VJET 8-K/A
Flyte Aviation, Inc. (VJET)
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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(Address of principal executive offices)
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(Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Exhibit No.
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Description
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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Date: July 28, 2026
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CATHETER PRECISION, INC.
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By:
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/s/ Phillip Anderson
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Phillip Anderson
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Chief Financial Officer
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-1 No. 333-296946, No. 333-262195, Post Effective Amendment to S-1 No. 333-240187, S-1 No. 333-239887, S-1 No. 333-237701, S-3 No. 333-267443, S-1 (Post Effective Amendment to S-3) No. 333-269491, S-3 No. 333-271388, S-1 (Post Effective Amendment to S-3) No. 333-270919, S-8 No. 333-264495, S-8 No. 333-254370, S-8 No. 333-250094, S-8 No. 333-237096, S-8 No. 333-230332, S-8 No. 333-227696, S-8 No. 333-269612, S-8 No. 333-273351, S-3 No. 333-284217, S-1 No. 333-283392, Post Effective Amendment to S-1 No. 333-281849, S-1 No. 333-279930, S-8 No. 333-280786, S-8 No. 333-288348, S-3 No. 333-287483 of Fly Flyte, Inc. of our report dated July 14, 2026, (which includes an explanatory paragraph relating to Fly Flyte, Inc.’s ability to continue as a going concern) relating to the consolidated financial statements of Fly Flyte, Inc. appearing in this Current Report on Form 8-K/A dated July 28, 2026.
/s/ WithumSmith+Brown, PC
East Brunswick, New Jersey
July 28, 2026
Exhibit 99.1
CONSOLIDATED FINANCIAL STATEMENT OF
FLY FLYTE, INC AND SUBSIDIARIES
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Fly Flyte, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Fly Flyte, Inc. (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2025 and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt About the Company’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses and negative cash flows from operations and has a working capital deficit, which raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company’s auditor since 2026.
East Brunswick, New Jersey
July 14, 2026
FLY FLYTE, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
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December 31, |
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2025 |
2024 |
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ASSETS |
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Current Assets |
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Cash |
$ | 26 | $ | 27 | ||||
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Accounts receivable |
2 | - | ||||||
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Total current assets |
28 | 27 | ||||||
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Property and equipment, net |
56 | 236 | ||||||
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Assets held for sale |
- | 2,163 | ||||||
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Operating lease right-of-use assets, net |
557 | 340 | ||||||
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Other non-current assets |
52 | 26 | ||||||
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TOTAL ASSETS |
$ | 693 | $ | 2,792 | ||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
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Current Liabilities |
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Accounts payable |
$ | 55 | $ | 267 | ||||
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Accrued expenses |
783 | 426 | ||||||
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Accrued expenses due to related parties |
6 | 467 | ||||||
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Deferred revenue |
35 | 34 | ||||||
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Due to parent |
2,079 | - | ||||||
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Accrued interest due to related parties |
- | 82 | ||||||
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Short term notes payable, net of discount |
- | 257 | ||||||
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Convertible notes payable, at fair value |
964 | 4,354 | ||||||
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Current portion of notes payable |
450 | 2,947 | ||||||
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Current portion of notes payable due to related parties |
365 | - | ||||||
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Current portion of operating lease liabilities |
332 | 211 | ||||||
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Total current liabilities |
5,069 | 9,045 | ||||||
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Notes payable, net of current portion |
64 | 107 | ||||||
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Notes payable due to related parties, net of current portion |
- | 284 | ||||||
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Operating lease liabilities |
234 | 178 | ||||||
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Total liabilities |
5,367 | 9,614 | ||||||
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Commitments and Contingencies (see Note 6) |
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Stockholders' Deficit |
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Common stock, $0.0001 par value: 100,000,000 authorized; 1,000,000 and 796,745 shares issued and outstanding as of December 31, 2025 and December 31, 2024 |
- | - | ||||||
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Additional paid-in capital |
12,493 | 5,548 | ||||||
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Accumulated deficit |
(17,167 | ) | (12,370 | ) | ||||
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Total stockholders' deficit |
(4,674 | ) | (6,822 | ) | ||||
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT |
$ | 693 | $ | 2,792 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
FLY FLYTE, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
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For the Year Ended December 31, |
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2025 |
2024 |
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Service revenue |
$ | 986 | $ | 706 | ||||
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Cost of service revenues |
691 | 433 | ||||||
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Gross profit |
295 | 273 | ||||||
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Operating expenses |
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Selling, general and administrative |
5,098 | 3,112 | ||||||
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Sales and marketing |
94 | 161 | ||||||
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Depreciation and amortization |
95 | 334 | ||||||
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Gain on disposal of assets |
(290 | ) | (195 | ) | ||||
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Loss on impairment of assets held for sale |
- | 906 | ||||||
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Total operating expenses |
4,997 | 4,318 | ||||||
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Operating loss |
(4,702 | ) | (4,045 | ) | ||||
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Other income (expenses), net |
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Interest expense |
(95 | ) | (293 | ) | ||||
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Interest expense - related parties |
(31 | ) | (41 | ) | ||||
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Change in fair value of Convertible Notes |
(189 | ) | (519 | ) | ||||
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Gain on extinguishment of debt |
520 | - | ||||||
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Loss on litigation settlement |
(300 | ) | - | |||||
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Other income, net |
- | 98 | ||||||
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Total other income (expenses), net |
(95 | ) | (755 | ) | ||||
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Loss from operations before income taxes |
(4,797 | ) | (4,800 | ) | ||||
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Income taxes |
- | - | ||||||
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Net loss |
$ | (4,797 | ) | $ | (4,800 | ) | ||
The accompanying notes are an integral part of these consolidated financial statements.
FLY FLYTE, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(in thousands, except share and per share data)
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Total |
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Common Stock |
Additional |
Accumulated |
Stockholders' |
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Shares |
Amount |
Paid-In Capital |
Deficit |
Deficit |
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Balance as of December 31, 2023 |
747,045 | $ | - | $ | 5,058 | $ | (7,570 | ) | $ | (2,512 | ) | |||||||||
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Stock-based compensation |
- | - | 490 | - | 490 | |||||||||||||||
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Issuance of common stock for vested restricted stock units |
49,700 | - | - | - | - | |||||||||||||||
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Net loss |
- | - | - | (4,800 | ) | (4,800 | ) | |||||||||||||
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Balance as of December 31, 2024 |
796,745 | - | 5,548 | (12,370 | ) | (6,822 | ) | |||||||||||||
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Stock-based compensation |
- | - | 135 | - | 135 | |||||||||||||||
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Issuance of common stock for vested restricted stock units |
3,455 | - | - | - | - | |||||||||||||||
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Issuance of common stock to SEG Jets LLC for services rendered |
199,800 | - | 2,885 | - | 2,885 | |||||||||||||||
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Contribution to capital from parent for settlement of third party debt |
- | - | 3,313 | - | 3,313 | |||||||||||||||
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Contribution to capital from related party debt forgiveness |
- | - | 612 | - | 612 | |||||||||||||||
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Net loss |
- | - | - | (4,797 | ) | (4,797 | ) | |||||||||||||
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Balance as of December 31, 2025 |
1,000,000 | $ | - | $ | 12,493 | $ | (17,167 | ) | $ | (4,674 | ) | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
FLY FLYTE, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
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For the years ended December 31, |
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2025 |
2024 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
$ | (4,797 | ) | $ | (4,800 | ) | ||
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
95 | 334 | ||||||
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Amortization of operating lease right-of-use assets |
142 | 358 | ||||||
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Accretion of debt discount |
12 | 45 | ||||||
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Change in fair value of Convertible Notes |
189 | 519 | ||||||
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Loss on impairment of assets held for sale |
- | 906 | ||||||
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Stock-based compensation |
3,020 | 490 | ||||||
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Gain on disposal of assets |
(290 | ) | (195 | ) | ||||
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Gain on extinguishment of debt |
(520 | ) | - | |||||
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Gain on extinguishment of operating lease liability |
(265 | ) | - | |||||
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Loss on abandonment of operating right-of-use asset |
183 | - | ||||||
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Loss on litigation settlement |
300 | - | ||||||
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Changes in operating assets and liabilities: |
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Accounts receivable |
(2 | ) | - | |||||
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Prepaid expenses and other current assets |
322 | 260 | ||||||
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Other non-current assets |
(26 | ) | 61 | |||||
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Accounts payable |
(212 | ) | 117 | |||||
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Accrued expenses |
(209 | ) | (1,651 | ) | ||||
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Accrued expenses due to related parties |
(217 | ) | 467 | |||||
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Accrued interest due to related parties |
42 | 516 | ||||||
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Deferred revenue |
1 | (42 | ) | |||||
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Operating lease liabilities |
(100 | ) | (309 | ) | ||||
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Net cash used in operating activities |
(2,332 | ) | (2,924 | ) | ||||
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of property and equipment |
- | (76 | ) | |||||
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Proceeds from sale of property and equipment |
50 | 305 | ||||||
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Proceeds from sale of assets held for sale |
2,175 | - | ||||||
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Net cash provided by investing activities |
2,225 | 229 | ||||||
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Payments on notes payable |
(2,158 | ) | (312 | ) | ||||
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Payments on notes payable due to related parties |
(43 | ) | - | |||||
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Payments on short term notes payable |
(219 | ) | (52 | ) | ||||
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Proceeds from loan from parent, net |
2,055 | - | ||||||
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Proceeds from issuance of short term notes payable |
471 | 264 | ||||||
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Proceeds from issuance of convertible notes payable |
- | 2,605 | ||||||
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Proceeds from issuance of convertible notes due to related parties |
- | - | ||||||
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Proceeds from issuance of notes payable due to related parties |
- | 17 | ||||||
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Net cash provided by (used in) financing activities |
106 | 2,522 | ||||||
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NET CHANGE IN CASH |
(1 | ) | (173 | ) | ||||
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CASH, beginning of year |
27 | 200 | ||||||
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CASH, end of year |
$ | 26 | $ | 27 | ||||
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Supplemental disclosure of cash flow information: |
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Interest paid |
$ | 29 | $ | 175 | ||||
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Income taxes paid |
$ | - | $ | - | ||||
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Supplemental disclosure of noncash investing and financing activities: |
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Extinguishment of convertible notes payable through parent capital contribution |
$ | 3,313 | $ | - | ||||
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Extinguishment of liabilities due to related party forgiveness |
$ | 612 | $ | - | ||||
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Operating right-of-use asset obtained in exchange for new operating lease liabilities |
$ | 542 | $ | 596 | ||||
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Common stock issued for settlement of accrued payroll liabilities |
$ | 244 | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements.
FLY FLYTE, INC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
1. ORGANIZATION AND NATURE OF OPERATIONS
Business
Fly Flyte Inc. (“Flyte” or the “Company”) is incorporated in the state of New York on August 13, 2018, is headquartered in New York, New York, and operates on a calendar year-end (December 31st). Flyte operates a private aviation platform supported by a mobile application that facilitates access to private air travel at competitive price points. The Company offers regional and long-range private jet charter services throughout the United States through a combination of leased aircraft and third-party operator relationships. Customers are able to book flights directly or place bids on available empty-leg flights in real time. The Company is also developing a local and regional air-taxi service intended to expand access to private aviation for middle-market travelers by offering shorter-distance flights at lower price points relative to traditional charter services, and has begun the regulatory approval process to operate in Canada, Mexico, and the Caribbean.
Corporate Structure and Ownership Changes
Flewber Global Inc. was incorporated in the State of Delaware in January 2019. Flewber Global Inc.’s legal subsidiaries consisted of:
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Flewber, Inc. - incorporated in New York (wholly-owned subsidiary) |
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Ponderosa Air LLC - formed in New York (wholly-owned subsidiary) |
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Vision FGAR 1, LLC - formed in Delaware (99.99% owned by the Company, with 0.01% owned by another stockholder) |
On February 27, 2025, Creatd, Inc. (“Creatd”) acquired 100% outstanding common stock of Flewber Global, Inc., including all ownership interests of Flewber Global, Inc. Creatd also acquired the remaining 0.01% non-controlling interest in Vision FGAR 1, LLC. In connection with Creatd’s acquisition, Flewber Global Inc. and Vision FGAR 1, LLC were dissolved and on August 11, 2025 Flewber, Inc. was renamed Fly Flyte, Inc. The surviving corporate structure after reorganization was Creatd owning 100% outstanding common stock of Fly Flyte, Inc and Fly Flyte, Inc’s wholly owned subsidiary Ponderosa Air LLC.
In connection with the acquisition of Flyte by Creatd, the outstanding shares of common stock were replaced with new shares of common stock. Accordingly, all references to share and per share amounts for all periods presented in the consolidated financial statements have been retrospectively recasted to reflect this recapitalization event.
On September 9, 2025, Fly Flyte, Inc. entered into a side letter agreement with an investor SEG Jets LLC pursuant to which Fly Flyte, Inc. issued 19.98% of outstanding common equity to SEG Jets LLC in exchange for services rendered in the form of strategic business cooperation. Fly Flyte’s equity issuance consisted of fully paid restricted common stock. The equity issuance was entered into with SEG Jets LLC contemporaneously with a separate aircraft lease arrangement with SEG Jets LLC (see Note 8).
On February 6, 2026, SEG Jets LLC sold its 19.98% interest in Fly Flyte, Inc. to Catheter Precision, Inc., and on March 9, 2026, Creatd sold its remaining 80.02% interest in Fly Flyte, Inc. to Catheter Precision, Inc. As a result, Catheter Precision, Inc. owns 100% of the outstanding common stock of Fly Flyte, Inc. See Note 12, Subsequent Events, for additional information regarding these transactions.
Going Concern
The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from uncertainty related to its ability to continue as a going concern.
The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception. For the year ended December 31, 2025, the Company incurred $4.8 million in net losses and used $2.3 million in cash for operating activities. As of December 31, 2025, the Company had an accumulated deficit of $17.2 million, working capital deficit of $4.4 million, and cash of $26 thousand.
On March 9, 2026, subsequent to the balance sheet date, the Company was acquired by Catheter Precision, Inc. Following the acquisition, Catheter Precision, Inc. has committed to provide financial support to fund the Company’s operations and meet obligations as they come due. Catheter Precision, Inc. plans to raise additional capital through public or private equity offerings, debt financing, or other financing strategies to support both its own and the Company’s operating and capital requirements. However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all. Based on the Company's liquidity resources, there is substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date the financial statements are issued.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Financial Accounting Standards Board (“FASB”) establishes these principles to ensure financial condition, results of operations, and cash flows are consistently reported. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative nongovernmental U.S. GAAP as found in the FASB Accounting Standards Codification ("ASC").
Principles of Consolidation
The consolidated financial statements include the accounts of Fly Flyte, Inc. and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
The non-controlling interests related to Vision FGAR 1, LLC has not been recorded or presented in the consolidated financial statement as associated amounts are de minimis during the period in which the 0.01% was owned by another minority stockholder.
Use of Estimates
The preparation of consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates due to risks and uncertainties. The Company’s consolidated financial statements are based upon a number of estimates including, but not limited to, the valuation of long-lived assets and their associated estimated useful lives, evaluation of impairment of long-lived assets, valuation of assets held for sale, determination of the incremental borrowing rates used in calculating lease liabilities, evaluation of probable loss contingencies, Convertible Notes, and fair value of equity awards granted.
Fair Value Measurement
Fair value represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants and is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to identify inputs used in measuring fair value as follows:
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Level 1 |
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Observable inputs such as quoted prices (unadjusted) for identical assets or liabilities in active markets; |
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Level 2 |
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— |
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Inputs other than the quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets or liabilities; and |
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Level 3 |
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— |
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Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. |
The carrying amounts of the Company’s financial instruments, including cash, accounts receivable, accounts payable, accrued expenses, accrued expenses due to related parties, and deferred revenue approximate their fair values due to their short-term maturities.
The carrying values of all the Company’s debt instruments classified within current liabilities, except for the Convertible Notes measured at fair value as separately discussed below, on the consolidated balance sheet approximate fair value as of December 31, 2025 and 2024 given their near-term maturity dates. The carrying values of the notes payable and notes payable due to related parties classified within non-current liabilities on the consolidated balance sheets approximate their fair value given the current market rates for similar instruments.
The following table details the Company’s fair value measurements within the fair value hierarchy (in thousands):
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December 31, 2025 |
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Total |
Level 1 |
Level 2 |
Level 3 |
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Liabilities: |
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Convertible Notes (see Note 5) |
$ | 964 | $ | — | $ | — | $ | 964 | ||||||||
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December 31, 2024 |
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Total |
Level 1 |
Level 2 |
Level 3 |
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Assets: |
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Aircraft held for sale (see Note 3) |
$ | 2,163 | $ | — | $ | 2,163 | $ | — | ||||||||
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Liabilities: |
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Convertible Notes (see Note 5) |
$ | 4,354 | $ | — | $ | — | $ | 4,354 | ||||||||
Convertible notes payable and notes payable due to related parties
The Company elected the fair value option to measure the convertible notes payable and notes payable due to related parties (collectively the “Convertible Notes”) and measures the Convertible Notes at fair value on a recurring basis. The Convertible Notes are classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs.
As of December 31, 2025
The fair value of the Convertible Notes is determined using a probability weighted expected return model that incorporates multiple potential settlement outcomes, including (i) conversion of the Convertible Notes into shares of common stock upon an initial public offering, (ii) conversion of the Convertible Notes into shares of common stock upon a change of control or merger and acquisition, (iii) cash settlement of the Convertible Notes’ principal and accrued interest at maturity, and (iv) cash settlement of the Convertible Note’s principal and accrued interest upon an event of default. The debt component of the instrument was valued using a discounted cash flow methodology based on an implied market yield for comparable high-risk debt instruments, while the conversion feature was valued using a Black-Scholes option pricing methodology. Significant unobservable inputs included management’s expectations regarding the probability and timing of future settlement scenarios, the estimated fair value of the underlying common stock, expected volatility derived from guideline public companies, implied market yield / discount rate assumptions, and applicable risk-free interest rates. Because these assumptions are not directly observable in the marketplace, the instrument was classified within Level 3 of the fair value hierarchy.
The following table summarizes the significant unobservable inputs used in Level 3 financial instruments as of December 31, 2025:
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Instrument |
Valuation Technique |
Unobservable Input |
Input Range |
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Convertible Notes |
Probability-weighted expected return model utilizing a bond-plus call option framework, wherein the bond component was discounted using implied market yield and the conversion feature was priced under the Black-Scholes option pricing model |
Expected settlement outcomes and probability weighting |
Change of Control: 90%; |
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Discount rate |
32.7% |
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Underlying common stock value |
$81.24 per share |
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Expected volatility |
114.0% |
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Risk-free rate |
3.6% |
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Expected term |
0.25 - 0.58 years |
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Recovery rate under default scenario |
48.8% |
As of December 31, 2024
The fair value of the Convertible Notes is determined using a discounted cash flow methodology based on an implied market yield for comparable high-risk debt instruments. Significant unobservable inputs included the estimated fair value of the underlying common stock, expected volatility derived from guideline public companies, implied market yield / discount rate assumptions, and applicable risk-free interest rates. Because these assumptions are not directly observable in the marketplace, the instrument was classified within Level 3 of the fair value hierarchy.
The following table summarizes the significant unobservable inputs used in Level 3 financial instruments as of December 31, 2024:
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Instrument |
Valuation Technique |
Unobservable Input |
Input Range |
|||
|
Convertible Notes |
Discounted cash flow method |
Discount rate |
32.0% |
|||
|
Underlying common stock value |
$1.37 per share |
|||||
|
Expected volatility |
103.0% |
|||||
|
Risk-free rate |
4.4 - 5.0% |
The table below summarizes the change in account balance for Level 3 financial instruments for the for the year ended December 31, 2025 and 2024 (in thousands):
|
Convertible Notes |
||||
|
Balance at January 1, 2024 |
$ | 1,230 | ||
|
Fair value at issuance |
2,605 | |||
|
Change in fair value |
519 | |||
|
Balance at December 31, 2024 |
$ | 4,354 | ||
|
Settlement of Convertible Notes |
$ | (3,579 | ) | |
|
Change in fair value |
189 | |||
|
Balance at December 31, 2025 |
$ | 964 | ||
Increases or decreases in the fair value of Convertible Notes can result from updates to assumptions and based on contractual cash interest accruals. Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period. Changes or updates to assumptions could have a material impact on the reported fair value, the change in fair value, and the results of operations in any given period. The Company remeasured the Convertible Notes as of each required remeasurement date recorded the changes in fair value within consolidated statements of operations during the years ended December 31, 2025 and 2024, respectively.
Aircraft held for sale
The fair value measurement for the aircraft held for sale was a nonrecurring measurement triggered by the reclassification into asset as held for sale. At December 31, 2024, the Company classified its Cirrus SF50 aircraft (FAA registration N619GK) as held for sale in accordance with ASC 360-10. The aircraft was measured at fair value less costs to sell, resulting in a fair value measurement of $2.2 million. The Company applied the market approach using the negotiated sales price of $2.2 million pursuant to a purchase and sale agreement with an unaffiliated third party, less estimated costs to sell of $12 thousand.
The negotiated sales price represented the best evidence of fair value as it reflected the amount a market participant would pay for the asset in its current condition. The measurement is classified as Level 2 within the fair value hierarchy because it is based on observable inputs (the binding sales agreement) but does not represent quoted prices in an active market.
The Company recognized an impairment loss of $0.9 million as part of the reclassification to asset held for sale during the year ended December 31, 2024. The impairment loss represented the excess of the carrying value of $3.1 million over the fair value less costs to sell and is included in operating expenses in the consolidated statements of operations.
This aircraft was subsequently sold on February 11, 2025, for the agreed-upon price of $2.2 million (see Note 3).
Accounts Receivable
The Company collects payment from customers in advance of providing any flight services as part of its customary operating activities. In certain cases, the Company may choose to provide flight services to select repeat customers in advance of collecting payment for those flight services. Accounts receivable are recorded for the contractually invoiced amounts that the Company expects to collect from customers related to such flights. Accounts receivable is an unsecured financial instrument and does not bear interest. The Company monitors exposure for losses and maintains an allowance for credit losses for any receivables that may be uncollectible. There was no allowance for credit losses recorded as of December 31, 2025 and 2024.
Concentration of Credit Risk
The Company's financial instruments held during the years ended December 31, 2025 and 2024 that are exposed to concentrations of credit risk consist primarily of cash. The Company generally maintains cash balances in various operating accounts at financial institutions with high quality credit ratings and had no deposits in financial institutions in excess of federally insured limits of $250 thousand. The Company has not experienced any losses related to its cash and does not believe that it is subject to significant or unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company has no significant off-balance sheet risk, such as foreign exchange contracts, option contracts, or other hedging arrangements.
The Company had zero and two customers that individually accounted for 10% or more of total revenues included in the consolidated statements of operations for the years ended December 31, 2025 and December 31, 2024, respectively. Two customers represented 74%, and 19% of total revenues for the year ended December 31, 2024.
The Company purchased services from various vendors and had one and three vendors that individually accounted for 10% or more of accounts payable included in the consolidated balance sheets as of December 31, 2025 and December 31, 2024, respectively. One vendor represented 27% of accounts payable as of December 31, 2025, and three vendors represented 41%, 13% and 12% of accounts payable as of December 31, 2024. The loss of a significant vendor could materially adversely affect the Company’s operations.
Other Non-current Assets
Other non-current assets primarily consists of refundable security deposits associated with leases.
Property and Equipment, Net
Property and equipment are recorded at cost, less accumulated depreciation and amortization. Property and equipment is depreciated or amortized on a straight-line basis over their estimated useful lives as follows:
|
Aircraft |
15 years |
|||
|
Machine and equipment |
3 years |
|||
|
Vehicle |
5 years |
|||
|
Capitalized software |
5 years |
Leasehold improvements are depreciated on a straight-line basis over the shorter of either the term of the lease or an estimated useful life of 3 years.
The Company periodically reviews the residual values and estimated useful lives of each class of its property and equipment for ongoing reasonableness, considering the long-term views of their intended use and the level of planned improvements to maintain and enhance those assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective account balances, and any resulting gain or loss is recognized in the Company’s consolidated statements of operations. The cost of repairs and maintenance is expensed as incurred, whereas significant renewals and betterments are capitalized.
Capitalized Software
The Company capitalizes costs associated with software developed or obtained for internal use in accordance with ASC 350-40, Intangibles—Goodwill and Other, Internal-Use Software. The Company begins capitalizing software development costs when both of the following occur: (1) management, with the relevant authority, implicitly or explicitly authorizes and commits to funding a computer software project; and (2) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred.
Capitalized internal-use software is presented within property and equipment, net on the consolidated balance sheets and is amortized on a straight-line basis over its estimated useful life of 5 years. The Company evaluates capitalized software for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable in accordance with ASC 360-10, Property, Plant, and Equipment.
Evaluation of Long-Lived Assets for Impairment
In accordance with ASC 360, Impairment and Disposals of Long-lived Assets ("ASC 360"), the Company periodically reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value of the long-lived assets may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the assets carrying value over its fair value is recorded in the Company’s consolidated statements of operations at that date. The Company did not identify any triggering events, nor impairment charges recorded, for the year ended December 31, 2025 and 2024 other than the impairment loss recorded associated aircraft reclassified as held for sale in 2024.
Assets Held for Sale
The Company classifies an asset as held-for-sale when all of the criteria set forth in ASC 360 have been met. The criteria are as follows: (i) management, having the authority to approve the action, commits to a plan to sell the asset; (ii) the asset is available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale of the asset is probable and is expected to be completed within one year; (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. At the time the Company classifies an asset as held for sale, the Company ceases recording depreciation and amortization expense. An asset classified as held for sale is measured and reported at the lower of its carrying amount or its estimated fair value less cost to sell. At December 31, 2024, the Company classified its Cirrus SF50 aircraft (FAA registration N619GK) as held for sale.
Stock-Based Compensation
The Company issues equity-based compensation awards to employees and consultants, including unrestricted and restricted stock grants per employment or consulting agreements under the Company’s equity compensation plan. Equity-based compensation awards are measured on the date of grant based on the estimated fair value of the respective award, and the resulting compensation expense is recognized over the required service period of the respective award. The Company accounts for forfeitures as they occur.
For restricted stock units, the fair value is determined based on the fair value of the underlying common stock on the grant date. Stock-based compensation expense is classified in the same expense categories as the cash compensation paid to employees receiving the awards.
Fair Value of Common Stock as of December 31, 2024
The Company’s common stock is not publicly traded, and there is no active market for the underlying shares. Consequently, the fair value of the Company's common stock is determined by the Board of Directors. To estimate the fair value of the common stock, the Board of Directors utilized contemporaneous independent valuations prepared by a third-party specialist in accordance with IRC Section 409A guidelines. These valuations estimate the enterprise value of the Company using a combination of the income approach (discounted cash flows) and market approaches (guideline public companies and precedent transactions).
The estimated enterprise value was adjusted for cash, debt, and other non-operating items to derive total equity value, which was subsequently allocated to common stock using the Current Value Method. The resulting per-share value was further adjusted for a discount for lack of marketability (“DLOM”) of 25.0% to reflect the illiquid nature of the Company’s privately held common stock. The DLOM was estimated using an Asian put option methodology incorporating expected liquidity timing and estimated equity volatility assumptions.
Fair Value of Common Stock as of December 31, 2025
The Board of Directors used the purchase price paid by Creatd for the Company on February 27, 2025, to estimate the enterprise value and the resulting per-share value of common stock. The resulting per-share value was used to determine the fair value of the common stock issued to SEG Jets, LLC in exchange for services rendered in the form of strategic business cooperation.
Convertible notes payable and convertibles notes payable to related parties
The Convertible Notes represent debt-host financial instruments whose embedded features must be assessed for bifurcation and separate accounting as derivative liabilities under ASC Topic 815, Derivatives and Hedging (“ASC 815”), unless the fair value option is elected under ASC Topic 825, Financial Instruments (“ASC 825”). ASC 825 allows entities to elect the fair value option to measure certain financial assets and liabilities at fair value. The fair value option may be elected on a financial instrument-by-financial instrument basis and is irrevocable, unless a new election date occurs. The fair value option simplifies the accounting by requiring the entire financial instrument to be measured at fair value.
As permitted under ASC 825, the Company elected the fair value option to account for the Convertible Notes. The Company elected the fair value option for the Convertible Notes to simplify their accounting. The fair value option was elected for all of the Company's convertible notes payable and notes payable due to related parties within this group of similar instruments; the election was not made on a partial basis. The Company records the Convertible Notes at fair value with any changes in fair value recorded as a component of other income (expense), net in the consolidated statements of operations. For the years ended December 31, 2025 and 2024, the Company recorded $189 thousand and $519 thousand, respectively, of net changes in the fair value of the Convertible Notes within other income (expense), net, as reflected in the roll-forward of Level 3 recurring fair value measurements under Fair Value Measurement above. The change in fair value of Convertible Notes includes interest expense related to cash accruals. The Company has not elected to present interest expense on the Convertible Notes separately from other changes in fair value; all such amounts are recorded within other income (expense), net in the consolidated statements of operations. Any portion of the change in fair value that is attributed to a change in the Convertible Notes’ credit risk is recognized as a component of other comprehensive income. The Company determined the credit risk associated with the Convertible Notes was de minimis for the years ended December 31, 2025 and 2024 and on a cumulative basis since the fair value option was elected. Because no amounts attributable to instrument-specific credit risk were recognized in other comprehensive income, no amounts were reclassified to net income in connection with the settlement of Convertible Notes during the year ended December 31, 2025.
As a result of applying the fair value option, any debt issuance costs related to the Convertible Notes is expensed as incurred. See Fair Value Measurement above and Note 5, Debt, for the disclosures required under ASC 825-10-50-25, including the reasons for electing the fair value option, the effect of changes in fair value on earnings for the period, the interest rate and other contractual terms that would otherwise apply, and the difference between the aggregate fair value and the aggregate unpaid principal balance of the Convertible Notes.
Distinguishing Liabilities from Equity
The Company evaluates equity or liability classification for freestanding financial instruments, including preferred stock, and options, pursuant to the guidance under ASC Topic 480 (“ASC 480”), Distinguishing Liabilities from Equity. The Company classifies as liabilities all freestanding financial instruments that are (i) mandatorily redeemable, (ii) represent an obligation to repurchase the Company’s equity shares by transferring assets, or (iii) represent an unconditional obligation (or conditional obligation if the financial instrument is not an outstanding share) to issue a variable number of shares predominantly based on a fixed monetary amount, variations in something other than the fair value of the Company’s equity shares, or variations inversely related to changes in fair value of the Company’s equity shares.
If a freestanding financial instrument does not represent an outstanding equity share and does not meet liability classification under ASC 480, the Company then assesses whether the freestanding financial instrument is indexed to its own stock and meets equity classification pursuant to ASC Topic 815-40. The Company further assesses whether the freestanding financial instruments should be classified as temporary equity. Freestanding financial instruments that are redeemable for cash or other assets at a fixed or determinable date, at the option of the holder, or upon the occurrence of an event are classified in temporary equity in accordance with ASC 480. Otherwise, the freestanding financial instruments are classified in permanent equity.
See Note 5, Debt and Note 9, Equity for additional information on the freestanding financial instruments assessed under ASC 480 and ASC Topic 815-40 for equity or liability classification.
Advertising Costs
The Company expenses the cost of advertising and promoting its services as incurred. Such amounts are included in sales and marketing expense in the consolidated statements of operations and totaled $94 thousand and $161 thousand for the year ended December 31, 2025 and 2024, respectively.
Legal Contingencies
The Company records liabilities for losses from legal proceedings when it determines that it is probable that the outcome will be unfavorable and the amount of loss can be reasonably estimated. Legal costs are expensed as incurred.
Service Revenue
In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”), the Company accounts for contracts with customers when there is a legally enforceable contract, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. Revenue is measured as the amount of consideration expected to be received in exchange for transferring promised services. The amount of consideration to be received and revenue recognized may vary due to discounts. A performance obligation is a promise in a contract to transfer a distinct service. If there are multiple performance obligations in the customer contract, the Company allocates the transaction price in the contract to each performance obligation based on the relative standalone selling price. The Company does not have significant financing component for its contracts. Revenue is recognized when performance obligations in the customer contract are satisfied. This generally occurs when a customer receives the promised service.
Pursuant to ASC Topic 606, the Company applies the following five steps to each customer contract:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the Company satisfies a performance obligation
Performance Obligations and Timing of Revenue Recognition
The Company generates revenue through two primary private aviation services: Hops and Luxe.
Hops refers to Flyte’s short-haul private charter service, through which Flyte arranges charter routes using leased jets and pilots dedicated to Flyte’s operations. These flights are conducted on Company-managed aircraft and typically service high-demand regional routes throughout the New York Metro Area, Long Island, New England and the Eastern seaboard, to any destination within 400 nautical miles of the Company’s base in Farmingdale, New York. Each flight represents a performance obligation. For Hops arrangements, the Company acts as the principal because it controls the specified flight service before it is transferred to the customer, is primarily responsible for operating and fulfilling the flight, and has discretion in establishing pricing. Accordingly, Hops revenue is presented on a gross basis in the consolidated statements of operations. Revenue is recognized at a point in time upon completion of each flight and includes base charter rates, repositioning fees, and ancillary charges. Customer payments received in advance are recorded as deferred revenue until the related performance obligation is satisfied.
Luxe is the Company’s brokerage division, offering clients access to on-demand charters through a vetted network of independent third-party aircraft operators. For Luxe arrangements, the Company evaluates whether it controls the specified flight service before it is transferred to the customer or whether the Company’s performance obligation is to arrange for a third-party operator to provide the flight service. The Company has determined that it acts as an agent in Luxe arrangements because the third-party aircraft operator is primarily responsible for operating and fulfilling the flight, and the Company does not control the underlying flight service before it is provided to the customer. Accordingly, Luxe revenue is presented on a net basis in the consolidated statements of operations and represents the commission, brokerage fee, or other net amount retained by the Company after amounts payable to the third-party aircraft operator.
For both Hops and Luxe, flights are earned and recognized as revenue at the point in time in which the service is provided, representing the satisfaction of the performance obligation. The Company generally does not issue refunds for flights unless there is a failure to meet its service obligations. For roundtrip flights, revenue is recognized upon arrival at the destination for each flight.
Contract Balances
The Company’s standard practice is to collect payment from customers in advance of providing flight services. Payments received in advance are recorded as deferred revenue (contract liabilities) and recognized as revenue when the related flight is completed. The Company generally does not issue refunds unless there is a failure to meet service obligations.
Practical Expedients
The Company expenses contract acquisition costs, primarily sales commissions, when incurred because the amortization period would be one year or less, as substantially all contracts are completed within one year.
Cost of Service Revenues (exclusive of items shown separately)
Cost of revenue primarily includes direct labor costs and associated benefits and indirect costs related to contract performance, such as fuel, supplies, uniforms, and other flight service incidentals.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. 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. A valuation allowance is recorded when it is “more likely-than-not” that deferred tax assets will not be realized.
On a regular basis, the Company evaluates the recoverability of deferred tax assets and the need for a valuation allowance. Such evaluations involve the application of significant judgment. The Company considers multiple factors in its evaluation of the need for a valuation allowance. The Company’s net deferred tax assets primarily consist of assets related to net operating losses and deductible temporary differences. The Company’s net operating losses and credits have a finite life primarily based on the 20-year carryforward rule for federal net operating losses (“NOLs”) generated through December 30, 2025. At December 31, 2025 and 2024, respectively, the Company has recorded a full valuation allowance on its net deferred tax assets in the amount of $1.9 million and $1.5 million, respectively.
The effective tax rate was 0.0% for the years ended December 31, 2025 and 2024. The Company’s effective tax rate for the years ended December 31, 2025 and 2024 differs from the federal statutory rate of 21.0% primarily due to a full valuation allowance against its net deferred tax assets where it is more likely than not that the deferred tax assets will not be realized.
Until an appropriate level of profitability is attained, the Company expects to maintain a full valuation allowance on its deferred tax assets. Any tax benefits or tax expense recorded on its consolidated statements of operations will be offset with a corresponding valuation allowance until such time that the Company changes its determination related to the realization of deferred tax assets. In the event that the Company changes its determination as to the amount of deferred tax assets that can be realized, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such a determination is made.
For uncertain tax positions that meet a “more likely-than-not” threshold, the Company recognizes the benefit of uncertain tax positions in the consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations.
Leases
In accordance with FASB ASC Topic 842, Leases (“ASC 842”), the Company determines if an arrangement is or contains a lease at contract inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset.
The Company has operating leases primarily for office space, hangar, and aircrafts. Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.
Lease payments included in the measurement of the lease liability comprise a fixed payment owed over the lease term. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any incentives received.
To determine the present value of lease payments, the Company must use the rate implicit in the lease if it is readily determinable; otherwise, the Company may use either (a) a borrowing rate based on similar debt or (b) the practical expedient option provided by ASC 842, which allows an entity to use a risk-free rate for each class of underlying asset for a period comparable to the lease term to discount the lease payments to present value.
The Company considers the lease term to be the noncancellable period that it has the right to use the underlying asset, including all periods covered by an option to (1) extend the lease, if the Company is reasonably certain to exercise the option, (2) terminate the lease, if the Company is reasonably certain not to exercise that option, and (3) extend or not to terminate the lease, in which exercise of the option is controlled by the lessor.
The Company enters into contracts that contain both lease and non-lease components. Non-lease components include costs that do not provide a right to use a leased asset but instead provide a service such as maintenance costs. The Company has elected to account for the lease and non-lease components together as a single component for all classes of underlying assets. Variable costs associated with the lease, such as maintenance and utilities, are not included in the measurement of ROU assets and liabilities but rather are expensed when the events determining the amount of variable consideration to be paid have occurred.
The Company monitors for events or changes that can require a reassessment of its leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. Operating lease ROU assets are presented as operating lease right-of-use assets on the balance sheet. The current portion of the operating lease liabilities is included in current liabilities, and the long-term portion is presented separately in long-term liabilities.
Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.
The Company also enters into sale leaseback transactions. To determine whether the transaction should be accounted for as a sale, the Company evaluates whether control of the asset has transferred to a third party. If the transfer of the asset is determined to be a sale, the Company recognize the transaction price for the sale based on cash proceeds received, derecognize the carrying amount of the asset sold and recognize a gain or loss in the consolidated statement of operations for any difference between the carrying value of the asset and the transaction price. If the transfer of the asset is not determined to be a sale, the transaction is accounted for as a financing arrangement.
Recently Adopted Accounting Pronouncement
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which clarifies and modernizes the accounting for costs related to internal-use software in ASC Topic 350-40, Intangibles -Goodwill and Other - Internal-Use Software (ASC 350-40). ASU 2025-06 removed all references to project stages throughout ASC 350-40, and requires entities to begin capitalizing software costs when both of the following occur: (1) management, with the relevant authority, implicitly or explicitly authorizes and commits to funding a computer software project; and (2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the probable-to-complete recognition threshold). The guidance is effective for annual periods beginning after December 15, 2027 and interim periods within those annual reporting periods. Early adoption is permitted. The Company early adopted ASU 2025-06 on a retrospective basis effective January 1, 2024 and determined that the financial statement impact was immaterial. See Note 3, Property and Equipment, Net.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about an entity’s effective tax rate reconciliation and additional information about income taxes paid. For entities other than public business entities, the guidance is effective for annual periods beginning after December 15, 2025. The Company is evaluating the effect of adoption and does not expect it to have a material impact on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires disaggregated disclosure of certain costs and expenses in the notes to the financial statements. For entities other than public business entities, the guidance is effective for annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the effect of adoption on its consolidated financial statements.
3. PROPERTY AND EQUIPMENT, NET
The Company’s property and equipment consists of the following:
|
December 31, |
December 31, |
|||||||
|
Machinery and equipment |
$ | 147 | $ | 147 | ||||
|
Vehicle |
- | 109 | ||||||
|
Capitalized software |
457 | 457 | ||||||
|
Leasehold improvements |
40 | 40 | ||||||
|
Property and equipment, gross |
$ | 644 | $ | 753 | ||||
|
Less: Accumulated depreciation and amortization |
(588 | ) | (517 | ) | ||||
|
Property and equipment, net |
$ | 56 | $ | 236 | ||||
Depreciation and amortization expense was $95 thousand and $334 thousand for the year ended December 31, 2025 and 2024, respectively.
On November 14, 2024, the Company had financed the acquisition of a Cirrus SF50 aircraft (serial number 0209, FAA registration N619GK) pursuant to a $2.8 million promissory note in favor of Radlo Family Irrevocable Trust II (Aircraft Loan C in Note 5 below) secured by the aircraft. Prior to December 31, 2024, the Company committed to a plan to sell the N619GK aircraft and determined that all the criteria to be classified as held for sale were met as of December 31, 2024.
The Company determined that the fair value less cost to sell the N619GK was lower than its carrying value as of December 31, 2024. The Company reduced the carrying value of $3.1 million down to its fair value of $2.2 million less costs to sell of $12 thousand and recognized an impairment loss of $0.9 million in the consolidated statement of operations for the year ended December 31, 2024.
The following table presents the assets that are classified as held for sale (in thousands):
|
December 31, |
December 31, |
|||||||
|
Aircraft |
$ | - | $ | 3,069 | ||||
|
Allowance for reduction of assets held for sale |
- | (906 | ) | |||||
|
Assets held for sale |
$ | - | $ | 2,163 | ||||
See Note 2 for additional information on the valuation technique and inputs used to measure the fair value of the assets held for sale.
Sale and Leaseback of N421ST
On March 5, 2024, Ponderosa Air LLC, a wholly owned subsidiary of Fly Flyte, Inc., sold the 1976 Cessna C-421C aircraft (serial number 421C-0114, FAA registration N421ST) to an unaffiliated buyer in exchange for $305 thousand, excluding transaction costs, pursuant to a purchase and sale agreement signed on March 5, 2024. Concurrent with the sale, the Company entered into a short-term leaseback arrangement for the plane 45 days. The transaction met the criteria for a sale under ASC 842, Leases and ASC 606, Revenue from Contracts with Customers and the leaseback was determined to be an operating lease.
In connection with the transaction, the Company determined that the leaseback terms were not at market as the leaseback was rent-free. Accordingly, the Company derecognized the carrying value of the aircraft of $133 thousand, recognized a gain of $195 thousand on the sale of the asset, and recognized a prepaid right-of-use asset of $23 thousand based on the estimated market rate for the lease.
Sale and Leaseback of N619GK
On February 11, 2025, Vision FGAR 1, LLC, a wholly owned subsidiary of Fly Flyte, Inc., sold the Cirrus SF50 aircraft (serial number 0209, FAA registration N619GK) to an unaffiliated buyer, in exchange for $2.2 million, excluding transaction costs, pursuant to a purchase and sale agreement signed on February 11, 2025. The Company used the proceeds to settle Aircraft Loan C, which had an outstanding balance of $2.5 million. The difference between the carrying amount of the notes payable and the settlement amount at extinguishment of $372 thousand was recorded as a gain on extinguishment of debt in the consolidated statements of operations (see Note 5).
Concurrent with the sale, the Company also entered into a short-term leaseback arrangement for the plane for a term expiring June 1, 2025. The transaction met the criteria for a sale under ASC 842, Leases and ASC 606, Revenue from Contracts with Customers and the leaseback was determined to be an operating lease. The Company determined that the leaseback terms were not at market as the leaseback was rent-free. Accordingly, the Company also derecognized the carrying value of the assets held for sale of $2.2 million and recognized a prepaid right-of-use asset of $325 thousand based on the estimated market rate for the lease. Since the Company did not transfer any consideration for the prepaid right-of-use asset, the Company recognized a gain for the leaseback of the plane.
Sale of Vehicle
On August 8, 2025, the Company disposed of its vehicle for cash consideration of $50 thousand, which it used to pay off the vehicle loan (see FN 5). The Company recorded a loss of $35 thousand on the consolidated statements of operations.
4. ACCRUED EXPENSES
The following table summarizes the Company’s accrued expenses and accrued expenses due to related parties (in thousands):
Accrued Expenses
|
December 31, 2025 |
December 31, 2024 |
|||||||
|
Compensation and related benefits |
$ | 94 | $ | 7 | ||||
|
Luxe third-party aircraft operators |
132 | 308 | ||||||
|
Employment litigation |
150 | - | ||||||
|
Note payable litigation |
300 | - | ||||||
|
Accrued interest expense |
78 | 111 | ||||||
| Other accrued expenses | 29 | - | ||||||
|
Accrued expenses |
$ | 783 | $ | 426 | ||||
Accrued expenses due to related parties
|
December 31, 2025 |
December 31, 2024 |
|||||||
|
Compensation and related benefits |
$ | 6 | $ | 467 | ||||
On June 20, 2025, Marc Sellouk, CEO of the Company, agreed to settle his outstanding accrued payroll balance of $216 thousand in exchange for 215,800 shares of common stock of Creatd. Similarly, on June 25, 2025, Thane Gevas, Executive Vice President of the Company, agreed to settle his outstanding accrued payroll balance of $156 thousand in exchange for 156,200 shares of common stock of Creatd. The difference between the total outstanding accrued payroll balance due to Marc Sellouk and Thane Gevas of $372 thousand and the fair value of the shares of Creatd common stock issued to both executive officers of $128 thousand was recorded as a capital contribution of $244 thousand from related parties under additional paid-in capital in the consolidated balance sheets.
5. DEBT
Convertible Notes
Overview and Terms
The Company’s balance of convertible notes payable, at fair value is as follows (in thousands):
|
December 31, 2024 |
December 31, 2025 |
||||||
|
Instrument |
Issue Date (Month – Year) |
Maturity Date, as extended (Month – Year) |
Principal Amount |
Accrued Interest |
Principal Balance |
Accrued Interest |
Principal Balance |
|
A |
Dec-22 |
Dec-23, extended to May-24 |
175 |
29 |
175 |
44 |
175 |
|
B |
Jan-23 |
Jan-24, extended to May-24, extended to Jun-24 |
100 |
16 |
100 |
- |
- |
|
C1 |
Mar-23 |
Mar-24, extended to May-24 |
75 |
11 |
75 |
- |
- |
|
C2 |
Mar-23 |
Mar-24, extended to May-24 |
100 |
14 |
100 |
22 |
100 |
|
D1 |
Apr-23 |
Apr-24 |
50 |
7 |
50 |
11 |
50 |
|
D2 |
Apr-23 |
Apr-24 |
130 |
18 |
130 |
- |
- |
|
E1 |
Jun-23 |
Jun-24 |
100 |
13 |
100 |
21 |
100 |
|
E2 |
Jun-23 |
Jun-24 |
90 |
11 |
90 |
- |
- |
|
F1 |
Aug-23 |
Aug-24 |
100 |
11 |
100 |
19 |
100 |
|
F2 |
Aug-24 |
Aug-24 |
150 |
17 |
150 |
29 |
150 |
|
G |
Dec-23 |
Dec-24 |
100 |
8 |
100 |
- |
- |
|
H |
Feb-24 |
Feb-25 |
130 |
9 |
130 |
- |
- |
|
I |
May-24 |
Aug-24, extended to Sep-24 |
853 |
52 |
853 |
- |
- |
|
J |
Aug-24 |
Sep-25 |
1,870 |
115 |
1,870 |
34 |
110 |
|
Total convertible notes payable |
$4,023 |
$331 |
$4,023 |
$180 |
$785 |
||
Convertible notes payable A through H have a stated interest of 8% and no default interest rate. Convertible notes payable I and J have no contractually stated interest rate, were issued with a 10% discount, and will begin to accrue 2% cash interest per month upon an event of default.
Convertible notes payable A through G are automatically contingently convertible into shares of the Company’s common stock upon an initial public offering. The conversion price applicable to such conversion is 75% of the initial public offering price.
Convertible note payable H is automatically convertible into shares of the Company’s common stock at the time of an initial public offering. The conversion price applicable to such conversion is 70% of the initial public offering price.
Convertible notes payable I and J are automatically convertible into shares of the Company’s common stock at the time of an initial public offering (“Mandatory Conversion”), or at the option of the holder if the convertible note payable remains outstanding after December 31, 2024, and the holder gives written notice on or before January 31, 2025 that it elects to convert the principal and unpaid interest into shares of the Company’s common stock (“Optional Conversion”). The conversion price applicable to the Mandatory Conversion is 45% of the initial public offering price. The conversion price applicable to the Optional Conversion is either, at the option of the holder 1) $1.80 or 2) as determined based on a $15.5 million valuation of the Company. Convertible notes payable I was settled during 2025 through a separate subsequent amendment whereby Creatd issued the counterparty units of Creatd’s common stock as payment in full for outstanding balances due (see Settlement section below). The holder of convertible note payable J did not elect the Optional Conversion and this instrument remains outstanding and in default as of December 31, 2025.
The aggregate unpaid principal and accrued interest balances of the Convertible Notes outstanding as of December 31, 2025, was $965 thousand, compared to an aggregate fair value of $964 thousand, a difference of $1 thousand. The aggregate unpaid principal and accrued interest balances of the Convertible Notes outstanding as of December 31, 2024, was $4,354 thousand, which is the same the fair value of $4,354 thousand. The fair values based on using a probability-weighted expected return model reflecting the Company's financial condition, as discussed under Fair Value Measurement above.
Modifications
During 2024, convertible notes payable A, B, C1, C2 and I were amended to extend their maturity dates. The Company analyzed these amendments pursuant to ASC 470-50, Debt-Modifications Extinguishments and ASC 470-60, Troubled Debt Restructuring, and determined that convertible note payable C2 qualified as a debt modification as the change in terms were not substantially different, and all other convertible note payable amendments qualified as troubled debt restructurings, as the Company was experiencing financial difficulty, and those creditors had granted a concession. The concession granted consisted of an extension of the maturity dates of convertible notes payable A, B, C1, and I without additional consideration or an increase in the stated interest rate commensurate with the Company’s credit risk. The Company accounted for the effect of the modification to convertible note payable C2 prospectively through revising the effective interest rate of 7.2%. The Company accounted for the effect of the debt restructuring of convertible notes payable A, B, C1, and I by revising the respective effective interest rates prospectively which ranged from 0% to 30.0%.
Settlements
In connection with the Creatd’s acquisition of the Company in 2025, Creatd undertook a strategic debt restructuring in which it offered the Company’s debtholders the ability to settle their debt instrument held by the Company with equity units of Creatd’s preferred stock and warrants. Convertible note payable holders B, C1, D2, E2, and G through I accepted Creatd’s offer. All outstanding amounts owed, including principal and accrued interest, were settled resulting in the Company recording a capital contribution to additional paid in capital based on the carrying values at the time of settlement. This amount is recorded as a contribution to capital from parent for settlement of third party debt within the consolidated statement of stockholders’ deficit.
Defaults
Convertible notes payable A through G and I, were in default as of December 31, 2024. All convertible notes payable that remained outstanding as of December 31, 2025 were in default.
Notes payable
Government loan
The Company received a loan in 2020 totaling $64 thousand from the United States’ Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act. This government loan accrues interest at 3.8% per annum. The balance of principal and interest will be fully repaid thirty years from the date the loan was received. Future payments of $4 thousand will be made each year from 2022 onwards until the principal balance is fully repaid, with amounts first applied to any accrued interest. The balance of this SBA loan was approximately $64 thousand and $64 thousand at December 31, 2025 and 2024, respectively.
Automotive loan
The Company purchased a vehicle in 2022 and obtained a vehicle financing loan of $99 thousand. This loan bears interest at 4.8% per annum and is secured by the vehicle purchased. The Company makes monthly payments for a period of seventy-five months representing total annual payments of $18 thousand between 2023 and 2028.
On August 8, 2025, the Company executed a settlement agreement with the lender, who agreed to settle the automotive loan with an outstanding balance of $60 thousand for $50 thousand and forgive the remaining balance of $10 thousand. The Company used the proceeds from the disposed vehicle of $50 thousand (see Note 3) to settle the automotive loan. The difference between the carrying amount of the automotive loan of $60 thousand and the settlement amount of $50 thousand was recognized as a gain of $10 thousand, which is presented within other income (expense), net in the consolidated statements of operations. The balance of this loan was $0 and $63 thousand at December 31, 2025 and 2024, respectively.
Aircraft loans
The following notes payable were issued as part of the strategic financing for the acquisition of a Cirrus Jet (see Note 3 above) and included the following amounts (in thousands):
|
December 31, 2024 |
December 31, 2025 |
||||||
|
Instrument |
Issue Date (Month – Year) |
Maturity Date, as extended (Month – Year) |
Principal Amount |
Accrued Interest |
Ending Balance |
Accrued Interest |
Ending Balance |
|
Loan A |
Nov-23 |
Jan-24 |
$100 |
$14 |
100 |
$26 |
$100 |
|
Loan B |
Nov-23 |
Feb-24 |
200 |
27 |
200 |
52 |
200 |
|
Loan C |
Nov-23 |
Nov-30 |
2,800 |
14 |
2,479 |
- |
- |
|
Total aircraft loans |
$3,100 |
$55 |
$2,779 |
$78 |
$300 |
||
Loan C had a security interest in the Cirrus Jet, and was payable in equal monthly installments of principal and interest in the amount of $42 thousand until paid in full. The Company had the right to prepay the note payable, in whole or in part, at any time, without penalty. The Company sold the aircraft during 2025 (see Note 3) and used the proceeds to repay the $2.8 million note payable. A $0.4 million gain on settlement of Loan C was recognized under gain on extinguishment of debt in the consolidated statements of operations.
All the notes payable were in default as of December 31, 2024.
Jaisun Garcha loans
On May 18, 2023, the Company issued a note payable with a principal balance of $50 thousand to Jaisun Garcha. The note payable accrued interest at 12% per annum and was payable on August 1, 2023. The maturity date was extended to October 1, 2023.
On July 17, 2023, the Company issued an additional note payable with a principal balance of $100 thousand to Jaisun Garcha. The note payable accrued interest at 5% per annum and was payable on October 1, 2023. The maturity date was extended to February 1, 2024.
Jaisun Garcha was the Chief Financial Officer of the Company in FY 2023 and left the Company in FY 2024. The notes payable had an outstanding balance of $167 thousand, including $17 thousand in interest, and $112 thousand, including $28 thousand in interest, as of December 31, 2024 and 2025, respectively. Both notes payable issued were in default as of December 31, 2024 and 2025.
Notes payable due to related parties
The Company’s balance of notes payable due to related parties is as follows (in thousands):
|
December 31, 2024 |
December 31, 2025 |
||||||
|
Instrument |
Issue Date (Month – Year) |
Maturity Date, as extended (Month – Year) |
Principal Amount |
Accrued Interest |
Ending Balance |
Accrued Interest |
Ending Balance |
|
Marc Sellouk |
Feb-25 |
4/2/2025 (Ongoing) |
$ 365 |
$ 82 |
$ 284 |
$ - |
$ 365 |
Marc Sellouk was the Chief Executive Officer of the Company in FY 2024 and FY 2025. The notes payable due to Marc Sellouk accrued interest at a flat rate of $3 thousand per month throughout the year ended December 31, 2025, and was in default as of December 31, 2025.
Short-term loan payable
In June 2024, the Company entered into a merchant advance against future revenues in the amount of $140 thousand, with debt discount of $45 thousand, for net proceeds to the Company of $95 thousand. The Company is required to make weekly payments of approximately $4 thousand for 32 weeks. During 2025 the Company repaid the loan and recognized a gain of $77 thousand. The balance of this loan was zero and $88 thousand, net of discount of $18 thousand, at December 31, 2025 and 2024, respectively.
In July 2024, the Company entered into a loan payable in the amount of $109 thousand, with debt discount of $35 thousand, for net proceeds to the Company of $74 thousand. The Company is required to make weekly payments of $3 thousand for 40 weeks. During 2025, the Company repaid the loan and recognized a gain of $52 thousand. The balance of this loan was zero and $74 thousand, net of discount of $16 thousand, at December 31, 2025 and 2024, respectively.
The Company’s total future maturities of principal payments on long-term debt due in 2026 and thereafter consists of $60 thousand. The Company also has current debt due and payable as of December 31, 2025 as reported within the consolidate balance sheets.
Senior promissory note due to related party
On January 23, 2025, the Company entered into a senior promissory note with Creatd. The senior promissory note was issued to cover any expenses incurred by the Company during the period leading up to the acquisition by Creatd. Under the terms of the senior promissory note, the Company could draw down up to $2.0 million in funds with a 25.0% discount for a predefined period ending on June 30, 2025. The borrowings did not have a stated interest rate and were due on or prior to the acquisition of the Company by Creatd. If the acquisition did not occur, the borrowings were due on June 30, 2025. If the Company failed to make timely payments, voluntarily or involuntarily declared bankruptcy, or failed to comply with related covenants, the senior promissory note would be in default and a default interest rate of 2.0% would apply to all outstanding borrowings.
Through the acquisition date, the Company borrowed $368 thousand, net of debt discount of $122 thousand, under the senior promissory note. The outstanding balance of $368 thousand was forgiven by Creatd when it acquired the Company on February 27,2025, and the amount was recorded as a capital contribution under additional paid-in capital in the consolidated balance sheet as of December 31, 2025.
Due to parent
The Company received several cash advances from Creatd throughout the year ended December 31, 2025. The cash advances do not bear interest nor have a stated maturity date. Cash advances totaled $2.1 million as of December 31, 2025, and are recorded under due to parent in the consolidated balance sheets.
6. COMMITMENTS AND CONTINGENCIES
Note Payable Litigation
The Company was previously involved in a legal proceeding regarding a defaulted $200 thousand short-term note payable to Third Row LLC (Patrick Leung) originally executed in November 2023. In September 2025, judgment was entered against Flyte in favor of the noteholder. On March 11, 2026, the Company entered into a settlement and judgment satisfaction agreement to resolve the matter and satisfy the judgment. Pursuant to the agreement, the Company agreed to pay an aggregate settlement amount of $0.3 million in two installments of $150 thousand each, with the first installment made in March 2026 and the second installment made in May 2026. As of December 31, 2025, the Company recorded a liability of $0.3 million related to the settlement which is included within accrued expenses on the consolidated balance sheets.
Lease Dispute
The Company was involved in a lease occupancy dispute with a landlord, Futurewei Technologies Inc. The Company stopped making contractual payments and defaulted on the lease as of September 2024. The Company occupied the leased space up until January 2025 when the Company decided to abandon the leased space. At that date, the remaining $0.2 million right of use asset balance associated with this lease was recognized as accelerated lease expense and presented within selling, general, and administrative in the consolidated statements of operations. The Company and landlord reached an agreement in August 2025 to settle the $0.3 million outstanding lease liability for a final payment of $8 thousand. A $0.3 million gain on early lease termination was recognized and presented within selling, general, and administrative in the consolidated statements of operations.
Employment Litigation
The Company is involved in an employment dispute with a former employee alleging wrongful termination. The plaintiff asserts that the Company failed to provide proper and timely notice of termination, arguing that his employment contract was automatically renewed as a result. The matter is currently proceeding through arbitration. The Company disputes these allegations, maintaining that the plaintiff failed to perform his duties for a significant portion of the disputed period and abandoned efforts to renegotiate the employment contract. While the Company intends to vigorously defend itself, management evaluates contingent liabilities. As of December 31, 2025, the Company determined a loss was probable and reasonably estimable and recorded an estimated liability of $150 thousand and is included within accrued expenses on the consolidated balance sheets. No amounts had been paid related to this matter as of issuance date of these consolidated financial statements.
7. RELATED PARTIES
The amounts owed to related parties are summarized in the following table (in thousands):
|
December 31, 2025 |
December 31, 2024 |
|||||||
|
Accrued expenses due to related parties |
$ | 6 | $ | 467 | ||||
|
Accrued interest due to related parties |
- | 82 | ||||||
|
Notes payable due to related parties |
365 | 284 | ||||||
|
Lease liability due to related parties |
455 | - | ||||||
|
Total |
$ | 826 | $ | 833 | ||||
Accrued expenses due to related parties primarily relates to compensation and payroll expenses due to Marc Sellouk, CEO of the Company in FY 2024 and FY 2025, Thane Gevas, Executive Vice President of the Company in FY 2024, and Avner Nebel, Chief Operating Officer of the Company in FY 2024. As discussed in Note 5, accrued interest and notes payable due to related parties represents a loan due to Marc Sellouk. On March 30, 2026, Catheter Precision, Inc., which acquired the Company on March 9, 2026, promised to repay the outstanding note payable due to Marc Sellouk on behalf of the Company through a series of installment payments until it has been paid in full (see Note 12).
On September 9, 2025, the Company entered into an aircraft lease agreement with SEG Jets LLC (see Note 8). In connection with the lease agreement, the Company paid $95 thousand to SEG Jets LLC and recorded an outstanding lease liability of $455 thousand. On February 11, 2026, and March 16, 2026, the Company entered into two separate, additional aircraft lease agreements with SEG Jets LLC and promised to pay $22 thousand and $25 thousand per month for the right to use each aircraft over 24 months, respectively (see Note 12).
8. LEASES
Office Leases
In July 2021, the Company entered into a lease agreement for an office suite located at 540 West 26th Street, New York, New York 10001. The lease began on August 2021 and expired on August 2024. The Company decided to sublease this space starting in December 2021. The Company generated other income of $98 thousand from subleasing office space during the year ended December 31, 2024 which is presented within other income in the consolidated statements of operations. The subleased office space agreement expired on August 31, 2024.
In August 2024, the Company entered into a lease agreement for a commercial office space located at 7 Times Square, New York, NY. The lease term began on August 15, 2024 with an expiration date of February 27, 2026. The monthly lease payment under this agreement was $13 thousand. The lease incremental borrowing rate was 7%. In July 2025, the Company entered into a settlement agreement with the lessor, Futurewei Technologies, Inc., pursuant to which the parties agreed to terminate the lease and resolve all outstanding obligations (see Note 6). In connection with the termination, the Company closed its New York City office. As of December 31, 2025, the lease has been fully terminated and is no longer in effect.
Hangar & Office Leases
In August 2021, the Company entered into a lease agreement for hangar #7 and an office space located at 7110 Republic Airport, Farmingdale, NY 11735. The lease term began in August 2021 which an expiration in August 2024. In August 2024, the Company entered into a lease amendment which extended the lease to August 31, 2027. The monthly lease payment under the amendment lease agreement was $3 thousand for the first four months and $6 thousand thereafter, and the lease incremental borrowing rate was 7%.
In December 2023, the Company entered into a lease agreement for hangar #4 and an office space located at 7110 Republic Airport, Farmingdale, NY 11735. The lease term began in December 2023 for the hangar and January 2024 for the office space and was to expire 36 months later. In October 2024, the Company decided to terminate the lease early.
Aircraft Leases
On June 12, 2025, the Company entered into an exclusive aircraft lease agreement pursuant to which Ponderosa Air LLC leased a Cirrus Vision Jet SF50 aircraft bearing U.S. registration number N116PB from a related party. The lease term is two months with an expiration on August 12, 2025. The lease provides for monthly base rent payable in advance, a security deposit, and additional hourly maintenance charges, and is structured as a dry lease with the Company retaining operational control of the aircraft during the lease term under FAA Part 135 regulations. The monthly lease payment under this agreement was $54,000. The lease expired in August 2025 and is no longer in effect as of the date of this filing.
On September 9, 2025, the Company entered into an exclusive aircraft lease agreement pursuant to which Ponderosa Air LLC leased a Cirrus Vision Jet SF50 aircraft bearing U.S. registration number N25MG from an unaffiliated lessor. The lease term is 24 months with an expiration on August 9, 2027. The lease provides for monthly base rent payable in advance, a security deposit, and additional hourly maintenance charges, and is structured as a dry lease with the Company retaining operational control of the aircraft during the lease term under FAA Part 135 regulations. The monthly lease payment under this agreement was $24 thousand. The lease incremental borrowing rates was 5.5%.
Balance sheet information related to the Company’s leases is presented below (thousands):
|
December 31, 2025 |
December 31, 2024 |
|||||||
|
Operating lease right-of-use assets, net |
$ | 557 | $ | 340 | ||||
|
Current portion of operating lease liabilities |
$ | 332 | $ | 211 | ||||
|
Operating lease liabilities |
234 | 178 | ||||||
|
Total operating lease liabilities |
$ | 566 | $ | 389 | ||||
The following provides details of the Company’s operating lease expense and cash paid (thousands):
|
December 31, 2025 |
December 31, 2024 |
|||||||
|
Operating lease expense |
$ | 323 | $ | 397 | ||||
|
Cash paid for leases |
$ | 377 | $ | 350 | ||||
Other information related to leases is presented below:
|
December 31, 2025 |
December 31, 2024 |
|||||||
|
Operating Leases Term Rates |
||||||||
|
Weighted average remaining lease term (in years) |
1.7 | 1.7 | ||||||
|
Weighted average discount rate - operating leases |
5.8 | % | 6.3 | % | ||||
As of December 31, 2025, the expected annual minimum lease payments of the Company’s operating lease liabilities were as follows (thousands):
|
Years ending December 31: |
Operating Leases |
Operating Leases |
||||||
|
2026 |
$ | 355 | $ | 173 | ||||
|
2027 |
238 | 694 | ||||||
|
2028 |
- | 47 | ||||||
|
Total minimum lease payments |
$ | 593 | $ | 914 | ||||
|
Less effects of discounting |
(27) | (525 | ) | |||||
|
Present value of future minimum lease payments |
$ | 566 | $ | 389 | ||||
Sale Leaseback Transactions
On March 5, 2024, the Company entered into a leaseback arrangement for a plane for a term expiring April 25, 2034. The transaction met the criteria for a sale under ASC 842, Leases and ASC 606, Revenue from Contracts with Customers and the leaseback was determined to be an operating lease. The Company recognized a prepaid right-of-use asset of $23 thousand based on the estimated market rate for the lease (see Note 3).
On February 11, 2025, the Company entered into a leaseback arrangement for a plane for a term expiring June 1, 2025. The transaction met the criteria for a sale under ASC 842, Leases and ASC 606, Revenue from Contracts with Customers and the leaseback was determined to be an operating lease. The Company recognized a prepaid right-of-use asset of $325 thousand based on the estimated market rate for the lease (see Note 3).
9. EQUITY
Common Stock
The Company is authorized to issue 100,000,000 shares of common stock, with a par value of $0.0001 per share. The Company had 1,000,000 and 796,745 common stock issued and outstanding as of December 31, 2025 and 2024, respectively. Common stockholders are entitled to one vote per share on all matters submitted to a vote of stockholders. There are no contractually stated rights entitling common stockholders to receive dividends, nor have any dividends have been declared or paid during the years ended December 31, 2025 and 2024.
On February 27, 2025, in connection with Creatd’s acquisition of the Company, the Company effected a recapitalization of its common stock, resulting in 800,200 shares of fully paid restricted common stock being issued to Creatd. Accordingly, all references to share and per share amounts for all periods presented in the consolidated financial statements have been retrospectively recasted to reflect this recapitalization event.
On September 9, 2025, the Company issued 199,800 fully paid restricted common stock representing 19.98% ownership interest to SEG Jets LLC in exchange for services rendered in the form of strategic business cooperation.
Stock-Based Compensation
2021 Equity Incentive Plan
On June 16, 2021, the Company’s Board of Directors and stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”), which provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards, and other equity-based awards to the Company’s employees, directors, and consultants. Restricted stock units granted under the 2021 Plan to employees, directors, and consultants generally vest quarterly over a one-year period, two-year period, or as determined by the Committee of the Board of Directors (the “Committee”). At the discretion of the Committee, holders of restricted stock units have the right to receive an amount equal to the cash or stock dividends paid to common stockholders. As of December 31, 2025 and December 31, 2024, 961,179 shares of common stock were reserved for issuance pursuant to the 2021 Plan.
Restricted Stock Units
A summary of the restricted stock units activity for the year ended December 31, 2025, is presented below:
|
Weighted |
||||||||
|
Average |
||||||||
|
Restricted |
Grant Date |
|||||||
|
Stock Units |
Fair Value |
|||||||
|
Outstanding at December 31, 2024 |
13,954 | $ | 11.46 | |||||
|
Granted |
- | - | ||||||
|
Vested |
3,455 | $ | 11.46 | |||||
|
Cancelled/forfeited |
10,499 | - | ||||||
|
Outstanding at December 31, 2025 |
- | $ | - | |||||
On February 27, 2025, in connection with its acquisition of the Company, Creatd cancelled all outstanding equity awards of the Company. Accordingly, the Company accelerated the recognition of stock-based compensation expense for the cancelled awards. Stock-based compensation expense for the years ended December 31, 2025 and 2024 was $3.0 million and $490 thousand, respectively. Stock-based compensation expense is recorded in selling, general and administrative expenses in the consolidated statements of operations.
There was no unrecognized estimated stock-based compensation as of December 31, 2025.
10. SERVICE REVENUE
The following table summarizes the Company’s disaggregated revenue by service offering (thousands):
|
For the Year Ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
Hops |
$ | 638 | $ | 52 | ||||
|
Luxe |
348 | 654 | ||||||
|
Total service revenue |
$ | 986 | $ | 706 | ||||
Deferred Revenue
Deferred revenue is an obligation to transfer services to a customer for which the Company has already received consideration. Upon receipt of a prepayment from a customer for all or a portion of the transaction price, the Company initially recognizes a contract liability. The contract liability is settled, and revenue is recognized when the Company satisfies its performance obligation to the customer at a future date. The following table summarizes the Company’s deferred revenue (thousands):
|
For the Year Ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
Deferred revenue, beginning of period |
$ | 34 | $ | 75 | ||||
|
Revenue recognized in the year ended related to amounts included in deferred revenue at the beginning of the period |
(34 | ) | (75 | ) | ||||
|
Revenue deferred, net of revenue recognized in contracts in the respective period |
35 | 34 | ||||||
|
Deferred revenue, end of period |
$ | 35 | $ | 34 | ||||
The Company expects the balance of deferred revenue to be recognized within the next 12 months.
Revenue Contract Liabilities
The Company has recorded revenue contract liabilities related to future payments due to Luxe third-party flight operators that are associated with the advanced amounts collected from Luxe customers. Revenue contract liabilities total $132 thousand and $308 thousand for the year ended December 31, 2025 and 2024, respectively and are recorded within accrued expenses on the consolidated balance sheets.
11. TAXES
The income tax expense (benefit) for the years ended December 31, 2025 and 2024, was as follows (in thousands):
|
For the Year Ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
Current |
||||||||
|
Federal |
$ | — | $ | — | ||||
|
State |
— | — | ||||||
| — | — | |||||||
|
Deferred |
||||||||
|
Federal |
— | — | ||||||
|
State |
— | — | ||||||
| — | — | |||||||
|
Income tax expense |
$ | — | $ | — | ||||
A reconciliation of the differences between the U.S. statutory federal income tax rate and the effective tax rate as provided in the consolidated statements of operations is as follows:
|
For the Year Ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
U.S. federal statutory rate |
21.0 | % | 21.0 | % | ||||
|
State taxes, net of federal benefit |
0.6 | % | 1.8 | % | ||||
|
Stock-based compensation |
(12.4 | )% | (0.0 | )% | ||||
|
Other permanent differences |
(1.2 | )% | (0.1 | )% | ||||
|
Change in valuation allowance |
(8.0 | )% | (22.7 | )% | ||||
|
Effective tax rate |
0.0 | % | 0.0 | % | ||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the Company’s deferred tax assets and liabilities as of December 31, 2025 and 2024 were as follows:
|
December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
Deferred tax assets: |
||||||||
|
Net operating loss carryforwards |
$ | 1,894 | $ | 1,511 | ||||
|
Fixed asset basis |
30 | 51 | ||||||
|
Charitable contributions |
4 | 4 | ||||||
|
Operating lease liabilities |
142 | 38 | ||||||
|
Total gross deferred tax assets |
2,070 | 1,604 | ||||||
|
Deferred tax liabilities: |
||||||||
|
Fixed asset basis |
(13 | ) | (36 | ) | ||||
|
Operating lease right-of-use assets |
(127 | ) | (48 | ) | ||||
|
Total gross deferred tax liabilities |
(140 | ) | (84 | ) | ||||
|
Valuation allowance |
(1,930 | ) | (1,520 | ) | ||||
|
Net deferred tax asset |
$ | — | $ | — | ||||
As of December 31, 2025, the Company had Federal Net Operating Loss (NOL) carryforwards of approximately $8.2 million and state and local NOL carryforwards of approximately $3.2 million. As of December 31, 2024, the Company had federal NOL carryforwards of approximately $6.5 million and state and local NOL carryforwards of approximately $2.7 million.
The valuation allowance relates to deferred tax assets for certain items that will be deductible for income tax purposes under very limited circumstances and for which the Company believes it is not more likely than not that it will realize the associated tax benefit. However, in the event that the Company determines that it would be able to realize more or less than the recorded amount of net deferred tax assets, an adjustment to the deferred tax asset valuation allowance would be recorded in the period such a determination is made. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax planning strategies in making this assessment. Based on the Company’s history of losses and uncertainty regarding the realization of future taxable income, the Company recorded a full valuation allowance against its net deferred tax assets as of December 31, 2025 and 2024. The valuation allowance increased by approximately $0.4 million during the year ended December 31, 2025 and increased by approximately $0.5 million during the year ended December 31, 2024.
Utilization of the Company’s net operating loss carryforwards may be subject to substantial annual limitations under Section 382 of the Internal Revenue Code and similar state provisions due to ownership changes that have occurred or may occur in the future. Such limitations could result in the expiration of net operating loss carryforwards before they are utilized. During 2025, the Company experienced an ownership change for purposes of Section 382. Accordingly, utilization of certain pre-change NOL carryforwards is subject to an estimated annual limitation of approximately $0.5 million for federal income tax purposes. The annual limitation may result in the expiration of NOL carryforwards before they are fully utilized.
The Company evaluates its tax positions and has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. The Company did not recognize any material interest or penalties related to income taxes for the years ended December 31, 2025 and 2024.
The Company files income tax returns as prescribed by tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state and local jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction. The Company has no open income tax audits with any taxing authority as of December 31, 2025. The Company is still subject to income tax examinations by U.S. federal and state tax authorities for the years 2022 through 2025. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss carryforward amount.
12. SUBSEQUENT EVENTS
Sale of Fly Flyte, Inc.
On February 6, 2026, SEG Jets LLC entered into an Acquisition Purchase Agreement with Catheter Precision, Inc., whereby Catheter Precision, Inc. agreed to acquire 19.98% of the issued and outstanding shares of common stock of Fly Flyte, Inc. held by SEG Jets.
On March 9, 2026, Catheter Precision, Inc. entered into an Acquisition Purchase Agreement with Creatd, Inc. and acquired the remaining 80.02% of the issued and outstanding shares of common stock of Fly Flyte, Inc. and all of its wholly owned consolidated subsidiaries. As a result of these transactions, Catheter Precision, Inc. owns 100% of the issued and outstanding common stock of Fly Flyte, Inc. and its wholly owned consolidated subsidiaries.
Aircraft Leases
On February 11, 2026, the Company entered into a long-term aircraft lease agreement with SEG Jets LLC for one Cirrus Design Corp. SF50 aircraft N696MR. The lease term is 2 years and commenced at the time of lease execution when the Company took possession of the aircraft. The lease requires monthly base rent payments of approximately $22 thousand resulting in a total future minimum lease commitment of approximately $0.5 million over the lease term. A non-refundable security deposit of $22 thousand was also required at the execution date which may be applied to rents owed as an in-substance prepaid lease payment. The lease was structured as a dry lease, with the Company retaining operational control of the aircraft during the lease term under FAA Part 135 regulations.
On March 16, 2026, the Company entered into a long-term aircraft lease agreement with SEG Jets LLC for one Cirrus Design Corp. SF50 aircraft N895WT. The lease term is 2 years and commenced at the time of lease execution when the Company took possession of the aircraft. The lease requires monthly base rent payments of approximately $25 thousand resulting in a total future minimum lease commitment of approximately $0.6 million over the lease term. A non-refundable security deposit of $25 thousand was also required at the execution date which may be applied to rents owed as an in-substance prepaid lease payment. The lease was structured as a dry lease, with the Company retaining operational control of the aircraft during the lease term under FAA Part 135 regulations.
Exhibit 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
On February 6, 2026, Catheter Precision, Inc., a Delaware corporation ("VTAK") entered into an Acquisition Purchase Agreement with SEG Jets, whereby VTAK agreed to acquire 19.98% of the issued and outstanding shares of common stock of Fly Flyte, Inc. (FLYTE Interests), a New York corporation ("FLYTE") , in consideration for VTAK agreeing to issue and sell in a private placement 5,250 shares of VTAK’s Series D Preferred Stock representing $5,250,000 of stated value of Series D Preferred Stock.
On March 9, 2026, VTAK, entered into a Securities Purchase Agreement (the "Purchase Agreement"), by and between VTAK and Creatd, Inc., a Nevada corporation ("Seller"), pursuant to which, subject to the terms and conditions set forth therein, Seller will sell to VTAK, and VTAK will purchase from Seller, (i) 800,200 shares of the issued and outstanding shares of common stock, par value $0.001 per share, of Fly Flyte (the "Shares"), representing 80.02% of the issued and outstanding common stock of Fly Flyte, and (ii) 100% of the membership interests (the "Membership Interests") of Ponderosa Air, LLC, a New York limited liability company ("Ponderosa") (collectively, the "Transaction"). Upon consummation of the Transaction, VTAK will own 100% of (x) the issued and outstanding common stock of Fly Flyte and (y) the Membership Interests of Ponderosa. Prior to the Transaction, VTAK owned 199,800 shares of Fly Flyte common stock, representing 19.98% of the issued and outstanding common stock of Fly Flyte.
The Purchase Agreement provides that the aggregate purchase price for the Shares and the Membership Interests shall be $11,554,827 (the "Purchase Price"), comprised of: (i) $5,776,827 in cash, payable as follows: (A) $776,827 due within three (3) Business Days of the Closing Date (the "Initial Closing Date Payment"); and (B) $5,000,000 payable pursuant to that certain promissory note (the "Promissory Note"), in monthly installments from April 2026 through December 2026; and (ii) $5,778,000 to be satisfied by the issuance to Seller of 5,778 shares of VTAK's Series D Preferred Stock, par value $0.0001 per share and a stated value of $1,000 per share (the "Preferred Shares"), within three (3) Business Days following and contingent upon receipt of shareholder approval in accordance with all applicable laws, New York Stock Exchange ("NYSE") rules and regulations, and VTAK's organizational documents (the "Shareholder Approval"), having the rights, preferences and privileges set forth in VTAK's Certificate of Designations.
Private Placements
On February 6, 2026, VTAK entered into a securities purchase agreement with certain accredited investors for a private placement financing and issued an aggregate of (i) 392,608 shares of the Company's common stock, par value $0.0001 per share, at a per share purchase price of $1.43 and (ii) 1,617 shares of newly designated Series C-1 Convertible Preferred Stock par value $0.0001 per share, with a stated value of $1,000 per share for gross proceeds of $2.2 million, net of $0.2 million in issuance costs (the “February Private Placement”).
On March 9, 2026, VTAK entered into a securities purchase agreement, to fund the Transaction, with certain accredited investors for the issuance and sale of 1,853 shares of Series C-1 Convertible Preferred Stock, initially convertible into up to 1,295,805 shares of Common Stock at an initial conversion price of $1.43 per share, for aggregate gross proceeds of $1,853,000 (collectively, with the February Private Placement, the “Private Placements”).
Basis for Pro Forma Presentation
The unaudited pro forma combined financial information was prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma combined balance sheet data assumes the Transaction took place on December 31, 2025 and combines the audited VTAK and Fly Flyte historical balance sheets on December 31, 2025. The unaudited pro forma combined statement of operations for the year ended December 31, 2025 combines the audited consolidated statement of operations of VTAK and Fly Flyte for the year ended December 31, 2025 giving effect to the Transaction as if it had been consummated on January 1, 2025, the beginning of the earliest period presented.
A pro forma combined balance sheet as of March 31, 2026 has not been presented because the effects of the Transaction are already reflected in the Company's consolidated balance sheet as of March 31, 2026 included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026. An unaudited pro forma combined statement of operations for the three months ended March 31, 2026 has not been presented because the Transaction was consummated early in the Company's 2026 fiscal year, and the unaudited pro forma combined statement of operations for the year ended December 31, 2025, together with the Company's historical results of operations for the quarterly period ended March 31, 2026, are not materially affected by the omission of separate pro forma interim statement of operations information.
The unaudited pro forma combined financial information and corresponding notes to the unaudited pro forma combined financial information were derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes:
|
● |
The historical audited consolidated financial statements of VTAK as of and for the fiscal year ended December 31, 2025, as included in VTAK's Annual Report on Form 10-K filed with the SEC on March 31, 2026, which is incorporated by reference herein; |
|
● |
The historical audited consolidated financial statements of Fly Flyte as of and for the fiscal year ended December 31, 2025, as included herein; |
The unaudited pro forma combined financial information gives effect to the accounting for the Transaction (the "Transaction Accounting Adjustments" or "Adjustments").
The following unaudited pro forma combined financial information gives effect to the Transaction, which includes adjustments for the following:
|
● |
Adjustments to reflect purchase accounting under ASC 805; |
|
● |
The Private Placements; and |
|
● |
Non-recurring transaction costs in connection with the Transaction. |
Accounting for the Transaction
The Transaction has been accounted for as a business combination using the acquisition method with VTAK assumed to be the accounting acquirer in accordance with Accounting Standards Codification 805, Business Combinations ("ASC 805"). Under this method of accounting, the consideration transferred has been allocated to Fly Flyte's and Ponderosa's assets acquired and liabilities assumed based upon their estimated fair values at the closing date. Any differences between the fair value of the consideration transferred and the fair value of the assets acquired, and liabilities assumed will be recorded as goodwill by VTAK.
Because VTAK obtained control of Fly Flyte through a series of equity interest acquisitions, by acquiring 19.98% and 80.02% on February 6, 2026 and March 9, 2026, respectively, the Transaction is accounted for as a business combination achieved in stages under ASC 805.
In a business combination achieved in stages, ASC 805 requires the acquirer to remeasure its previously held equity interest in the acquiree to its acquisition-date fair value, with any resulting gain or loss recognized in earnings on the acquisition date. Furthermore, the fair value of the previously held equity interest is included in the measurement of consideration transferred. See Note 3.
The pro forma transaction accounting adjustments are based upon currently available information and certain assumptions that VTAK's management believes are reasonable and factually supportable as of the date of this filing. The unaudited pro forma combined financial statements are presented for informational purposes only and are not intended to present or be indicative of what the results of operations or financial position would have been had the events actually occurred on the date indicated, nor are they meant to be indicative of future results of operations or financial position for any future period or as of any future date. Future results may differ significantly from the pro forma amounts presented. The unaudited pro forma combined financial statements do not include any adjustments not otherwise described herein; they do not give effect to the potential impact of current financial conditions, or any anticipated revenue enhancements, cost savings, operating synergies or dis-synergies that may result from the Transaction. In the opinion of VTAK's management, all adjustments necessary to present fairly the pro forma financial information have been made.
Unaudited Pro Forma Combined Balance Sheets
(in thousands)
|
As of December 31, 2025 |
||||||||||||||||||||||
|
Catheter Precision, Inc. (Historical) |
Fly Flyte, Inc. (Historical) |
Transaction Adjustments |
Private Placements |
Pro Forma Combined |
||||||||||||||||||
|
Assets |
||||||||||||||||||||||
|
Current assets: |
||||||||||||||||||||||
|
Cash and cash equivalents |
$ | 88 | $ | 26 | $ | (1,239 | ) |
A |
$ | 3,731 |
D |
$ | 2,606 | |||||||||
|
Accounts receivable, net |
155 | 2 | - | - | 157 | |||||||||||||||||
|
Inventories |
86 | - | - | - | 86 | |||||||||||||||||
|
Prepaid expenses and other current assets |
61 | - | - | - | 61 | |||||||||||||||||
|
Total current assets |
390 | 28 | (1,239 | ) | 3,731 | 2,910 | ||||||||||||||||
|
Property and equipment, net |
64 | 56 | - | - | 120 | |||||||||||||||||
|
Operating lease right-of-use assets, net |
162 | 557 | - | - | 719 | |||||||||||||||||
|
Intangible assets, net |
15,236 | - | 7,450 |
A |
- | 22,686 | ||||||||||||||||
|
Goodwill |
- | - | 10,484 |
A |
- | 10,116 | ||||||||||||||||
| (368 | ) |
B |
||||||||||||||||||||
|
Other non-current assets |
8 | 52 | - | - | 60 | |||||||||||||||||
|
Total assets |
$ | 15,860 | $ | 693 | $ | 16,327 | $ | 3,731 | $ | 36,611 | ||||||||||||
|
Liabilities and Stockholder's Equity (Deficit) |
||||||||||||||||||||||
|
Current liabilities: |
||||||||||||||||||||||
|
Accounts payable |
$ | 1,492 | $ | 55 | $ | - | $ | - | $ | 1,547 | ||||||||||||
|
Accrued expenses |
1,697 | 783 | (150 | ) |
A |
- | 2,380 | |||||||||||||||
| 50 |
C |
|||||||||||||||||||||
|
Accrued expenses due to related parties |
- | 6 | - | - | 6 | |||||||||||||||||
|
Deferred revenue |
- | 35 | - | - | 35 | |||||||||||||||||
|
Due to parent |
- | 2,079 | (2,079 | ) |
A |
- | - | |||||||||||||||
|
Current portion of notes payable due to related parties |
- | 365 | - | - | 365 | |||||||||||||||||
|
Current portion of notes payable |
- | 450 | - | - | 450 | |||||||||||||||||
|
Convertible notes payable, at fair value |
298 | 964 | - | - | 1,262 | |||||||||||||||||
|
Short-term notes payable of variable interest entities due to related parties |
306 | - | - | - | 306 | |||||||||||||||||
|
Current portion of royalties payable due to related parties |
51 | - | - | - | 51 | |||||||||||||||||
|
Current portion of operating lease liabilities |
63 | 332 | - | - | 395 | |||||||||||||||||
|
Total current liabilities |
3,907 | 5,069 | (2,179 | ) | - | 6,797 | ||||||||||||||||
|
Royalties payable due to related parties |
792 | - | - | - | 792 | |||||||||||||||||
|
Operating lease liabilities |
101 | 234 | - | - | 335 | |||||||||||||||||
|
Notes payable of variable interest entities, net of discount |
1,330 | - | - | - | 1,330 | |||||||||||||||||
|
Notes payable due to related parties |
1,748 | - | - | - | 1,748 | |||||||||||||||||
|
Notes payable |
- | 64 | - | - | 64 | |||||||||||||||||
|
Promissory note payable, net of discount |
- | - | 4,788 |
A |
- | 4,788 | ||||||||||||||||
|
Deferred consideration |
- | - | 8,726 |
A |
- | 8,726 | ||||||||||||||||
|
Deferred tax liability |
1,331 | - | 368 |
B |
- | 1,699 | ||||||||||||||||
|
Total liabilities |
9,209 | 5,367 | 11,703 | - | 26,279 | |||||||||||||||||
|
Stockholders’ equity (deficit): |
||||||||||||||||||||||
|
Preferred stock |
- | - | - | - | - | |||||||||||||||||
|
Common stock |
- | - | - | - | - | |||||||||||||||||
|
Additional paid‑in capital |
316,589 | 12,493 | (12,493 | ) |
A |
3,731 |
D |
320,320 | ||||||||||||||
|
Accumulated deficit |
(309,535 | ) | (17,167 | ) | 17,167 |
A |
- | (309,585 | ) | |||||||||||||
| (50 | ) |
C |
||||||||||||||||||||
|
Total stockholders’ equity (deficit) attributable to stockholders of Catheter Precision, Inc. |
7,054 | (4,674 | ) | 4,624 | 3,731 | 10,735 | ||||||||||||||||
|
Equity attributable to noncontrolling interests |
(403 | ) | - | - | - | (403 | ) | |||||||||||||||
|
Total stockholders’ equity (deficit) |
6,651 | (4,674 | ) | 4,624 | 3,731 | 10,332 | ||||||||||||||||
|
Total liabilities and stockholders’ equity (deficit) |
$ | 15,860 | $ | 693 | $ | 16,327 | $ | 3,731 | $ | 36,611 | ||||||||||||
See accompanying notes to the pro forma combined financial statements
Unaudited Pro Forma Combined Statements of Operations
(in thousands)
|
Year Ended December 31, 2025 |
|||||||||||||||||||||||||||
|
Catheter Precision, Inc. (Historical) |
Fly Flyte, Inc. (Historical) |
Reclass Adjustment |
Transaction Adjustments |
Private Placements |
Pro Forma Combined |
||||||||||||||||||||||
|
Revenues |
$ | 819 | $ | 986 | $ | - | $ | - | $ | - | $ | 1,805 | |||||||||||||||
|
Cost of revenues |
63 | 691 | - | - | - | 754 | |||||||||||||||||||||
|
Gross profit |
756 | 295 | - | - | - | 1,051 | |||||||||||||||||||||
|
Operating expenses: |
|||||||||||||||||||||||||||
|
Selling, general and administrative |
12,075 | 5,098 | 94 |
AA |
50 |
BB |
- | 17,317 | |||||||||||||||||||
|
Sales and marketing |
- | 94 | (94 | ) |
AA |
- | - | - | |||||||||||||||||||
|
Research and development |
862 | - | - | - | - | 862 | |||||||||||||||||||||
|
Acquired in-process research and development |
1,967 | - | - | - | - | 1,967 | |||||||||||||||||||||
|
Loss on impairment of intangible assets |
6,995 | - | - | - | - | 6,995 | |||||||||||||||||||||
|
Gain on disposal of assets |
- | (290 | ) | - | - | - | (290 | ) | |||||||||||||||||||
|
Depreciation and amortization |
- | 95 | - | 523 |
CC |
- | 618 | ||||||||||||||||||||
|
Total operating expenses |
21,899 | 4,997 | - | 573 | - | 27,469 | |||||||||||||||||||||
|
Operating loss |
(21,143 | ) | (4,702 | ) | - | (573 | ) | - | (26,418 | ) | |||||||||||||||||
|
Other income (expenses), net |
|||||||||||||||||||||||||||
|
Interest income |
34 | - | - | - | - | 34 | |||||||||||||||||||||
|
Interest expense |
(95 | ) | (95 | ) | - | (212 | ) |
DD |
- | (402 | ) | ||||||||||||||||
|
Interest expense due to related parties |
(186 | ) | (31 | ) | - | - | - | (217 | ) | ||||||||||||||||||
|
Change in fair value of royalties payable due to related parties |
5,709 | - | - | - | - | 5,709 | |||||||||||||||||||||
|
Change in fair value of convertible notes payable |
2 | (189 | ) | - | - | - | (187 | ) | |||||||||||||||||||
|
Gain on loan settlement |
- | 520 | - | - | - | 520 | |||||||||||||||||||||
|
Loss on litigation settlement |
- | (300 | ) | - | - | - | (300 | ) | |||||||||||||||||||
|
Loss on debt extinguishment |
(3,260 | ) | - | - | - | - | (3,260 | ) | |||||||||||||||||||
|
Net loss on trading debt securities |
(564 | ) | - | - | - | - | (564 | ) | |||||||||||||||||||
|
Other expenses, net |
(2 | ) | - | - | - | - | (2 | ) | |||||||||||||||||||
|
Total other income (expenses), net |
1,638 | (95 | ) | - | (212 | ) | - | 1,331 | |||||||||||||||||||
|
Loss from operations before income tax provision (benefit) |
(19,505 | ) | (4,797 | ) | - | (785 | ) | - | (25,087 | ) | |||||||||||||||||
|
Income tax provision (benefit) |
(1,810 | ) | - | - | - | - | (1,810 | ) | |||||||||||||||||||
|
Net loss |
(17,695 | ) | (4,797 | ) | - | (785 | ) | - | (23,277 | ) | |||||||||||||||||
|
Less: Net loss attributable to noncontrolling interests |
(512 | ) | - | - | - | - | (512 | ) | |||||||||||||||||||
|
Net loss attributable to stockholders of Catheter Precision, Inc. |
$ | (17,183 | ) | $ | (4,797 | ) | $ | - | $ | (785 | ) | $ | - | $ | (22,765 | ) | |||||||||||
|
Net loss per share, basic and diluted |
$ | (15.90 | ) | $ | - | $ | (15.45 | ) | |||||||||||||||||||
|
Weighted average common shares used in computing net loss per share, basic and diluted |
1,080,617 | 392,608 |
EE |
1,473,225 | |||||||||||||||||||||||
See accompanying notes to the pro forma combined financial statements
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Note 1. Basis of Presentation
The accompanying unaudited pro forma combined financial information was prepared in accordance with Article 11 of Regulation S-X, Pro Forma Financial Information, of the Securities Act. The historical information of VTAK and Fly Flyte is presented in accordance with GAAP.
The unaudited pro forma combined financial information is prepared using the acquisition method of accounting in accordance with the business combination accounting guidance under ASC 805, with VTAK as the accounting acquirer for the Transaction. Under ASC 805, assets acquired and liabilities assumed in a business combination are recognized and measured at the closing date fair value. Transaction costs associated with a business combination are expensed as incurred. The excess of consideration over the fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.
The unaudited pro forma combined financial information does not reflect any anticipated synergies or dis-synergies, operating efficiencies, or cost savings that may result from the integration costs that may be incurred. The pro forma adjustments represent VTAK's best estimates and are based upon currently available information and certain assumptions that VTAK believes are reasonable under the circumstances.
The unaudited pro forma combined financial information is provided for informational purposes only and may not be indicative of the operating results that would have occurred if the Transaction had been completed as of the dates set forth above, nor is it indicative of the future results of VTAK following the Transaction. In determining the estimate of fair values of assets acquired and liabilities assumed of Fly Flyte, VTAK used publicly available benchmarking information as well as a variety of other assumptions, including market participant assumptions. There can be no assurances that the valuations will not result in material changes to this purchase price allocation. Any increase or decrease in fair values of the net assets as compared with the unaudited pro forma combined financial information may change the amount of the total acquisition consideration allocated to goodwill and other assets and liabilities and may impact the unaudited pro forma combined statements of operations due to adjustments in the depreciation and amortization expense of the adjusted assets.
Note 2. Accounting Policies and Reclassifications
During the preparation of this unaudited pro forma combined financial information, VTAK management performed a preliminary review of Fly Flyte's financial information to identify differences in accounting policies compared to those of VTAK and differences in financial statement presentation compared to the presentation of VTAK. At the time of preparing the unaudited pro forma combined financial information, other than the adjustments described herein, VTAK is not aware of any other material differences. However, VTAK will continue to perform its detailed review of Fly Flyte's accounting policies. Upon completion of that review, differences may be identified between the accounting policies of VTAK and Fly Flyte that, when conformed, could have a material impact on the unaudited pro forma combined financial information.
Note 3. Transaction Adjustments to the Unaudited Pro Forma Combined Balance Sheet as of December 31, 2025
The adjustments included in the unaudited pro forma combined balance sheet as of December 31, 2025 are as follows:
|
A. |
Reflects the purchase consideration allocation adjustments to record Fly Flyte’s assets and liabilities at estimated fair value based on the consideration conveyed. The related adjustments to the statement of operations are discussed in the subsequent notes below. The purchase consideration was allocated among the identified net assets to be acquired. Goodwill is expected to be recognized as a result of the Transaction, which represents the excess fair value of consideration over the fair value of the underlying net assets of Flyte. This was considered appropriate based on the determination that the Transaction would be accounted for as a business acquisition under ASC 805. The estimates of fair value are based upon valuation assumptions, and are believed to be reasonable, but are inherently uncertain. As a result, actual results may differ from estimates, and the difference may be material. The primary area of estimate that is not yet finalized include the valuation of the identifiable intangible assets deferred income taxes. The allocation is dependent upon certain valuation and other studies that have not yet been completed. Accordingly, the pro forma purchase price allocation is subject to further adjustments as additional information becomes available and as additional analyses and final valuations are conducted. There can be no assurance that these additional analyses and final valuations will not result in significant changes to the estimates of fair value set forth below. |
The following is an estimate of the assets acquired and the liabilities assumed by VTAK in the Transaction, reconciled to the estimated purchase consideration with exception of property and equipment and leases. VTAK used the net book value of the property and equipment as the fair value has not yet been determined:
|
(in thousands) |
As of December 31, 2025 |
|||
|
Cash and cash equivalents |
$ | 26 | ||
|
Accounts receivable |
2 | |||
|
Property and equipment |
56 | |||
|
Operating lease right-of-use assets |
557 | |||
|
Other non-current assets |
52 | |||
|
Intangible assets |
7,450 | |||
|
Total assets |
$ | 8,143 | ||
|
Accounts payable |
55 | |||
|
Accrued expenses |
639 | |||
|
Deferred revenue |
35 | |||
|
Current portion of operating lease liabilities |
332 | |||
|
Current portion of notes payable |
450 | |||
|
Current portion of notes payable due to related parties |
365 | |||
|
Convertible notes payable, at fair value |
964 | |||
|
Notes payable |
64 | |||
|
Operating lease liabilities |
234 | |||
|
Deferred tax liability |
368 | |||
|
Net assets acquired |
4,637 | |||
|
Goodwill |
10,116 | |||
|
Fair value of consideration transferred |
$ | 14,753 | ||
The following is a summary of the purchase consideration:
|
(in thousands) |
As of December 31, 2025 |
|||
|
Cash consideration |
$ | 1,239 | ||
|
Fair value of promissory note |
4,788 | |||
|
Fair value of Series D Preferred Stock |
5,778 | |||
|
Fair value of existing equity interest (a) |
2,948 | |||
|
Fair value of consideration transferred |
$ | 14,753 | ||
|
(a) |
In accordance with ASC 805-10-25-10, VTAKs previously held equity interest in Fly Flyte was remeasured to its acquisition-date fair value, with the loss recognized in earnings on the acquisition date. The fair value of the previously held interest was estimated at $2.9 million based on the per-share price implied by the contemporaneous acquisition of the 80.02% interest from the Seller. This estimated remeasurement loss of approximately $2.3 million is non-recurring in nature and has not been reflected in the unaudited pro forma combined statement of operations. |
|
B. |
Reflects deferred income tax liabilities resulting from preliminary fair value adjustments. The estimate of deferred tax liabilities was determined based on the estimate of book and tax basis differences of the net assets acquired using the blended statutory rate of 24.7%, which was partially offset by the release of VTAK’s valuation allowance, as the deferred tax liability recognized in purchase accounting represents a source of future taxable income that supports realization of VTAK’s net operating loss carryforwards, resulting in an effective rate of 5.0% of the related fair value adjustments. The accounting for opening balance sheet deferred income taxes is preliminary. The estimates may differ from amounts ultimately calculated after completing a detailed analysis, and the difference could have a material effect on the unaudited pro forma combined financial information. |
|
C. |
Reflects the accrual of transaction costs incurred by VTAK in connection with the Transaction, consisting of legal fees. |
|
D. |
Reflects the net cash proceeds of $3.7 million from the issuance of 392,608 shares of Common Stock and 3,470 shares of Series C-1 Convertible Preferred Stock in connection with the Private Placements. |
Note 4. Adjustments to the Unaudited Pro Forma Combined Statement of Operations for Year Ended December 31, 2025
|
AA. |
Reflects the reclassification to Fly Flyte historical financial statements to conform to VTAKs financial statement presentation. |
|
BB. |
Reflects the nonrecurring transaction costs incurred by VTAK in connection with the Transaction, consisting of legal fees. |
|
CC. |
Reflects the amortization of the intangible assets. For purposes of the unaudited pro forma combined financial information, the intangible assets useful lives ranging from 5 to 15 years. |
|
DD. |
Reflects the accretion of the debt discount on the promissory note issued to the Seller under the effective interest method. The promissory notes nine-month installment schedule is assumed to have run from January 1, 2025 through approximately September 30, 2025; accordingly, the entire $0.2 million of debt discount amortizes within the year ended December 31, 2025. |
|
EE. |
Reflects the increase in shares of VTAKs Common Stock in connection with the February Private Placement. |