Volato Group, Inc.

Previous wording

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” section of our Annual Report on Form 10-K for the year ended December 31, 2024 and elsewhere in the Quarterly 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.

Current wording

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” section of our Annual Report on Form 10-K for the year ended December 31, 2025 and elsewhere in this Quarterly 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.

Previous wording

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

Current wording

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.

Previous wording

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 U.S. Strategic Mineral Reserve, a Public/Private Partnership to collaborate with the U.S. government. Upon consummation of the Merger it is currently expected that M2i’s stockholders will own approximately 85% of the combined company.

Current wording

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.

Previous wording

We believe that the following factors have affected our financial condition and results of operations and are expected to continue to have a significant effect:

Current wording

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.

Previous wording

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 provided us with the opportunity to focus on what we believe to be our high-growth areas, including aircraft sales and proprietary software. We have benefited from the margins on aircraft sales without the burden of operational costs, while also generating revenue from our proprietary software, including the Vaunt platform, our empty leg consumer app.

Current wording

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 resulted in substantial cost savings and provided us with the opportunity to focus on what we believe to be our high-growth areas, including aircraft sales and proprietary software. We have benefited from the margins on aircraft sales without the burden of operational costs, while also generating revenue from our proprietary software, including the Vaunt platform, our empty leg consumer app.

Previous wording

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 discretionary charter and deposit products. Our 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.

Current wording

The private aviation industry is volatile and affected by economic cycles and trends. Our financial performance is susceptible to economically driven changes in demand for our Vaunt platform. Historically, our 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.

Previous wording

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

Current wording

Comparison of three months ended March 31, 2026 and 2025

Previous wording

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

Current wording

The following table sets forth our results of operations for the three months ended March 31, 2026 and 2025 (in thousands, except percentages):

Previous wording

Revenue decreased by $38.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in revenue was the result of a decrease in aircraft sales of $38.1 million, as we did not take delivery of an aircraft during the quarter (but did take delivery of an aircraft in the 2024 period), partially offset by an increase in subscription based revenue of $65 thousand during the three months ended September 30, 2025 compared to the prior year period. The increase in subscription based revenues is attributable to our Vaunt platform which began to generate revenue during the 2024 fiscal year and continuing through the quarter ended September 30, 2025.

Current wording

Revenue decreased by $25.1 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease in revenue was the result of a decrease in aircraft sales of $25.0 million, as we did not take delivery of aircraft during the year, and an increase in subscription based revenue of $0.6 million during the three months ended March 31, 2026 compared to the prior year period. The increase in subscription based revenues is attributable to our Vaunt platform.

Previous wording

Cost of revenue comprises expenses tied to the associated revenue streams: aircraft sales and subscription based revenue. Aircraft sales cost of revenue is our purchase price of the aircraft. Subscription cost include costs we incur related to our proprietary software, the Vaunt platform.

Current wording

Cost of revenue comprises expenses tied to the associated revenue streams: aircraft sales and subscription based revenue. Aircraft sales cost of revenue is the purchase price of the aircraft. Subscription cost of revenue includes costs we incur related to our proprietary software, the Vaunt platform.

Previous wording

Cost of revenue decreased by $31.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in cost of revenue was primarily a result of a decrease in aircraft sales as we did not take delivery of aircraft during the third quarter of 2025.

Current wording

Cost of revenue decreased by $20.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. 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 during the three months ended March 31, 2025.

Previous wording

Loss on change in fair value of financial instruments

Current wording

Gain (loss) on change in fair value of financial instruments

Previous wording

For the three and nine months ended September 30, 2025, the loss on change in fair value of financial instruments relates to the fair value adjustment on the 2024 Convertible Notes resulting in a non-cash loss of $384 thousand and a non-cash loss of $1.1 million, respectively. The loss also includes a loss on the Investment in M2i share exchange of $155 thousand for the three and nine months ended September 30, 2025.

Current wording

For the three months ended March 31, 2025, 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 of $0.8 million during the three months ended March 31, 2025.

Previous wording

Interest income (expense), net primarily consists of interest related to our aircraft brokerage and services agreement with OgaraJets LLC and the pre-delivery payment agreement with SAC Leasing G280 LLC, offset by interest income on the note receivable related to our sale of GC Aviation, Inc. in March 2025.

Current wording

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 March 31, 2025.

Previous wording

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 September 30, 2025, we had $4.4 million of cash and cash equivalents.

Current wording

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 March 31, 2026, we had $2.0 million of cash and cash equivalents.

Previous wording

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

Current wording

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, 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.

Previous wording

We have historically incurred negative cash flows from operating activities and significant losses from operations historically. Management believes that its current cash position, along with its anticipated margin from one (or more) additional aircraft sales and proceeds from future debt and/or equity financings, when combined with prudent expense management, will allow the Company to continue as a going concern and to fund its operations for at least one year from the date of this Quarterly Report. There are no assurances, however, that management will be able to raise capital or debt on terms acceptable to the Company. 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.

Current wording

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 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.

Previous wording

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

Current wording

The following table summarizes our cash flows for the three months ended March 31, 2026, and 2025 (in thousands):

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $10.5 million. The cash outflow from operating activities consisted of our net loss of $38.7 million, non-cash items of $3.2 million and a change in net operating assets and liabilities of $18.8 million. The change in net assets and liabilities for discontinued operations for the nine months ended September 30, 2024 was $6.2 million.

Current wording

Net cash used in operating activities for the three months ended March 31, 2026 was $2.5 million. The cash outflow from operating activities consisted of our net loss of $2.6 million, non-cash items of $0.4 million, a change in net operating assets and liabilities of $0.3 million and a change in net assets and liabilities for discontinued operations of $0.2 million. The change in net operating assets and liabilities was primarily a result of an increase in prepaid and other current assets of $0.6 million, an increase in member deposits and deferred revenue of $0.6 million and an increase in contract assets of $0.2 million.

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2025 was $2.4 million. The cash outflow from operating activities consisted of our net income of $11.2 million, non-cash items of $7.4 million, and a change in net operating assets and liabilities of $3.2 million. The change in net operating assets and liabilities was primarily a result of a decrease in customer deposits and deferred revenue of $0.9 million and accounts payable and accrued liabilities of $0.9 million, offset by a decrease in deposits of $5.2 million. The change in net assets and liabilities for discontinued operations for the nine months ended September 30, 2025 was $9.5 million.

Current wording

Net cash used in operating activities for the three months ended March 31, 2025 was $0.3 million. The cash outflow from operating activities consisted of our net income of $0.4 million, non-cash items of $1.1 million, 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 million. The change in net operating assets and liabilities was primarily as a result of a decrease in customer deposits and deferred revenue of $2.1 million and a decrease in deposits of $1.8 million.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2025 was $39 thousand. The cash flow from investing activities consisted of the sale of property and equipment, offset by the purchase of property and equipment.

Current wording

Net cash used in investing activities for the three months ended March 31, 2026 was $0.2 million. The cash flow from investing activities consisted of the purchase of property and equipment.

Previous wording

Net cash used in financing activities for the nine months ended September 30, 2024 was $0.5 million. Cash flow used in financing activities consisted of the repayment on loans of $3.9 million, offset by proceeds from the issuance of term loan of $4.0 million. The cash used in financing from discontinued operations was $0.6 million for the nine months ended September 30, 2024.

Current wording

Net cash used in financing activities for the three months ended March 31, 2026 was $46 thousand. Cash flow used in financing activities consisted primarily of the issuance of costs of share issuances.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $2.8 million. Cash flow provided by financing activities consisted of the repayment on loans of $1.1 million, and the proceeds from the second and third tranche convertible notes totaling $4.1 million (as described in Notes 10).

Current wording

Net cash used in financing activities for the quarter ended March 31, 2025 was $1.1 million. Cash flow used in financing activities consisted of the repayment on loans of $1.1 million.

Previous wording

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 September 30, 2025, we had a working capital of approximately $1.9 million. As of September 30, 2025, our primary source of liquidity was cash totaling $4.4 million. Based on our recent trends, we expect to fund our operations in 2025 from our cash on hand, cash from operations, one or more sales of convertible promissory notes in accordance with the Securities Purchase Agreement described in Note 2 and Note 10 to our unaudited financial statements in this Quarterly Report and potentially additional sales of equity or debt securities. The Company believes it has the ability to generate and obtain enough cash to meet its obligations for the next 12 months.

Current wording

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 March 31, 2026, we had negative working capital of approximately $2.5 million and our primary source of liquidity was cash totaling $1.9 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 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.

Previous wording

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 was the earlier of the delivery date of the aircraft or September 14, 2025, which is thirty-five (35) months from the date of funding. The purchase agreement contracts were assigned to SAC Leasing G280 LLC as collateral on this credit facility. In the third quarter of 2024, $9.0 million was repaid to SAC Leasing G280 LLC as a result of the delivery of the first Gulfstream G280. In the first quarter of 2025, an additional $19.5 million was repaid to SAC Leasing G280 LLC as a result of the delivery of the second Gulfstream G280 and the return of $9.0 million in deposits related to the fourth Gulfstream G280. After the delivery of the second Gulfstream G280 and the deposit return related to the fourth Gulfstream G280, the outstanding balance of the credit facility from SAC Leasing G280 was $8.5 million, net. In the second quarter of 2025, with the delivery of the third G280, the remaining outstanding balance of the SAC Leasing G280 credit facility was paid in full.

Current wording

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 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.

Previous wording

The Company generates revenue primarily through: (i) the sale of aircraft and (ii) our Vaunt software-as-a-subscription platform. 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.

Current wording

The Company generated revenue primarily through: (i) the sale of aircraft and (ii) our Vaunt software-as-a-subscription platform. 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.