full comparison: every changed paragraph (48)
Volato is an aviation company advancing the industry with innovative solutions in aviation software and on-demand flight access. Historically, we generated revenue through our aircraft ownership program. This program was a focused commercial strategy including deposit products, charter flights, and aircraft management services. Our aviation experience led to the development of our proprietary software, products, and applications – “Mission Control”, “Vaunt”, and “Parslee”. Mission Control drives efficiency across operations and supports operators in managing fractional ownership, charter, and other services, Vaunt is an experiential private aviation platform that connects travelers to private, empty leg flights, and Parslee is a document intelligence platform that enhances the performance of leading large language models (“LLMs”) by adding deterministic structure and auditability to complex documents such as contracts and SEC filings. With a commitment to advanced technology and customer-focused solutions, we are seeking to build scalable tools to elevate service quality and operational effectiveness in private aviation.
In September 2024, we announced an agreement with flyExclusive, Inc. (“flyExclusive”) to transition the management of our aircraft ownership program fleet operations to flyExclusive. Our management expects that this arrangement will provide substantial cost savings to the Company and allow us to focus on high-growth proprietary software sales.
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 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. Volato sought 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 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 such flight operations. Items related to our aircraft ownership program fleet operations are included in discontinued
operations.
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. M2i’sOn businessJune focuses4, on2026, providingthe itsCompany partnersdelivered withwritten accessnotice 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 private critical minerals reserve. Upon consummation ofterminating the Merger itAgreement isand currently
expected that M2i’s stockholders will own approximately 85% ofabandoning the combinedtransactions company.contemplated
thereby.
In
July 2025, the Company began development of an enterprise AI “Artificial Intelligence” platform that deploys autonomous agents
within Microsoft 365 environments to automate workflows, synthesize information across systems, and execute multi-step business processes;
the platform includes optional deterministic document processing capabilities for applications requiring enhanced reliability and auditability,
such as contract analysis and regulatory filings.
On
October 16, 2025, pursuant to the Securities Purchase Agreement the Company issued a fourth tranche Convertible Note in the principal
amount of $2.2 million for a purchase price of $2.0 million, representing an original issue discount of ten percent (10%). The Convertible
Note matures on October 16, 2026.
On
October 1, 2025, the Company entered into a Fourth Amendment (the “Amendment”) to Aircraft Management Services Agreement
(as amended the “Agreement”) with flyExclusive to bring the Agreement in line with Company’s anticipated shift in operations,
new business directives, and to better accommodate the proposed Merger with M2i. The Amendment served to, (i) modify the term of the
Agreement; (ii) grant flyExclusive, subject to certain terms and conditions, the right to purchase certain aviation-related assets from
the Company and assume certain obligations of the Company (the “flyExclusive Asset Option”); (iii) grant the Company, subject
to certain terms and conditions, the right to sell certain aviation-related assets to flyExclusive and assign certain obligations of
the Company to flyExclusive (the “Company Asset Option,” and collectively with the flyExclusive Asset Option, the “Asset
Options”); (iv) obligate flyExclusive to pay the Company $100,000 upon execution of the Amendment as settlement of net payables
owed by flyExclusive to the Company under the terms of the Agreement (the “Net Payables Obligation”); and (v) modify the
material terms of flyExclusive’s right to cause the Company to merge with and into a wholly owned subsidiary of flyExclusive (the
“flyExclusive Merger Option”), including that the flyExclusive Merger Option is to be only exercisable in the event that
the Company and M2i terminate the Merger Agreement. The purchase price for the Asset Options and the Net Payables Obligations may be
paid by flyExclusive in cash or shares of flyExclusive Class A common stock, at the sole discretion of flyExclusive. flyExclusive elected
to pay the Net Payables Obligation by issuing the Company 20,576 shares of Class A common stock.
As
consideration for the execution of the Amendment, flyExclusive agreed to pay $2,000,000 to the Company, in cash or shares of flyExclusive
Class A common stock, in exchange for the right to receive either (i) the net proceeds that the Company receives from the sale of a certain
G280 aircraft, which is expected to be delivered to the Company pursuant to an existing agreement (the “G280 Agreement”)
with Gulfstream Aerospace Corporation (“Gulfstream”), or (ii) if, and only if, Gulfstream provides written consent, assignment
of the G280 Agreement from the Company to flyExclusive subject to the execution of an asset purchase agreement relating solely to the
transfer of the G280 Agreement. flyExclusive elected to pay all of the $2,000,000 in shares of its Class A common stock and issued an
aggregate of 411,523 shares of its Class A common stock to the Company.
OnIn
December 16, 20252025, the Company announced a stock dividend of shares of flyExclusive stock to Volato shareholders of record as of December
26, 2025. The dividend was effected in January 2026.
On March 6, 2026, the Company signed amendment number five to the Aircraft Management Services Agreement with flyExclusive, pursuant to which the Company sold certain unused intellectual property assets for $1.3 million payable in cash or shares of flyExclusive’s Class A common stock. Such assets represent a portion of the total assets which were anticipated to be sold under one of the Asset Options as described above. Following the sale of the intellectual property assets pursuant to the fifth amendment, there is $700,000 in remaining assets that may be sold to flyExclusive under the terms of the Aircraft Management Services Agreement, as amended.
On June 7, 2026, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) for the sale by the Company of 6,500,000 shares of the Company’s common stock. The Company received gross proceeds of $2.1 million from the offering. Under the Purchase Agreement the Company also divested its 411,523 shares of flyExclusive Class A common stock the Company had acquired under the terms of the Fourth Amendment to Aircraft Management Services Agreement it entered into in October 2025.
On June 28, 2026, the Company entered into a securities purchase agreement, dated June 27, 2026, for the sale by the Company of an aggregate of 11,038,767 shares of the Company’s Class A common stock. The Company received gross proceeds of $1.82 million.
On
May 7, 2026, the shareholders of the Company approved the Merger.
We
believe that the below key factors have affected our financial condition and results of operations and may continue to have a significant
effect. In addition, upon closing the Merger our financial condition and results of operations will be impacted by those of M2i and its
industry.
During 2025, we took delivery of three Gulfstream G280 aircraft, which were delivered and sold to third parties. We have not and do not expect to take delivery of additional aircraft in 2026.
In
2022 and 2023, we invested in the core business systems, processes and people required to safely operate a growing,a, publicly traded private
aviation company. In September 2024, we entered into an agreement with flyExclusive to transition our fleet operations to flyExclusive.
This move 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
operational costs, while also generating revenue from our proprietary software, including the Vaunt platform, our empty leg consumer
app.
Comparison
of three and six months ended MarchJune 31,30, 2026 and 2025
The
following table sets forth our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands, except
percentages):
Revenue
decreased by $25.1$23.9 million for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025. The decrease in
in revenue was the result of a decrease in aircraft sales of $25.0$24.5 million, as we did not take delivery of aircraft during the2026, year,and
and an increase in subscription based revenue of $0.6 million during the three months ended MarchJune 31,30, 2026 compared to the prior year period.
period. The increase in subscription based revenues is attributable to our Vaunt platform.
Revenue decreased by $48.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in revenue was the result of a decrease in aircraft sales of $49.6 million, as we did not take delivery of aircraft during 2026, and an increase in subscription based revenue of $1.2 million during the six months ended June 30, 2026 compared to the prior year period. The increase in subscription based revenues is attributable to our Vaunt platform.
Cost
of revenue decreased by $20.9$20.8 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The
The decrease in cost of revenue was primarily a result of a decrease in aircraft sales as we purchased and took delivery of one aircraft
aircraft during the three months ended MarchJune 31,30, 2025.
Cost of revenue decreased by $41.5 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease 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 2025.
Selling,
general and administrative expenses increased by $1.1$0.3 million for the three months ended MarchJune 31,30, 2026, compared to the three months
ended MarchJune 31,30, 2025. The increase in selling, general and administrative is primarily related to a $0.5$0.6 million increase in accounting,a legal
legalsettlement andaccrual, othera $0.2 increase in professional fees as we work toward the merger with M2i,fees, a $0.4 million increase related to professional fees and software
development for our Vaunt platform and $0.2 million$0.1 increase in salaries and wagesbenefits, foroffset ourby Parsleea platform.decrease of $0.6
million of stock based compensation expense.
Selling, general and administrative expenses increased by $1.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in selling, general and administrative is primarily related to $1.0 million in professional, legal and accounting fees, $0.6 million increase in a legal settlement accrual, a $0.3 million increase in salaries and benefits, a $0.2 million increase in advertising and marketing offset by a $0.6 million decrease in stock based compensation.
For
the three months ended March 31, 2026, the loss on the change in fair value of financial instruments relates to a non-cash loss on
the Investment in M2i share exchange of $0.8 million, a loss on the Investment of flyExclusive of $174 thousand, a loss on the fair
value of the aviation asset of $0.3 million and a loss on the change in the fair value of the Convertible Notes of $60 thousand.
For
the three months ended MarchJune 31,30, 2025,2026, the loss on the change in fair value of financial instruments relates to the fair value adjustment
on the 2024 Convertible Notes resulting in a non-cash loss on
the Investment in M2i share exchange of $0.8$0.2 million during the three months ended March 31, 2025.million.
For the six months ended June 30, 2026, the loss on the change in fair value of financial instruments relates to a non-cash loss of $0.5 million on the remaining Investment in M2i, $0.3 million related to the fair value of the aviation asset and a $0.2 million loss on the fair value of the Investment in flyExclusive.
Gain from reversal of M2i Investment
Gain from the reversal of M2i Investment consist of the reversal of the original losses booked from the Investment in M2i due to the cancellation of Share Purchase agreements with two investors.
Interest
income (expense) net, primarily consists of interest related to the note receivable and the sale of the GC Aviation, IncInc., in March
2025.
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 as of MarchJune 31,30, 2025.
Our
principal sources of liquidity have historically consisted of financing activities, including proceeds from the issuance of stock, borrowings
under our credit facilities, and proceeds from sales of debt and equity securities. We additionally generate revenue through sales subscriptions
to our software application. As of MarchJune 31,30, 2026, we had $2.0$8.4 million of cash and cash equivalents.
We
believe the primary factors that could affect our liquidity include 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,include, 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 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.
Except
for our 2025 fiscal year, we have historically incurred negative cash flows from operating activities and significant losses from operations.
Management believes that itsour current cash position, along with 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. If the Company is unable to obtain sufficient additional capital or debt on terms acceptable to the Company, the Company
may be required to reduce the near-term scope of its planned development and operations, which could delay implementation of the Company’s
business plan and harm its business, financial condition, and operating results. 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 threesix months ended MarchJune 31,30, 2026, and 2025 (in thousands):
Net
cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $2.5$2.9 million. The cash outflow from operating
activities activities
consisted of our net loss of $2.6$4.7 million, non-cash items of $0.4$0.1 million, a change in net operating assets and
liabilities of $0.3$1.7 million
and a change in net assets and liabilities for discontinued operations of $0.2$0.3 million. The change in
net operating assets and liabilities
was primarily a result of an increase in deferred revenue and customer deposits of $1.8
million, prepaid and other current assets of $0.6$0.2 million, an increase in membercontract depositsassets, and deferred
revenuenet of $0.6$0.5 millionmillion, and
an increase in contractaccount payable and accrued liabilities of $0.5 million, as they are no longer included in discontinued
operations. The change in net assets ofand liabilities for discontinued operations for the six months ended June 30, 2026 was $0.2
million.
Net
cash usedprovided inby operating activities for the threesix months ended MarchJune 31,30, 2025 was $0.3$0.5 million. The cash outflowinflow from operating activities
consisted of our net income of $0.4$4.1 million, non-cash items of $1.1$2.4 million, and a change in net operating assets and liabilities of $0.3
million, and a change in net assets and liabilities for discontinued operations of $1.5$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 $2.1$1.5 million and accounts payable and accrued liabilities of $0.9 million, offset by a decrease in deposits
of $1.8$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 investing activities for the threesix months ended MarchJune 31,30, 2026 was $0.2$0.4 million. The cash flow from investing activities consisted
consisted of the purchase of property and equipment.
Net
cash provided by investing activities for the threesix months ended MarchJune 31,30, 2025 was $21$30 thousand. The cash flow from investing activities
consisted of the sale of property and equipment.
Net
cash usedprovided inby financing activities for the threesix months ended MarchJune 31,30, 2026 was $46$7.0 thousand.million. Cash flow usedprovided inby financing activities
consisted primarilyof proceeds from the at the market offering of $3.6 million, proceeds from the PIPE offering of 2.2 million and proceeds from
the registered direct offering of 1.6 million cash received and $0.2 million receivable, offset by cost of share issuance of costs$0.4 of share issuances.million.
Net
cash usedprovided inby financing activities for the quartersix months ended MarchJune 31,30, 2025 was $1.1$141 million.thousand. Cash flow used in financing activities
consisted 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.
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 MarchJune 31,30, 2026, we had negative working capital of
approximately $2.5$0.9 million and our primary
source of liquidity was cash totaling $1.9$8.4 million. Based on our recent trends, we expect
to fund our operations in 2026 from our cash
on hand, cash from operations, or one or more sales of convertible promissory notes in
accordance with the Securities Purchase Agreement described in Note 2 and Note 8 to our unaudited financial statements in this
Quarterly Report and potentially additional sales of equity or debt securities (including potential sales of common stock in our at-the-market
at-the-market sales program described below and elsewhere in this Quarterly Report). The Company believes it has the ability to
generate and obtain
enough cash to meet its obligations for the next 12 months.
The
Company entered into the pre-delivery payment agreement on October 5, 2022, with SAC Leasing G280 LLC to obtain loans in the aggregate
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 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 LLC 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 LLC credit
facility was paid in full.
On
March 27, 2026, the Company entered into an ATM Sales Agreement with Curvature Securities, LLC (the “Agent”), pursuant to
to which the Agent will act as the Company’s sole sales agent or principal with respect to the offer and sale from time-to-time of
of shares of the Company’s Class A Common Stock, having an aggregate gross sales price of an aggregate of up to $3.7 million. In April
April 2026, the Company received $3.6 million in net proceeds from the sale of stock under our at-the-market program. The Company does not currently expect to utilize its ATM sales program during the remainer of 2026 due, in part, to limitations imposed
under SEC rules.
On June 7, 2026, the Company entered into a Securities Purchase Agreement for the sale by the Company of 6,500,000 shares of the Company’s Class A common stock. The Company received gross proceeds of $2.2 million from the offering.
On June 27, 2026, the Company entered into a Securities Purchase agreement for the sale by the Company of 11,38,767 shares of the Company’s Class A common stock. The Company received gross proceeds of $1.8 million from the offering.
We
are an “emerging growth company” as defined in the JOBS Act. The JOBS Act permits emerging growth companies to take advantage
of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards
until they would apply to private companies. We have elected to use this extended transition period under the JOBS Act until the earlier
of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition
period provided in the JOBS Act. 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 MarchJune 31,30, 2026.
SOAR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-30 | Liotta Matthew |
Grant/award | 606,060 | $0.17 | $103.0K |
Well-known investors holding SOAR (13F)
None of the 59 investors we track reported a position in their latest 13F.