Sky Harbour Q3 shareholder loss narrows to $72K
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Sky Harbour Group Corp. reported third-quarter revenue of $10.576 million, up from $7.302 million a year earlier, while net loss attributable to shareholders narrowed to $72,000 from $1.878 million. For the first nine months, revenue was $29.156 million versus $19.483 million, while shareholder results shifted from $9.199 million income to a $6.888 million loss.
The hangar developer used $4.102 million in operating cash during the nine months, compared with $6.900 million in 2025, and held $156.492 million in cash and restricted cash at September 30, 2026. Management said it believes liquidity is sufficient to allow continued operations for more than one year after the financial statements were issued. The company completed a $150 million bond financing and registered direct offerings of 5,000,000 Class A shares at $10.00 each, generating $50.0 million in gross proceeds before offering-related expenses.
The bonds bear 6.00% annual interest and are subject to mandatory tender for purchase on January 1, 2031. Sky Capital III will be required to refinance or remarket them on or before that date. Sky Harbour develops, constructs, leases, and manages general aviation hangars for business aircraft across the United States.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointThird-quarter revenue rose to $10.576 million from $7.302 million.
Negative
- Moderate pointNine-month shareholder results: $6.888 million loss, versus $9.199 million income.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Series 2026 bonds: $150 million must be refinanced or remarketed by January 1, 2031. 18% of market cap
Filing Explained
Unexercised warrants could add Class A shares; the separate LLC exchange right involves Class A shares alongside an equal number of Class B shares.
This 10-Q reports 15,798,155 outstanding warrants that were not exercised in the nine months ended
Holders of approximately 51.5% of Sky Common Units may exchange units together with an equal number of Class B shares for Class A shares; the filing describes an exchange right, not a completed exchange. Each warrant is exercisable for one Class A share at
Key Figures
Key Terms
Up-C financial
non-controlling interests financial
mandatory tender financial
right-of-use assets financial
at-the-market offering program financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were SKYH's third-quarter 2026 revenue and shareholder results?
How much did SKYH raise through its registered direct offerings?
When must SKYH's Series 2026 bonds be refinanced or remarketed?
How long do the lock-up restrictions last for SKYH's registered direct offerings?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
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 |
| Trading Symbols |
| Name of Exchange on Which Registered |
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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 | ☐ |
☒ |
| 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
SKY HARBOUR GROUP CORPORATION
TABLE OF CONTENTS
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Page |
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PART I. FINANCIAL INFORMATION |
2 | |
Item 1. |
Financial Statements |
2 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
26 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
45 |
Item 4. |
Controls and Procedures |
45 |
PART II. OTHER INFORMATION |
46 | |
Item 1. |
Legal Proceedings |
46 |
Item 1A. |
Risk Factors |
46 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
46 |
Item 3. |
Defaults Upon Senior Securities |
46 |
Item 4. |
Mine Safety Disclosures |
46 |
Item 5. |
Other Information |
46 |
Item 6. |
Exhibits |
47 |
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Exhibit Index |
47 |
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Signatures |
48 |
Table of Contents
ITEM 1. FINANCIAL STATEMENTS
SKY HARBOUR GROUP CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
|
| 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; $0.0001 par value; 10,000,000 shares authorized as of September 30, 2026; none issued and outstanding |
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Class A common stock, $0.0001 par value; 200,000,000 shares authorized; 39,622,045 and 33,989,673 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively |
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Class B common stock, $0.0001 par value; 50,000,000 shares authorized; 42,046,356 and 42,046,356 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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| $ |
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See accompanying Notes to Unaudited Consolidated Financial Statements
2
Table of Contents
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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| Nine months ended |
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| September 30, 2026 |
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| September 30, 2025 |
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| September 30, 2026 |
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Revenue: |
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Rental revenue |
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| $ |
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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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| $ | ( | ) |
| $ |
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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
3
Table of Contents
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 | | |
| | | ( | ) | | | ( | ) | | | ( | ) | |
Total comprehensive (loss) income | | $ | ( | ) | | $ | ( | ) | | $ | ( | ) | | $ | | |
See accompanying Notes to Unaudited Consolidated Financial Statements
4
Table of Contents
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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| Total |
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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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| Total |
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| Amount |
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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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| - |
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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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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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| $ |
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Share-based compensation |
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Vesting of restricted stock units |
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Shares withheld for payment of employee taxes |
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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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| - |
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Balance at June 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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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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| - |
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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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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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| (Deficit) |
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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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| $ | ( | ) |
| $ |
|
|
|
|
| $ |
|
| $ |
| |||||||||
Share-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Vesting of restricted stock units |
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
| ||
Shares withheld for payment of employee taxes |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||||||
Payment of equity issuance costs |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
Exchange of Sky Incentive Units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||||||
Other comprehensive loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) |
|
|
|
|
| ( | ) | |||||
Net loss |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) |
|
| ( | ) | ||||
Balance at March 31, 2025 |
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ |
|
| $ |
| |||||||||
Share-based compensation |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
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
5
Table of Contents
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
6
Table of Contents
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
Table of Contents
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
Table of Contents
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 not 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
Table of Contents
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
Table of Contents
4. | Cost of Construction and Constructed Assets |
Constructed assets, net, and cost of construction, consists of the following:
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| September 30, 2026 |
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| December 31, 2025 |
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Constructed assets, net of accumulated depreciation: |
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Buildings: ADS Phase I, APA Phase I, BNA, CMA, DVT Phase I, OPF, SGR, and SJC Renovation |
| $ |
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| $ |
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Accumulated depreciation |
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| ( | ) |
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| $ |
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| $ |
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Cost of construction: |
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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 |
| $ |
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| $ |
| ||
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:
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| September 30, 2026 |
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| December 31, 2025 |
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Ground support equipment |
| $ |
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| $ |
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Machinery and equipment |
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Buildings |
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Land |
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Other equipment and fixtures |
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Purchase deposits and construction in progress |
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Accumulated depreciation |
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| ( | ) |
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| ( | ) |
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| $ |
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| $ |
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Depreciation expense for the three and nine months ended September 30, 2026 totaled approximately $
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Table of Contents
6. | Lease Intangible Assets |
Lease intangible assets, net, consists of the following:
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| September 30, 2026 |
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| December 31, 2025 |
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Acquired in-place lease |
| $ |
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| $ |
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Above market leases |
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Accumulated amortization |
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Total lease intangible assets |
| $ |
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| $ |
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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 |
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| December 31, 2025 |
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Costs of construction |
| $ |
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| $ |
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Employee compensation and benefits |
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Interest |
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Professional fees |
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Property taxes |
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Deferred rent and tenant rent received in advance |
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Tenant security deposits |
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Other |
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| $ |
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| $ |
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Table of Contents
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 |
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| Nine months ended |
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|
| September 30, 2026 |
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| September 30, 2025 |
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| September 30, 2026 |
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| September 30, 2025 |
| ||||
Ground lease expenses |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
Fuel expenses |
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General and administrative expenses |
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Total operating lease expense |
| $ |
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| $ |
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| $ |
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| $ |
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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 |
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|
| September 30, |
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| September 30, |
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| 2026 |
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| 2025 |
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Cash paid for amounts included in measurement of lease liabilities: |
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Operating cash flows from operating leases |
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Operating cash flows from finance leases |
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Financing cash flows from finance leases |
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Supplemental consolidated balance sheet information related to the Company’s leases was as follows:
Weighted Average Remaining Lease Term (in years) |
| September 30, 2026 |
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| December 31, 2025 |
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Operating leases |
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Ground leases - Unimproved at commencement |
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Ground leases - Existing improvements |
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Equipment leases |
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Office leases |
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All operating leases |
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Finance leases |
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Weighted Average Discount Rate |
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Operating leases |
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Ground leases - Unimproved at commencement |
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Ground leases - Existing improvements |
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Equipment leases |
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Office leases |
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| - |
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All operating leases |
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Finance leases |
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The Company’s future minimum lease payments required under leases as of September 30, 2026 were as follows:
Year Ending December 31, |
| Operating Leases |
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| Finance Leases |
| ||
2026 (remainder of year) |
| $ |
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| $ |
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2027 |
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2028 |
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2029 |
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2030 |
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Thereafter |
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Total lease payments |
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Less imputed interest |
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Total |
| $ |
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| $ |
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Table of Contents
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) |
| $ |
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2027 |
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2028 |
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2029 |
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2030 |
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Thereafter |
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Total |
| $ |
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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 |
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| Nine months ended |
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|
| September 30, 2026 |
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| September 30, 2025 |
|
| September 30, 2026 |
|
| September 30, 2025 |
| ||||
Variable payments included in rental revenue |
| $ |
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| $ |
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| $ |
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| $ |
| ||||
Variable payments included in fuel revenue |
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Total variable payments included in revenue |
| $ |
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| $ |
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| $ |
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| $ |
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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
Table of Contents
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:
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| September 30, 2026 |
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| December 31, 2025 |
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| Maturity Dates |
| Contractual Interest Rates |
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| Principal Amount |
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| Carrying Value |
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| Principal Amount |
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| Carrying Value |
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| Bonds payable: |
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Series 2021 Bonds | July 2036 - July 2054 |
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| $ |
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| $ |
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| $ |
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| $ |
| |||||
Series 2026 Bonds | Subject to Mandatory Tender January 2031 |
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| Total bonds payable |
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| Loans payable and finance leases: |
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| Term Loan Facility | September 2030 |
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| 80% of (SOFR + 0.1%) + 2.00% |
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Yorkville Promissory Note 1 | June 2027 |
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Yorkville Promissory Note 2 | June 2027 |
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| Vista Loan | December 2035 |
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| Prime + 0.25% |
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| Equipment Loan | August 2026 |
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| Finance Leases | August 2026 - July 2027 |
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| Total loans payable and finance leases |
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Total bonds and loans payable |
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| $ |
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| $ |
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| $ |
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| $ |
| |||||
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) |
| $ |
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| $ |
| ||
2027 |
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2028 |
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2029 |
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2030 |
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Thereafter |
|
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Total |
| $ |
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| $ |
| ||
As of September 30, 2026 and December 31, 2025, the fair value of the Company's Series 2021 Bonds was approximately $
15
Table of Contents
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 |
| $ |
|
| $ |
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| $ |
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| $ |
| ||||
Commitment fees |
|
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Accretion of bond premium and amortization of debt issuance costs |
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Total interest incurred |
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Less: capitalized interest |
|
| ( | ) |
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| ( | ) |
|
| ( | ) |
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| ( | ) |
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: |
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| Accounts receivable, prepaid expenses, and other assets |
| $ |
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| $ |
| ||
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
Table of Contents
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
Table of Contents
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
Table of Contents
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
Table of Contents
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
Table of Contents
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
Table of Contents
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 |
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| Nine Months Ended |
| ||||||||||
|
| September 30, 2026 |
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| September 30, 2025 |
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| September 30, 2026 |
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| September 30, 2025 |
| ||||
Numerator: |
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Net (loss) income |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
| |
Less: Net loss attributable to non-controlling interests |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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| ( | ) |
Basic net (loss) income attributable to Sky Harbour Group Corporation shareholders |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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Less: Net loss attributable to non-controlling interests |
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| ( | ) | |||
Diluted net (loss) income attributable to Sky Harbour Group Corporation shareholders |
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Denominator: |
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Basic weighted average shares of Class A Common Stock outstanding |
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Effect of dilutive exchange of Class B Common Stock |
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Effect of dilutive exchange of Sky Incentive Units |
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Effect of dilutive restricted stock units |
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Diluted weighted average shares outstanding |
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(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
Table of Contents
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
Table of Contents
17. | Segment Information |
The Company has one 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 |
| $20.0 million of capital improvements. |
| Complete minimum spend commitment within 60 months of the effective date of the lease. |
DVT |
| DVT Phase II |
| $14.6 million of capital improvements. |
| Complete construction within 36 months of receiving all permitting documents. |
ORL |
| ORL Phase I |
| $30.0 million of capital improvements. |
| Complete minimum spend commitment within 36 months of the effective date of the lease. |
ORL |
| ORL Phase II |
| $5.0 million of capital improvements. |
| Commence construction within 5 years of effective date of the lease and complete construction within 24 months of construction commencement. |
POU |
| POU Phase I |
| $25.0 million of capital improvements. |
| Commence construction within 6 months of the issuance of permits and complete construction within 15 months of construction commencement. |
PWK |
| PWK Phase I |
| None. |
| Commence construction within 6 months of the issuance of permits and complete construction within 18 months of construction commencement. |
SJC |
| All Phases |
| $8.1 million of capital improvements. |
| Complete minimum spend commitment within 15 years of lease commencement. |
SLC |
| SLC Phase I |
| $40.0 million of capital improvements. |
| None. |
TTN |
| TTN Phase I |
| $30.0 million of capital improvements. |
| Complete construction within 36 months of receiving all permitting documents or no later than 48 months after the effective date of the lease. |
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
Table of Contents
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 $
25
Table of Contents
ITEM 2. |
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; |
|
|
|
|
• |
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; |
|
|
|
|
• |
our limited operating history makes it difficult to predict future revenues and operating results; |
|
|
|
|
• |
our ability to implement our construction costs mitigation strategies; |
|
|
|
|
• |
changes in applicable laws or regulations; |
|
|
|
|
• |
the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; and |
|
|
|
|
• |
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.
26
Table of Contents
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.
27
Table of Contents
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. |
28
Table of Contents
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.
29
Table of Contents
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.
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Table of Contents
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.
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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. |
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Table of Contents
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.
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Table of Contents
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.
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Table of Contents
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.
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Table of Contents
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.
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Table of Contents
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.
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Table of Contents
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. |
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Table of Contents
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 | ) |
39
Table of Contents
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 |
|
40
Table of Contents
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.
41
Table of Contents
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.
42
Table of Contents
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.
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Table of Contents
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.
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Table of Contents
ITEM 3. |
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.
ITEM 4. |
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.
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Table of Contents
PART II – OTHER INFORMATION
ITEM 1. |
LEGAL PROCEEDINGS |
The Company is not currently a party to any material legal proceedings.
ITEM 1A. |
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.
ITEM 2. |
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.
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
Not applicable.
ITEM 4. |
MINE SAFETY DISCLOSURES |
Not applicable.
ITEM 5. | OTHER INFORMATION |
During the three months ended September 30, 2026, no 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.
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Table of Contents
ITEM 6. |
EXHIBITS |
|
(a) |
See accompanying Exhibit Index included before the signature page of this report for a list of exhibits filed or furnished with this report. |
|
|
|
|
Incorporated by Reference | ||||||
Exhibit |
|
Description |
|
Schedule/ |
|
File No. |
|
Exhibit |
|
Filing Date |
|
|
|
|
|
|
|
|
|
|
|
3.1 |
|
Second Amended and Restated Certificate of Incorporation of Yellowstone Acquisition Company. |
|
8-K |
|
001-39648 |
|
3.1 |
|
January 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
3.2 |
|
Bylaws of Sky Harbour Group Corporation. |
|
8-K |
|
001-39648 |
|
3.2 |
|
January 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
10.1 (#)(+) |
|
Form of Stock Purchase Agreement, dated August 10, 2026, by and among Sky Harbour Group Corporation and the Investors named therein. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1 (#) |
|
Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2 (#) |
|
Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1 (##) |
|
Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. |
|
|||||||
|
|
|
|
|||||||
32.2 (##) |
|
Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350. |
|
|||||||
|
|
|
|
|||||||
101.INS (#) |
|
Inline XBRL Instance Document. |
|
|
|
101.SCH (#) |
|
Inline XBRL Taxonomy Extension Schema Document. |
|
|
|
101.CAL (#) |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
|
|
|
101.DEF (#) |
|
Inline XBRL Taxonomy Extension Definition. |
|
|
|
101.LAB (#) |
|
Inline XBRL Taxonomy Extension Label Linkbase Document. |
|
|
|
101.PRE (#) |
|
Inline XBRL Taxonomy Presentation Linkbase Document. |
|
|
|
104 (#) |
|
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
(#) |
|
Filed herewith. |
(##) |
|
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. |
(+) |
|
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. |
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Table of Contents
SIGNATURES
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.
|
SKY HARBOUR GROUP CORPORATION (Registrant) |
|
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Tal Keinan |
|
|
Tal Keinan Chief Executive Officer (Principal Executive Officer) |
|
|
|
|
|
|
|
November 10, 2026 |
|
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Francisco Gonzalez |
|
|
Francisco Gonzalez Chief Financial Officer (Principal Financial Officer) |
|
|
|
|
|
|
|
November 10, 2026 |
|
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Michael W. Schmitt |
|
|
Michael W. Schmitt Chief Accounting Officer (Principal Accounting Officer) |
|
|
|
|
|
|
|
November 10, 2026 |
|
|
48