soar-20250331

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

FORM 10-Q

_____________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number 001-41104

VOLATO GROUP, INC.

(Exact name of Registrant as specified in its charter)

Delaware

4522

86-2707040

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

1954 Airport Road, Suite 124

Chamblee, GA 30341

Telephone: 844-399-8998

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Class A Common stock, $0.0001 par value per share	SOAR	NYSE American LLC
Warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $287.50	SOARW	OTC Markets Group, Inc.

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of May 12, 2025, there were 1,921,921 shares of common stock outstanding.

Table of Contents

VOLATO GROUP, INC.

FORM 10-Q

INDEX


		Page

	Special Note about Forward-Looking Statements
PART I	F INAN CIAL INFORM A TION	5
Item 1.	Financial Statements	5

	Consolidated Balance Sheets	6
	Consolidated Statements of Operations	7
	Consolidated Statements of Changes In Shareholders’ Deficit	8
	Consolidated Statements of Cash Flows	9
	Notes to Consolidated Financial Statements	11





Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	41


Item 4.	Controls and Procedures	41





PART II	O THER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	43
Item 6	Exhibits	43


	Signatures	45

Table of Contents

Note About Forward-Looking Statements

This report includes estimates, projections, statements relating to our business plans, objectives, and expected operating results that are “forward- looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements may appear throughout this report, including the following sections: “Risk Factors” (Part II, Item 1A of this Form 10-Q), and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part I, Item 2 of this Form 10- Q). These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions or the negative of such terms. However, the absence of these words does not mean that a statement is not forward-looking. Forward -looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. We describe certain risks and uncertainties that could cause actual results and events to differ materially in the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Quantitative and Qualitative Disclosures about Market Risk” of our most recent Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

Table of Contents

PART I. FINANCIAL INFORMATION

Table of Contents

ITEM 1. FINANCIAL STATEMENTS

Table of Contents

VOLATO GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except par value amounts)

(unaudited)


	March 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash	$	2,576	$	2,161
Restricted cash	—		1,839
Accounts receivable, net	1		2
Deposits	15,000		36,000
Note receivable, current	56		—
Prepaid expenses and other current assets	1,122		1,031
Current assets - discontinued operations	2,167		2,281
Total current assets	20,922		43,314

Property and equipment, net	579		680
Operating lease, right-of-use assets	158		167

Deposits	1		300
Note receivable, non-current	1,748		—




Non-current assets - discontinued operations	—		1,838
Total assets	$	23,408	$	46,299

LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	5,509	$	5,452

Convertible notes, net	4,899		4,050
Operating lease liability	40		39

Credit facility and other loans	8,315		28,855
Customer deposits and deferred revenue	9,323		11,386
Current liabilities - discontinued operations	11,037		12,418
Total current liabilities	39,123		62,200


Operating lease liability, non-current	118		128

Non-current liabilities - discontinued operations	—		305
Total liabilities	$	39,241	$	62,633
COMMITMENTS AND CONTINGENCIES (Note 15)

Shareholders’ deficit:
Common Stock Class A, $0.0001 par value; 200,000,000 authorized; 1,900,893 and 1,843,852 shares issued and outstanding as of March 31, 2025 and December 31,2024, respectively	5		5
Additional paid-in capital	88,014		87,968

Accumulated deficit	(103,852)		(104,307)
Total shareholders’ deficit	(15,833)		(16,334)
Total liabilities and shareholders’ deficit	$	23,408	$	46,299

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

Table of Contents

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share data)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Revenue	$	25,483	$	48




Costs and expenses:
Cost of revenue	20,987		52
Selling, general and administrative	1,970		4,330
Total costs and expenses	22,957		4,382

Operating income (loss)	2,526		(4,334)

Other income (expenses):



Other income, net	1,181		4
Loss from change in fair value of financial instruments	(849)		(227)

Interest expense, net	(2,400)		(1,138)
Other expenses	(2,068)		(1,361)

Income (loss) before provision for income taxes and discontinued operations	458		(5,695)
Provision for incomes taxes	98		6
Net income (loss) from continuing operations	360		(5,701)
Net income (loss) from discontinued operations, net of taxes	95		(11,689)


Net income (loss)	$	455	$	(17,390)

Basic and diluted net income (loss) per share
Net income (loss) per share from continuing operations, basic	$	0.19	$	(4.90)
Net income (loss) per share from continuing operations, diluted	$	0.03	$	(4.90)
Net income (loss) per share from discontinued operations, basic	$	0.05	$	(10.04)
Net income (loss) per share from discontinued operations, diluted	$	0.01	$	(10.04)
Net income (loss) per share, basic	$	0.24	$	(14.93)
Net income (loss) per share, diluted	$	0.03	$	(14.93)

Weighted average common shares outstanding:
Basic	1,862,438		1,164,648
Diluted	14,180,389		1,164,648

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

Table of Contents

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

(Amounts in thousands, except shares)

(unaudited)


	Class A Common Stock		Additional Paid-in Capital					Retained Deficit	Total Shareholders’ Deficit
		Shares			Amount
Balance as of December 31, 2023, as adjusted		1,121,738	$	3		$	78,410		$	(63,662)	$	14,751

Stock-based compensation		—	—			83			—		83
Issuance of common stock		48,327	—			—			—		—


Common stock and warrant reclass from in-kind liability to APIC		—	—			4,250			—		4,250

Net loss		—	—			—			(17,390)		(17,390)
Balance as of March 31, 2024, as adjusted		1,170,065	$	3		$	82,743		$	(81,052)	$	1,694


	Class A Common Stock			Additional Paid-in Capital		Retained Deficit		Total Shareholders’ Deficit
	Shares	Amount
Balance at December 31, 2024	1,843,852	$	5	$	87,968	$	(104,307)	$	(16,334)
Stock-based compensation	—	—		46		—		46

Issuance of common stock	57,041	—				—

Net income	—	—		—		455		455
Balance at March 31, 2025	1,900,893	$	5	$	88,014	$	(103,852)	$	(15,833)

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

Table of Contents

VOLATO GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Operating activities:
Net income (loss) from continuing operations	$	360	$	(5,701)
Net income (loss) from discontinued operations	95		(11,689)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization expense	85		65
Stock compensation expense	46		83

Gain from sale of property and equipment	(6)		—



Loss from sale of consolidated entity	35		—


Amortization right-of-use asset	9		—
Amortization of debt discount	98		47
Change in fair value forward purchase agreement	—		227
Change in fair value of convertible notes	849		—

Changes in assets and liabilities:
Accounts receivable	1		—
Prepaid and other current assets	(92)		195
Deposits	1,800		(75)
Account payable and accrued liabilities	40		2,736

Customers’ deposits and deferred revenue	(2,063)		3,478
Net cash provided by operating activities from continuing operations	1,162		1,055
Net cash (used in) operating activities from discontinued operations	(1,474)		(8,752)
Net cash used in operating activities	(312)		(7,697)
Investing activities:
Cash payment for property and equipment	—		(56)
Proceeds from the sale of property and equipment	21		—






Cash from investing activities - discontinued operations	—		—
Net cash provided by (used in) investing activities	21		(56)
Financing activities:







Principal payment on lease obligations	(9)		—

Repayment on loans	(1,124)		(387)




Cash used in financing activities - discontinued operations	—		(296)
Net cash used in financing activities	(1,133)		(683)
Net decrease in cash	(1,424)		(8,436)
Cash and restricted cash, beginning of period	4,000		16,723
Cash and restricted cash, end of period	$	2,576	$	8,287
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,224	$	1,119

Non-Cash Investing and Financing Activities:
Note receivable from sale of GC Aviation, Inc.	$	1,800	$	—
Non-cash interest	$	1,176	$	—
Credit facility for the aircraft deposits	$	(19,500)	$	6,000


Original debt discount	$	—	$	(45)
Financing for aircraft purchase	$	19,629	$	—

Table of Contents


Payment on liability for aircraft purchase	$	(19,718)	$	—
Deposits on aircraft	$	21,000	$	—

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

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

Table of Contents

VOLATO GROUP, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Volato Group, Inc. (“we”, “us”, “the Company”, or “Volato”) is a holding company for several wholly owned subsidiaries, including Volato, Inc., Fly Vaunt, LLC, Gulf Coast Aviation, Inc. and GC Aviation, Inc. The Company’s primary operating subsidiary was founded in 2021. That year, the Company entered the private jet charter and fractional ownership market with its Part 135 HondaJet ownership program, taking delivery of its first jet in August 2021 and completing its first Part 135 charter flight in October of 2021. In March 2022, the Company acquired Gulf Coast Aviation, Inc., owner of G C Aviation, Inc., a Texas entity and Part 135 air carrier certificate holder. In March 2022, the Company placed orders for four Gulfstream G280s for delivery in 2024 and 2025. In September 2022, the Company started internal development on its full suite Flight Management Software platform Mission Control, and on October 4, 2023 the Company announced the commercial launch of Vaunt, our proprietary consumer facing empty leg platform.

In September 2024, the Company entered into an agreement with flyExclusive, Inc., (“flyExclusive”) a leading provider of private jet charter services, to transition the management of its aircraft ownership fleet operations to flyExclusive. This move is expected to bring substantial cost savings and provide Volato with the opportunity to focus on its high-growth areas, including aircraft sales and proprietary software. The Company will continue to take delivery of new aircraft while also generating revenue from its proprietary software, including the Vaunt platform, its empty leg consumer app. In the fourth quarter of 2024, we transferred the aircraft lease agreements to flyExclusive and have no further obligations under the aircraft lease agreements or control over flight operations. The Company has retained insider card liabilities of $4.7 million that is included in discontinued operations as of March 31, 2025.

On February 12, 2025, the Board unanimously approved a reverse stock split of the Company’s Common Stock, at a ratio of 1-for-25 (the “Reverse Stock Split”). The Reverse Stock Split became effective on February 24, 2025, with no change in par value. All share amounts have been retroactively adjusted to account for the split as if it occurred at inception.

On March 20, 2025 the Company sold GC Aviation, Inc., which holds the FAA Part 135 certificate for $2.0 million, of which $1.8 million was a note receivable.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Going concern, liquidity, and capital resources

The Company has limited operating history, has recorded a net income of approximately $0.5 million for the three months ended March 31, 2025, has a negative working capital of approximately $18.2 million, and has an accumulated deficit of approximately $103.9 million as of March 31, 2025. Net cash used in operating activities for the three months ended March 31, 2025, was approximately $0.3 million.

These above matters raise substantial doubt about the Company's ability to continue as a going concern. During the next twelve months, the Company intends to fund its operations through the issuance of financial instruments including debts or equity and the sale of aircraft at a premium to cost.

Accordingly, management believes that its current cash position, along with its anticipated margin from aircraft sales and proceeds from future debt and/or equity financings, when combined with prudent expense management, will allow the Company to continue as a going concern and to fund its operations for at least one year from the date of issuance of these financial statements. There are no assurances, however, that management will be able to raise capital or debt on terms acceptable to the Company. If the Company is unable to obtain sufficient additional capital or debt on terms acceptable to the Company, the Company may be required to reduce the near-term scope of its planned development and operations, which could delay implementation of the Company’s business plan and harm its business, financial condition, and operating results. The balance sheets do not include any adjustments that might result from these uncertainties.

Table of Contents

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and following the requirements of the Securities and Exchange Commission (the “SEC”), for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted and, accordingly, the condensed consolidated balance sheet as of December 31, 2024 has been derived from audited consolidated financial statements at that date but does not include all of the information required by U.S. GAAP for complete financial statements. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments that are necessary for a fair presentation of the Company’s financial information. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other interim period or for any other future year.

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

Reclassifications

Certain amounts in 2024 have been reclassified to conform with the current period’s presentation to reflect discontinued operations.

Principles of consolidation

The consolidated financial statements include the Company’s accounts and the accounts of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Such estimates include:

•Useful lives of property, plant, and equipment.

•Assumptions used in valuing debt or equity instruments.

•Deferred income taxes and related valuation allowance.

•Assessment of long-lived assets impairment.

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

Cash and restricted cash

Cash consists primarily of cash on hand and bank deposits. The Company maintains cash deposits with financial institutions that may exceed federally insured limits at times. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. At March 31, 2025 and December 31, 2024, the Company had no cash equivalents besides what was in the cash balance as of this date. The Company had zero and $1.8 million of restricted cash at March 31, 2025, and December 31, 2024, respectively, which served as collateral for the credit facility with SAC Leasing G280 LLC.

Table of Contents

Accounts receivable

Accounts receivables are reported on the consolidated balance sheets at the outstanding principal amount adjusted for any allowance for credit losses and any charge offs. The Company provides an allowance for credit losses to reduce trade receivables to their estimated net realizable value equal to the amount that is expected to be collected. This allowance is estimated based on historical collection experience, the aging of receivables, specific current and expected future macro-economic and market conditions, and assessments of the current creditworthiness and economic status of customers. The Company considers a receivable delinquent if it is unpaid after the term of the related invoice has expired. Balances that are still outstanding after management has used reasonable collection efforts are written off. The Company reviews its allowance for credit losses on a quarterly basis.

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

Fixed assets

Fixed assets are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets, which range from three to seven years:


Classification						Life
Machinery and equipment						3-7 years
Automobiles						5 years
Computer and office equipment						5 years
Website development costs						3 years

Computer software development

Software development costs are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350-40, Internal Use Software. Internal software development costs are capitalized from the time the internal use software is considered probable of completion until the software is ready for use. Business analysis, system evaluation and software maintenance costs are expensed as incurred. The capitalized computer software development costs are reported under the section Property, plant and equipment net in the consolidated balance sheets and are amortized using the straight-line method over the estimated useful life of the software, generally three years from when the asset is placed in service. The Company capitalized zero and $142 thousand of internal software development costs incurred during the three months ended March 31, 2025 and twelve months ended December 31, 2024, respectively. The Company recognized $48 thousand and $26 thousand of amortization expense related to computer software development during the three months ended March 31, 2025 and 2024, respectively. The Company also expenses internal costs related to minor upgrades and enhancements, as it is impractical to separate these costs from normal maintenance activities.

Website development cost

The costs incurred for activities during the website application and infrastructure development stage are capitalized in accordance with the guidance on internal-use software in FASB ASC 350-40. The Company capitalized zero of website development costs during three months ended March 31, 2025 and twelve months ended December 31, 2024, respectively. The Company recognized approximately $24 thousand and $25 thousand of amortization expense related to website development costs during the three months ended March 31, 2025 and 2024, respectively.

Valuation of long-lived assets

In accordance with FASB ASC 360, property, plant, and equipment, and long-lived assets are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The Company evaluates at each balance sheet date whether events and circumstances have occurred that indicate possible impairment. If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable. In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value. No impairment was recognized during the three months ended March 31, 2025 and 2024, respectively.

Table of Contents

Fair value of financial instruments

The Company adopted the provisions of FASB ASC 820 (the “Fair Value Topic”) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

The Company measures fair value under a framework that utilizes a hierarchy prioritizing the inputs to relevant valuation techniques. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of inputs used in measuring fair value are:

▪Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company as the ability to access.

▪Level 2: Inputs to the valuation methodology include:

•Quoted prices for similar assets or liabilities in active markets.

•Quoted prices for identical or similar assets or liabilities in inactive markets.

•Inputs other than quoted prices that are observable for the asset or liability.

•Inputs that are derived principally from or corroborated by observable market date by correlation or other means; and

•If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

▪Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The fair value of the Company’s recorded forward purchase agreement (“FPA”) is determined based on unobservable inputs that are not corroborated by market data, which require a Level 3 classification. A Monte Carlo simulation model was used to determine the fair value as of December 31, 2023. The Company recorded the FPA at fair value on the consolidated balance sheets with changes in fair value recorded in the consolidated statements of operations. On July 23, 2024, the Company received notice of termination of the FPA and recognized an impairment in the value of the FPA in the second quarter of 2024 due to receipt of the termination notice. A loss of $3.0 million was recorded due to the cancellation of the FPA in the third quarter of 2024.

In December 2024, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”). Under the Securities Purchase Agreement, the Company may issue a series of convertible notes for an aggregate principal amount not to exceed $36.0 million. During the year ended December 31, 2024, the Company issued a single convertible note in an the principal amount of $4.5 million, of which $4.1 million was funded as of December 31, 2024, representing an original issue discount of ten percent. The Company elected the fair value guidance under ASC 825-10 and the 2024 Convertible note was recognized at initial fair value as of the issuance date. Any issuances of additional convertible promissory notes are subject to the terms and conditions of the Security Purchase Agreement. The value of the 2024 Convertible note at issuance approximated fair value as of December 31, 2024. During the three months ended March 31, 2025, the Company recorded a loss of $849 thousand on the change in the fair value of the 2024 Convertible note, recorded in other income (expense) on the consolidated statements of operations.

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


	Fair Value Measurements as of March 31, 2025
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
2024 Convertible Note	$	—	$	—	$	4,899	$	4,899
Total	$	—	$	—	$	4,899	$	4,899

Table of Contents


	Fair Value Measurements as of December 31, 2024
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

2024 Convertible Note	$	—	$	—	$	4,050	$	4,050
Total	$	—	$	—	$	4,050	$	4,050

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


	2024 Convertible Notes
Balance at December 31, 2024	$	4,050

Change in fair value	849
Balance at March 31, 2025	$	4,899

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


	Three months ended March 31, 2025
Volume Weighted average stock price ("VWAP")	$	1.69
Simulation Period	0.68 years
Expected Volatility	128.5		%
Credit risk-adjusted rate	18.2		%
Risk-free Rate	4.2		%

There were no gains and losses attributable to changes in instrument specific credit risk as the Company determined the likelihood of an event of default to be de minimus. The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid and other assets, accounts payable and accrued expenses, deposits, and members’ deposit approximate their fair value because of the short maturity of those instruments. The Company’s credit facility, convertible notes and other loans approximate the fair value of such liabilities based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements and due to the short-term maturity of these instruments at March 31, 2025 and December 31, 2024.

Commitments and contingencies

The Company follows subtopic 450-20 of the FASB ASC to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Table of Contents

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480 Distinguishing Liabilities from Equity (“ASC 480”) and FASB ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period end date while the warrants are outstanding. All of the Company’s warrants have met the criteria for equity treatment.

Revenue recognition

Revenues are recognized on a gross basis and presented on the consolidated statements of operations net of rebates, discounts, and taxes collected concurrent with revenue-producing activities. The transaction price in the Company’s contracts with its customers is fixed at the time control of goods and services are transferred to the customer. Therefore, the Company does not estimate variable consideration or perform a constraint analysis for our contracts.

The Company determines revenue recognition pursuant to ASC 606, Revenue from Contracts with Customers, through the following steps:

1.Identification of the contract, or contracts, with a customer.

2.Identification of the performance obligation(s) in the contract.

3.Determination of the transaction price.

4.Allocation of the transaction to the performance obligation(s) in the contract.

The Company generates revenue primarily through: (i) the sale of aircraft, and (ii) our Vaunt software-as-a-subscription product. Revenue is recognized when control of the promised service is transferred to a customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. At contract inception, the Company assesses the goods and services promised in its contracts with customers and identifies, as a performance obligation, each promise to transfer a good or service to a customer that is distinct. To identify its performance obligations, the Company considers all of the goods and services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices.

For each revenue stream, we evaluate whether our obligation is to provide the good or service itself, as the principal or to arrange for the good or service to be provided by the other party, as the agent, using the control model. In such circumstances, the Company is primarily responsible for satisfying the overall performance obligation with the customer and is considered the principal in the relationship.

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

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


	Three Months Ended March 31,
	2025		2024
Aircraft sales	$	25,100	$	—

Subscription	383		48
Total	$	25,483	$	48

Table of Contents

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

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


	Amount
Balance as of December 31, 2024	$	696
Revenue recognized	(383)
Revenue deferred	389
Balance as of March 31, 2025	$	702

Income taxes

The Company follows Section 740-10-30 of the FASB ASC, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

The Company follows the guidance of 740-10-25 of the FASB ASC (“Section 740-10-25”) with regards to uncertainty in income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its assets and/or liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

The Company is subject to tax in the United States (“U.S.”) and files tax returns in the U.S. Federal jurisdiction, and state jurisdictions. The Company is subject to U.S. Federal, state, and local income tax examinations by tax authorities. The Company currently is not under examination by any tax authority.

Stock-based compensation

The Company accounts for equity-based compensation using the fair value method as set forth in the ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based payment awards based on estimated fair values. This method requires companies to estimate the fair value of stock-based compensation on the date of grant using an option pricing model. The Company estimates the fair value of each equity-based payment award on the date of grant using the Black-Scholes pricing model.

The Black-Scholes model determines the fair value of equity-based payment awards based on the fair value of the underlying common stock on the date of grant and requires the use of estimates and assumptions, including the fair value of the Company’s common stock, exercise price of the stock option, expected volatility, expected life, risk-free interest rate and dividend rate. The Company estimates the expected volatility of its stock options by taking the average historical volatility of a group of comparable publicly traded companies over a period equal to the expected life of the options; it is not practical for the Company to estimate its own volatility due to the lack of historical prices. The expected term of the options is determined in accordance with existing equity agreements as the underlying options are assumed to be exercised upon the passage of time. The risk-free interest rate is the estimated average interest rate based on U.S. Treasury zero-coupon notes with terms consistent with the expected life of the awards. The expected dividend yield is zero as the Company does not anticipate paying any recurring cash dividends in the foreseeable future. The Company accounts for forfeitures as they occur.

Table of Contents

Net income (loss) per share

The Company computes basic and diluted earnings per share amounts pursuant to section 260-10-45 of the FASB ASC. Basic earnings per share is computed by dividing net income (loss) available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted earnings per share is computed by dividing net income (loss) available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially dilutive debt or equity. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation. Securities that are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been antidilutive for the three months ended March 31, 2025, include stock options and convertible debt.

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

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

Concentration of credit risk

The Company maintains its cash with a major financial institution located in the United States of America which it believes to be creditworthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits.

Intangible assets

Intangible assets other than goodwill consists of acquired finite-lived customer relationships and acquired indefinite-lived Part 135 air carrier certificate. At initial recognition, intangible assets acquired in a business combination are recognized at their fair value as of the date of acquisition. Following initial recognition, finite-lived intangible assets are carried at cost less accumulated amortization and impairment losses, if any, and are amortized on a straight-line basis over the estimated useful life of the asset, which was determined based on management’s estimate of the period over which the asset will contribute to our future cash flows.

The Company reviews the intangible assets for impairment on an annual basis or if events or changes in circumstances indicate it is more likely than not that they are impaired. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale, or disposition of a significant portion of the business, or other factors. If the review indicates the impairment, an impairment loss would be recorded for the difference of the value recorded and the fair value. There was no impairment loss for the three months ended March 31, 2025 or 2024, respectively.

Goodwill

Goodwill represents the excess of the aggregate purchase price paid over the fair value of the net assets acquired in our business combinations. Goodwill is not amortized and is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Events or changes in circumstances that could trigger an impairment review include a significant adverse change in business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill.

If, after assessing the totality of events or circumstances, the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, additional impairment testing is not required. The Company tests for goodwill impairment annually during its fourth quarter. In March 2025, the Company sold GC Aviation, Inc and the Part 135 air carrier certificate. In connection with that sale, the Company recorded an impairment on goodwill of $35

Table of Contents

thousand for the three months ended March 31, 2025. The loss is recorded in other income, net in the consolidated statements of operations. There was no impairment loss recorded for the three months ended March 31, 2024.

Segment reporting

The Company identifies operating segments as components of the Company for which discrete financial information is available and is regularly reviewed by the chief operating decision maker, or decision-making group, in making decisions regarding resource allocation and performance assessment. The chief operating decision maker is the chief executive officer. We determined that the Company operates in a single operating and reportable segment, private aviation services, as the chief operating decision maker reviews financial information including total assets from continuing operations and consolidated statement of operations from continuing operations presented on a consolidated basis for purposes of making operating decisions, allocating resources, and assessing performance. Substantially all of our long-lived assets are located in the U.S.

Cost of revenue

Cost of revenue includes costs that are directly related to the related revenue streams – aircraft sales and subscription based revenue. Aircraft sales cost of revenue is our purchase price of the aircraft. Subscription costs includes costs of our proprietary software, the Vaunt platform.

Advertising costs

Advertising costs are expensed as incurred and included in selling, general and administrative expenses on the statements of operations. Such advertising amounted to $137 thousand and $2.2 million for the three months ended March 31, 2025 and 2024, respectively.

Leases

ASC Topic 842, “Leases” (“ASC 842”) requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset (“ROU asset”). ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liability represents the Company’s obligation to make lease payments arising from the lease. The right-of-use asset and lease liability are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. ROU asset is evaluated for impairment using the long-lived asset impairment guidance. Leases will be classified as financing or operating, which will drive the expense recognition pattern. The Company elects to exclude short-term leases when recording a ROU asset and lease liability if and when the Company has them.

Recent accounting pronouncements

In November 2023, the FASB issued Accounting Standards Update “ASU” 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker “CODM” and included within each reported measure of segment profit and loss. The amendments also require disclosure of all other segment items by reportable segment and a description of its composition. Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, Early adoption was permitted. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2025. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

In November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement

Table of Contents

Expenses (“ASU 2024-03”). ASU 2024-03 is intended to enhance the disclosures for expenses for all public entities in accordance with ASC Topic 220, Income Statement-Reporting Comprehensive Income. ASU 2024-03 addresses investor requests for more detailed information about expenses, specifically cost of sales and selling, general, and administrative expenses. ASU 2024-03 requires a public entity to disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption presented on the face of the income statement as well as a qualitative description of the amounts remaining in the relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 also requires a public entity to disclose the total amount of selling expenses and the entity’s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. A public entity should apply ASU 2024-03 either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of ASU 2024-03 on its future consolidated financial statements and related disclosures.

NOTE 3 – DISCONTINUED OPERATIONS

In September 2024, the Company entered into an agreement with flyExclusive to transition our aircraft ownership program fleet operations to flyExclusive. This move is expected to provide Volato with the opportunity to focus on what it believes to be its high-growth areas, including aircraft sales and proprietary software. We will continue to take delivery of new aircraft, while also generating revenue from our proprietary software, including the Vaunt platform, Volato’s empty leg consumer app. In March 2025, the Company sold GC Aviation, Inc., which holds the FAA Part 135 certificate, therefore items related to managed aircraft are included in discontinued operations.

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


	Three Months Ended March 31,
	2025		2024
Revenue - Aircraft usage	$	56	$	11,469
Revenue - Managed aircraft	—		1,695
Costs of Revenue - Aircraft usage	38		15,929
Cost of Revenue - Managed aircraft	—		1,510
Selling, general and administrative	207		7,414
Other income (loss) from discontinued operations	(59)		—
Loss from discontinued operations before provision for taxes	(130)		(11,689)
Benefit for taxes from discontinued operations	(225)		—
Net income (loss) from discontinued operations, net	$	95	$	(11,689)

Carrying amounts and major classes of assets included as part of discontinued operations are as follows:


	March 31, 2025		December 31, 2024
Accounts receivable, net	$	987	$	1,027
Prepaid and other assets	1,180		1,254
Property and equipment, net	—		3



Intangibles, net	—		1,200
Goodwill	—		635
Total assets associated with discontinued operations	$	2,167	$	4,119

Carrying amounts and major classes of liabilities included as part of discontinued operations are as follows:


	March 31, 2025		December 31, 2024
Accounts payable and accrued liabilities	$	5,365	$	6,344

Credit facility and other loans	918		918
Customer deposits and deferred revenue	4,754		5,156
Deferred income tax liability	—		305
Total liabilities associated with discontinued operations	$	11,037	$	12,723

Table of Contents

NOTE 4–INTANGIBLES

Finite-Lived Intangible Assets

As of December 31, 2024, the Company impaired the remaining value of the customer relationships asset and recorded a loss on the impairment of $130 thousand which was recorded in selling, general and administrative expenses. Intangible asset amortization expense was zero and $15 thousand for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025 and December 31 2024 the balance of customer relationships was zero.

Indefinite - Lived Intangible Assets

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


	March 31, 2025		December 31, 2024
Intangible asset - Part 135 certificate	$	—	$	1,200

The FAA Part 135 certificate amount of $1.2 million relates to the certificate held by GC Aviation, Inc. In March 2025, the Company sold GC Aviation, Inc, and the FAA Part 135 Certificate for $2.0 million. The Company did not recognize any impairment of the Part 135 certificate during the three months ended March 31, 2025 and 2024, respectively.

NOTE 5 - MERGER TRANSACTION COSTS PAYABLE

In connection with the business combination in December 2023, the Company entered into three agreements (the “Agreements”) with financial institutions, in which the Company agreed to pay a success fee in the aggregate amount of $4.25 million to the financial institutions in case the Company consummates the acquisition. The success fees were to be paid in shares of the Company’s common stock and warrants during the 2024 fiscal year.

ASC 480 Distinguishing Liabilities From Equity requires liability classification for all instruments that embodies an unconditional obligation that the Company must or may settle by issuing a variable number of its equity shares, if, at inception, the monetary value of the obligation is based solely on a fixed monetary amount know at inception. As a result, the Company classified such liability in current liabilities as of December 31, 2023. In January 2024, the Company issued an aggregate number of 48,342 shares of common stock and 4,000 warrants in full settlement of the merger transactions costs of $4.25 million which was payable to three financial institutions. As of March 31, 2025 and December 31, 2024 the merger transaction costs payable were zero.

NOTE 6 – FORWARD PURCHASE AGREEMENT

On November 28, 2023, the Company Volato, Inc. and Vellar Opportunities Fund Master, Ltd. (“Seller”), entered into an agreement (as defined above the “Forward Purchase Agreement”) for an OTC Equity Prepaid Forward Transaction (the “Forward Purchase Transaction”). Pursuant to the terms of the Forward Purchase Agreement, the Seller could purchase, prior to the closing, up to 2.0 million shares (the “Maximum Number of Shares”) of the Company from third parties through a broker in the open market. The Number of Shares (as defined in the Forward Purchase Agreement) subject to the Forward Purchase Agreement could be subject to reduction following a termination of the Forward Purchase Agreement with respect to such shares as described under “Optional Early Termination” in the Forward Purchase Agreement.

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

During the year ended December 31, 2023, the Company paid an aggregate amount of approximately $18.9 million. The Company collected $2.4 million in December 2023 and recognized a loss on the change in fair value of the forward purchase agreement in the aggregated amount of $13.4 million, which was reported in other expenses in the consolidated statement of operations for the year ended December 31, 2023.

Table of Contents

In July 2024, Seller notified the Company of the termination of the Forward Purchase Agreement, following a delivery of a notice establishing the Valuation Date (as defined in the Forward Purchase Agreement); upon termination, Seller was not obligated to pay the Company a cash amount. The Company recorded the impact of the notice in the second quarter of 2024. In the three months ended March 31, 2025 and 2024, the Company recognized a loss on the change in fair value of zero and $227 thousand, respectively, reported in other expenses in the consolidated statement of operations.

NOTE 7– PROPERTY AND EQUIPMENT, NET

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


	March 31, 2025		December 31, 2024
Machine and equipment	$	186	$	188
Automobiles	39		72
Website development costs	290		290
Computer and office equipment	5		5
Software development costs	579		579
	1,099		1,134
Less accumulated depreciation	(520)		(454)
Property and equipment, net	$	579	$	680

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

NOTE 8 – DEPOSITS

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


	March 31, 2025		December 31, 2024
Deposits on aircraft	$	15,000	$	36,000
Other deposits	1		300
Total deposits	15,001		36,300
Less current portion	(15,000)		(36,000)
Total deposits, non-current	$	1	$	300

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


	March 31, 2025		December 31, 2024
Gulfstream aircraft deposits	$	15,000	$	36,000

Total deposits on aircraft	15,000		36,000
Less current portion	(15,000)		(36,000)
Total deposits on aircraft non-current	$	—	$	—

Gulfstream Aerospace, LP

In 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four (4) Gulfstream G 280 aircraft for total consideration of $79 million with expected delivery throughout fiscal year 2025. The first Gulfstream G280 was delivered in the third quarter of 2024. The second Gulfstream G280 was delivered in January 2025. The remaining two Gulfstream G280’s are expected to be delivered throughout fiscal year 2025.

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

Table of Contents

and December 31, 2024, respectively. Upon delivery of the first Gulfstream G280 in the third quarter of 2024, $12.0 million of the deposits were applied toward the purchase price of the airplane. Upon delivery of the second GulfStream G280, in January 2025, $12.0 million of the deposits were applied toward the purchase price of the airplane. Additionally, in March 2025, GulfStream notified the Company that the fourth Gulfstream G280 would be delayed from the original timeline with delivery now expected in Q4 2025. In connection with the delivery delay, GulfStream agreed to return the deposit on the fourth Gulfstream G280 reducing the deposits by $9.0 million. In April 2025, the third Gulfstream G280 was delivered and $12.0 million of the deposits were applied toward the purchase price of the airplane.

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

NOTE 9 – PROMISSORY NOTE- RELATED PARTY

Dennis Liotta - March 2023 note

On March 15, 2023, the Company entered into a promissory note agreement with Dennis Liotta, an affiliate of the Company, for a total amount of $1.0 million, with an effective date of February 27, 2023 and which matured on March 31, 2024 (“March 2023 note”). The entire outstanding principal balance together with accrued but unpaid interest were due at the maturity date. The March 2023 note included a ten percent (10%) interest rate per annum. On April 1, 2024, the March 2023 note was paid in full. Promissory note from related party was zero as of March 31, 2025, and December 31, 2024, respectively.

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

NOTE 10 – UNSECURED CONVERTIBLE NOTES

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


	March 31, 2025		December 31, 2024
2024 unsecured convertible notes, 4% coupon, due December 2025	$	4,899	$	4,050
Less current portion	(4,899)		(4,050)
Total unsecured convertible note, long term	$	—	$	—

2024 unsecured convertible notes due December 2025 - 2024 Convertible note

During the year ended December 31, 2024, the Company entered into the Securities Purchase Agreement as described in Note 2 above. Under the Securities Purchase Agreement, the Company may issue a series of convertible notes for an aggregate principal not to exceed $36.0 million. During the year ended December 31, 2024, the Company issued a single convertible note in a principal amount of $4.5 million, (as defined above, the “2024 Convertible note”) of which $4.1 million was funded as of December 31, 2024, representing an original issue discount of ten percent. Interest is payable quarterly at the Company’s option and shall either be (i) paid in cash; (ii) paid-in-kind in shares of common stock; or (iii) compound and become additional principal outstanding. The Company recorded $14 thousand of accrued interest expense in the year ended December 31, 2024. During the three months ended March 31, 2025 the $14 thousand of paid-in-kind interest was rolled into the principal balance of the 2024 Convertible note.

The 2024 Convertible note is accounted for as a single liability measured at fair value in accordance with ASC 825-10. At March 31, 2025, the Company valued the 2024 Convertible note using the Monte-Carlo valuation model. See Note 2.

Table of Contents

NOTE 11 – CREDIT FACILITY AND OTHER LOANS

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


	March 31, 2025		December 31, 2024
SAC Leasing G280 LLC credit facility, 12.5% interest, net of deposits	$	8,500	$	28,000
Term Loan	—		1,102
Less discounts	(185)		(247)
Total credit facility, net of discount and deposits	$	8,315	$	28,855

SAC Leasing G280 LLC Line of credit

During the year ended December 31, 2022, the Company executed a series of purchase agreements with Gulfstream Aerospace, LP for the acquisition of four (4) Gulfstream G-280 aircraft for total consideration of $79.0 million with expected deliveries in 2024 and 2025, of which an aggregate amount of $48.0 million was funded and paid as of December 31, 2024, partially through a credit facility from SAC leasing G 280.

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

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

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

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

The maturity date is the earlier of the delivery date of the aircraft or September 14, 2025, which is thirty-five (35) months from the date of funding. The purchase agreement contracts were assigned to SAC G280 LLC as collateral on this credit facility.

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

The 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 Board of Directors consented to the participation of Coastal States Bank, as a syndicate lender in the financing of additional aircraft by SAC Leasing G280 LLC. On August 25, 2023, the Company and SAC Leasing V280, LLC entered into the first amendment to pre-delivery payment agreement.

In connection with the purchase and sale of the second G280, the Company entered into a financing agreement with OgaraJets. The Company borrowed $19.6 million from OgaraJets to facilitate the delivery and subsequent sale of the second G280. Upon the sale of the second G280, in February 2025, $19.7 million was repaid to OgaraJets. All transactions occurred during the first quarter of 2025.

Term Loan

In July 2024, the Company entered into a business loan and security agreement (the “Loan”) with TVT Capital Sources LLC (the “Lender”), for a term loan in the amount of $4.0 million. Net proceeds of $3.9 million were received by the

Table of Contents

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

The Loan provides for events of default customary for term loans. As of December 31, 2024, the Company was in compliance with all covenants. The Loan is collateralized by all assets of the Company with the exception of the purchase agreements of G280 aircraft or any collateral pledged to SAC Leasing G280.

The Company incurred financing fees of $200 thousand, which were recorded as a direct discount to the debt and are being amortized over the term of the Loan. The Company amortized $36 thousand and zero of financing fees in the three months ended March 31, 2025 and 2024, respectively. The Company recorded $107 thousand of interest expense related to the Loan in the three months ended March 31, 2025.

In November 2024, the Company entered into an agreement with a third party to settle outstanding payables owed by the Company to designated vendors in exchange for a settlement amount in shares of common stock. As of December 31, 2024 in accordance with the agreement, the Company issued 639,720 shares of common stock for the payment of $1.475 million of principal and interest due to the Lender under the Loan and $725 thousand of payables related to a separate vendor. The Company recorded a $2.8 million loss on extinguishment of debt upon the settlement of each issuance equal to the payables less the fair value of the shares calculated as of the closing stock price on the date of settlement.

In February 2025, the Company paid the remaining principal balance due on the Loan of $1.1 million and outstanding interest of $107 thousand.

NOTE 12 – RELATED PARTIES

Liotta Family Office, LLC

Liotta Family Office, LLC (“LFO”) is owned 20% by the Company’s Chief Executive Officer (“CEO”), 60% owned by the father of the Company’s Chief Executive Officer, and 20% owned by the brother of the CEO. LFO currently owns 74,372 Shares of Common Stock which represents 3.9% of the Company’s issued and outstanding Common Stock as of March 31, 2025.

During the year ended December 31, 2023, Liotta Family Office, LLC (“LFO”) entered into an unsecured promissory note for a total amount of $1.0 million (Note 9). The Company incurred approximately $23 thousand of interest during the three months ended March 31, 2024. In April 2024, the promissory note and interest was paid in full.

Plane Co’s

The Company facilitated the formation of limited liability companies (“Plane Co’s”), which are then funded by third party members prior to the sale and delivery of an aircraft purchased from Honda Aircraft that entered into the Company’s fractional program.

In October 2024, as part of the agreement with flyExclusive, Volato sold all of its interest in the Plane Co’s to flyExclusive.

The aggregate amount of revenue included in loss from discontinued operations generated from Plane Co’s totaled zero and $1.2 million for the three months ended March 31, 2025 and 2024, respectively.

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

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

NOTE 13 – INCOME TAXES

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

Table of Contents

The effective tax rate was negative 39.00% and zero percent for the three months ended March 31, 2025 and 2024, respectively. Our effective tax rate for the three months ended March 31, 2025 differs from the federal statutory rate of 21%, and was negative as a result of the valuation allowance on the deferred tax benefit due to the disposition of GC Aviation, Inc. and the Part 135 FAA Certificate intangible asset.

NOTE 14 – SHAREHOLDERS’ DEFICIT

On December 1, 2023, the Company filed its Second Amended and Restated Certificate of Incorporation with the State of Delaware. Our Certificate of Incorporation initially authorized the issuance of 81,000,000 shares, consisting of 80,000,000 shares of Class A Common Stock, $0.0001 par value per share, and 1,000,000 shares of Preferred Stock, $0.0001 par value per share. On October 28, 2024, the Company filed an amendment to the Certificate of Incorporation to increase the number of authorized shares to 201,000,000 shares consisting of 200,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock.

On February 12, 2025, the Board unanimously approved the Reverse Stock Split of the Company’s Common Stock, at a ratio of 1-for-25. The Reverse Stock Split became effective on February 24, 2025, with no change in par value. All share amounts have been retroactively adjusted to account for the Reverse Stock Split as if it occurred at inception. The Reverse Stock Split did not have an effect on the Authorized Common Stock.

Preferred Stock

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

Stock Options - Equity Incentive Plans

Summary of the 2023 Plan

The 2023 Stock Incentive Plan (the “2023 Plan”) was approved at the special meeting of the shareholders of the Company on November 28, 2023. The 2023 Plan provides for the grant of stock opti

SEC Form 10-Q filed by Volato Group Inc.