2.         Summary of Significant Accounting Policies

Basis of Presentation

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

Principles of Consolidation

As of December 31, 2025, these financial statements contain the assets and liabilities of Premier Holdings. As disclosed above, on March 11, 2025, the operations of Premier Holdings have been consolidated. As of December 31, 2025, these financial statements do not include any of Premier Holdings’ operations other than the capital structure. All significant intercompany balances and transactions will be eliminated in consolidation.

Use of Estimates

The preparation of the Company’s financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses and the disclosure in the Company’s financial statements and accompanying notes. The Company based its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates.

Significant estimates include the allowance for credit losses, determination of the incremental borrowing rate used and the classification of right of use leases, recoverability of long-lived assets, including engine reserves.

Segment Reporting

The Company currently operates and manages its business as one operating segment, which is the business of operating chartered flights and managing leased aircraft. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for evaluating financial performance.

The CODM primarily uses net income (loss) as the key measure of segment performance. This metric is used to assess the Company’s overall profitability and to make decisions regarding resource allocation.

A summary of net loss for the years ended December 31, 2025 and 2024 is as follows:

No additional segment-level financial information is reviewed by the CODM, and therefore no further segment disclosures are presented.

Cash

Cash consists of cash in readily available checking accounts and funds deposited into savings accounts. Cash is recorded at cost, which approximates fair value. As of December 31, 2025 and 2024, the Company had cash balances deposited at a major financial institution. Cash balances are subject to minimal credit risk as the balances are with high-credit quality financial institutions.

Accounts Receivable 

Accounts receivable are comprised of trade receivables from the Company’s customers and are recorded at the invoiced amount or amounts earned in accordance with contractual terms but not yet invoiced. Accounts receivable do not bear interest.

The Company estimates an allowance for expected credit losses in accordance with ASC 326 (Current Expected Credit Losses). The allowance is based on a combination of:

For certain receivables, including those that are individually significant or exhibit unique risk characteristics, the Company applies a specific identification approach rather than relying solely on historical loss rates.

During the year ended December 31, 2025, the Company recognized amounts due under contractual arrangements that include fixed minimum payment provisions, which are earned as performance obligations are satisfied and are enforceable irrespective of usage. These amounts are included in accounts receivable and are subject to the Company’s CECL evaluation.

The Company’s allowance for doubtful accounts includes estimates related to:

As of December 31, 2025 and 2024, the Company had an allowance for doubtful accounts of $1,568,030 and $72,405, respectively.

The Company identified approximately $470,633 of unbilled contractual revenue related to prior periods. Due to the timing of recognition and ongoing evaluation of collectability, these amounts have not been recognized in the current period financial statements. Management believes these amounts are contractually enforceable and is pursuing recovery through legal channels.

Concentration of Credit Risk

Financial instruments that may potentially expose the Company to concentrations of credit risk primarily consist of cash and accounts receivable.

The Company maintains cash balances with multiple high-credit-quality financial institutions. Such balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to applicable limits; however, balances may exceed insured limits at times. The Company has not experienced any losses in such accounts.

The Company’s accounts receivable are concentrated among a limited number of customers. Credit quality is monitored on an ongoing basis, and allowances for expected credit losses are recorded as appropriate.

As of December 31, 2025:

As of December 31, 2024:

A portion of the Company’s receivables relates to amounts due under contractual arrangements that are currently subject to dispute and/or collection efforts. While management believes these receivables are contractually enforceable and expects to recover a substantial portion of the outstanding balances, the ultimate timing and amount of recovery may vary.

Property and Equipment, Net

Property and equipment are stated at cost, less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred.

The following estimated useful lives were used to depreciate the Company’s assets:

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment. Long-lived assets are tested for impairment when events and circumstances indicate the assets might be impaired by first comparing the estimated future undiscounted cash flows of the asset or asset group to the carrying value. If the carrying value exceeds the estimated future undiscounted cash flows, an impairment loss of its long-lived assets is recognized based on the amount that the carrying value exceeds the fair value of the asset or asset group. The Company did not recognize impairment losses of its long-lived assets during the years ended December 31, 2025 and 2024.

Investments

The Company applies the cost method of accounting to investments when it does not have significant influence or a controlling interest in the investee and the fair value of the investment is not readily determinable. Dividends on cost method investments received are recorded as income.

For equity investments without readily determinable fair values measured at cost, the Company assesses investments for impairment whenever there are observable price changes for an identical or similar investment of the same issuer. If the Company identifies observable price changes in orderly transactions for the identical or a similar investment of the same issuer, the Company must measure its equity investment at fair value in accordance with ASC 820, Fair Value Measurement, as of the date that the observable transaction occurred. See Note 3 for additional information.

Debt

Debt is recognized initially at fair value, net of transaction costs, and is subsequently measured at amortized cost using the effective interest method. The difference between the proceeds (net of transaction costs) and the redemption value is recognized in the statement of operations over the period of the borrowings using the effective interest method.

Classification of debt depends on the terms of the agreement. Debt payable within twelve months after reporting period is reported as current liabilities while debt that is expected to be due more than twelve months after the reporting period is reported as non-current liabilities. However, if at the balance sheet date, the Company intends to refinance a short-term obligation on a long-term basis, the short-term obligation is classified as non-current only if the Company can demonstrate its ability to consummate the long-term refinancing by either of the (a) issuing the long-term obligation or equity securities after the Company’s balance sheet date, but before the balance sheet is issued or available to be issued or (b) entering into a financing agreement before the borrower’s balance sheet is issued or available to be issued.

Leases

Under ASC 842, leases are separated into two classifications: operating leases and finance leases. For a lease to be classified as a finance lease, it must meet one of the five finance lease criteria at inception: (1) transfer of title/ownership to the lessee, (2) purchase option, (3) lease term for the major part of the remaining economic life of the asset, (4) present value represents substantially all of the fair value of the asset, and (5) asset specialization. Any lease that does not meet these criteria is classified as an operating lease. ASC 842 requires all leases to be recognized on the Company’s balance sheet. Operating leases are included in operating lease right-of-use (ROU) assets, current operating lease liabilities and noncurrent operating lease liabilities within the balance sheet. Finance leases are included in property, plant, and equipment, current maturities of long-term debt and finance leases, and long-term debt and finance leases, net of current maturities, within the balance sheet.

The Company leases certain aircraft and equipment under operating lease arrangements. The Company has elected the short-term lease exemption for leases with an initial term of 12 months or less. Under this election, short-term leases are not recorded on the balance sheet, and lease payments are recognized as lease expense on a straight-line basis over the lease term.

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

ASC 820 identifies fair value as the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company’s financial assets are subject to fair value measurements on a recurring basis. As of December 31, 2025 and 2024, the Company’s investment – related party is considered a level 2 item as the fair market value is based upon the common stock of Dalrada Financial Corporation, see above and Note 3 for additional information.

Revenue Recognition

The Company follows ASC 606, Revenue from Contracts with Customers (ASC 606) for recognition of its chartered flights and management fees. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for goods or services and excludes sales incentives and amounts collected on behalf of third parties. The Company analyzes the nature of these performance obligations in the context of individual agreements in order to assess the distinct performance obligations.

The Company applies the following five-step model to recognize revenue: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Revenue is derived from a variety of sources including, but not limited to (i) flights and (ii) aircraft management.

The Company accounts for a contract when both parties have approved and are committed to performing their obligations, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and the collectability of consideration is probable.

Revenue is recorded net of discounts on standard pricing and incentive offerings, including special pricing agreements and certain promotions.

Deferred revenue is an obligation to transfer services to a customer for which consideration has already been received. Upon receipt of a prepayment from a customer for all or a portion of the transaction price, a contract liability is initially recognized. The contract liability is settled and revenue is recognized upon satisfaction of the performance obligation to the customer at a future date.

Flights and flight-related services, along with the related costs of the flights, are earned and recognized as revenue at the point in time in which the service is provided. For round trip flights, revenue is recognized upon completion of the trip.

The Company manages aircraft for owners in exchange for a contractual fee. Management fees are reported as revenue along with amounts billed to the aircraft owner for maintenance parts and labor. Owner-incurred expenses, including maintenance coordination, cabin crew, and pilots, as well as recharging of certain incurred aircraft operating costs and expenses such as maintenance, fuel, landing fees, parking, and other related operating costs are recovered by the Company as pass through costs. No revenue is recorded for the reimbursement of these costs as they are recorded net.

The Company’s disaggregated revenues comprised of the following for the years ended December 31:

Advertising Costs

The Company reports as expense the cost of advertising and promoting its services as incurred. Such amounts are included in selling, general and administrative expenses in the accompanying statements of operations and totaled $249,931 and $198,557 for the years ended December 31, 2025 and 2024, respectively.

Income Taxes

Prior to February 2024, as discussed in Note 1, the Company was taxed as a partnership. Under these provisions, the Company was not subject to federal corporate income taxes on its taxable income. Instead, the member was liable for individual federal and state income taxes on their respective shares of the Company’s taxable income. However, the Company was subject to certain state, excise, franchise and license fees; the provision for income taxes reflected in the accompanying financial statements consists primarily of such items. Deferred tax assets and liabilities related to these taxes were insignificant.

Subsequent to January 1, 2024, the Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred income taxes are recognized for differences between financial reporting and tax bases of assets and liabilities at the enacted statutory tax rates in effect for the years in which the temporary differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Company evaluates the realizability of deferred tax assets and valuation allowances are provided when necessary to reduce net deferred tax assets to the amounts expected to be realized.

The Company calculates the current and deferred income tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed income tax returns are recorded when identified. The amount of income taxes paid is subject to examination by U.S. federal and state tax authorities. The estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. To the extent that the assessment of such tax positions change, the change in estimate is recorded in the period in which the determination is made.

At January 1, 2024, the Company recorded a deferred tax liability of approximately $23,000 due to book to tax difference upon the conversion to a C-corp. As of December 31, 2024, the Company reversed the deferred tax liability as the Company has a deferred tax asset due to net operating losses. As of December 31, 2024, the Company has recorded a valuation allowance against 100% of the deferred tax assets.

Net Income Per Share

Net income per share is computed by dividing net income by the weighted average shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share”. Basic earnings per share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares outstanding during the year. Diluted earnings per share calculations are determined by dividing net income by the weighted average number of shares and dilutive share equivalents outstanding. As of December 31, 2025, the Company has 37,405,860 in dilutive securities related to the conversion of outstanding shares of Series A Preferred Stock. The effects of the dilutive shares have been excluded from the calculation of dilutive loss per share for the year ended December 31, 2025 as they are anti-dilutive. The Company did not have any dilutive securities outstanding for the year ended December 31, 2024.

Recent Accounting Pronouncements

The FASB issues ASUs to amend the authoritative literature in ASC. There have been several ASUs issued to date, that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact on our financial statements.

Accounting Standard Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). In December 2023, the FASB issued ASU 2023-09, which requires more detailed income tax disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of ASU 2023-09 on January 1, 2025 did not have a significant impact on the Company’s operations other than expanded footnote disclosures.

In November 2024, the FASB issued the ASC 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-04) Disaggregation of Income Statement Expenses, which requires additional disclosure of the nature of expenses included in the income statement in response to requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as disclosures about selling expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements and disclosures.