Sky Harbour Group Corp 10-Q for FY2026 Q3
Sky Harbour Group Corp (SKYH)
About this 10-Q
Sky Harbour Group Corp filed this 10-Q on November 10, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $10.58M
- up 44.8% from $7.3M a year earlier
- Net loss
- $72K
- compared with a net loss of $1.88M a year earlier
- Diluted EPS
- $0.00
- compared with -$0.06 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Commission File Number:
Sky Harbour Group Corporation
(Exact name of registrant as specified in its Charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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Westchester County Airport (Address of principal executive offices) | (Zip Code) |
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( Registrant’s telephone number, including area code | |
Securities registered pursuant to Section 12(b) of the Act: |
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Title of Class |
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common stock at an exercise price of $11.50 per share |
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. (See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act).
Large accelerated filer | ☐ |
| Accelerated filer | ☐ |
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| Smaller reporting company | ||
Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 4, 2026,
TABLE OF CONTENTS
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Item 1. |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
45 | |
Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
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| September 30, 2026 |
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| December 31, 2025 |
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Assets |
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Cash |
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Restricted cash |
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Restricted investments |
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Accounts receivable, prepaid expenses, and other assets |
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Cost of construction |
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Constructed assets, net |
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Right-of-use assets |
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Long-lived assets, net |
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Lease intangible assets, net |
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Total assets |
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Liabilities and equity |
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Accounts payable, accrued expenses and other liabilities |
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Operating lease liabilities |
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Loans payable and finance lease liabilities |
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Bonds payable, net of debt issuance costs and premiums |
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Warrants liability |
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Total liabilities |
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Commitments and contingencies (Note 18) |
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Stockholders’ equity |
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Preferred stock; $ par value; shares authorized as of September 30, 2026; issued and outstanding |
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Class A common stock, $ par value; shares authorized; and shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively |
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Class B common stock, $ par value; shares authorized; and shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive income |
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Total Sky Harbour Group Corporation stockholders’ equity |
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Non-controlling interests |
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Total equity |
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Total liabilities and equity |
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See accompanying Notes to Unaudited Consolidated Financial Statements
SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
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| Three months ended |
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| September 30, 2026 |
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| September 30, 2025 |
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Revenue: |
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Rental revenue |
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Fuel revenue |
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Total revenue |
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Expenses: |
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Campus operating expenses |
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Fuel expenses |
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Ground lease expenses |
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Depreciation and amortization |
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Pursuit and marketing expenses |
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Employee compensation and benefits |
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General and administrative expenses |
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Total expenses |
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Operating loss |
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Other (income) expense: |
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Interest expense |
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Unrealized gain on warrants |
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Other (income) expense |
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Total other income |
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Net (loss) income |
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Net loss attributable to non-controlling interests |
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Net income (loss) attributable to Sky Harbour Group Corporation shareholders |
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Loss per share |
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Basic |
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Diluted |
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Weighted average shares |
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Basic |
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Diluted |
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See accompanying Notes to Unaudited Consolidated Financial Statements
SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(Unaudited)
| | Three Months Ended | | | Nine Months Ended | | ||||||||||
| | September 30, 2026 | | | September 30, 2025 | | | September 30, 2026 | | | September 30, 2025 | | ||||
Net (loss) income | | $ | ( | ) | | $ | ( | ) | | $ | ( | ) | | $ | | |
Unrealized gains on available-for-sale securities | | | | | | | | | | | | | ||||
Realized gains on available-for-sale securities reclassified to the consolidated statements of operations | | |
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Total comprehensive (loss) income | | $ | ( | ) | | $ | ( | ) | | $ | ( | ) | | $ | | |
See accompanying Notes to Unaudited Consolidated Financial Statements
SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(Unaudited)
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| Class A |
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| Additional |
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| Accumulated Other |
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| Comprehensive |
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| Stockholders’ |
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| Controlling |
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| Total |
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| Amount |
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| Amount |
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| Capital |
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| Deficit |
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| Income (Loss) |
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| Interests |
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Balance at December 31, 2025 |
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Share-based compensation |
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Vesting of restricted stock units |
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| - |
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Shares withheld for payment of employee taxes |
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| - |
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Issuance of stock through ATM Facility, net of equity issuance costs |
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| - |
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Shares issued as debt issuance costs |
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Other comprehensive income |
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Net loss |
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Balance at March 31, 2026 |
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| $ |
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Share-based compensation |
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Vesting of restricted stock units |
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| - |
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| - |
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| - |
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| - |
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| - |
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Shares withheld for payment of employee taxes |
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| - |
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Issuance of stock through ATM Facility, net of equity issuance costs |
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Payment of equity issuance costs |
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Other comprehensive loss |
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Net loss |
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Balance at June 30, 2026 |
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| $ |
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| $ |
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Share-based compensation |
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Vesting of restricted stock units |
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| - |
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| - |
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Shares withheld for payment of employee taxes |
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| - |
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Issuance of stock through registered direct offerings, net of equity issuance costs |
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| - |
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Net income (loss) |
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| - |
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Balance at September 30, 2026 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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| $ |
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| $ |
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| $ |
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| Class A |
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| Class B |
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| Additional |
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| Accumulated Other |
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| Total |
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| Non- |
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| Total |
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| Common Stock |
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| Common Stock |
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| Paid-in |
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| Accumulated |
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| Comprehensive |
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| Stockholders’ |
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| Controlling |
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| Equity |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| Income (Loss) |
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| Equity |
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| Interests |
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Balance at December 31, 2024 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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| $ |
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Share-based compensation |
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| - |
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Vesting of restricted stock units |
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| - |
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| - |
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| - |
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| - |
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| - |
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| - |
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| - |
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Shares withheld for payment of employee taxes |
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Payment of equity issuance costs |
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| - |
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| - |
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Exchange of Sky Incentive Units |
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Other comprehensive loss |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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Balance at March 31, 2025 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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| $ |
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| $ |
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| $ |
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Share-based compensation |
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| - |
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|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Vesting of restricted stock units |
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| ||
Shares withheld for payment of employee taxes |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| |
|
| ( | ) |
|
|
|
|
| ( | ) | ||||||
Issuance of stock through ATM Facility, net of equity issuance costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
| |
|
|
| ||||||||||
Payment of equity issuance costs |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
| |
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
Other comprehensive loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net income (loss) |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||||
Balance at June 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||||
Share-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Vesting of restricted stock units |
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| ||
Shares withheld for payment of employee taxes |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||||||
Other comprehensive income |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||||
Balance at September 30, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||||
See accompanying Notes to Unaudited Consolidated Financial Statements
SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
|
| Nine months ended |
| |||||
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||
Cash flows from operating activities: |
|
|
| |
|
|
| |
Net (loss) income |
| $ | ( | ) |
| $ |
| |
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|
|
| |
|
|
| |
Depreciation and amortization |
|
|
|
|
|
| ||
Amortization of debt issuance costs |
|
|
|
|
|
| ||
Straight-line rent adjustments, net |
|
| ( | ) |
|
| ( | ) |
Equity-based compensation |
|
|
|
|
|
| ||
Non-cash operating lease expense |
|
|
|
|
|
| ||
Realized gain on available for sale investments |
|
| ( | ) |
|
| ( | ) |
Paid-in-kind interest expense |
|
|
|
|
|
| ||
Loss on disposition of assets |
|
|
|
|
|
| ||
Unrealized gain on warrants |
|
| ( | ) |
|
| ( | ) |
Changes in operating assets and liabilities: |
|
|
| |
|
|
| |
Accounts receivable, prepaid expenses, and other assets |
|
| ( | ) |
|
|
| |
Accounts payable, accrued expenses, and other liabilities |
|
|
|
|
|
| ||
Net cash used in operating activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
| |
Cash flows from investing activities: |
|
|
| |
|
|
| |
Purchases of long-lived assets |
|
| ( | ) |
|
| ( | ) |
Payments for cost of construction |
|
| ( | ) |
|
| ( | ) |
Proceeds from disposition of long-lived assets |
|
|
|
|
|
| ||
Investment in notes receivable, net |
|
|
|
|
| ( | ) | |
Purchases of available for sale investments |
|
| ( | ) |
|
| ( | ) |
Purchases of held-to-maturity investments |
|
| ( | ) |
|
|
| |
Proceeds from available for sale investments |
|
|
|
|
|
| ||
Proceeds from held-to-maturity investments |
|
|
|
|
|
| ||
Net cash used in investing activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
| |
|
|
| |
Cash flows from financing activities: |
|
|
| |
|
|
| |
Proceeds from registered direct offerings |
|
|
|
|
|
| ||
Proceeds from ATM Facility |
|
|
|
|
|
| ||
Proceeds from issuance of bonds payable |
|
|
|
|
|
| ||
Proceeds from issuance of loans payable |
|
|
|
|
|
| ||
Principal payments for loans payable and finance leases |
|
| ( | ) |
|
| ( | ) |
Payments for debt issuance costs |
|
| ( | ) |
|
| ( | ) |
Payments for equity issuance costs |
|
| ( | ) |
|
| ( | ) |
Payments of employee taxes related to vested equity awards |
|
| ( | ) |
|
| ( | ) |
Net cash provided by (used in) financing activities |
|
|
|
|
| ( | ) | |
|
|
|
| |
|
|
| |
Net increase (decrease) in cash and restricted cash |
|
|
|
|
| ( | ) | |
|
|
|
| |
|
|
| |
Cash and restricted cash, beginning of period |
|
|
|
|
|
| ||
|
|
|
| |
|
|
| |
Cash and restricted cash, end of period |
| $ |
|
| $ |
| ||
See accompanying Notes to Unaudited Consolidated Financial Statements
SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2026
(in thousands, except share data)
1. | Organization and Business Operations |
Sky Harbour Group Corporation (“SHG”) is a holding company organized under the laws of the State of Delaware and, through its main operating subsidiary, Sky Harbour LLC and its subsidiaries (collectively, “Sky”), is an aviation infrastructure development company that develops, constructs, leases, and manages general aviation hangars for business aircraft across the United States. SHG and its consolidated subsidiaries are collectively referred to as the “Company.”
The Company is organized as an umbrella partnership-C corporation, or “Up-C”, structure in which substantially all of the operating assets of the Company are held by Sky and SHG’s only substantive assets are its equity interests in Sky (the “Sky Common Units”). As of September 30, 2026, SHG owned approximately
2. | Basis of Presentation and Summary of Significant Accounting Policies |
Basis of Presentation
The accompanying unaudited consolidated financial statements and the related notes (the “Financial Statements”) have been prepared in conformity with the U.S. Securities and Exchange Commission (the “SEC”) requirements for quarterly reports on Form 10-Q, and consequently exclude certain disclosures normally included in audited consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). These Financial Statements include the accounts of SHG and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Financial Statements should be read in conjunction with the audited consolidated financial statements and the notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which includes additional disclosures and a summary of the Company's significant accounting policies. In the Company’s opinion, these Financial Statements include all adjustments, consisting of normal recurring items, considered necessary by management to fairly state the Company’s results of operation, financial position, and cash flows.
Certain historical amounts have been reclassified to conform to the current year’s presentation.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Such estimates include assumptions used within impairment analyses, estimated useful lives of depreciable assets and amortizable costs, estimates of inputs utilized in determining the fair value of financial instruments such as warrants, and estimates and assumptions related to right-of-use assets and operating lease liabilities. Actual results could differ materially from those estimates.
Risks and Uncertainties
The Company is subject to risks and uncertainties common to early-stage companies. For most of its history, the Company has been engaged in securing access to land through ground leases and developing and constructing aviation hangars. The major risks faced by the Company are its future ability to obtain additional tenants for the facilities that it constructs, and to contract with such tenants for rental income in an amount that is sufficient to meet the Company’s financial obligations, including increasing construction costs due to inflation and increased borrowing costs to the extent that the Company incurs additional indebtedness.
Liquidity and Capital Resources
As a result of ongoing construction projects and business development activities, including the development of aircraft hangars and the leasing of available hangar space, the Company has incurred recurring losses and negative cash flows from operating activities since its inception. The Company expects to continue to invest in such activities and generate operating losses in the near future.
The Company obtained long-term financing through bond and equity offerings, committed bank drawdown facility, and has the ability to utilize its at-the-market offering program to fund its construction, lease, and operational commitments, and believes its liquidity is sufficient to allow continued operations for more than one year after the date these financial statements are issued.
7
Significant Accounting Policies
Basis of Consolidation
SHG is deemed to have a controlling interest of Sky through its appointment as the managing member of Sky, in which SHG has control over the affairs and decision-making of Sky. The interests in Sky not owned by SHG are presented as non-controlling interests. Sky’s ownership percentage in each of its consolidated subsidiaries is
Cost of Construction
Cost of construction on the accompanying consolidated balance sheets is carried at cost. The cost of acquiring an asset includes the costs necessary to bring a capital project to the condition necessary for its intended use. Costs are capitalized once the construction of a specific capital project is probable. Construction labor and other direct costs of construction are capitalized. Professional fees for engineering, procurement, consulting, and other soft costs that are directly identifiable with the project and are considered an incremental direct cost are capitalized. Activities associated with internally manufactured hangar buildings, including materials, direct manufacturing labor, and manufacturing overhead directly identifiable with such activities are allocated to our construction projects and capitalized. The Company allocates a portion of its internal salaries to both capitalized cost of construction and to general and administrative expense based on the percentage of time certain employees worked in the related areas. Interest, net of the amortization of debt issuance costs and premiums, and net of interest income earned on bond proceeds, is also capitalized until the capital projects are completed.
Once a capital project is complete, the Company begins to depreciate the constructed asset on a straight-line basis over the lesser of the estimated useful life of the asset or the remaining term of the related ground lease, including expected renewal terms.
Leases
The Company accounts for leases under Accounting Standards Codification (“ASC”) Topic 842, Leases. The Company determines whether a contract contains a lease at the inception of the contract. ASC Topic 842 requires lessees to recognize lease liabilities and right-of-use (“ROU”) assets for all operating leases with terms of more than 12 months on the consolidated balance sheets. The Company has made an accounting policy election to not recognize leases with an initial term of 12 months or less on the Company’s consolidated balance sheets and will recognize those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. When management determines that it is reasonably certain that the Company will exercise its options to renew the leases, the renewal terms are included in the lease term and the resulting ROU asset and lease liability balances.
The Company has lease agreements with lease and non-lease components; the Company has elected the accounting policy to not separate lease and non-lease components for all underlying asset classes. The Company has not elected to capitalize any interest cost that is implicit within its operating leases into cost of construction on the consolidated balance sheet, but instead, expenses its ground lease cost as a component of operating expenses in the consolidated statements of operations.
All of the Company’s ground leases at airports are classified as operating leases under ASC Topic 842. Management has determined that it is reasonably certain that the Company will exercise its options to renew the leases, and therefore the renewal options are included in the lease term and the resulting ROU asset and operating lease liability balances. As the Company’s lease agreements do not provide a readily determinable implicit rate, nor is the rate available to the Company from its lessors, the Company uses its incremental borrowing rate to determine the present value of the lease payments.
The Company has operating leases that contain variable payments, most commonly in the form of common area maintenance and operating expense charges, which are based on actual costs incurred. These variable payments were excluded from the calculation of the ROU asset and operating lease liability balances since they are not fixed or in-substance fixed payments. These variable payments were not material in amount for the three and nine months ended September 30, 2026 and 2025. Some of the leases contain covenants that require the Company to construct the hangar facilities on the leased grounds within a certain period and spend a set minimum dollar amount. For one of the leases, the shortfall (if any) must be paid to the lessor. See Note 18 — Commitments and Contingencies.
Warrants liability
The Company accounts for its Warrants (as defined in Note 11 — Warrants) in accordance with the guidance contained in ASC Topic 815, “Derivatives and Hedging” (“ASC 815”), under which warrants that do not meet the criteria for equity classification and must be recorded as derivative liabilities. Accordingly, the Company classifies the Warrants as liabilities carried at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the consolidated statement of operations.
8
Revenue recognition
The Company leases the hangar facilities that it constructs to third party customers. The Company determines whether a contract contains a lease at the inception of the contract. The lease agreements are either on a month-to-month basis or have a defined term and may have options to extend the term. Some of the leases contain options to terminate the lease by either party with given notice. The Company expects to continue to derive benefit from the underlying assets after the end of the lease term through further leasing arrangements. The underlying assets are the leasehold interest that the Company has in connection with its ground leases. There are no options given to the lessee to purchase the underlying assets.
Rental revenue is recognized in accordance with ASC 842 and includes fixed payments of cash rents, which represents revenue each tenant pays in accordance with the terms of its respective lease and is recognized on a straight-line basis over the term of the lease. Rental revenue and the corresponding rent and other receivables are recorded net of any concessions and uncollectible tenant receivables, if any, for all periods presented. The Company evaluates the collectability of tenant receivables for payments required under the lease agreements. If the Company determines that collectability is not probable, the Company recognizes any difference between revenue amounts recognized to date under ASC 842 and payments that have been collected from the lessee, including any additional rent or lease termination fees, as a current period adjustment to rental revenue.
At certain of the Company’s hangar campuses, the Company recognizes revenue from ground-based services, such as the fueling and towing of aircraft under ASC Topic 606, Revenue from Contracts with Customers. Revenue for the sale of aircraft fuel is recognized at the time customer obtains control of the fuel. Revenue for the sale of other ground-based services is recognized at the time the service is performed and provided to customers. Customers are invoiced at the time the services are performed and the associated revenue is recognized in the period it is earned. The Company’s fueling arrangements generally are unique at each location it operates, and may be accounted for on a gross or net basis. The Company determines whether to recognize fuel and services revenue on a gross or net basis based on consideration of various factors, including whether the Company has control of the products or services prior to delivery to customers, the Company’s degree of latitude in establishing the sales price, whether the Company carries the associated inventory risk, and which party is the primary obligor within such sales arrangements.
For the three and nine months ended September 30, 2026 and 2025, the Company did derive 10% of its revenue from any single tenant.
Income Taxes
SHG is classified as a corporation for U.S. Federal income tax purposes and is subject to U.S. Federal and state income taxes. SHG includes in income, for U.S. Federal income tax purposes, its allocable portion of income from the “pass-through” entities in which it holds an interest, including Sky. The “pass-through” entities are not subject to U.S. Federal and certain state income taxes at the entity level, and instead, the tax liabilities with respect to taxable income are passed through to the members, including SHG. As a result, prior to the transactions contemplated by that certain Equity Purchase Agreement, dated as of August 1, 2021, by and among Yellowstone Acquisition Company (“YAC”) and Sky, which we refer to as the Yellowstone Transaction, Sky was not subject to U.S. Federal and certain state income taxes at the entity level.
The Company follows the asset and liability method of accounting for income taxes. This method gives consideration to the future tax consequences associated with the differences between the financial accounting and tax basis of the assets and liabilities as well as the ultimate realization of any deferred tax asset resulting from such differences, as well as from net operating losses and other tax-basis carryforwards. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. When a valuation allowance is increased or decreased, a corresponding tax expense or benefit is recorded.
The Company recorded income tax expense of $
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income: Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public business entities to disclose in the notes to financial statements specific categories within relevant expense captions presented on the face of the income statement. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied on a prospective basis with retrospective application permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.
9
3. | Investments and Restricted Investments |
Investments of the Company’s cash in various U.S. Treasury securities that have been classified as available-for-sale and are carried at estimated fair value utilizing Level 1 inputs as determined based upon quoted market prices. Investments of the funds held in the restricted trust bank accounts associated with the Series 2021 Bonds and the Series 2026 Bonds, as defined in Note 10 — Bonds payable, loans payable, and interest, are reported as “Restricted investments” in the accompanying consolidated balance sheets. Such investments are classified as available-for-sale or held-to-maturity at the time of investment.
Unrealized losses on certain of the Company’s investments and restricted investments are primarily attributable to changes in interest rates. The Company does not believe the unrealized losses represent impairments because the unrealized losses are due to general market factors. The Company has not recognized an allowance for expected credit losses related to its investments or restricted investments as the Company has not identified any unrealized losses attributable to credit factors during the three and nine months ended September 30, 2026. The held-to-maturity restricted investments are carried on the consolidated balance sheet at amortized cost. As of September 30, 2026, the Company has the ability and intent to hold these restricted investments until maturity, and as a result, the Company would not expect the value of these investments to decline significantly due to a sudden change in market interest rates. The fair value of the Company’s restricted investments is estimated utilizing Level 1 inputs including prices for U.S. Treasury securities with comparable maturities on active markets.
The following tables set forth summaries of the amortized cost, unrealized gains, unrealized losses, and fair value by investment type as of September 30, 2026 and December 31, 2025:
|
| September 30, 2026 |
| |||||||||||||
|
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Estimated Fair Value |
| ||||
Securities available-for-sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted investments - U.S. Treasuries |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Total securities available-for-sale |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities held-to-maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted investments - U.S. Treasuries |
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||
Total securities held-to-maturity |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||
|
| December 31, 2025 |
| |||||||||||||
|
| Amortized Cost |
|
| Gross Unrealized Gains |
|
| Gross Unrealized Losses |
|
| Estimated Fair Value |
| ||||
Securities available-for-sale: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted investments - U.S. Treasuries |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Total securities available-for-sale |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities held-to-maturity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted investments - U.S. Treasuries |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total securities held-to-maturity |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
The following table sets forth the maturity profile of the Company’s investments and restricted investments as of September 30, 2026:
|
| Securities Available-for-Sale |
|
| Securities Held-to-Maturity |
| ||
Due within one year |
| $ |
|
| $ |
| ||
Due one year through five years |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
10
4. | Cost of Construction and Constructed Assets |
Constructed assets, net, and cost of construction, consists of the following:
|
| September 30, 2026 |
|
| December 31, 2025 |
| ||
Constructed assets, net of accumulated depreciation: |
|
|
|
|
|
|
|
|
Buildings: ADS Phase I, APA Phase I, BNA, CMA, DVT Phase I, OPF, SGR, and SJC Renovation |
| $ |
|
| $ |
| ||
Accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
|
| $ |
|
| $ |
| ||
Cost of construction: |
|
|
|
|
|
|
|
|
ADS Phase II, BDL Phase I, HIO Phase I, IAD Phase I, ORL Phase I, POU Phase I, PWK Phase I, SLC Phase I, and TTN Phase I |
| $ |
|
| $ |
| ||
Depreciation expense for the three and nine months ended September 30, 2026 totaled approximately $
5. | Long-lived Assets |
Long-lived assets, net, consists of the following:
|
| September 30, 2026 |
|
| December 31, 2025 |
| ||
Ground support equipment |
| $ |
|
| $ |
| ||
Machinery and equipment |
|
|
|
|
|
| ||
Buildings |
|
|
|
|
|
| ||
Land |
|
|
|
|
|
| ||
Other equipment and fixtures |
|
|
|
|
|
| ||
Purchase deposits and construction in progress |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
|
| $ |
|
| $ |
| ||
Depreciation expense for the three and nine months ended September 30, 2026 totaled approximately $
11
6. | Lease Intangible Assets |
Lease intangible assets, net, consists of the following:
|
| September 30, 2026 |
|
| December 31, 2025 |
| ||
Acquired in-place lease |
| $ |
|
| $ |
| ||
Above market leases |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Accumulated amortization |
|
| ( | ) |
|
| ( | ) |
Total lease intangible assets |
| $ |
|
| $ |
| ||
Amortization expense for the three and nine months ended September 30, 2026 totaled approximately $
7. | Accounts Payable, Accrued Expenses, and Other Liabilities |
Accounts payable, accrued expenses and other liabilities, consists of the following:
|
| September 30, 2026 |
|
| December 31, 2025 |
| ||
Costs of construction |
| $ |
|
| $ |
| ||
Employee compensation and benefits |
|
|
|
|
|
| ||
Interest |
|
|
|
|
|
| ||
Professional fees |
|
|
|
|
|
| ||
Property taxes |
|
|
|
|
|
| ||
Deferred rent and tenant rent received in advance |
|
|
|
|
|
| ||
Tenant security deposits |
|
|
|
|
|
| ||
Other |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
12
8. | Leases — Lessee |
The table below sets forth a summary of operating lease expense for the three and nine months ended September 30, 2026 and 2025 recorded in the captions within our consolidated statement of operations:
|
| Three months ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, 2026 |
|
| September 30, 2025 |
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||||
Ground lease expenses |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Fuel expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total operating lease expense |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
The Company’s long-term ground leases have remaining terms ranging between
In January 2026, the Company, through an indirect, wholly-owned subsidiary of the Company, executed a lease amendment with respect to its ground lease at SWF to add an approximately
In September 2026, the Company, through an indirect, wholly-owned subsidiary of the Company, executed a lease amendment with respect to its ground lease at IAD to modify certain terms of the original lease and add an option exercisable by the Company to add an approximately
Supplemental consolidated cash flow information related to the Company’s leases was as follows:
|
| Nine months ended |
| |||||
|
| September 30, |
|
| September 30, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Cash paid for amounts included in measurement of lease liabilities: |
|
|
|
|
|
|
|
|
Operating cash flows from operating leases |
| $ |
|
| $ |
| ||
Operating cash flows from finance leases |
|
|
|
|
|
| ||
Financing cash flows from finance leases |
|
|
|
|
|
| ||
Supplemental consolidated balance sheet information related to the Company’s leases was as follows:
Weighted Average Remaining Lease Term (in years) |
| September 30, 2026 |
|
| December 31, 2025 |
| ||
Operating leases |
|
|
|
|
|
|
|
|
Ground leases - Unimproved at commencement |
|
|
|
|
|
| ||
Ground leases - Existing improvements |
|
|
|
|
|
| ||
Equipment leases |
|
|
|
|
|
| ||
Office leases |
|
| - |
|
|
|
| |
All operating leases |
|
|
|
|
|
| ||
Finance leases |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Weighted Average Discount Rate |
|
|
|
|
|
|
|
|
Operating leases |
|
|
|
|
|
|
|
|
Ground leases - Unimproved at commencement |
|
| % |
|
| % | ||
Ground leases - Existing improvements |
|
| % |
|
| % | ||
Equipment leases |
|
| % |
|
| % | ||
Office leases |
|
| - |
|
|
| % | |
All operating leases |
|
| % |
|
| % | ||
Finance leases |
|
| % |
|
| % | ||
The Company’s future minimum lease payments required under leases as of September 30, 2026 were as follows:
Year Ending December 31, |
| Operating Leases |
|
| Finance Leases |
| ||
2026 (remainder of year) |
| $ |
|
| $ |
| ||
2027 |
|
|
|
|
|
| ||
2028 |
|
|
|
|
|
| ||
2029 |
|
|
|
|
|
| ||
2030 |
|
|
|
|
|
| ||
Thereafter |
|
|
|
|
|
| ||
Total lease payments |
|
|
|
|
|
| ||
Less imputed interest |
|
| ( | ) |
|
| ( | ) |
Total |
| $ |
|
| $ |
| ||
13
9. | Leases — Lessor |
Tenant leases to which the Company is the lessor require the following non-cancelable future minimum lease payments from tenants as of September 30, 2026:
Year Ending December 31, |
| Operating Leases |
| |
2026 (remainder of year) |
| $ |
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
Thereafter |
|
|
| |
Total |
| $ |
| |
The amounts presented above exclude tenant variable payments, rental escalations that are not fixed, or future rental revenue from the renewal or replacement of existing tenant leases.
Variable payments consist of recoveries from tenants for common area maintenance, utilities, and operating expenses of the property, and various other fees, including fees associated with the delivery of aircraft fuel, late fees, short-term rentals, and lease termination fees. Variable payments are charged based on the terms and conditions included in the respective tenant leases and are recognized in the same period as the expenses are incurred.
The table below sets forth a summary of variable payments for the three and nine months ended September 30, 2026 and 2025 recorded in the captions within our consolidated statement of operations:
|
| Three months ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, 2026 |
|
| September 30, 2025 |
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||||
Variable payments included in rental revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Variable payments included in fuel revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total variable payments included in revenue |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
As of September 30, 2026 and December 31, 2025, the deferred rent receivable included in accounts receivable, prepaid expenses, and other assets was approximately $
14
10. | Bonds payable, Loans payable, and Interest |
The following table summarizes the Company’s bonds and loans payable as of September 30, 2026 and December 31, 2025:
|
|
|
|
|
|
| September 30, 2026 |
|
| December 31, 2025 |
| ||||||||||
| Maturity Dates |
| Contractual Interest Rates |
|
| Principal Amount |
|
| Carrying Value |
|
| Principal Amount |
|
| Carrying Value |
| |||||
| Bonds payable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2021 Bonds | July 2036 - July 2054 |
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
Series 2026 Bonds | Subject to Mandatory Tender January 2031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Total bonds payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans payable and finance leases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Term Loan Facility | September 2030 |
|
| % of (SOFR + 0.1%) + 2.00% |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Yorkville Promissory Note 1 | June 2027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Yorkville Promissory Note 2 | June 2027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Vista Loan | December 2035 |
|
| Prime + % |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Equipment Loan | August 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Finance Leases | August 2026 - July 2027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
| Total loans payable and finance leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total bonds and loans payable |
|
|
|
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||
The Company’s contractual principal payments required under its bonds payable and loans payable as of September 30, 2026 were as follows:
Year Ending December 31, |
| Bonds Payable |
|
| Loans Payable |
| ||
2026 (remainder of year) |
| $ |
|
| $ |
| ||
2027 |
|
|
|
|
|
| ||
2028 |
|
|
|
|
|
| ||
2029 |
|
|
|
|
|
| ||
2030 |
|
|
|
|
|
| ||
Thereafter |
|
|
|
|
|
| ||
Total |
| $ |
|
| $ |
| ||
As of September 30, 2026 and December 31, 2025, the fair value of the Company's Series 2021 Bonds was approximately $
15
Interest Expense
The following table sets forth the details of interest expense:
|
| Three months ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, 2026 |
|
| September 30, 2025 |
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||||
Interest |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Commitment fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Accretion of bond premium and amortization of debt issuance costs |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total interest incurred |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Less: capitalized interest |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Interest expense |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
The Company uses derivative financial instruments to manage its interest rate risk associated with its variable-rate term loan facility in an aggregate principal amount of up to $
The following table reflects the fair value of the Swap Agreement as of September 30, 2026 and December 31, 2025:
| Balance sheet location: |
| September 30, 2026 |
|
| December 31, 2025 |
| ||
| Asset derivatives: |
|
|
|
|
|
|
|
|
| Accounts receivable, prepaid expenses, and other assets |
| $ |
|
| $ |
| ||
The Swap Agreement is not designated as a hedging instrument. The Company records cash settlements and changes in fair value associated with the Swap Agreement as a component of interest expense within the consolidated statement of operations.
16
Tax-Exempt Series 2026 Bonds Issuance
On February 12, 2026, Sky Harbour Capital III LLC (“Sky Capital III”), an indirect, wholly-owned subsidiary of the Company, completed a $
The Series 2026 Bonds and borrowings under the Loan Agreement bear interest at a rate of
The principal amount of the Loan is $
The Series 2026 Bonds are subject to (a) optional redemption at the discretion of Sky Capital III at any time on or after January 1, 2030 at a redemption price equal to the principal amount plus a 1% premium and accrued and unpaid interest to the redemption date, (b) mandatory redemption upon the occurrence of a determination of taxability of the Series 2026 Bonds, and (c) mandatory sinking fund redemption beginning in 2056.
Sky Capital III expects to meet its payment obligations under the Loan Agreement from funds to the extent available and permitted to be released under the master trust indenture with respect to the Series 2021 Bonds and the Term Loan Facility. Interest is capitalized through January 1, 2029.
The Indenture and the Loan Agreement provide for customary events of default, all as described in the Indenture and the Loan Agreement.
Term Loan Facility
First Amendment to Term Loan Facility
On January 8, 2026, Sky Harbour Capital II LLC (“SH Capital II”), an indirect, wholly-owned subsidiary of the Company, entered into an amendment (the “Amendment”) to the Term Loan Facility. The Amendment amended the Term Loan Facility to provide for, among other things, conditions under which surplus funds, as defined in the Amendment (the “Term Loan Facility Surplus Funds”), may be released to SH Capital II and its special purpose subsidiaries (the “Term Loan Borrowers”).
In addition, Sky Harbour Holdings III LLC (“SKYH III”) amended its related guaranty (the “Sky III Guaranty”, and such amendment, the “Sky III Guaranty Amendment”) to provide for, among other things, conditions under which surplus funds arising from amounts received by Sky from excess revenues released from the Master Indenture may be utilized by Sky, as discussed below.
Provided certain conditions within the Amendment are met, the Amendment permits the Term Loan Borrowers to distribute or otherwise transfer such Term Loan Facility Surplus Funds to (i) Sky (the “Parent Guarantor”) for the payment of general and administrative expenses of the Parent Guarantor, (ii) pay current interest or principal on indebtedness of the Parent Guarantor or indebtedness guaranteed by the Parent Guarantor, (iii) deposit or transfer such funds into a separate account of an affiliate of the Parent Guarantor as security for the payment of principal of or interest on other indebtedness, or (iv) make a capital contribution of a Term Loan Borrower for the approved construction and operation of hangar project facilities at various airports (the “Portfolio II Projects”, and such restriction on distributions and transfers the “Permissible Uses”). The Amendment permits the release of the Term Loan Facility Surplus Funds beginning on the later of January 1, 2027 or a trigger date based on substantial completion of certain Portfolio II Projects, and requires the Term Loan Borrowers to maintain (i) a historical debt service coverage ratio, and (ii) a projected debt service coverage ratio, in each case determined on the last day of each fiscal quarter of the Term Loan Borrowers, at a ratio of not less than 2.00 to 1.00.
The Sky III Guaranty Amendment permits the release of excess revenues released from the Master Trust on or after the later of (i) January 1, 2027 and (ii) three (3) months after the Capitalized Interest End Date provided that (a) there are funds in excess of $
The above release conditions are also subject to the customary condition that there not be any default under the Term Loan Facility.
17
Second Amendment to Term Loan Facility
On June 29, 2026, SH Capital II entered into an amendment (the “Second Amendment”) to the Term Loan Facility. The Second Amendment amends the Term Loan Facility to permit the Company to request a borrowing not to exceed $
The Second Amendment required that the Company make cash contributions to one or more of the Borrowers in an aggregate amount of not less than $
As of September 30, 2026, the Company had fulfilled the requirements of the Term Loan Facility Replenishment.
Other Term Loan Facility Activity
On January 8, 2026, subsidiaries of the Company that own existing and future hangar campuses at CMA and BDL were added to the borrowing base of the Term Loan Facility. Subsequently, on January 8, 2026, SH Capital II drew funds of approximately $
On April 17, 2026, the subsidiary of the Company that owns a hangar campus at SLC was added to the borrowing base of the Term Loan Facility. Subsequently, the Company drew funds of approximately $
As of September 30, 2026, there was approximately $
2026 Yorkville Promissory Note
On January 27, 2026, Sky issued a non-convertible, unsecured promissory note to YA II PN, Ltd., a Cayman Islands exempt limited company, or its registered assigns (“Yorkville”), in the aggregate principal amount of $
The January 2026 Yorkville Promissory Note accrues interest at a rate of
18
11. | Warrants |
SHG’s legal predecessor, YAC, issued to third-party investors
In connection with the Securities Purchase Agreement (the “2023 Purchase Agreement”) entered into on November 1, 2023 with certain investors, the Company issued to third-party investors
The Warrants contain an exercise price of $
The closing price of the Warrants was $
12. | Equity |
Common Equity
As of September 30, 2026, there were
The holders of Class A Common Stock are entitled to receive dividends, as and if declared by the Company’s Board of Directors out of legally available funds. With respect to stock dividends, holders of Class A Common Stock must receive Class A Common Stock. The holders of Class B Common Stock do not have any right to receive dividends other than stock dividends consisting of shares of Class B Common Stock, as applicable, in each case paid proportionally with respect to each outstanding share of Class B Common Stock.
Registered Direct Offerings
On August 10, 2026 and August 21, 2026, the Company entered into stock purchase agreements with certain investors (the “Investors”), pursuant to which the Company agreed to sell an aggregate of
In connection with the registered direct offerings, the Company and its directors and executive officers and certain holders of more than
19
At-the-Market Facility
On March 27, 2024, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) with respect to an “at the market” offering program (the “ATM Facility”), under which the Company may, from time to time, at its sole discretion, issue and sell through B. Riley, acting as sales agent, up to $
On December 31, 2025, the Company entered into an Amended and Restated At Market Issuance Sales Agreement (the “A&R ATM Agreement”) with B. Riley and Yorkville Securities, LLC (“Yorkville Securities” and, together with B. Riley, the “Sales Agents”), pursuant to which, among other things, Yorkville Securities was added as an additional sales agent. Pursuant to the A&R ATM Agreement, the Company may offer and sell, from time to time through the Sales Agents, shares of its Class A Common Stock, having an aggregate offering price of up to $
The Company is not obligated to sell any shares under the ATM Agreement or the A&R ATM Agreement. The offering of shares pursuant to the ATM Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through the Sales Agents, of all of the shares subject to the ATM Agreement and (ii) termination of the ATM Agreement in accordance with its terms.
During the three months ended September 30, 2026, there were
Non-controlling Interests
The LLC Interests’ ownership in Sky is presented as non-controlling interests within the Equity section of the consolidated balance sheet as of September 30, 2026 and represents the Sky Common Units held by holders other than SHG. The holders of LLC Interests may exchange Sky Common Units along with an equal number of Class B Common Shares, for Class A Common Shares of the Company. The LLC Interests do not have the option to redeem their Sky Common Units for cash or a variable number of Class A Common Shares, nor does SHG have the option to settle a redemption in such a manner. As of September 30, 2026, the LLC interests owned approximately
20
13. | Equity Compensation |
Restricted Stock Units (“RSUs”)
In February 2026, the Company granted time-based RSUs to certain employees, consultants, and non-employee directors under the Company’s 2022 Incentive Award Plan.
During the three and nine months ended September 30, 2026, the Company recognized stock compensation expense of approximately $
Non-qualified Stock Options (“NSOs”)
In February 2026, the Company granted to certain employees options to purchase
During the three and nine months ended September 30, 2026, the Company recognized stock compensation expense of approximately $
21
14. | Earnings (loss) per Share |
Basic earnings (loss) per share of Class A Common Stock is computed by dividing net income (loss) attributable to SHG by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted net income (loss) per share of Class A Common Stock is computed by dividing net income (loss) attributable to SHG, adjusted for the assumed exchange of all potentially dilutive securities, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive shares using the treasury stock or if-converted method as appropriate. Shares of the Company’s Class B Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B Common Stock under the two-class method has not been presented.
|
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
|
| September 30, 2026 |
|
| September 30, 2025 |
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
| |
Less: Net loss attributable to non-controlling interests |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Basic net (loss) income attributable to Sky Harbour Group Corporation shareholders |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
| |
Less: Net loss attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
| ( | ) | |||
Diluted net (loss) income attributable to Sky Harbour Group Corporation shareholders |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares of Class A Common Stock outstanding |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Effect of dilutive exchange of Class B Common Stock |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Effect of dilutive exchange of Sky Incentive Units |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Effect of dilutive restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Diluted weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per share of Class A Common Stock – Basic |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
| |
(Loss) earnings per share of Class A Common Stock – Diluted |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
| |
Potentially dilutive shares excluded from the weighted-average shares used to calculate the diluted net earnings (loss) per common share were as follows (in thousands):
|
| Three Months Ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, 2026 |
|
| September 30, 2025 |
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||||
Shares subject to unvested restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shares issuable upon the exercise of unvested stock options |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shares issuable upon the exercise of Warrants |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shares issuable upon the exchange of Class B Common Stock |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shares issuable upon the exercise and exchange of Sky Incentive Units |
|
|
|
|
|
|
|
|
|
|
|
| ||||
22
15. | Accumulated Other Comprehensive Income |
The following table summarizes the components of accumulated other comprehensive income:
|
| Unrealized gain on Available-for-sale Securities |
|
| Total |
| ||
Balance as of December 31, 2025 |
| $ |
|
| $ |
| ||
| Other comprehensive income before reclassifications |
|
|
|
|
|
| ||
Amounts reclassified to other (income) expense |
|
| ( | ) |
|
| ( | ) |
Balance as of September 30, 2026 |
| $ |
|
| $ |
| ||
|
| Unrealized gain on Available-for-sale Securities |
|
| Total |
| ||
Balance as of December 31, 2024 |
| $ |
|
| $ |
| ||
| Other comprehensive income before reclassifications |
|
|
|
|
|
| ||
Amounts reclassified to other (income) expense |
|
| ( | ) |
|
| ( | ) |
Balance as of September 30, 2025 |
| $ |
|
| $ |
| ||
16. | Supplemental Cash Flow Information |
The following table summarizes non-cash investing and financing activities:
|
| Nine months ended |
| |||||
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||
Accrued costs of construction, including capitalized interest |
| $ |
|
| $ |
| ||
Accrued costs of long-lived assets |
|
|
|
|
|
| ||
Debt issuance costs and premium amortized to cost of construction |
|
|
|
|
|
| ||
The following table summarizes non-cash activities associated with the Company’s operating leases:
|
| Nine months ended |
| |||||
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||
Right-of-use assets obtained in exchange for operating lease liabilities |
| $ |
|
| $ |
| ||
Net (decrease) increase in right-of-use assets and operating lease liabilities due to lease remeasurement |
|
| ( | ) |
|
|
| |
The following table summarizes interest paid:
|
| Nine months ended |
| |||||
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||
Interest paid |
| $ |
|
| $ |
| ||
The following table provides a reconciliation of cash and restricted cash reported within the consolidated balance sheets to the total shown within the consolidated statements of cash flows:
|
| Nine months ended |
| |||||
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||
Cash, beginning of year |
| $ |
|
| $ |
| ||
Restricted cash, beginning of year |
|
|
|
|
|
| ||
Cash and restricted cash, beginning of year |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Cash, end of period |
| $ |
|
| $ |
| ||
Restricted cash, end of period |
|
|
|
|
|
| ||
Cash and restricted cash, end of period |
| $ |
|
| $ |
| ||
23
17. | Segment Information |
The Company has consolidated reportable segment. This segment derives revenues from customers through the leasing of home-basing aircraft hangars and through services and products ancillary to its leasing activities. As of September 30, 2026, the Company drives revenue entirely within the United States and manages the business activities on a consolidated basis.
The determination of reportable operating segments is based on the Chief Operating Decision Maker’s (“CODM’s”) use of financial information provided for the purposes of assessing performance and making operating decisions. The Company’s CODM is its founder and Chief Executive Officer. The CODM uses net income (loss) to allocate resources and assess the performance of the Company by comparing actual results to historical results and previously forecasted financial information and the allocation of budget between the expenses presented within the consolidated statement of operations. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. All required significant financial segment information can be found within the consolidated financial statements.
18. | Commitments and Contingencies |
In addition to the lease payment commitments discussed in Note 8 — Leases — Lessee, the ground leases to which the Company is a party contain covenants that require the Company to conduct construction of hangar facilities on the leased grounds within a certain period and in some cases, to spend a minimum dollar amount.
Airport |
| Project |
| Minimum Spend Commitment |
| Timeframe Commitments |
CMA |
| CMA Phase I |
|
| ||
DVT |
| DVT Phase II |
|
| ||
ORL |
| ORL Phase I |
|
| ||
ORL |
|
|
| |||
POU |
|
|
| |||
PWK |
|
|
| |||
SJC |
| All Phases |
|
| ||
SLC |
| SLC Phase I |
|
| None. | |
TTN |
|
|
|
As of September 30, 2026, the Company has contracts for construction of the OPF Phase II, BDL Phase I, and POU Phase I construction projects. The Company may terminate any of the contracts or suspend construction without cause. There are no termination penalties under such construction contracts.
The Company is involved in various legal proceedings and claims in the ordinary course of its business. Although the Company cannot predict with certainty the ultimate resolution of these matters, which involve judgements that are inherently subjective, the Company does not expect that the ultimate disposition of such other contingencies or matters will materially affect its financial condition, results of operations or cash flows.
24
19. | Related Party Transactions |
Loan and Security Agreement
On December 6, 2024, the Company entered into a revolving line of credit loan and security agreement (the “Loan and Security Agreement”), with a company controlled by the former owner of the Company’s acquired subsidiaries at Camarillo Airport (“CMA”), who also serves as an independent contractor of the Company. The Company provided an initial loan commitment of $
As of September 30, 2026 and December 31, 2025, the Company had loaned a total of $
Echo Echo Agreement
On September 19, 2024, the Company entered into an additional non-exclusive agreement with Echo Echo, LLC for the use of an Epic E1000GX aircraft. The effective date of the agreement was August 30, 2024 and the agreement automatically renews annually. The agreement can be terminated without penalty if either party provides 30 days’ written notice, or if the aircraft is sold or otherwise disposed of. Additionally, the Company is responsible for reimbursing its pro rata share of the direct operating costs of the aircraft, exclusive of maintenance and insurance.
For the three and nine months ended September 30, 2026, the Company recognized approximately $
Other Relationships
For the three and nine months ended September 30, 2026 and 2025, the Company recognized less than $
On June 1, 2025, the Company hired an individual to serve as its head of construction and president of one of its wholly-owned subsidiaries, Ascend Aviation Services (“Ascend”). Such individual was previously employed by, and continues to hold a financial interest in, a company that provides construction services to the Company (the “General Contractor”). The General Contractor was previously engaged by the Company to serve as general contractor in connection with its SGR and APA Phase I development project. During the three and nine months ended September 30, 2025, the Company incurred $
Ascend shares office space, equipment, and various administrative services with the General Contractor. Costs incurred by the General Contractor are allocated between Ascend and the General Contractor and are charged at cost. During the three and nine months ended September 30, 2026 the allocated costs from the General Contractor to Ascend were less than $
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes included elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”), as well as the information contained in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2026 (the “Form 10-K”), which is accessible on the SEC’s website at www.sec.gov.
Cautionary Note Regarding Forward-Looking Statements
This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “might,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but not limited to:
|
• |
expectations regarding the Company’s strategies and future financial performance, including the Company’s future business plans or objectives, prospective performance and commercial opportunities and competitors, services, pricing, marketing plans, operating expenses, market trends, revenues, liquidity, cash flows and uses of cash, capital expenditures, and the Company’s ability to invest in growth initiatives; |
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• |
the effects of general macroeconomic conditions, including inflation, interest rate volatility, changes in trade policies (including with respect to imposed and proposed tariffs), and a prolonged recession in the national economy; |
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• |
our limited operating history makes it difficult to predict future revenues and operating results; |
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• |
our ability to implement our construction costs mitigation strategies; |
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|
• |
changes in applicable laws or regulations; |
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• |
the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and |
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• |
our financial performance. |
The forward-looking statements contained in this Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in our Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described in our Form 10-K may not be exhaustive.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in our Form 10-K or this Form 10-Q. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.
Overview and Background
We are an aviation infrastructure development company building the first nationwide network of Home Base Operator (“HBO”) campuses designed exclusively for business aircraft. We develop, lease and manage general aviation hangars across the United States, targeting airfields in markets with significant based aircraft populations and high hangar demand. Our HBO campuses feature private and semi-private hangars and a full suite of dedicated services specifically optimized for home based, versus transient, aircraft.
The physical footprint of the U.S. business aviation fleet grew by almost 46 million square feet in the past sixteen years, with hangar supply lagging dramatically, especially in key growth markets. As the fleet of private jets in the United States continues to grow, with recent new aircraft deliveries exceeding retirements, demand for hangar space is at a premium in part because new jets require taller tail clearances and more square footage of hangar space and the pace of new hangar construction has lagged behind the demand. The cumulative square footage of the business aircraft fleet in the United States increased 73% between 2010 and 2025. Moreover, over that same period, there was an 120% increase in the square footage of larger private jets – those with greater than a 24-foot tail height. A recent study conducted by a business aircraft manufacturer forecasted that business aircraft will only continue to grow in the next ten years, with up to 8,500 new business jet deliveries worth over $283 billion expected to be delivered between 2025 and 2034, with over two-thirds of the deliveries expected to be comprised of larger private jets. This forecast is further supported by data from the major business aviation manufacturers that suggest the current order backlog for new business aviation aircraft as of December 31, 2025 is over $57 billion, an increase of approximately 10% over the prior year.
These larger footprint aircraft do not fit in much of the existing hangar infrastructure and impose stacking challenges and constraints in the traditional shared or community hangars operated by fixed-base operators (“FBO”). The addition of winglets (the vertical extensions on aircraft wingtips) on most modern business jets inhibits wing-over-wing storage. Aircraft hangars are in high demand and short supply, with some airports compiling waiting lists that can exceed several years.
We believe our scalable, real estate-centric business model is uniquely positioned to capture this market opportunity and address the increased imbalance between the supply and demand for private jet storage. We intend to capitalize on the existing hangar supply constraints at major U.S. airports by targeting high-end tenants in markets where there is a shortage of private and FBO hangar space, or where such hangars are or are becoming obsolete.
We expect to realize economies of scale in construction through prototype hangar designs replicated at our HBO campuses across the United States through our in-house construction management and general contracting. This allows for centralized procurement, straightforward permitting processes, efficient development processes, and the best hangar in business aviation. Unlike a service company, our revenues are mostly derived from long-term rental agreements, offering stability and forward visibility of revenues and cash flows. This allows us to fund our development through the public bond market and bank debt, providing capital efficiency and mitigating refinance risk.
We seek to develop our home basing hangar campuses on long-term ground leases (or sub-leases thereof) at airports with suitable infrastructure serving metropolitan centers across the United States. We lease each of our properties under long-term ground leases.
The table below presents certain information with respect to our portfolio of ground leases as of September 30, 2026.
Airport |
|
IATA Code |
|
Location (City, State) |
|
Location (Metropolitan Center) |
|
Ground Lessor |
Ground Lease Acres |
Ground Lease Exp. Year(1) |
||
Addison Airport |
|
ADS |
|
Addison, TX |
|
Dallas, TX |
|
Town of Addison |
|
12.5 |
|
2065 |
Bradley International Airport |
|
BDL |
|
Windsor Locks, CT |
|
Hartford, CT |
|
Connecticut Airport Authority |
|
8.0 |
|
2075 |
Camarillo Airport(2) |
|
CMA |
|
Camarillo, CA |
|
Los Angeles, CA |
|
County of Ventura |
|
17.1 |
|
2073 |
Centennial Airport |
|
APA |
|
Englewood, CO |
|
Denver, CO |
|
Arapahoe County Public Airport Authority |
|
19.7 |
|
2097 |
Chicago Executive Airport |
|
PWK |
|
Wheeling, IL |
|
Chicago, IL |
|
Village of Wheeling and City of Prospect Heights |
|
15.0 |
|
2075 |
| Fort Worth Meacham International Airport |
|
FTW |
|
Fort Worth, TX |
|
Fort Worth, TX |
|
City of Fort Worth |
|
4.5 |
|
2056 |
| Hillsboro Airport |
|
HIO |
|
Hillsboro, OR |
|
Portland, OR |
|
Port of Portland |
|
13.2 |
|
2072 |
Hudson Valley Regional Airport |
|
POU |
|
Wappingers Falls, NY |
|
New York, NY |
|
County of Dutchess |
|
7.1 |
|
2066 |
| Long Beach Airport |
|
LGB |
|
Long Beach, CA |
|
Los Angeles, CA |
|
City of Long Beach |
|
17.1 |
|
2075 |
Miami-Opa Locka Executive Airport |
|
OPF |
|
Opa Locka, FL |
|
Miami, FL |
|
Miami-Dade County |
|
22.6 |
|
2079 |
Nashville International Airport |
|
BNA |
|
Nashville, TN |
|
Nashville, TN |
|
Metropolitan Nashville Airport Authority |
|
15.2 |
|
2070 |
| New York Stewart International Airport |
|
SWF |
|
New Windsor, NY |
|
New York, NY |
|
The Port Authority of New York and New Jersey |
|
26.0 |
|
2070 |
Orlando Executive Airport |
|
ORL |
|
Orlando, FL |
|
Orlando, FL |
|
Greater Orlando Aviation Authority |
|
20.0 |
|
2074 |
Phoenix Deer Valley Airport |
|
DVT |
|
Phoenix, AZ |
|
Phoenix, AZ |
|
City of Phoenix |
|
15.4 |
|
2061 |
Salt Lake City International Airport |
|
SLC |
|
Salt Lake City, UT |
|
Salt Lake City, UT |
|
Salt Lake City Corporation |
|
8.4 |
|
2077 |
San José Mineta International Airport |
|
SJC |
|
San José, CA |
|
San José, CA |
|
City of San José |
|
6.5 |
|
2044 |
Sugar Land Regional Airport |
|
SGR |
|
Sugar Land, TX |
|
Houston, TX |
|
City of Sugar Land |
|
4.1 |
|
2049 |
Trenton-Mercer Airport |
|
TTN |
|
Ewing, NJ |
|
New York, NY - Philadelphia, PA |
|
County of Mercer |
|
11.8 |
|
2078 |
Washington Dulles International Airport |
|
IAD |
|
Dulles, VA |
|
Washington, DC |
|
Metropolitan Washington Airports Authority |
|
30.0 |
|
2084 |
(1) |
Ground lease expiration years presented include estimates of term commencements based on the achievement of certain milestones and assume the exercise of all lease term extension options exercisable at our sole discretion. |
(2) |
Our portfolio at Camarillo Airport consists of two ground leases which cover 6.2 and 10.9 acres, respectively. Such leases expire in 2071 and 2073, respectively. |
The following tables provide supplemental information regarding each of our home basing hangar campus properties in operation and in development:
PROPERTIES IN OPERATION
Facility |
Completion Date |
|
Hangars |
|
|
Rentable Square Footage |
|
|
% of Total Rentable Square Footage |
|
|
Occupancy at September 30, 2026 |
|
|
Economic Occupancy at September 30, 2026(1) |
|
|||||
SGR |
December 2020 |
|
|
7 |
|
|
|
66,080 |
|
|
|
6.3 | % |
|
|
100.0 | % |
|
|
100.0 | % |
BNA |
November 2022 |
|
|
10 |
|
|
|
149,069 |
|
|
|
14.3 | % |
|
|
99.0 | % |
|
|
99.0 | % |
| OPF | February 2023 / May 2026 |
|
|
15 |
|
|
|
271,293 |
|
|
|
26.0 | % |
|
|
86.3 | % |
|
|
86.3 | % |
| DVT Phase I | April 2025 |
|
|
8 |
|
|
|
134,270 |
|
|
|
12.9 | % |
|
|
76.9 | % |
|
|
76.9 | % |
| ADS Phase I | June 2025 |
|
|
6 |
|
|
|
118,602 |
|
|
|
11.4 | % |
|
|
97.5 | % |
|
|
97.5 | % |
| APA Phase I | September 2025 |
|
|
9 |
|
|
|
130,664 |
|
|
|
12.5 | % |
|
|
44.5 | % |
|
|
44.5 | % |
| SJC Renovation | Existing facility |
|
|
1 |
|
|
|
50,431 |
|
|
|
4.8 | % |
|
|
100.0 | % |
|
|
131.7 | % |
| CMA | Existing facility |
|
|
4 |
|
|
|
121,931 |
|
|
|
11.7 | % |
|
|
100.0 | % |
|
|
102.1 | % |
Total/Weighted Average |
|
|
60 |
|
|
|
1,042,340 |
|
|
|
100.0 | % |
|
|
86.1 | % |
|
|
87.9 | % | |
(1) |
Economic Occupancy is measured as the total square footage of aircraft subject to leases divided by the total rentable square footage of the designated property. The square footage of individual aircraft is calculated by multiplying its respective length (i.e., from its nose to its tail) by its wingspan. We believe we can achieve Economic Occupancy in excess of 100% in our semi-private hangars due to stacking considerations and the manner in which we price such semi-private leases. Occupancy and Economic Occupancy are key performance indicators which may be calculated in a manner different than similar key performance indicators used by other issuers. These metrics are estimated operating metrics and not projections, nor actual financial results, and are not indicative of current or future performance. |
PROPERTIES IN DEVELOPMENT
|
|
Projected | Projected | Estimated Total |
|
|
|
|
Construction | Completion | Project Cost |
|
Rentable |
Facility |
Status |
Start (1) |
Date (1) |
($mm) (1) |
Hangars (1) |
Square Footage (1) |
| ADS Phase II | In Construction | Q1 2026 | Q1 2027 | 24.6 - 27.6 | 4 | 110,990 |
APA Phase II |
In Development |
TBD |
TBD |
30.4 - 33.6 |
3 |
57,570 |
| BDL Phase I | In Construction | Q3 2025 | Q4 2026 | 40.0 - 42.1 | 3 | 107,360 |
| CMA Phase I | In Development | Q1 2028 | Q1 2029 | 26.0 - 35.0 | 3 | 92,680 |
DVT Phase II |
In Development |
TBD |
TBD |
34.6 - 38.6 |
4 |
132,732 |
| FTW Phase I | In Development | Q4 2026 | Q4 2027 | 19.0 - 22.0 | 2 | 74,560 |
HIO Phase I |
In Development |
Q4 2027 |
Q4 2028 |
32.0 - 34.0 |
4 |
107,680 |
| HIO Phase II | In Development | TBD | TBD | 29.5 - 32.0 | 2 | 85,760 |
| IAD Phase I | In Development | Q4 2026 | Q1 2028 | 92.0 - 96.0 | 4 | 171,520 |
| IAD Phase II | In Development | TBD | TBD | 44.7 - 49.4 | 4 | 171,520 |
| IAD Phase III | In Development | TBD | TBD | 44.7 - 49.4 | 4 | 171,520 |
| LGB Phase I | In Development | Q3 2027 | Q4 2028 | 38.8 - 45.7 | 3 | 138,434 |
| LGB Phase II | In Development | TBD | TBD | TBD | 2 | 85,760 |
| ORL Phase I | In Construction | Q2 2026 | Q3 2027 | 41.0 - 44.0 | 4 | 133,640 |
| ORL Phase II | In Development | TBD | TBD | 35.2 - 39.0 | 3 | 128,640 |
| POU Phase I | In Construction | Q2 2026 | Q3 2027 | 31.0 - 32.5 | 2 | 85,760 |
| POU Phase II | In Development | TBD | TBD | 18.3 - 20.3 | 1 | 42,880 |
| PWK Phase I | In Construction | Q4 2026 | Q1 2028 | 38.0 - 44.0 | 3 | 128,640 |
| PWK Phase II | In Development | TBD | TBD | TBD | 4 | 171,520 |
| SJC Phase II | In Development | Q2 2027 | Q2 2028 | 17.1 - 17.9 | 1 | 28,000 |
| SLC Phase I | In Construction | Q1 2026 | Q1 2027 | 47.2 - 49.0 | 4 | 171,520 |
| SWF Phase I | In Development | TBD | TBD | TBD | 8 | 256,240 |
| TTN Phase I | In Development | Q4 2026 | Q1 2028 | 40.1 - 44.3 | 3 | 128,640 |
Total |
|
|
|
724.2 - 796.4 |
75 |
2,783,566 |
(1) |
Our projections associated with the commencement and completion of construction, estimated total construction cost, number of hangars, and rentable square footage of our properties in development are inherently subjective and require judgement to estimate. We believe that our estimates of construction costs and timelines are subject to variability based on various factors including, but not limited to, changes in anticipated site plans, hangar mix, hangar specifications, executed guaranteed maximum price construction contracts, and general market conditions. |
Recent Developments
In September 2026, we executed the IAD Lease Amendment to add an option exercisable by the Company to add an approximately 15 acre parcel of land our existing lease at IAD. The option granted by the IAD Lease Amendment expires the earlier of five years from the certificate of occupancy associated with IAD Phase II or December 31, 2037. The lease term associated with the option granted by the IAD Lease Amendment is co-terminus with our other parcel covered by the Company's ground lease at IAD.
Factors That May Influence Future Results of Operations
Airfield and Tenant Portfolio Growth
Our future success depends upon our ability to attract and retain tenants for hangars at our HBO campuses. The extent to which we achieve growth in our customer base materially influences our business and results of operations. Any number of factors could affect our ability to grow our customer base, including tenant preferences for hangar space and related services, including size and location of the hangar, as well as general economic conditions. The level and volatility of fuel prices may also impact the general aviation industry and our ability to attract and retain tenants. For example, during the first three quarters of 2026, fuel prices increased significantly as a result of ongoing geopolitical events and market disruptions. At our ADS, APA, and CMA HBO campuses, we are directly exposed to fluctuations in fuel prices, which could have a material effect on our operating results at such campuses. Due to the competitive nature of our industry, we cannot predict the impact periods of high volatility in fuel prices or significant disruptions in the supply of aircraft fuel will have on our ability to attract and retain tenants. In addition, our ability to attract and retain customers may be dependent on other factors outside of our control, including the future trend of private aircraft sizes and the availability of alternative hangars, including size, location and/or services provided. Any significant decline in our customer base, or in our rate of growth, could have a material adverse effect on our business and results of operations, which could, in turn, result in a decline in the trading price of our securities.
Our ability to expand through new ground leases at airports is also integral to our long-term business strategy and requires that we identify and consummate suitable new ground leases or investment opportunities in real estate properties for our portfolio that meet our investment criteria and are compatible with our growth strategy. Our ability to enter into new ground leases on favorable terms, or at all, may be adversely affected by certain significant factors. We may not be able to negotiate new ground leases with airport authorities on attractive terms or at all, and we may encounter competition from other potential ground lessors, which could significantly increase the lease rate for properties we seek to lease. In our efforts to secure new ground leases, we may incur significant costs and divert management attention in connection with evaluating and negotiating such ground leases, including ground leases that we are subsequently unable to execute. In addition, even if we enter into letters of intent or conditional agreements for new ground leases of airport properties, these agreements are subject to customary closing conditions, including, but not limited to, the satisfactory results of our due diligence investigations and local government and municipal authority approvals.
Construction Material Costs and Labor
When constructing our HBO campuses we use various materials, assemblies, and labor components. We contract for our materials and labor both internally through our in-house general contractor and with various external general contractors under guaranteed maximum price (GMP) contracts upon receipt of building permits. This allows us to mitigate certain inflationary pressures associated with increases in certain building materials and labor costs between the time construction begins at a hangar campus and the time it is completed. Typically, the materials and most of the components used to construct our hangar campuses are readily available in the United States, and we attempt to procure such materials from domestic sources where and when possible. We monitor the supply markets and ensure robust competition to achieve the best prices available. Typically, the price changes that most significantly influence our development operations are price increases in steel, concrete, and labor. Inflationary and supply chain pressures have previously led to increased construction materials costs, specifically associated with steel, concrete, and other materials. Further inflationary and supply chain pressures, including those associated with changes in trade policies, could adversely affect our business. The imposition of or increase in tariffs on construction materials such as steel, and other potential changes in U.S. and global trade policy, could substantially increase the cost of and limit the availability of construction materials. Tariffs and retaliatory tariffs announced by the U.S. and other countries, the implementation, size and timing of which remain uncertain and rapidly evolving, could impact the cost of certain of our construction materials. The implementation of these tariffs and future tariffs, or any changes in trade policies that have a similar effect, or the threat of any of the foregoing, could result in further interruptions in the supply chain. We believe we may continue to experience such pressures in future quarters, as well as delays in our subsidiaries’ and contractors’ ability to requisition such materials. However, there can be no assurance that we will be able to increase the lease rates for the hangars within our hangar campuses to absorb these increased costs, if at all.
Our projections associated with the commencement and completion of construction, estimated total construction cost, hangars, and rentable square footage of our properties in development are inherently subjective and require judgement to estimate. We believe that our estimates of construction costs and timelines are subject to variability based on various factors including, but not limited to, changes in anticipated site plans, hangar mix, hangar specifications, executed guaranteed maximum price construction contracts, and general market conditions. During 2025, we updated many of our preliminary estimates based on our intention to begin incorporating a larger hangar prototype into our home basing hangar campuses, which is intended to provide an increase in rentable square footage of hangar, office, and lounge space upon completion. This larger hangar prototype requires an increase in construction materials and components, and we expect its incorporation into multiple future development projects will ultimately result in cost savings through the realization of economies of scale. Our updated estimates of total construction costs do not include projections of potential cost reductions due to such efficiencies, and we continue to reevaluate our preliminary and updated estimates from time to time over the course of the development lifecycle. We intend to continue to mitigate inflationary pressures, reduce construction costs to the greatest extent possible, and pursue compressed development schedules. We currently structure our guaranteed maximum price construction contracts with shared savings clauses to incentivize the general contractors to reduce construction costs. No assurance can be given that our cost mitigation strategies will be successful, the costs of our ongoing and future projects will not exceed budgets or the guaranteed maximum price for such projects, or that the completion will not be delayed beyond the projected completion dates.
Increases in Market Interest Rates and Future Costs of Borrowing
Economic conditions and actions by policymaking bodies contributed to rising interest rates, which, along with increases in our borrowing levels, could increase our future borrowing costs. While the Federal Reserve reduced interest rates during 2025, it has since paused its rate-cutting cycle and has raised interest rates, and has indicated the potential for further interest rate hikes in the future. Interest rates remain relatively high and there can be no certainty with respect to the occurrence, timing, or magnitude any future interest rate decisions by the Federal Reserve, and thus no certainty with respect to the ultimate impact on our borrowing costs. We expect to issue additional debt to finance future site developments and refinance the Term Loan Facility and the Series 2026 Bonds on or prior to its maturity date and mandatory tender date, respectively. Elevated interest rates would impact our overall economic performance. In addition, we are subject to credit spreads demanded by fixed income investors. As a non-rated issuer, increases in general of credit spreads in the market, or for us, may result in a higher cost of borrowing in the future. We intend to access the bond market on an opportunistic basis. In addition, we may hedge against rising benchmark interest rates by entering into hedging strategies with high quality counterparties.
Current Capital Requirements and Future Expenditures for Expansion
Each constructed and in-construction facility in our portfolio is funded by secured indebtedness under the Series 2021 Bonds, the Term Loan Facility, or the Series 2026 Bonds. We entered into the $200 million Term Loan Facility in September 2025 and issued $150 million of Series 2026 Bonds in February 2026. We anticipate that the proceeds of the Term Loan Facility and Series 2026 Bonds will fund an additional 1.2 million rentable square feet of construction projects at seven airport locations.
We raise equity capital from time to time to fund construction at additional HBO campuses over the next several years. We also have the ability to access the capital markets through our ATM Facility and through our effective shelf registration statement on Form S-3. On average, each future campus is anticipated to be composed of 200,000 rentable square feet and is expected to cost approximately $60 million, with 70% or more to be funded with additional private activity bonds or other indebtedness. All future hangar campus projects are discretionary and require us to identify the appropriate airports with the target hangar demand economics, secure required ground leases and permits, and complete future construction at such sites.
The cumulative 50 airport site business plan is estimated to cost approximately $3.0 billion, with approximately 80% or more anticipated from private activity bonds and the balance with equity or equity-linked financing. Our ability to raise additional equity and/or debt financing will be subject to a number of risks, including our ability to obtain financing upon reasonable terms, if at all, our ability to reinvest free cash flow from operations, if at all, costs of construction, delays in constructing new facilities, operating results, and other risk factors. In the event that we are unable to obtain additional financing, we may be required to raise additional equity capital, creating additional dilution to existing stockholders. There can be no assurance that we would be successful in raising such additional equity capital on favorable terms, if at all. Even if we can obtain such additional equity financing if needed, there can be no assurance that we would be successful in raising such additional financing on favorable terms, if at all.
Key Business Metrics
We focus on a variety of indicators and key operating and financial metrics to monitor the financial condition and performance of the continuing operations of our business. These metrics include:
Metric |
Description |
|
|
Revenue |
The majority of our revenue is generated from rents and fees we earn pursuant to the lease and service agreements we enter into with our tenants. Our ability to achieve revenue growth depends upon our ability to attract and retain tenants for hangars at our home basing hangar campuses. The extent to which we achieve growth in our customer base materially influences our business and results of operations. Any number of factors could affect our ability to grow our customer base, including tenant preferences for hangar space and related services, including size and location of the hangar, as well as general economic conditions. Rental revenue is recognized in accordance with ASC Topic 842, Leases, and includes (i) fixed payments of cash rents, which represents revenue each tenant pays in accordance with the terms of its respective lease and is recognized on a straight-line basis over the term of the lease and (ii) variable payments of tenant reimbursements, which are recoveries of all or a portion of the common area maintenance and operating expenses of the property and are recognized in the same period as the expenses are incurred. We derive all of our revenue from tenants in the United States. At certain of our HBO campuses, we recognize revenue from ground-based services, such as the fueling and towing of aircraft. Revenue for the sale of aircraft fuel is recognized at the time the customer obtains control of the fuel. Revenue for the sale of other ground-based services is recognized at the time the service is performed and provided to customers. Customers are invoiced at the time the services are performed and the associated revenue is recognized in the period it is earned. Our fueling arrangements generally are unique at each location we operate, and may be accounted for on a gross or net basis. We determine whether to recognize fuel and services revenue on a gross or net basis based on consideration of various factors, including whether we have control of the products or services prior to delivery to customers, our degree of latitude in establishing the sales price, whether we carry the associated inventory risk, and which party is the primary obligor within such sales arrangements. |
|
|
Operating Expenses |
In addition to changes in our revenue, our operating results are affected by, among other things, the level of our operating expenses. One of our largest expenses is the payments payable under our ground leases. For the nine months ended September 30, 2026 and 2025, we recognized expense related to ground leases of approximately $11.7 million and $10.0 million, respectively. We elect to expense rather than capitalize ground lease expense incurred at hangar campus sites under development and will incur expense under GAAP regardless of whether our ground leases defer cash rent payments until completion of construction. As we enter into new ground leases at new airport sites, our ground lease expense and associated cash payments to airport landlords will continue to increase. If airport landlords increase the per acre cost of the ground lease of our target campuses, the operating margins at potential target developments may be impacted negatively. Other operating expenses reflected in our consolidated statement of operations are reflective of the professional, legal and consulting fees, compensation costs, and other general and administrative expenses, including those necessary to support our business as a public company such as expenses associated with corporate governance, SEC reporting, and other compliance matters. While we expect that such expenses will rise in some measure as our portfolio of hangar campuses grows, we expect that such expenses as a percentage of our portfolio will decrease over time due to efficiencies, economies of scale, insourcing of job functions, and cost control measures. |
|
|
Operating Income (Loss) |
The presentation of operating income (loss) provides a measure of performance which is useful for investors, analysts and other interested parties in company-to-company operating performance comparisons. Operating income (loss) is computed by deducting operating expenses from revenue. |
|
|
Net Income (Loss) |
The presentation of net income provides a measure of performance which is useful for investors, analysts and other interested parties in company-to-company operating performance comparisons. |
|
|
Net Cash Provided By (Used In) Operating Activities |
We focus on measures designed to monitor cash flow, including net cash provided by (used in) operating activities. The presentation of net cash provided by (used in) operating activities provides a measure of performance which is useful for investors, analysts and other interested parties in company-to-company operating performance comparisons. |
|
|
| Non-GAAP Financial Measures | To supplement our results presented in accordance with GAAP, we utilize several non-GAAP financial measures that exclude or adjust certain items. These non-GAAP financial measures are detailed in the section “— Non-GAAP Financial Measures” below. |
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Such estimates include assumptions used within impairment analyses, estimated useful lives of depreciable assets and amortizable costs, estimates of inputs utilized in determining the fair value of financial instruments such as warrants, and estimates and assumptions related to right-of-use assets and operating lease liabilities. Actual results could differ materially from those estimates.
Cost of Construction
Cost of construction on the consolidated balance sheets is carried at cost. The cost of acquiring an asset includes the costs necessary to bring a capital project to the condition necessary for its intended use. Costs are capitalized once the construction of a specific capital project is probable. Construction labor and other direct costs of construction are capitalized. Professional fees for engineering, procurement, consulting, and other soft costs that are directly identifiable with the project and are considered an incremental direct cost are capitalized. We allocate a portion of our internal salaries to both capitalized cost of construction and to general and administrative expense based on the percentage of time certain employees worked in the related areas. Interest costs on the loans and bonds used to fund the capital projects are also capitalized until the capital project is completed. Once a capital project is complete, the cost of the capital project is reclassified to Constructed Assets on the accompanying balance sheet and we begin to depreciate the constructed asset on a straight-line basis over the lesser of the life of the asset or the remaining term of the related ground lease, including expected renewal terms.
Leases
We account for leases under Accounting Standards Codification (“ASC”) Topic 842, Leases. We determine whether a contract contains a lease at the inception of the contract. ASC Topic 842 requires lessees to recognize operating lease liabilities and right-of-use (“ROU”) assets for all leases with terms of more than 12 months on the consolidated balance sheets. We have made an accounting policy election that will keep leases with an initial term of 12 months or less off our consolidated balance sheets and will result in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. When management determines that it is reasonably certain that we will exercise our options to renew the leases, the renewal terms are included in the lease term and the resulting ROU asset and operating lease liability balances. We have elected to not capitalize any interest cost that is implicit within our operating leases into cost of construction on the consolidated balance sheet, but instead, we expense our ground lease cost in the consolidated statements of operations.
We have lease agreements with lease and non-lease components; we have elected the accounting policy to not separate lease and non-lease components for all underlying asset classes.
Revenue Recognition
We lease hangar facilities that we construct to third party customers. The lease agreements are either on a month-to-month basis or have a defined term and may have options to extend the term. Some of the leases contain options to terminate the lease by either party with given notice. There are no options given to the lessee to purchase the underlying assets. Rental revenue is recognized in accordance with ASC Topic 842, Leases, and includes (i) fixed payments of cash rents, which represents revenue each tenant pays in accordance with the terms of its respective lease and is recognized on a straight-line basis over the term of the lease and (ii) variable payments of tenant reimbursements, which are recoveries of all or a portion of the common area maintenance and operating expenses of the property and are recognized in the same period as the expenses are incurred.
The Company evaluates the collectability of tenant receivables for payments required under the lease agreements. If the Company determines that collectability is not probable, the Company recognizes any difference between revenue amounts recognized to date under ASC 842 and payments that have been collected from the lessee, including any additional rent or lease termination fees, as a current period adjustment to rental revenue.
At certain of our HBO campuses, we recognize revenue from ground-based services, such as the fueling and towing of aircraft. Revenue for the sale of aircraft fuel is recognized at the time customer obtains control of the fuel. Revenue for the sale of other ground-based services is recognized at the time the service is performed and provided to customers. Customers are invoiced at the time the services are performed and the associated revenue is recognized in the period it is earned. Our fueling arrangements generally are unique at each location we operate, and may be accounted for on a gross or net basis. We determine whether to recognize fuel and services revenue on a gross or net basis based on consideration of various factors, including whether we have control of the products or services prior to delivery to customers, our degree of latitude in establishing the sales price, whether we carry the associated inventory risk, and which party is the primary obligor within such sales arrangements.
Recent Accounting Pronouncements
See Note 2 — Basis of Presentation and Significant Accounting Policies in the Notes to Consolidated Financial Statements for a full description of recent accounting pronouncements including the expected dates of adoption and effects on results of operations and financial condition.
Results of Operations
Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025
The following table sets forth a summary of our consolidated results of operations for the periods indicated below and the changes between the periods (in thousands).
|
|
Three months ended |
|
|
|
|
|
|||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
Change |
|
|||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenue |
|
$ |
7,640 |
|
|
$ |
5,709 |
|
|
$ |
1,931 |
|
Fuel revenue |
|
|
2,936 |
|
|
|
1,593 |
|
|
|
1,343 |
|
Total revenue |
|
|
10,576 |
|
|
|
7,302 |
|
|
|
3,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Campus operating expenses |
|
|
2,801 |
|
|
|
2,102 |
|
|
|
699 |
|
Fuel expenses |
|
|
1,777 |
|
|
|
689 |
|
|
|
1,088 |
|
Ground lease expenses |
|
|
3,879 |
|
|
|
3,522 |
|
|
|
357 |
|
Depreciation and amortization |
|
|
2,208 |
|
|
|
1,774 |
|
|
|
434 |
|
Pursuit and marketing expenses |
|
|
586 |
|
|
|
564 |
|
|
|
22 |
|
Employee compensation and benefits |
|
|
4,655 |
|
|
|
4,961 |
|
|
|
(306 |
) |
General and administrative expenses |
|
|
940 |
|
|
|
1,369 |
|
|
|
(429 |
) |
Total expenses |
|
|
16,846 |
|
|
|
14,981 |
|
|
|
1,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(6,270 |
) |
|
|
(7,679 |
) |
|
|
1,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
1,176 |
|
|
|
280 |
|
|
|
896 |
|
Unrealized gain on warrants |
|
|
(4,581 |
) |
|
|
(3,002 |
) |
|
|
(1,579 |
) |
Other income |
|
|
(46 |
) |
|
|
(304 |
) |
|
|
258 |
|
Total other income |
|
|
(3,451 |
) |
|
|
(3,026 |
) |
|
|
(425 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,819 |
) |
|
$ |
(4,653 |
) |
|
$ |
1,834 |
|
Revenues
Rental revenues for the three months ended September 30, 2026 were approximately $7.6 million, compared to approximately $5.7 million for the three months ended September 30, 2025. The $1.9 million, or 33%, increase was primarily the result of the completion of OPF Phase II during the three months ended June 30, 2026 and the cumulative impact of increased occupancy at our BNA, DVT, and ADS hangar campuses.
Fuel revenues for the three months ended September 30, 2026 were approximately $2.9 million, compared to approximately $1.6 million for the three months ended September 30, 2025. The approximately $1.3 million, or 81%, increase was primarily the result of a $1.3 million increase in fuel sales at our CMA, ADS, and APA hangar campuses, where our fuel revenues and related expenses are recognized on a gross basis.
Operating Expenses
Campus operating expenses increased approximately $0.7 million, or 33%, from approximately $2.1 million for the three months ended September 30, 2025, to approximately $2.8 million for the three months ended September 30, 2026. Salaries, wages, and benefits associated with our hangar campus personnel increased approximately $0.2 million, primarily driven by headcount increases associated with the expansion of operations at our OPF Phase II hangar campus. Other campus operating expenses increased approximately $0.5 million, primarily driven by increases of property taxes, insurance and the expansion of operations at OPF.
Fuel expenses for the three months ended September 30, 2026 were approximately $1.8 million, compared to approximately $0.7 million for the three months ended September 30, 2025. The approximately $1.1 million, or 157%, increase was primarily the result of an increase in the cost of fuel of approximately $1.1 million, driven by the impact recognizing fuel revenue and expenses on a gross basis at our CMA, ADS, and APA hangar campuses and increased volatility in fuel prices.
Ground lease expenses increased approximately $0.4 million, or 11%, from approximately $3.5 million for the three months ended September 30, 2025, to approximately $3.9 million for the three months ended September 30, 2026. The increase in ground lease expense was driven by the ground leases signed at LGB and FTW during the three months ended December 31, 2025.
Depreciation and amortization for the three months ended September 30, 2026 was approximately $2.2 million, as compared to approximately $1.8 million for the three months ended September 30, 2025. The approximately $0.4 million, or 22%, increase was primarily driven by the commencement of operations at our OPF Phase II campus during the three months ended June 30, 2026, the commencement of operations at our ADS campus during the three months ended June 30, 2025 and the commencement of operations at our APA campus during the three months ended September 30, 2025.
Pursuit and marketing expenses for the three months ended September 30, 2026 were approximately $0.6 million, compared to approximately $0.6 million for the three months ended September 30, 2025. The less than 1% increase was primarily the result of increased marketing expenditure and our investment in our growth strategy in securing airport site acquisitions and potential tenants throughout the year.
Employee compensation and benefits expenses decreased approximately $0.3 million, or 6%, to $4.7 million for the three months ended September 30, 2026, as compared to approximately $5.0 million for the three months ended September 30, 2025. The decrease was primarily driven by non-recurring charges associated with the accelerated vesting of certain RSU awards during the three months ended September 30, 2025.
For the three months ended September 30, 2026 and 2025, other general and administrative expenses were approximately $0.9 million and approximately $1.4 million, respectively. The approximately $0.5 million, or 36%, decrease was primarily driven by a decrease in legal and accounting related costs due to non-recurring transaction costs and our efforts to internalize job functions.
Other (Income) Expense
Other income increased from approximately $3.0 million for the three months ended September 30, 2025, to approximately $3.5 million for the three months ended September 30, 2026. The increase was primarily due to an approximately $1.6 million difference in the mark-to-market adjustment of the outstanding warrants at September 30, 2026 as compared to September 30, 2025, an approximately $0.9 million increase in interest expense due to higher indebtedness, and an approximately $0.3 million decrease in interest income.
Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
The following table sets forth a summary of our consolidated results of operations for the periods indicated below and the changes between the periods (in thousands).
|
|
Nine months ended |
|
|
|
|
|
|||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
Change |
|
|||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenue |
|
$ |
21,163 |
|
|
$ |
15,395 |
|
|
$ |
5,768 |
|
Fuel revenue |
|
|
7,993 |
|
|
|
4,088 |
|
|
|
3,905 |
|
Total revenue |
|
|
29,156 |
|
|
|
19,483 |
|
|
|
9,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Campus operating expenses |
|
|
7,754 |
|
|
|
6,212 |
|
|
|
1,542 |
|
Fuel expenses |
|
|
4,799 |
|
|
|
2,346 |
|
|
|
2,453 |
|
Ground lease expenses |
|
|
11,689 |
|
|
|
9,994 |
|
|
|
1,695 |
|
Depreciation and amortization |
|
|
6,295 |
|
|
|
4,352 |
|
|
|
1,943 |
|
Pursuit and marketing expenses |
|
|
1,872 |
|
|
|
1,729 |
|
|
|
143 |
|
Employee compensation and benefits |
|
|
13,612 |
|
|
|
13,494 |
|
|
|
118 |
|
General and administrative expenses |
|
|
3,145 |
|
|
|
3,386 |
|
|
|
(241 |
) |
Total expenses |
|
|
49,166 |
|
|
|
41,513 |
|
|
|
7,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(20,010 |
) |
|
|
(22,030 |
) |
|
|
2,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
3,809 |
|
|
|
551 |
|
|
|
3,258 |
|
Unrealized gain on warrants |
|
|
(7,583 |
) |
|
|
(22,275 |
) |
|
|
14,692 |
|
Other income |
|
|
(76 |
) |
|
|
(883 |
) |
|
|
807 |
|
Total other income |
|
|
(3,850 |
) |
|
|
(22,607 |
) |
|
|
18,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(16,160 |
) |
|
$ |
577 |
|
|
$ |
(16,737 |
) |
Revenues
Rental revenues for the nine months ended September 30, 2026 were approximately $21.2 million, compared to approximately $15.4 million for the nine months ended September 30, 2025. The $5.8 million, or 38%, increase was primarily the result of operations at our APA and ADS hangar campuses, which commenced operations throughout the year ended December 31, 2025, the completion of OPF Phase II during the three months ended June 30, 2026, and the cumulative impact of increased occupancy at our BNA, DVT, and SJC hangar campuses.
Fuel revenues for the nine months ended September 30, 2026 were approximately $8.0 million, compared to approximately $4.1 million for the nine months ended September 30, 2025. The approximately $3.9 million, or 95%, increase was primarily the result of a $3.4 million increase in fuel sales at our CMA, ADS, and APA hangar campuses, where our fuel revenues and related expenses are recognized on a gross basis. Other fuel revenue increased by approximately $0.5 million, which was primarily driven by an increase in fuel gallons uplifted at our BNA, OPF, and SJC hangar campuses due to increased occupancy.
Operating Expenses
Campus operating expenses increased approximately $1.6 million, or 26%, from approximately $6.2 million for the nine months ended September 30, 2025, to approximately $7.8 million for the nine months ended September 30, 2026. Salaries, wages, and benefits associated with our hangar campus personnel increased approximately $0.6 million, primarily driven by headcount increases associated with the commencement of operations at our DVT, APA, and ADS hangar campuses throughout the year ended December 31, 2025. Other campus operating expenses increased approximately $1.0 million, primarily driven by increased insurance, property taxes, and utilities associated with operations at DVT, APA, ADS and OPF.
Fuel expenses for the nine months ended September 30, 2026 were approximately $4.8 million, compared to approximately $2.3 million for the nine months ended September 30, 2025. The approximately $2.5 million, or 109%, increase was primarily the result of an increase in the cost of fuel of approximately $2.7 million, driven by the impact of recognizing fuel revenue and expenses on a gross basis at our CMA, ADS, and APA hangar campuses and increased volatility in fuel prices, offset by an approximately $0.2 million decrease in other fuel-related expenses.
Ground lease expenses increased approximately $1.7 million, or 17%, from approximately $10.0 million for the nine months ended September 30, 2025, to approximately $11.7 million for the nine months ended September 30, 2026. The increase in ground lease expense was driven by the ground leases signed at SWF and HIO during the three months ended June 30, 2025 and the ground leases signed at LGB and FTW during the three months ended December 31, 2025.
Depreciation and amortization for the nine months ended September 30, 2026 was approximately $6.3 million, as compared to approximately $4.4 million for the nine months ended September 30, 2025. The approximately $1.9 million, or 43%, increase was primarily driven by the commencement of operations at our OPF Phase II campus during the three months ended June 30, 2026, the commencement of operations at our DVT and ADS campuses during the three months ended June 30, 2025, and the commencement of operations at our APA campus during the three months ended September 30, 2025.
Pursuit and marketing expenses for the nine months ended September 30, 2026 were approximately $1.9 million, compared to approximately $1.7 million for the nine months ended September 30, 2025. The 12% increase was primarily the result of increased marketing spend and our investment in our growth strategy in securing airport site acquisitions and potential tenants throughout the year.
Employee compensation and benefits expenses increased approximately $0.1 million, or 1%, to $13.6 million for the nine months ended September 30, 2026, as compared to approximately $13.5 million for the nine months ended September 30, 2025. The increase was primarily driven by an increase in expense recognized associated with our equity compensation programs.
For the nine months ended September 30, 2026 and 2025, other general and administrative expenses were approximately $3.1 million and approximately $3.4 million, respectively. The approximately $0.3 million, or 9%, decrease was primarily driven by a decrease in legal and accounting related costs due to non-recurring transaction costs and our efforts to internalize job functions.
Other (Income) Expense
Other income decreased from approximately $22.6 million for the nine months ended September 30, 2025, to approximately $3.9 million for the nine months ended September 30, 2026. The decrease was primarily due to an approximately $14.7 million difference in the mark-to-market adjustment of the outstanding warrants at September 30, 2026 as compared to September 30, 2025, an approximately $3.3 million increase in interest expense due to higher indebtedness and an approximately $0.8 million decrease in interest income.
Non-GAAP Financial Measures
To supplement our results presented in accordance with GAAP, we utilize several non-GAAP financial measures that exclude or adjust certain items. Our method of calculating these measures may differ from similarly titled measures utilized by other companies and therefore their comparability may be limited. These non-GAAP financial measures include:
Metric |
Description |
|
|
Adjusted EBITDA |
We utilize Adjusted EBITDA to evaluate our operating and financial performance, which is supplemental in nature and a financial measure not calculated in accordance with GAAP. We define Adjusted EBITDA as net income before (i) depreciation and amortization expense, (ii) interest expense, (iii) interest income, (iv) non-cash stock-based compensation expense, (v) non-cash gains and losses resulting from the change in fair value of our liability-classified warrants, (vi) non-cash operating lease expense, (vii) non-cash operating lease income, and (viii) other non-cash expenses, including, but not limited to, the impairment of long-lived assets, gains or losses arising from the disposition of assets, losses on extinguishment of debt, and other non-cash non-operating expenses. We believe Adjusted EBITDA is useful for investors, analysts and other interested parties as it provides a view of our operating performance, analyzes our ability to meet debt service obligations, and facilitates company-to-company operating performance comparisons by excluding potential differences caused by variations in capital structures, the age and book depreciation of assets, and equity-based incentive plans. |
|
|
Adjusted Rental Revenue |
Adjusted Rental Revenue is a non-GAAP financial measure defined as rental revenue before the impact of non-cash operating lease income resulting from recognizing lease income on a straight-line basis over the term of the leases. We believe Adjusted Rental Revenue is useful for investors, analysts, and other interested parties as it provides information about cash rental income earned in a given period by excluding the non-cash income or loss associated with the straight-line recognition of leases under ASC Topic 842. |
|
|
| Adjusted Net Fuel Revenue | Adjusted Net Fuel Revenue is a non-GAAP financial measure defined as fuel revenue net of fuel expenses. For GAAP purposes, our fueling arrangements may be accounted for on a gross or net basis based on the consideration of various factors, including whether we have control of the products or services prior to delivery to customers, our degree of latitude in establishing the sales price, whether we carry the associated inventory risk, and which party is the primary obligor within such sales arrangements. Management utilizes Adjusted Net Fuel Revenue to evaluate our operating performance for excluding potential differences caused by differing revenue recognition methods across our operating portfolio. At our ADS, APA, and CMA hangar campuses, fuel revenue and expense is accounted for on a gross basis under GAAP, whereas the calculation of Adjusted Net Fuel Revenue is more representative of the net margin we earn from fuel sales at such campuses. We believe Adjusted Net Fuel Revenue is useful for investors, analysts, and other interested parties as it enhances comparability of the net contribution of fuel revenue with prior periods. |
|
|
| Adjusted Total Revenue | Adjusted Total Revenue is a non-GAAP financial measure that is defined as the sum of Adjusted Rental Revenue and Adjusted Net Fuel Revenue. Refer to “— Adjusted Rental Revenue” and “— Adjusted Net Fuel Revenue” above. |
|
|
Adjusted Campus Operating Expenses |
Adjusted Campus Operating Expenses is a non-GAAP financial measure defined as the sum of our reported campus operating expenses and ground lease expenses before the impact of non-cash operating lease expense resulting from recognizing operating lease expense on a straight-line basis over the term of the ground lease. For GAAP purposes, we elect to expense rather than capitalize ground lease expense incurred at hangar campus sites under development and will incur expense under GAAP regardless of whether our ground leases defer cash rent payments until completion of construction. As such, our reported operating lease expense may include a significant amount of non-cash expense associated with hangar campuses not currently in operation. We believe Adjusted Campus Operating Expenses is useful for investors, analysts, and other interest parties as it provides a view of our operating performance at our hangar campuses presently in operation and facilitates period-to-period operating performance comparisons by excluding non-cash operating lease expense. |
|
|
Adjusted Campus Operating Profit (Loss) |
Adjusted Campus Operating Profit (Loss) is a non-GAAP financial measure defined as the sum of Adjusted Rental Revenue and Adjusted Net Fuel Revenue minus Adjusted Campus Operating Expenses. Management utilizes Adjusted Operating Profit (Loss) to evaluate the operating performance of HBO hangar campuses presently in operation by excluding certain non-cash expenses and income, as well as general and administrative expenses associated with our corporate operations. We believe Adjusted Campus Operating Profit is useful for investors, analysts, and other interest parties as it provides a view of our operating performance at our hangar campuses presently in operation and facilitates period-to-period operating performance comparisons. |
|
|
Adjusted Corporate Operating Expenses |
Adjusted Corporate Operating Expenses is a non-GAAP financial measure defined as the sum of our reported pursuit and marketing expenses, general and administrative expenses, and employee compensation and benefits before the impact of non-cash stock-based compensation expense. We believe Adjusted Corporate Operating Expenses is useful for investors, analysts, and other interest parties as it segregates expenses not associated with revenue-generating activities and facilitates period-to-period operating performance comparisons. |
A reconciliation of non-GAAP measures to the comparable financial measures calculated in accordance with GAAP is presented below:
|
|
Three months ended |
|
|
Nine months ended |
|
||||||||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
||||
Net income (loss) |
|
$ | (2,819 | ) |
|
$ | (4,653 | ) |
|
$ | (16,160 | ) |
|
$ | 577 |
|
Add (subtract): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,208 |
|
|
|
1,774 |
|
|
|
6,295 |
|
|
|
4,352 |
|
Interest expense |
|
|
1,176 |
|
|
|
280 |
|
|
|
3,809 |
|
|
|
551 |
|
Other expense (income) |
|
|
(46 | ) |
|
|
(304 | ) |
|
|
(76 | ) |
|
|
(883 | ) |
Changes in fair value of warrant liabilities |
|
|
(4,581 | ) |
|
|
(3,002 | ) |
|
|
(7,583 | ) |
|
|
(22,275 | ) |
Equity-based compensation |
|
|
1,657 |
|
|
|
1,990 |
|
|
|
5,075 |
|
|
|
4,551 |
|
Non-cash operating lease expense |
|
|
2,310 |
|
|
|
1,939 |
|
|
|
6,890 |
|
|
|
5,287 |
|
Non-cash operating lease income |
|
|
(441 | ) |
|
|
(302 | ) |
|
|
(1,223 | ) |
|
|
(767 | ) |
Adjusted EBITDA |
|
$ | (536 | ) |
|
$ | (2,278 | ) |
|
$ | (2,973 | ) |
|
$ | (8,607 | ) |
|
|
Three months ended |
|
|
Nine months ended |
|
||||||||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
||||
| Rental revenue |
|
$ | 7,640 |
|
|
$ | 5,709 |
|
|
$ | 21,163 |
|
|
$ | 15,395 |
|
Less: Non-cash operating lease income |
|
|
(441 | ) |
|
|
(302 | ) |
|
|
(1,223 | ) |
|
|
(767 | ) |
Adjusted rental revenue (non-GAAP) |
|
|
7,199 |
|
|
|
5,407 |
|
|
|
19,940 |
|
|
|
14,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel revenue |
|
|
2,936 |
|
|
|
1,593 |
|
|
|
7,993 |
|
|
|
4,088 |
|
Less: Fuel expenses |
|
|
(1,777 | ) |
|
|
(689 | ) |
|
|
(4,799 | ) |
|
|
(2,346 | ) |
Adjusted net fuel revenue (non-GAAP) |
|
|
1,159 |
|
|
|
904 |
|
|
|
3,194 |
|
|
|
1,742 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted total revenue (non-GAAP) |
|
|
8,358 |
|
|
|
6,311 |
|
|
|
23,134 |
|
|
|
16,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Campus operating expenses |
|
|
2,801 |
|
|
|
2,102 |
|
|
|
7,754 |
|
|
|
6,212 |
|
| Ground lease expenses |
|
|
3,879 |
|
|
|
3,522 |
|
|
|
11,689 |
|
|
|
9,994 |
|
| Less: Non-cash operating lease expense |
|
|
(2,310 | ) |
|
|
(1,939 | ) |
|
|
(6,890 | ) |
|
|
(5,287 | ) |
| Adjusted campus operating expenses (non-GAAP) |
|
|
4,370 |
|
|
|
3,685 |
|
|
|
12,553 |
|
|
|
10,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted campus operating profit (non-GAAP) |
|
|
3,988 |
|
|
|
2,626 |
|
|
|
10,581 |
|
|
|
5,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pursuit and marketing expenses |
|
|
586 |
|
|
|
564 |
|
|
|
1,872 |
|
|
|
1,729 |
|
| General and administrative expenses |
|
|
940 |
|
|
|
1,369 |
|
|
|
3,145 |
|
|
|
3,386 |
|
| Employee compensation and benefits |
|
|
4,655 |
|
|
|
4,961 |
|
|
|
13,612 |
|
|
|
13,494 |
|
| Less: Equity-based compensation |
|
|
(1,657 | ) |
|
|
(1,990 | ) |
|
|
(5,075 | ) |
|
|
(4,551 | ) |
| Adjusted corporate operating expenses (non-GAAP) |
|
|
4,524 |
|
|
|
4,904 |
|
|
|
13,554 |
|
|
|
14,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ | (536 | ) |
|
$ | (2,278 | ) |
|
$ | (2,973 | ) |
|
$ | (8,607 | ) |
Liquidity and Capital Resources
Overview
Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund the construction of new assets, fund working capital and other general business needs. Our primary sources of cash include the potential issuance of equity and debt securities and rental payments from tenants. Our long-term liquidity requirements include lease payments under our ground leases with airport authorities, repaying principal and interest on outstanding borrowings, funding the construction costs of our hangar campus development projects (see “— Construction Material Costs and Labor”), funding for operations, and paying accrued expenses.
We believe that we have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional private activity bonds, drawdowns under the Term Loan Facility, and other debt and the issuance of additional equity securities. We also have the ability to utilize our ATM Facility or otherwise utilize our shelf registration statement on Form S-3 to access the capital markets. However, we cannot assure you that we will have access to these sources of capital or that, even if such sources of capital are available, these sources of capital will be available on favorable terms. Our ability to incur additional debt will depend on multiple factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that are or may be imposed by future lenders. Our ability to access the equity and debt capital markets will depend on multiple factors as well, including general market conditions for real estate companies, our degree of leverage, the trading price of our common stock and debt and market perceptions about us.
Our cash deposits may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and the majority are maintained with a major financial institution with reputable credit. Our restricted cash is held in trust at major financial institutions pursuant to the respective indentures of the Series 2021 Bonds and Series 2026 Bonds. We monitor the relative credit standing of financial institutions with whom we transact and limit the amount of credit exposure with any one entity. Our portfolio of investments and restricted investments is composed entirely of U.S. Treasury securities as of September 30, 2026.
The following table summarizes our cash and cash equivalents, restricted cash, investments, and restricted investments as of September 30, 2026 and December 31, 2025 (in thousands):
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Cash and cash equivalents |
|
$ | 43,858 |
|
|
$ | 20,718 |
|
Restricted cash |
|
|
112,634 |
|
|
|
16,306 |
|
Restricted investments |
|
|
42,898 |
|
|
|
11,453 |
|
| Total cash, restricted cash, investments, and restricted investments |
|
$ | 199,390 |
|
|
$ | 48,477 |
|
Private Activity Bonds
Series 2026 Bonds
On February 12, 2026, Sky Harbour Capital III LLC (“Sky Capital III”) completed a $150 million financing through the issuance of Series 2026 Bonds. The Series 2026 Bonds were issued by the Public Finance Authority of Wisconsin and bear interest at a rate of 6.00% per year, payable semi-annually in arrears on January 1 and July 1 of each year, beginning on July 1, 2026. The Series 2026 Bonds are subject to mandatory tender for purchase on January 1, 2031 (the “Mandatory Tender Date”), and will mature on July 1, 2060, unless earlier exchanged, redeemed or repurchased. On the Mandatory Tender Date, holders will be required to tender their Bonds for purchase at a price equal to 100% of the principal amount thereof plus accrued interest. Following such mandatory tender, the Series 2026 Bonds may be remarketed at a new interest rate or otherwise refinanced. Accordingly, although the Series 2026 Bonds have a stated final maturity of July 1, 2060, Sky Capital III will be required to refinance or remarket the Series 2026 Bonds on or prior to January 1, 2031. We utilize the proceeds of the Series 2026 Bonds, together with other available funds, including draws from the Company’s Term Loan Facility, to (i) finance or refinance, directly or indirectly, all or a portion of the construction, equipping and/or improvement of all or a portion of the 2026 Projects; (ii) fund a deposit to the debt service reserve fund for the Series 2026 Bonds; (iii) pay capitalized interest on the Series 2026 Bonds through January 1, 2029; and (iv) pay the costs of issuance of the Series 2026 Bonds.
Series 2021 Bonds
On September 14, 2021, SHC completed an issuance through the Public Finance Authority (Wisconsin) of $166.3 million of Series 2021 PABs. The Series 2021 Bonds are comprised of three maturities: $21.1 million bearing interest at 4.00%, due July 1, 2036; $30.4 million bearing interest at 4.00%, due July 1, 2041; and $114.8 million bearing interest at 4.25%, due July 1, 2054. The Series 2021 Bond that has a maturity date of July 1, 2036 was issued at a premium, and Sky received bond proceeds that were $0.2 million above its face value. The net proceeds from the issuance of the Series 2021 Bonds were used to (a) finance or refinance the construction of various aviation facilities consisting of general aviation aircraft hangars and storage facilities located and to be located on the SGR site, the OPF site, the BNA site, the APA site, the DVT site, and following our March 2023 election to reallocate a portion of the net proceeds, the ADS site; (b) fund debt service and other operating expenses such as ground lease expense during the initial construction period; (c) fund deposits to the Debt Service Reserve Fund; and (d) pay certain costs of issuance related to the Series 2021 Bonds.
Term Loan Facility
On September 4, 2025, we entered into a Draw Down Note Purchase And Continuing Covenant Agreement (the “Credit Agreement”) among SH Capital II, the other borrowers party thereto, the lenders party thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., as administrative agent, sole bookrunner and sole lead arranger (“JPMorgan” or “Administrative Agent”). The Credit Agreement provides for, among other things, the Term Loan Facility. The Term Loan Facility provides for borrowings up to an aggregate principal amount of $200 million under the Credit Agreement (the “Loans”) to be made by the Lenders from time to time as requested by SH Capital II. The Loans will mature on September 4, 2030, subject to any extensions by the Lenders. The Term Loan Facility may be increased, subject to credit approval, up to an aggregate principal amount of $300 million. Such Loans will bear interest at a rate of 80% of the sum of SOFR and 0.10%, plus 200 basis points. In October 2025, we entered into an interest rate swap (the “Swap Agreement”) for notional amounts of up to $200 million, based on predetermined notional schedule agreement as defined in the Swap Agreement. The Swap Agreement effectively fixes the SOFR component of any Loans at or below the notional schedule made under the Term Loan Facility at approximately 2.65%, or 4.73% inclusive of applicable interest rate spreads, for the five-year term.
The Credit Agreement provides for Loans to be made from time to time by our special purpose subsidiaries of SH Capital II for the construction and operation of hangar project facilities at various airports (the “Hangar Projects”), subject to customary phased eligibility criteria. Loans will be secured by the real estate underlying the Hangar Projects, pledges of equity interests and certain revenues of SH Capital II and the special purpose subsidiaries (the “Term Loan Borrowers”). Sky and Sky Harbour Holdings II LLC, the holding company of SH Capital II, and Sky Harbour Holdings III LLC will guarantee the Term Loan Borrower’s obligations under the Loans pursuant to a Parent Guarantee and a Holdco Guaranty, respectively. In addition, pursuant to a Non-Recourse Carveout Guaranty, we will be required to guarantee the Term Loan Borrowers’ obligations under the Loans in certain limited circumstances such as misconduct by the Term Loan Borrowers or the primary guarantors.
As of September 30, 2026, there was approximately $129.2 million of availability under the Term Loan Facility, subject to borrowing base restrictions.
Yorkville Promissory Notes
On December 8, 2025, we issued the Yorkville Promissory Note to Yorkville, in the aggregate principal amount of $15 million. The issue price for the Yorkville Promissory Note was 100% of the aggregate principal amount thereof. The Yorkville Promissory Note accrues interest at a rate of 7.75% per annum (or 18% upon the occurrence of an event of default) and matures on June 8, 2027. Beginning on July 8, 2026, and continuing on the same day of each of the twelve successive months thereafter, we are required to repay a portion of the outstanding balance of the Yorkville Promissory Note in amounts equal to $1.25 million, with $7.5 million and $7.5 million due during the years ended December 31, 2026 and 2027, respectively.
On January 27, 2026, Sky issued the January 2026 Yorkville Promissory Note to Yorkville, in the aggregate principal amount of $10 million. The issue price for the January 2026 Yorkville Promissory Note was 100% of the aggregate principal amount thereof. The January 2026 Yorkville Promissory Note accrues interest at a rate of 7.75% per annum (or 18% upon the occurrence of an event of default) and matures on June 8, 2027. Beginning on July 8, 2026, and continuing on the same day of each of the twelve successive months thereafter, we are required to repay a portion of the outstanding balance of the January 2026 Yorkville Promissory Note in amounts equal to approximately $0.8 million.
Registered Direct Offerings
On August 10, 2026 and August 21, 2026, we entered into stock purchase agreements with the Investors, pursuant to which we agreed to sell an aggregate of 5,000,000 shares of Class A Common Stock to the Investors in registered direct offerings at a purchase price of $10.00 per share. The closings of the offerings occurred on August 12, 2026 and August 26, 2026, respectively. We received aggregate gross proceeds of $50.0 million from the offerings, before deducting offering-related expenses.
At-the-Market Facility
On March 27, 2024, we entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with B. Riley Securities, Inc. (“B. Riley”) with respect to an “at the market” offering program (the “ATM Facility”), under which we may, from time to time, at our sole discretion, issue and sell through B. Riley, acting as sales agent, up to $100 million of shares of Class A Common Stock. Pursuant to the ATM Agreement, we may sell the shares through B. Riley by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act. B. Riley will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon instructions from us, including any price or size limits or other customary parameters or conditions we may impose. We pay B. Riley a commission of 3.0% of the gross sales price per share sold under the ATM Agreement, subject to certain reductions. On December 31, 2025, we entered into an Amended and Restated At Market Issuance Sales Agreement (the “A&R ATM Agreement”) with B. Riley and Yorkville Securities, LLC (“Yorkville Securities” and, together with B. Riley, the “Sales Agents”), pursuant to which, among other things, Yorkville Securities was added as an additional sales agent. Pursuant to the A&R ATM Agreement, we may offer and sell, from time to time through the Sales Agents, shares of our Class A Common Stock, having an aggregate offering price of up to $100.0 million (the “ATM Shares”). The material terms and conditions of the ATM Agreement otherwise remain unchanged.
During the three months ended September 30, 2026, the Company sold no shares of Class A Common Stock under the ATM Facility. During the nine months ended September 30, 2026, the Company sold 242,483 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $10.49. As of September 30, 2026, ATM Shares having an aggregate gross sales price of up to approximately $95.2 million remain available for issuance under the A&R ATM Agreement.
We are not obligated to sell any shares under the A&R ATM Agreement. The offering of shares pursuant to the A&R ATM Agreement will terminate upon the earlier to occur of (i) the issuance and sale, through the Sales Agents, of all of the shares subject to the A&R ATM Agreement and (ii) termination of the A&R ATM Agreement in accordance with its terms. We have made limited sales under the ATM Facility to date and will only do so when our stock price is at prices our Board deems appropriate.
Debt Covenants
The Term Loan Facility contains financial and non-financial covenants, including a debt service coverage ratio, debt service reserve requirements, restricted payments test, and limitations on the sale, lease, or distribution of assets. Commencing three months after the earlier of September 4, 2028 or a trigger date based on substantial completion of certain projects, SH Capital II is required to maintain a historical and projected debt service coverage ratio of no less than 1.25 to 1.00.
The Series 2021 Bonds contain financial and non-financial covenants, including a debt service coverage ratio, a restricted payments test and limitations on the sale, lease, or distribution of assets. To the extent that SHC does not comply with these covenants, an event of default or cross-default may occur under one or more agreements, and we or our subsidiaries may be restricted in our ability to pay dividends, issue new debt or access our leased facilities. The Series 2021 Bonds are collateralized on a joint and several basis with the property and revenues of all SHC subsidiaries and their assets financed or to be financed from the proceeds of the Series 2021 Bonds. Covenants in the Series 2021 Bonds require SHC to maintain a debt service coverage ratio (as defined in the relevant documents) of at least 1.25 for each applicable test period, commencing with the quarter ending December 31, 2024. The Series 2021 Bonds are subject to a Continuing Disclosure Agreement whereby SHC is obligated to provide electronic copies of (i) monthly construction reports, (ii) quarterly reports containing quarterly financial information of SHC and (iii) annual reports containing audited consolidated financial statements of SHC to the Municipal Securities Rulemaking Board.
As of September 30, 2026, we were in compliance with all debt covenants.
Lease Commitments
The Company’s future minimum lease payments required under leases as of September 30, 2026 were as follows:
| Year Ending December 31, |
|
Operating Leases |
|
|
Finance Leases |
|
||
2026 (remainder of year) |
|
$ | 1,816 |
|
|
$ | 11 |
|
| 2027 |
|
|
8,756 |
|
|
|
45 |
|
| 2028 |
|
|
10,691 |
|
|
|
32 |
|
| 2029 |
|
|
11,436 |
|
|
|
- |
|
| 2030 |
|
|
11,590 |
|
|
|
- |
|
| Thereafter |
|
|
719,525 |
|
|
|
- |
|
| Total lease payments |
|
|
763,814 |
|
|
|
88 |
|
| Less imputed interest |
|
|
(554,460 | ) |
|
|
(5 | ) |
| Total |
|
$ | 209,354 |
|
|
$ | 83 |
|
Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet arrangements.
Cash Flows
The following table summarizes our sources and uses of cash for the nine months ended September 30, 2026 and 2025 (in thousands):
|
|
Nine months ended |
|
|||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
||
Cash and restricted cash at beginning of period |
|
$ | 37,024 |
|
|
$ | 94,359 |
|
Net cash used in operating activities |
|
|
(4,102 | ) |
|
|
(6,900 | ) |
Net cash used in investing activities |
|
|
(145,210 | ) |
|
|
(44,295 | ) |
Net cash provided by (used in) financing activities |
|
|
268,780 |
|
|
|
(6,691 | ) |
Cash and restricted cash at end of period |
|
$ | 156,492 |
|
|
$ | 36,473 |
|
Operating Activities
Cash used in operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business. Our working capital consists primarily of cash, receivables from tenants, prepaid expenses, accounts payable, accrued compensation, accrued other expenses, and lease liabilities. The timing of collection of our tenant receivables, and the timing of spending commitments and payments of our accounts payable, accrued expenses, accrued payroll and related benefits, all affect these account balances.
Net cash used in operating activities was approximately $4.1 million for the nine months ended September 30, 2026, as compared to cash used in operating activities of approximately $6.9 million for the same period in 2025. The approximately $2.8 million decrease in cash used in operating activities was primarily attributable to an approximately $3.9 million decrease in net loss, net of non-cash adjustments offset by an unfavorable change in working capital of approximately $1.1 million. The decrease in net loss, net of non-cash adjustments was primarily driven by the impact of increases in revenue from our operations at DVT, APA, ADS, and OPF. The favorable change in working capital was primarily driven by the timing of collections of accounts receivable as well as spending commitments and payments of our accounts payable and other accrued expenses.
Investing Activities
Our primary investing activities have consisted of payments related to the cost of construction at our various hangar campus development projects and investment in U.S. Treasury Securities. As our business expands, we expect to continue to invest in our current and anticipated future portfolio of hangar campus development projects.
Net cash used in investing activities was approximately $145.2 million for the nine months ended September 30, 2026, as compared to cash used in investing activities of approximately $44.3 million for the same period in 2025. The increase of approximately $100.9 million of cash used in investing activities was driven primarily by an increase of capital expenditures of approximately $52.1 million and a net decrease in proceeds received from available-for-sale and held-to-maturity investments of approximately $50.4 million.
Financing Activities
Our primary financing activities have consisted of capital raised to fund the growth of our business and proceeds from debt obligations incurred to finance our hangar campus development projects. We expect to raise additional equity capital and issue additional indebtedness as our business grows.
Net cash provided by financing activities was approximately $268.8 million for the nine months ended September 30, 2026, as compared to net cash used in financing activities of approximately $6.7 million for the same period in 2025. The approximately $275.5 million increase in net cash provided by financing activities was primarily driven by proceeds received from the issuance of the Series 2026 Bonds of $150.0 million, approximately $78.8 million of proceeds received from the Term Loan Facility and 2026 Yorkville Promissory Note, and approximately $50.0 million of proceeds received from registered direct offerings. The aforementioned increases were offset by an increase of approximately $5.1 million in principal payments for loans payable.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this item.
CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
In connection with the preparation of this Form 10-Q, as required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2026. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the three months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
LEGAL PROCEEDINGS |
The Company is not currently a party to any material legal proceedings.
RISK FACTORS |
There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
During the three months ended September 30, 2026, there were no unregistered sales of the Company’s securities that were not reported in a Current Report on Form 8-K.
DEFAULTS UPON SENIOR SECURITIES |
Not applicable.
MINE SAFETY DISCLOSURES |
Not applicable.
OTHER INFORMATION |
During the three months ended September 30, 2026, director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
EXHIBITS |
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3.1 |
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Second Amended and Restated Certificate of Incorporation of Yellowstone Acquisition Company. |
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January 31, 2022 |
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Inline XBRL Instance Document. |
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Inline XBRL Taxonomy Extension Schema Document. |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
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Inline XBRL Taxonomy Extension Definition. |
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Inline XBRL Taxonomy Extension Label Linkbase Document. |
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Inline XBRL Taxonomy Presentation Linkbase Document. |
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104 (#) |
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Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
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Filed herewith. |
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The certifications attached as Exhibits 32.1 and 32.2 that accompany this Report, are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Sky Harbour Group Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Report irrespective of any general incorporation language contained in such filing. |
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Certain schedules and exhibits to this Exhibit have been omitted pursuant to Item 601(a)(5) or Item 601(b)(10)(iv), as applicable, of Regulation S-K. The Registrant agrees to furnish supplemental copies of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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SKY HARBOUR GROUP CORPORATION (Registrant) |
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/s/ Tal Keinan |
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Tal Keinan Chief Executive Officer (Principal Executive Officer) |
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November 10, 2026 |
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Francisco Gonzalez Chief Financial Officer (Principal Financial Officer) |
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November 10, 2026 |
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Michael W. Schmitt Chief Accounting Officer (Principal Accounting Officer) |
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November 10, 2026 |
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48
Exhibit 10.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into on August 10, 2026, by and among Sky Harbour Group Corporation, a Delaware corporation (the “Company”), and each of the investors identified on Schedule A hereto (each, an “Investor” and collectively, the “Investors”) and shall become effective upon the execution and delivery of this Agreement by the parties hereto.
WHEREAS, the Company desires to issue and sell to the Investors, and the Investors desire to purchase from the Company, shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), in a registered direct offering (the “Primary Direct Offering”) on the terms and subject to the conditions set forth herein;
WHEREAS, the shares of Common Stock to be issued and sold to the Investors in the Primary Direct Offering will be offered and sold pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-278275) (together with any amendments thereto, the “Primary Registration Statement”), initially filed by the Company with the SEC on March 27, 2024 and declared effective on April 10, 2024, and the Company Prospectus (as defined below) included therein, as supplemented by a prospectus supplement to be filed with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the execution and delivery of this Agreement (the “Prospectus Supplement”).
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following terms have the meanings set forth below:
“Actions” means any civil, criminal or administrative action, suit, demand, claim, charge, complaint, litigation, audit, formal proceeding, arbitration or hearing.
“Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is controlled by, or is under common Control with such Person. For the avoidance of doubt, an Investor shall be deemed not to be an Affiliate of (i) any portfolio company of such Investor or its Affiliates or (ii) any limited partner of such Investor or its Affiliates.
“Agreement” has the meaning set forth in the Recitals.
“Aggregate Investor Shares” means 4,000,000 shares of Common Stock, representing the aggregate number of Primary Direct Offering Shares to be purchased by the Investors in the Primary Direct Offering, as set forth on Schedule A hereto.
“ATM Program” has the meaning set forth in Section 6.6.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.
“Closing” has the meaning set forth in Section 2.2(a).
“Closing Date” means August 12, 2026, provided all conditions precedent set forth in Article V have been satisfied or waived.
“Common Stock” has the meaning set forth in the Recitals.
“Company” has the meaning set forth in the Recitals.
“Company Lock-Up Period” has the meaning set forth in Section 6.6.
“Company Prospectus” means the base prospectus included in the Primary Registration Statement, as it may be amended or supplemented from time to time.
“Company’s Knowledge” means the actual knowledge of the Company’s executive officers (as defined in Rule 405 under the Securities Act) of the Company after due inquiry.
“Control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“DTC” has the meaning set forth in Section 2.2(b)(i).
“EDGAR System” has the meaning set forth in Section 3.1(g).
“Environmental Laws” has the meaning set forth in Section 3.1(n).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“GAAP” has the meaning set forth in Section 3.1(p).
“Intellectual Property” means trademarks, trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations therefor.
“Investor(s)” has the meaning set forth in the Recitals.
“Lien” means any charge, mortgage, deed of trust, pledge, hypothecation, encumbrance, easement, license, option, right of first refusal, security interest or other lien of any kind.
“Material Adverse Effect” means any event, occurrence, fact, condition or change that is, or could reasonably be expected to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial or otherwise), assets or liabilities of the Company and its subsidiaries, taken as a whole, or (b) the ability of the Company to consummate the transactions contemplated hereby on a timely basis.
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“NYSE” means the New York Stock Exchange.
“Permitted Liens” means (i) statutory or common law Liens of mechanics, materialmen, warehousemen, landlords, carriers, repairmen, construction contractors and other similar Liens that arise or incur in the ordinary course of business, and that relate to amounts not yet due and payable, delinquent or that are being contested in good faith through appropriate Actions, in each case only to the extent appropriate reserves have been established in accordance with GAAP, (ii) Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business, (iii) Liens for taxes not yet due and payable or which are being contested in good faith through appropriate Actions for which appropriate reserves have been established in accordance with GAAP, (iv) Liens, encumbrances and restrictions on real property (including easements, covenants, rights of way and similar restrictions of record that (A) are matters of record and (B) do not materially interfere with the present uses of such real property), (v) non-exclusive licenses of Intellectual Property entered into in the ordinary course of business, (vi) Liens on equity or debt securities resulting from applicable federal, state and other securities laws, (vii) other than with respect to Intellectual Property, any right, interest, Lien or title of a licensor, sublicensor, licensee, sublicensee, lessor or sublessor under any license, lease or other similar agreement or in the property being leased or licensed entered into in the ordinary course of business, and (viii) other Liens that would not, individually or in the aggregate, have a Material Adverse Effect.
“Per Share Purchase Price” means $10.00 per share.
“Person” means any individual, corporation, limited liability company, partnership, trust, joint stock company, business trust, unincorporated association, joint venture, governmental authority or other entity of any nature.
“Primary Direct Offering” has the meaning set forth in the Recitals.
“Primary Direct Offering Shares” means the shares of Common Stock to be purchased by the Investors pursuant to this Agreement.
“Primary Registration Statement” has the meaning set forth in the Recitals.
“Prospectus Supplement” has the meaning set forth in the Recitals.
“Public Warrants” means the warrants to purchase shares of Common Stock, CUSIP No. 98566K113.
“Registration Rights Agreement” means that certain agreement, dated as of October 25, 2024, by and among the Company and each investor signatory thereto.
“SEC” has the meaning set forth in the Recitals.
“Securities Act” means the Securities Act of 1933, as amended.
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“SEC Filings” has the meaning set forth in Section 3.1(g).
“Short Sales” has the meaning set forth in Section 4.1(e).
“Sky Common Units” means the common units of Sky Harbour LLC.
“Tax Return” means any return, information return, declaration, or any similar statement, and any amendment thereto, including any attached Schedule and supporting information that is filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection or payment of a Tax.
“Tax(es)” means all U.S. federal, state, local, or non-U.S. net or gross income, net or gross receipts, net or gross proceeds, payroll, employment, excise, stamp, occupation, windfall or excess profits, profits, customs, capital stock, withholding, social security, unemployment, real property, personal property (tangible and intangible), sales, use, transfer, value added, alternative or add-on minimum, capital gains, ad valorem, franchise, capital, estimated, goods and services, premium, environmental or other taxes, assessments, duties or similar charges of any kind whatsoever in the nature of tax, including all interest, penalties and additions to tax imposed by or otherwise payable to any Taxing Authority with respect to the foregoing.
“Taxing Authority” means the U.S. Internal Revenue Service and any other governmental authority responsible for the collection, assessment or imposition of any Tax or the administration of any law relating to any Tax.
“Transaction Documents” means this Agreement, the Prospectus Supplement and each other agreement, instrument or document contemplated hereby or thereby.
ARTICLE II — PURCHASE AND SALE
Section 2.1 Purchase and Sale.
(a) Subject to the terms and conditions of this Agreement, at the Closing, the Company agrees to issue and sell to each Investor, and each Investor agrees, severally and not jointly, to purchase from the Company, the number of Primary Direct Offering Shares set forth next to such Investor’s name on Schedule A hereto.
Section 2.2 Closing.
(a) Subject to the satisfaction or waiver of the conditions set forth in Article V, the closing of the purchase and sale of the Primary Direct Offering Shares (the “Closing”) shall occur remotely via exchange of executed documents and funds on the Closing Date.
(b) At the Closing:
(i) the Company shall deliver to each Investor the Primary Direct Offering Shares allocable to such Investor, in book-entry form through the facilities of The Depository Trust Company (“DTC”) or by such other means as the Company and such Investor may agree; and
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(ii) each Investor shall deliver to the Company, by wire transfer of immediately available funds, an amount equal to the Per Share Purchase Price multiplied by the number of Primary Direct Offering Shares allocable to such Investor.
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 The Company hereby represents and warrants to each Investor, as of the date hereof and as of the Closing Date, as follows:
(a) Organization; Good Standing and Power. The Company and its subsidiaries are corporations, limited partnerships or limited liability companies duly organized, validly existing and in good standing under the laws of the State of Delaware or their respective jurisdictions of organization and have the corporate, partnership or limited liability company power and authority to own, lease or operate their assets and properties and to conduct their business as now being conducted. The Company and its subsidiaries are duly licensed or qualified to do business and in good standing (or equivalent status as applicable) in each jurisdiction in which the assets owned or leased by them or the character of its activities require it to be licensed or qualified or in good standing (or equivalent status as applicable), except where the failure to be so licensed or qualified, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.
(b) Authorization. The Company has the requisite corporate power and authority and has taken all requisite corporate action necessary for, and no further action on the part of the Company, its officers, directors and stockholders is necessary for, (i) the authorization, execution and delivery of this Agreement, (ii) the authorization of the performance of all obligations of the Company hereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Primary Direct Offering Shares. The Agreement constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws of general applicability, relating to or affecting creditors’ rights generally and to general equitable principles.
(c) Capitalization. The authorized capital stock of the Company and the shares thereof issued and outstanding were as set forth in the Company’s filings with the SEC as of the dates reflected therein. All of the outstanding shares of Common Stock have been duly authorized and validly issued, and are fully paid and non-assessable. All of the Public Warrants have been duly authorized and validly issued, and are fully paid. Each Public Warrant is exercisable for one share of Common Stock at an exercise price of $11.50 per share. None of the shares of Common Stock or Public Warrants are subject to or were issued in violation of any purchase option, right of first refusal, preemptive right, subscription right or any similar right under any provision of the Delaware General Corporation Law, the Company’s organizational documents or any contract to which the Company is a party or by which the Company is bound. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any Common Stock or any capital equity of the Company. Except as set forth in the SEC Filings, this Agreement and the Registration Rights Agreement, there are no agreements or arrangements under which the Company is obligated to register the sale of any securities under the Securities Act. Except as set forth in the SEC Filings, no shares of Common Stock and no Public Warrants are entitled to preemptive rights and there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which the Company is or may become bound to issue additional shares of the capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any shares of capital stock of the Company other than those issued or granted in the ordinary course of business pursuant to the Company’s equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in agreements entered into by the Company to sell restricted securities or as set forth in the SEC Filings, the Company is not a party to, and to the Company’s Knowledge, there is no agreement restricting the voting or transfer of any shares of the capital stock of the Company. Except as set forth in the SEC Filings, there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Agreement, the Registration Rights Agreement or any of the other Transaction Documents, or the consummation of the transactions described herein or therein.
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(d) Valid Issuance. The Primary Direct Offering Shares, when issued, delivered and paid for in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable, free and clear of all Liens, encumbrances, preemptive rights, rights of first refusal, subscription rights and similar rights, other than restrictions on transfer under the Securities Act and applicable state securities laws.
(e) Consents. Subject to the accuracy of the representations and warranties of the Investors set forth in Article IV hereof, the execution, delivery and performance by the Company of the Agreement and the offer, issuance and sale of the Primary Direct Offering Shares require no consent of, action by or in respect of, or filing with, any Person, governmental authority, agency, or official, including, without limitation, any consent, action by, or approval of stockholders of the Company, other than (a) filings that have been made pursuant to applicable state securities laws, (b) post-sale filings pursuant to applicable state and federal securities laws and (c) filings pursuant to the rules and regulations of the NYSE, each of which the Company has filed or undertakes to file within the applicable time. Subject to the accuracy of the representations and warranties of the Investors set forth in Article IV hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Primary Direct Offering Shares and (ii) the other transactions contemplated by the Agreement from the provisions of any stockholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which the Company or any of its assets and properties is subject that is or could reasonably be expected to become applicable to the Investor as a result of the transactions contemplated hereby, including without limitation, the issuance of the Primary Direct Offering Shares and the ownership, disposition or voting of the Primary Direct Offering Shares by the Investors or the exercise of any right granted to the Investors pursuant to this Agreement.
(f) No Material Adverse Change. Since the date of the most recent audited financial statements of the Company incorporated by reference in the Prospectus Supplement, (i) there has been no material adverse change in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company and its subsidiaries, taken as a whole, and (ii) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material to the Company and its subsidiaries, taken as a whole, in each case except as set forth in or contemplated by the Prospectus Supplement and the documents incorporated by reference therein.
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(g) SEC Filings. The Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since December 31, 2024 (collectively, the “SEC Filings”). At the time of filing thereof, the SEC Filings complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the SEC thereunder and did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. A copy of each SEC Filing is available to the Investors via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (the “EDGAR System”). To the Company’s Knowledge, there are no outstanding or unresolved comments in comment letters received by the Company from the staff of the Division of Corporation Finance of the SEC with respect to any of the SEC Filings as of the date hereof.
(h) No Conflicts. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any property or asset of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the Certificate of Incorporation or Bylaws of the Company (each as amended), or (iii) result in the violation of any law, statute, rule, regulation, order, judgment or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries, except, in the cases of clauses (i) and (iii), for such conflicts, breaches, violations or defaults as would not reasonably be expected to have a Material Adverse Effect.
(i) Tax Matters. Except as disclosed in the SEC Filings or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (a) there are no material Taxes due and payable by the Company or any of its subsidiaries that has not been timely paid, (b) there are no accrued and unpaid Taxes of the Company or any of its subsidiaries that are due, whether or not assessed or disputed, (c) to the Company’s knowledge there have been no examinations or audits of any Tax Returns by any governmental authority, and (d) the Company has duly and timely filed all material Tax Returns required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to Taxes for any year.
(j) Title to Assets. Other than as disclosed in the SEC Filings or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the property and assets that the Company and its subsidiaries own are free and clear of all Liens (other than Permitted Liens). With respect to the property and assets the Company and its subsidiaries respectively lease, except as disclosed in the SEC Filings, the Company and its subsidiaries are in material compliance with such leases and hold a valid leasehold interest free and clear of all Liens (other than Permitted Liens). None of the Company or any of its subsidiaries owns, nor has ever owned, any real property.
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(k) Certificates, Authorities and Permits. The Company possesses adequate certificates, authorities or permits issued by appropriate governmental authority necessary to conduct the business now operated by it, except where failure to so possess would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. The Company has not received any written notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that would reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, on the Company.
(l) Labor Matters.
(i) The Company is not party to or bound by any collective bargaining agreements or other agreements with labor organizations, which would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. To the Company’s Knowledge, the Company has not violated in any material respect any laws, regulations, orders or contract terms affecting the collective bargaining rights of employees or labor organizations, or any laws, regulations or orders affecting employment discrimination, equal opportunity employment, or employees’ health, safety, welfare, wages and hours, which violation would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(ii) No material labor dispute with the employees of the Company, or with the employees of any principal supplier, manufacturer, customer or contractor of the Company, exists or, to the Company’s Knowledge, is threatened or imminent, which would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(m) Intellectual Property. Except as disclosed in the SEC Filings or as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company or one of its subsidiaries owns and possesses all right, title and interest in and to, or has licenses or other rights to use, all Intellectual Property used or held for use by the Company and its subsidiaries in the conduct of the business of the Company and its subsidiaries as currently conducted and as presently proposed to be conducted. Except as disclosed in the SEC Filings, to the Company’s Knowledge, the Company has not received any communications alleging that the Company or any of its subsidiaries has violated, or by conducting its business, is violating any Intellectual Property rights of any other Person. To the Company’s Knowledge, no product or service marketed or sold by the Company or any of its subsidiaries violates any Intellectual Property rights of any other Person, which violation would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the SEC Filings, the Company or one of its subsidiaries has obtained and possesses valid licenses to use all of the software programs present on the computers and other software-enabled electronic devices that the Company and its subsidiaries own or lease or that it has otherwise provided to its employees for their use in connection with its business, except where the failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as disclosed in the SEC Filings, other than with respect to commercially available software products under standard end-user object code license agreements, there are no outstanding material options, licenses, agreements, claims, encumbrances or shared ownership interests of any kind relating to the Company’s or any of its subsidiaries’ Intellectual Property, nor is the Company or any of its subsidiaries bound by or a party to any material options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other Person. There are no employees or consultants of the Company or any of its subsidiaries that own any Intellectual Property rights related to the Company’s or such subsidiary’s business as now conducted and as presently proposed to be conducted. To the Company’s Knowledge, it will not be necessary to use any inventions of any of its employees or consultants (or Persons it currently intends to hire) made prior to their employment by the Company or any of its subsidiaries, including prior employees or consultants.
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(n) Environmental Matters. The Company is not in violation of any statute, rule, regulation, decision or order of any governmental authority or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), has not released any hazardous substances regulated by Environmental Law onto any real property that it owns (if any) or operates, and has not received any written notice or claim it is liable for any off-site disposal or contamination pursuant to any Environmental Laws, which violation, release, notice, claim, or liability would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and to the Company’s Knowledge, there is no pending or threatened investigation that would reasonably be expected to lead to such a claim.
(o) Legal Proceedings. There are no legal, governmental or regulatory investigations, actions, suits or proceedings pending, or, to the Company’s Knowledge, threatened, to which the Company or its subsidiaries are a party or to which any property of the Company or its subsidiaries are the subject that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
(p) Financial Statements. The condensed consolidated financial statements included in each SEC Filing made since December 31, 2024 comply as to form in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing (or to the extent corrected by a subsequent restatement) and present fairly, in all material respects, the consolidated financial position of the Company as of the dates shown and its consolidated results of operations and cash flows for the periods shown, subject in the case of unaudited financial statements to normal, immaterial year-end audit adjustments, and such condensed consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”) (except as may be disclosed therein or in the notes thereto, and except that the unaudited financial statements may not contain all footnotes required by GAAP, and, in the case of quarterly financial statements, except as permitted by Form 10-Q under the Exchange Act). Except as set forth in the condensed consolidated financial statements of the Company included in the SEC Filings or as otherwise disclosed in the SEC Filings filed prior to the date hereof, the Company has not incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since the date of such financial statements, none of which, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect. The accountants who certified the financial statements are independent public accountants as required by the Securities Act and the Exchange Act and the regulations thereunder and the Public Company Accounting Oversight Board.
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(q) Insurance Coverage. The Company and its subsidiaries have in full force and effect insurance policies concerning such casualties as would be reasonable and customary for companies like the Company and its subsidiaries, reasonably sufficient in amount.
(r) Compliance with NYSE Continued Listing Requirements. As of the date hereof, the issued and outstanding shares of Common Stock and Public Warrants are registered pursuant to Section 12(b) of the Exchange Act, and are listed for trading on the NYSE, under the symbol “SKYH” and “SKYH WS”, respectively. The Company is in compliance with applicable NYSE continued listing requirements. There are no proceedings pending or, to the Company’s Knowledge, threatened against the Company relating to the continued listing of the Common Stock or the Public Warrants on NYSE, and the Company has not received any notice of, nor to the Company’s Knowledge is there any reasonable basis for, the delisting of the Common Stock or the Public Warrants from NYSE. Upon the Closing, the issued and outstanding shares of Common Stock and the Public Warrants, including the Primary Direct Offering Shares to be issued pursuant to this Agreement, will be registered pursuant to Section 12(b) of the Exchange Act and will be listed for trading on the NYSE. The Common Stock is currently eligible for electronic transfer through DTC or another established clearing corporation and the Company is current in payment of the fees to DTC (or such other established clearing corporation) in connection with such electronic transfer.
(s) Brokers and Finders. No Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company or any Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.
(t) No Directed Selling Efforts or General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any “directed selling efforts” as that term is used in Regulation S under the Securities Act with respect to the Primary Direct Offering Shares.
(u) No Integrated Offering. Neither the Company nor any of its affiliates, nor any Person acting on its behalf, has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any Company security, under circumstances that would cause the Primary Direct Offering to be integrated with any prior offering by the Company for purposes of (i) the Securities Act that would require the registration of any such securities under the Securities Act, or (ii) any applicable stockholder approval provisions of the NYSE Listed Company Manual.
(v) Questionable Payments. Neither the Company nor its subsidiaries nor, to the Company’s Knowledge, any of their current or former directors, officers, employees, agents or other Persons acting on behalf of the Company or its subsidiaries, has on behalf of the Company or its subsidiaries in connection with their business: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets which is in violation of law; (d) made any false or fictitious entries on the books and records of the Company; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature.
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(w) Transactions with Affiliates. Except for indemnification agreements, employment relationships and the payment of compensation, benefits and expense reimbursements and advances in the ordinary course of business and transactions entered into on arms-length terms, and except as set forth in the SEC Filings, there are no contracts between the Company or any of its subsidiaries, on the one hand, and any directors, executive officers or other Affiliate of the Company or their immediate family members, on the other hand, that would be required to be disclosed under Item 404 of Regulation S-K of the Exchange Act.
(x) Internal Controls. The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act), which (a) are designed to ensure that material information relating to the Company, including its subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities; (b) have been evaluated by management of the Company for effectiveness as of the end of the Company’s most recent fiscal quarter; and (c) are effective in all material respects to perform the functions for which they were established. Since the end of the Company’s most recent audited fiscal year, there have been no material weaknesses in the Company’s internal control over financial reporting (whether or not remediated) and no change in the Company’s internal control over financial reporting that has materially affected, or would reasonably be expected to materially affect, the Company’s internal control over financial reporting. The Company is not aware of any change in its internal controls over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or would reasonably be expected to materially affect, the Company’s internal control over financial reporting.
(y) Disclosures. Neither the Company nor any Person acting on its behalf has provided the Investors or their agents or counsel with any information that constitutes or would reasonably be expected to constitute material non-public information concerning the Company or its subsidiaries, other than information made available in connection with and with respect to the transactions contemplated hereby, which will be disclosed publicly by the Company via the issuance of a press release or filing with the SEC. Any information made available in connection with and with respect to the transactions contemplated hereby will not constitute material non-public information upon the filing of the Prospectus Supplement. The SEC Filings do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
(z) Required Filings. Except for the transactions contemplated by this Agreement, including the acquisition of the Primary Direct Offering Shares contemplated hereby, no event or circumstance has occurred or information exists with respect to the Company or its business, properties, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.
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(aa) Investment Company. The Company is not required to be registered as, and immediately following each Closing will not be required to register as, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(bb) Manipulation of Price. The Company has not taken, and, to the Company’s Knowledge, no Person acting on its behalf has taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Primary Direct Offering Shares.
(cc) Anti-Bribery and Anti-Money Laundering Laws. Each of the Company, its subsidiaries and any of their respective officers, directors, supervisors, managers, agents, or employees, are and have at all times been in compliance with and its participation in the offering will not violate: (A) anti-bribery laws, including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to any law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act 2010, or any other law, rule or regulation of similar purposes and scope or (B) anti-money laundering laws, including, but not limited to, applicable federal, state, international, foreign or other laws, regulations or government guidance regarding anti-money laundering, including, without limitation, Title 18 U.S. Code sections 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur, all as amended, and any executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued thereunder.
(dd) Shell Company Status. The Company is not, and since January 25, 2022 has not been, an issuer identified in Rule 144(i)(1). As of January 31, 2022, the Company filed current “Form 10 Information” (as defined in Rule 144(i)(3)) with the SEC reflecting its status as an entity that was no longer an issuer described in Rule 144(i)(1)(i).
(ee) NYSE Stockholder Approval. No approval of the stockholders of the Company is required for the issuance of the Primary Direct Offering Shares under Section 312.03 of the NYSE Listed Company Manual.
(ff) Sarbanes-Oxley Act. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof, each as applicable to “smaller reporting companies” as defined in Rule 12b-2 of the Exchange Act.
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(gg) Primary Registration Statement. The Primary Registration Statement has been declared effective by the SEC and no stop order suspending the effectiveness of the Primary Registration Statement has been issued, and no proceedings for that purpose have been commenced or, to the knowledge of the Company, are threatened by the SEC. The Company meets the general eligibility requirements for use of Form S-3. At the time the Primary Registration Statement became effective and at the date of this Agreement, the Primary Registration Statement, including the information deemed to be a part thereof pursuant to Rule 430B under the Securities Act, complied and complies in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC thereunder.
(hh) Prospectus Supplement. The Prospectus Supplement, when filed with the SEC, will conform in all material respects with the requirements of the Securities Act and the rules and regulations of the SEC thereunder, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Primary Direct Offering Shares are being offered, issued, and sold under the Primary Registration Statement and the Prospectus Supplement.
(ii) Incorporated Documents. The documents incorporated by reference in the Primary Registration Statement, the Company Prospectus and the Prospectus Supplement, when they became effective or were filed with the SEC, as the case may be, complied in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the SEC thereunder, and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(jj) Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (as amended) or the laws of the jurisdiction of its formation which is or could become applicable to the Investors (or their members, general or limited partners or stockholders) as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Primary Direct Offering Shares and the Investors’ (and their members’, general or limited partners’, stockholders’) ownership of the Primary Direct Offering Shares. The Company has not adopted a stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Company.
(kk) Compliance with Laws. The Company and each of its subsidiaries are in compliance with all applicable laws, statutes, ordinances, rules, regulations, orders, judgments and decrees of all governmental authorities having jurisdiction over the Company or any of its subsidiaries, except where the failure to be in compliance would not reasonably be expected to have a Material Adverse Effect.
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ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Section 4.1 Each Investor, severally and not jointly, hereby represents and warrants to the Company as of the date hereof and as of the Closing Date:
(a) Organization; Authority. Such Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has the power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Investor.
(b) No Conflicts. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any agreement or instrument to which such Investor is a party or by which such Investor is bound, or any law, statute, rule, regulation, order, judgment or decree applicable to such Investor.
(c) Investment Intent. Such Investor is acquiring the Primary Direct Offering Shares for its own account, for investment purposes and not with a view to, or for sale in connection with, any distribution thereof, except as contemplated by the Primary Registration Statement.
(d) Sophistication; Due Diligence. Such Investor has such knowledge, sophistication and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Primary Direct Offering Shares. Such Investor has had the opportunity to review the Primary Registration Statement, the Company Prospectus, the Prospectus Supplement, and the documents incorporated by reference therein.
(e) No Short Sales. Since the date that is thirty (30) days prior to the date of this Agreement, such Investor has not, and its affiliates have not, engaged in any Short Sales (as defined below) with respect to the Common Stock. “Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.
ARTICLE V — CONDITIONS TO CLOSING
Section 5.1 Conditions to Each Party’s Obligations. The obligations of each party to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or waiver by such party) of the following conditions:
(a) No governmental authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award that is then in effect and that has the effect of making the transactions contemplated hereby illegal or otherwise restraining or prohibiting consummation of such transactions.
(b) No action, suit or proceeding by any governmental authority or any other Person shall be pending or threatened that challenges or seeks to restrain or prohibit the consummation of the transactions contemplated hereby.
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Section 5.2 Additional Conditions to the Investors’ Obligations. The obligation of each Investor to purchase the Primary Direct Offering Shares at the Closing is further subject to the satisfaction (or waiver by such Investor) of the following conditions:
(a) The representations and warranties of the Company set forth in Article III shall be true and correct in all material respects (or, in the case of representations and warranties qualified by materiality or Material Adverse Effect, in all respects) as of the date of this Agreement and as of the Closing Date (except to the extent that any such representation and warranty expressly speaks as of a specified date, in which case such representation and warranty shall be true and correct as of such specified date).
(b) The Company shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by it at or prior to the Closing.
(c) Each Investor shall have received a certificate, dated the Closing Date, duly executed by an executive officer of the Company on behalf of the Company, certifying that the conditions specified in Sections 5.2(a) and 5.2(b) have been satisfied.
(d) Each Investor shall have received a certificate signed by the Secretary of the Company, in form and substance reasonably satisfactory to the Investors, certifying as to (i) the resolutions of the Board of Directors of the Company or a duly authorized committee thereof approving this Agreement and all of the transactions contemplated hereunder, (ii) its Certificate of Incorporation, (iii) its Bylaws, and (iv) the good standing of the Company in the State of Delaware (as evidenced by a certificate obtained from such jurisdiction dated within five (5) Business Days of the date hereof).
(e) The Primary Registration Statement shall be effective and available for the issuance and sale of the Primary Direct Offering Shares, and no stop order suspending the effectiveness of the Primary Registration Statement shall have been issued and no proceedings for that purpose shall have been commenced or threatened.
(f) The Prospectus Supplement shall have been filed with the SEC.
(g) The Primary Direct Offering Shares shall have been approved for listing on the NYSE, subject only to official notice of issuance.
(h) No Material Adverse Effect shall have occurred since the date of this Agreement that is continuing.
(i) No stop order or suspension of trading shall have been imposed by the NYSE, the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock.
Section 5.3 Additional Conditions to the Company’s Obligations. The obligation of the Company to issue and sell the Primary Direct Offering Shares to each Investor at the Closing is further subject to the satisfaction (or waiver by the Company) of the following conditions:
(a) The representations and warranties of such Investor set forth in Article IV shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date.
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(b) Such Investor shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by it at or prior to the Closing.
(c) Each Investor shall have caused to be delivered to the Company a duly completed and executed IRS Form W-8 or W-9, as applicable.
ARTICLE VI — COVENANTS
Section 6.1 NYSE Listing. The Company shall use commercially reasonable efforts to cause the Primary Direct Offering Shares to be listed on the NYSE on or prior to the Closing Date, subject only to official notice of issuance.
Section 6.2 Reservation of Shares. The Company shall at all times reserve and keep available a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue the Primary Direct Offering Shares.
Section 6.3 Form 8-K. The Company shall file with the SEC a Current Report on Form 8-K disclosing the material terms of this Agreement and the transactions contemplated hereby on or before the fourth (4th) Business Day following the date of execution of this Agreement.
Section 6.4 Primary Registration Statement Effectiveness. The Company shall use commercially reasonable efforts to maintain the effectiveness of the Primary Registration Statement until the Closing.
Section 6.5 Prospectus Supplement. Promptly after execution of this Agreement, and in any event in sufficient time to facilitate settlement of the Primary Direct Offering on a T+1 basis, the Company shall file the Prospectus Supplement with respect to the Primary Direct Offering Shares as required under, and in conformity with, the Securities Act, including Rule 424(b) thereunder. Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Primary Direct Offering Shares required under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall comply with all applicable federal, state and local laws, statutes, rules and regulations relating to the offering and sale of the Primary Direct Offering Shares to the Investors. The Investors shall comply with all applicable provisions of the Securities Act and the Exchange Act, including Regulation M thereunder, and all applicable state securities or “Blue Sky” laws. The Company shall provide the Investors reasonable opportunity to review and comment on the Prospectus Supplement and any filings and reports relating to the offer and sale of the Primary Direct Offering Shares, and any comments provided by the Investors shall not be unreasonably rejected.
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Section 6.6 Clear Market. Prior to 90 days after the Closing Date (the “Company Lock-Up Period”), the Company will not, and will not publicly disclose an intention to, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, hedge, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or submit to, or file with, the SEC a registration statement under the Securities Act, or (ii) enter into any swap, hedging or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, other than (A) any shares of Common Stock, restricted stock, restricted stock units and options to purchase Common Stock, shares of Common Stock underlying options granted and other securities, each pursuant to any director or employee equity plans, stock ownership plan or dividend reinvestment plan of the Company in effect on the date hereof and without giving effect to any amendments thereto after the date hereof; (B) any purchases or sales made pursuant to new, existing or amendments to trading plans established in compliance with Rule 10b5-1 of the Exchange Act, provided that none of the securities subject to such plan may be transferred, sold or otherwise disposed of until after the expiration of the Company Lock-Up Period; (C) any shares of Common Stock of the Company issued upon the exercise of convertible securities of the Company outstanding on the date hereof, provided that such exercise, exchange or conversion is effected pursuant to the terms of such securities as in effect on the date of this Agreement and without giving effect to any amendments thereto after the date hereof or as provided in this Agreement; (D) any shares of Common Stock of the Company issued pursuant to the Company’s existing “at-the-market” offering program with B. Riley Securities, Inc. and Yorkville Securities, LLC (the “ATM Program”), as in effect on the date hereof and without giving effect to any amendments thereto after the date hereof, so long as such shares of Common Stock issued pursuant to the ATM Program, are issued at a per share price equal to or greater than $10.00 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock after the date hereof); and (E) the shares of Common Stock to be sold hereunder and any post-effective amendments to the Primary Registration Statement filed consistent with the terms of this Agreement.
Section 6.7 Insider Lock-Up. Prior to the Closing Date, the Company shall cause each officer, director and stockholder of the Company set forth on Schedule B hereto to enter into a letter or letters, substantially in the form of Exhibit A hereto (the “Insider Lock-Up Agreements”).
ARTICLE VII — TERMINATION
Section 7.1 Termination. This Agreement may be terminated at any time prior to the Closing:
(a) by any Investor, with respect to such Investor’s obligations only, if there has been a material breach by the Company of any representation, warranty, covenant or agreement set forth in this Agreement that would give rise to the failure of a condition set forth in Section 5.2 and such breach is not cured within five (5) Business Days following written notice thereof; or
(b) by the Company, with respect to any Investor’s obligations, if there has been a material breach by such Investor of any representation, warranty, covenant or agreement set forth in this Agreement that would give rise to the failure of a condition set forth in Section 5.3 and such breach is not cured within five (5) Business Days following written notice thereof.
Section 7.2 Effect of Termination. If this Agreement is terminated pursuant to Section 7.1, this Agreement shall become void and of no further force or effect (except for the provisions of this Section 7.2, Article VIII and Article IX, which shall survive termination); provided, that nothing herein shall relieve any party from liability for any willful or intentional breach of this Agreement prior to such termination.
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ARTICLE VIII — INDEMNIFICATION
Section 8.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless each Investor and its affiliates, directors, officers, shareholders, members, partners, employees, agents, and controlling persons from and against all losses, claims, damages, liabilities and expenses (including reasonable and documented attorneys’ fees and expenses) arising out of or in connection with (a) any untrue statement or alleged untrue statement of a material fact contained in the Primary Registration Statement, the Company Prospectus or the Prospectus Supplement, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading other than any statement made in reliance upon and in conformity with information furnished by such Investor expressly for use therein, or (b) any material breach by the Company of any of its representations, warranties, covenants or agreements under this Agreement and will reimburse such indemnified party for all such amounts as are incurred by such indemnified party solely to the extent such amounts have been finally judicially determined not to have resulted from such indemnified party’s fraud or willful misconduct.
Section 8.2 Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder in respect of a third-party claim shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such third-party claim with counsel reasonably satisfactory to the indemnified party; provided that the indemnified party shall have the right to employ separate counsel and to participate in the defense of such third-party claim, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (a) the indemnifying party has agreed in writing to pay such fees or expenses, (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to the indemnified party or (c) in the reasonable judgment of the indemnified party, based upon written advice of its counsel, a conflict of interest exists between the indemnified party and the indemnifying party with respect to such claims (in which case, if the indemnified party notifies the indemnifying party in writing that the indemnified party elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of the indemnified party); and provided, further, that the failure of any indemnified party to give written notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, which consent shall not be unreasonably withheld, conditioned or delayed, consent to entry of any judgment or enter into any settlement with respect to a third-party claim that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the indemnified party of a release from all liability in respect of such claim or litigation. No indemnified party will, except with the consent of the indemnifying party, which consent shall not be unreasonably withheld, conditioned or delayed, consent to entry of any judgment or enter into any settlement with respect to a third-party claim.
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ARTICLE IX — MISCELLANEOUS
Section 9.1 Entire Agreement. This Agreement, together with the other Transaction Documents and the schedules and exhibits hereto, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, both oral and written, among the parties with respect to the subject matter hereof.
Section 9.2 Amendments and Waivers. No provision of this Agreement may be amended or waived except by a written instrument signed by the Company and the Investors (acting by the holders of a majority in interest of the Aggregate Investor Shares). No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default.
Section 9.3 Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be delivered by hand, by nationally recognized overnight courier service, by facsimile or by electronic mail, and:
If to the Investors:
to the respective addresses set forth on Schedule A hereto;
With a copy (which shall not constitute notice) to:
Paul Hastings LLP
200 Clarendon Street 49th Floor
Boston, MA 02116
Attention: Scott C. Chase
Telephone: (617) 912-1634
Email: scottchase@paulhastings.com
If to the Company:
Sky Harbour Group Corporation
136 Tower Road, Suite 205
Westchester County Airport
White Plains, NY 10604
Attention: Francisco Gonzalez, Chief Financial Officer
Telephone: (212) 554-5990
Email: fgonzalez@skyharbour.group
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With a copy (which shall not constitute notice) to:
Morrison & Foerster LLP
300 Colorado Street, Suite 1800
Austin, TX 78701
Attention: John Hensley
Telephone: (512) 617-0650
Email: jhensley@mofo.com
Section 9.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.
Section 9.5 Jurisdiction; Venue. Each party hereby irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York for the purpose of any action, suit or proceeding arising out of or relating to this Agreement.
Section 9.6 Specific Performance. The parties agree that irreparable damage would occur in the event that any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.
Section 9.7 Severability. If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of any other provision of this Agreement.
Section 9.8 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. No party may assign this Agreement without the prior written consent of the other parties, except that an Investor may assign its rights and obligations hereunder to an affiliate of such Investor, provided that such affiliate agrees in writing to be bound by the terms hereof.
Section 9.9 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart by electronic transmission shall be equally effective as delivery of a manually executed counterpart.
Section 9.10 Expenses. The Company will reimburse the Investors for the reasonable and documented legal expenses of a single counsel, Paul Hastings LLP, for the Investors in connection with the negotiation, execution and consummation of this Agreement and the transactions contemplated by this Agreement. Each party will otherwise bear its own expenses in connection with the negotiation, execution and consummation of this Agreement and the transactions contemplated hereby.
Section 9.11 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer upon any Person other than the parties hereto (and their respective successors and assigns and the Persons entitled to indemnification under Article VIII) any rights or remedies hereunder.
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Section 9.12 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under this Agreement are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance or non-performance of the obligations of any other Investor under this Agreement. Nothing contained herein, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Each Investor shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The Company has elected to provide all Investors with the same terms for the convenience of the Company and not because it was required or requested to do so by any of the Investors. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and an Investor, solely, and not between the Company and the Investors collectively and not between and among the Investors.
Section 9.13 Survival. Subject to applicable statutes of limitations, the representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Primary Direct Offering Shares.
Section 9.14 Waiver of Jury Trial. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER TRIAL BY JURY.
Section 9.15 Further Assurances. Each party shall execute and deliver such additional documents and instruments and take such further actions as may be reasonably necessary to carry out the provisions of this Agreement and give effect to the transactions contemplated hereby.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
SKY HARBOUR GROUP CORPORATION |
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| Name: Tal Keinan Title: Chief Executive Officer |
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[INVESTOR] |
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[Signature Page to Primary Stock Purchase Agreement]
SCHEDULE A
Investors
SCHEDULE B
Persons Subject to Lock-Up
EXHIBIT A
Form of Lock-Up Agreement
Exhibit 31.1
CERTIFICATIONS
I, Tal Keinan, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Sky Harbour Group Corporation; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 10, 2026
| /s/ Tal Keinan |
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| Tal Keinan, Chief Executive Officer |
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| (Principal Executive Officer) |
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Exhibit 31.2
CERTIFICATIONS
I, Francisco Gonzalez, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Sky Harbour Group Corporation; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 10, 2026
| /s/ Francisco Gonzalez |
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| Francisco Gonzalez, Chief Financial Officer |
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| (Principal Financial Officer) |
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sky Harbour Group Corporation (the “Company”) on Form 10‑Q for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 10, 2026 | /s/ Tal Keinan |
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| Tal Keinan, Chief Executive Officer |
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| (Principal Executive Officer) |
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Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sky Harbour Group Corporation (the “Company”) on Form 10‑Q for the period ended September 30, 2026 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 10, 2026 | /s/ Francisco Gonzalez |
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| Francisco Gonzalez, Chief Financial Officer |
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| (Principal Financial Officer) |
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