Financial Statement Elements

6 Months Ended

Jun. 30, 2026

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Financial Statement Elements

3. Financial Statement Elements

Property and Equipment

Property and equipment, net, as of June 30, 2026 and December 31, 2025 consists of the following:

Schedule of property and equipment net
		June 30,				December 31,
		2026				2025

Aircraft and improvements		$	10,133,388			$	9,255,997
Equipment			126,872				126,872
Building Signage			12,885				12,885
Vehicles			3,000				3,000
Furniture			11,239				11,239
Total:			10,287,384				9,409,993
Less accumulated depreciation			(1,404,391	)			(997,071	)
Total property and equipment		$	8,882,993			$	8,412,922

Depreciation related to property and equipment was $402,977 and $215,771 for the six months ended June 30, 2026 and 2025, respectively.

Aircraft Engine Long Term Service Contracts

The Company is a party to long-term service contracts to perform engine replacement and major maintenance. These contracts extend the useful life of an engine by providing major maintenance and/or replacement engines to mitigate risk of lost charter revenue due to aircraft downtime. Under these arrangements, the Company makes periodic payments in advance of services being performed or replacement parts being provided. These payments are generally based on contractual minimum usage requirements as well as variable usage in excess of such minimum thresholds. Payments made for such contracts for aircraft operated under operating leases are expensed as incurred. In the case of long-term service contracts for aircraft owned or financed, the Company evaluates the economic substance of these arrangements and accounts for the related payments based on their underlying nature as follows:

	·	Reserve balances – Amounts funded under these programs represent prepaid maintenance funding and are recorded as an asset on the balance sheet. These balances are amortized over the remaining term of the respective agreements based on estimated level-rate engine hours over the contractual term of the maintenance arrangements. The amortization reflects the pattern of consumption of the underlying economic benefit and is periodically adjusted based on updated estimates of future aircraft utilization.
	·	Minimum usage component – Payments associated with contractual minimum usage requirements are considered part of the overall reserve funding structure. Increases in reserve balances resulting from such minimum funding are included within the engine reserve asset and are amortized over the remaining contractual term based on estimated level-rate engine hours over the term of the maintenance arrangements. This amortization reflects the pattern of consumption of the underlying economic benefit and is periodically adjusted based on updated estimates of future aircraft utilization.
	·	Incremental usage component – Payments associated with usage in excess of contractual minimum thresholds represent variable, usage-based consumption of engine life and are expensed as incurred.

When major maintenance or replacement events occur under these programs, the Company evaluates the nature of the costs incurred. To the extent such costs represent a significant restoration or extension of engine life and are not otherwise satisfied through previously funded reserves, such amounts may be capitalized and amortized over the expected period of benefit.

During the six months ended June 30, 2026, the Company capitalized $507,565 of engine reserve payments associated with reserve funding and contractual minimum usage requirements. During the same period, the Company recognized $2,033,917 of engine reserve expense consisting primarily of variable usage-based payments together with amortization of previously capitalized engine reserve balances.

Investment - Related Party

The Company holds 420,366 shares of Dalrada Financial Corporation (“DFC”) Convertible Series “G” preferred stock (“Series G”). The stated amount of the investment was $420,366. The Series G are convertible at a fixed rate conversion price of $0.30 per common share, for a total of 1,401,220 common shares of DFC. The ownership in DFC is less than 20%. The Company accounts for the investment at fair market value.

During the six months ended June 30, 2026 and 2025, the Company recorded a gain (loss) of $28,025 and 18,216, respectively. The Company bases the fair market value of the investment on the closing stock price of DFC’s common stock which is considered a similar investment.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of June 30, 2026 and December 31, 2025 consist of the following:


		June 30, 2026				December 31, 2025

Accounts payable		$	6,899,780			$	4,256,149
Payroll liabilities			679				441,772
Credit cards payable			162,795				140,586
Total:		$	7,063,254			$	4,838,507

Deferred revenue is recorded when payments are received in advance of the Company performing its service obligations and are recognized over the service period. Deferred revenue primarily relates to prepayments of chartered flights as customers pay upfront for flights. Deferred revenue as of June 30, 2026 and December 31, 2025 was $250,123 and $733,785, respectively. All deferred revenue as of December 31, 2025 was recognized as of June 30, 2026 and all deferred revenue as of June 30, 2026, is expected to be recorded as revenue in calendar 2026.