Sky Harbour Group Corp 10-K

ITEM 9A. CONTROLS AND PROCEDURES   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.   As required by Rules 13a-15 and 15d-15 under the Exchange Act, the Chief Executive Officer and Chief Financial Officer of YAC carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021. Based upon their evaluation, our former Co-Chief Executive Officers and Chief Financial Officer determined that our disclosure controls and procedures were effective at a reasonable level of assurance as of December 31, 2021..   Internal Control over Financial Reporting   Management’s Report on Internal Controls over Financial Reporting   The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. In our amended 2020 Annual Report, filed on May 24, 2021, our former management identified a material weakness existing as of December 31, 2020. Our former management, including the Co-Chief Executive Officers and the Chief Financial Officer of Yellowstone Acquisition Company, had concluded, and certified to the Company, that they had remediated the previously disclosed material weakness related to the design and implementation of controls addressing the industry-wide issues and related insufficient risk assessment of the underlying accounting for certain instruments. The remediation efforts involved designing and implementing enhancements to internal control over financial reporting including those related to special purpose acquisition companies and expanding the use of specialist involvement in highly complex and technical areas of accounting, including transactions related to special purpose acquisition companies. Our former management performed testing to verify the effective design and successful operating effectiveness of the new or enhanced controls, based upon criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). As a result, our former management determined that our internal controls over financial reporting were effective as of December 31, 2021.   Changes in Internal Control over Financial Reporting   Except with respect to the remediated material weakness described above, there have not been any changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the fiscal quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.   ITEM 9B. OTHER INFORMATION   None.     ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS   Not Applicable.   62 Table of Contents   PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   The required information is incorporated by reference from our Proxy Statement to be filed with respect to our 2022 Annual Meeting of Stockholders.     ITEM 11. EXECUTIVE COMPENSATION   The required information is incorporated by reference from our Proxy Statement to be filed with respect to our 2022 Annual Meeting of Stockholders.     ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.   The required information is incorporated by reference from our Proxy Statement to be filed with respect to our 2022 Annual Meeting of Stockholders.     ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE   The required information is incorporated by reference from our Proxy Statement to be filed with respect to our 2022 Annual Meeting of Stockholders.     ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES   The required information is incorporated by reference from our Proxy Statement to be filed with respect to our 2022 Annual Meeting of Stockholders.   63 Table of Contents   PART IV   ITEM 15. EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES     (a) The following documents are filed as part of this Annual Report on Form 10-K:   Financial Statements: The financial statements listed in “Index to the Financial Statements” at “Item 8. Financial Statements and Supplementary Data” are filed as part of this Annual Report on Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.     (b) Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K.           Incorporated by Reference Exhibit Number   Description   Schedule/ Form   File No.   Exhibit   Filing Date                       2.1 (+)   Equity Purchase Agreement, dated as of August 1, 2021, by and among Yellowstone Acquisition Company and Sky Harbour LLC.   8-K   001-39648   2.1   August 3, 2021                       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                       4.1   Specimen Class A Common Stock Certificate.   S-1   333-249035   4.2   September 25, 2020                       4.2   Specimen Warrant Certificate.   S-1   333-249035   4.3   September 25, 2020                       4.3   Warrant Agreement, dated October 21, 2020, between Yellowstone Acquisition Company and Continental Stock Transfer & Trust Company, as warrant agent.   8-K   001-39648   4.1   October 26, 2020                       4.4 (#)   Description of Securities.                                       10.1 (+)   Stockholders’ Agreement, dated as of January 25, 2022, by and among Sky Harbour Group Corporation, Tal Keinan, Due West Partners LLC, Center Sky Harbour LLC, BOC Yellowstone I LLC, and BOC Yellowstone II LLC.   8-K   001-39648   10.1   January 31, 2022                       10.2 (+)   Registration Rights Agreement, dated as of September 14, 2021 by and among Sky Harbour LLC, the Existing Sky Equityholders, BOC YAC, the Sponsor and the BOC PIPE investors.   8-K   001-39648   10.2   January 31, 2022                       10.3 (#)   Amendment No. 1 to the Registration Rights Agreement, dated as of February 28, 2022 by and among Sky Harbour LLC, the Existing Sky Equityholders, BOC YAC, the Sponsor and the BOC PIPE investors.                                       10.4 (+)   Tax Receivable Agreement, dated as of January 25, 2022, by and among Sky Harbour Group Corporation, the Existing Sky Equityholders and the TRA Holder Representative.   8-K   001-39648   10.3   January 31, 2022                       10.5 (+)   Third Amended and Restated Operating Agreement of Sky Harbour LLC.   8-K   001-39648   10.4   January 31, 2022                       10.6 (*)   Sky Harbour Group Corporation 2022 Incentive Award Plan.   8-K   001-39648   10.5   January 31, 2022                       10.7 (*)   Sky Harbour Group Corporation 2022 Incentive Award Plan – Form of Restricted Stock Unit Agreement.   8-K   001-39648   10.6   January 31, 2022                       10.8 (*)   Form of Director and Officer Indemnification Agreement.   8-K   001-39648   10.7   January 31, 2022                       10.9 (*)   Employment Agreement with Francisco Gonzalez.   8-K   001-39648   10.8   January 31, 2022   64 Table of Contents   10.10 (*)   Employment Agreement with Alex Saltzman.   8-K   001-39648   10.9   January 31, 2022                       10.11   Trust Indenture between the Public Finance Authority and The Bank of New York Mellon.   8-K   001-39648   10.10   January 31, 2022                       10.12   Specimen Series 2021 Bonds (included as part of Exhibit 10.11).   8-K   001-39648   10.11   January 31, 2022                       10.13   Loan Agreement by and between the Public Finance Authority, Sky Harbour Sugar Land Airport, LLC, Sky Harbour Opa Locka Airport, LLC, Nashville Hangars LLC, APA Hangars LLC and DVT Hangars LLC.   8-K   001-39648   10.12   January 31, 2022                       10.14   Ground Sublease between Sunborne XVI, LTD. and APA Hangars LLC.   8-K   001-39648   10.13   January 31, 2022                       10.15 (+)   Unsubordinated Ground Lease and Option to Lease Additional Land between City of Phoenix and DVT Hangars LLC.   8-K   001-39648   10.14   January 31, 2022                       10.16   Lease Agreement by and between The Metropolitan Nashville Airport Authority and Sky Harbour, LLC.   8-K   001-39648   10.15   January 31, 2022                       10.17 (+)   First Amendment to the Lease Agreement by and between The Metropolitan Nashville Airport Authority and Nashville Hangars LLC.   8-K   001-39648   10.16   January 31, 2022                       10.18 (+)   Sublease Agreement by and between AA Acquisitions, LLC and Sky Harbour Opa Locka Airport, LLC.   8-K   001-39648   10.17   January 31, 2022                       10.19 (+)   First Amendment to Sublease Agreement between AA Acquisitions, LLC and Sky Harbour Opa Locka Airport, LLC.   8-K   001-39648   10.18   January 31, 2022                       10.20   Amended and Restated Standard Form Airport Corporate Hangar Land Lease between the City of Sugar Land and Sky Harbour Sugar Land Airport, LLC.   8-K   001-39648   10.19   January 31, 2022                       10.21   Amendment No. 2 to the Standard Form Airport Corporate Hangar Land Lease between the City of Sugar Land and Sky Harbour Sugar Land Airport, LLC.   8-K   001-39648   10.20   January 31, 2022                       10.22   BOC YAC PIPE Subscription Agreement dated December 22, 2021.   8-K   001-39648   10.1   December 23, 2021                       10.23   Letter Agreement dated December 22, 2021.   8-K   001-39648   10.2   December 23, 2021                       10.24   Forward Purchase Agreement dated January 17, 2022.   8-K   001-39648   10.1   January 18, 2022                       10.25 (#)   Purchase and Sale Agreement by and between AA Acquisitions, LLC and OPF Hangars Landlord LLC.                                       16.1   Letter from KPMG LLP to the SEC, dated January 31, 2022.   8-K   001-39648   16.1   January 31, 2022                       21.1 (#)   List of Subsidiaries.                                       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).                   65 Table of Contents   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 (#)   Inline XBRL (Extensible Business Reporting Language). The following materials from this Annual Report on Form 10-K for the period ended December 31, 2021, formatted in Inline XBRL: (i) consolidated balance sheets of Sky Harbour Group Corporation, (ii) consolidated statements of operations of Sky Harbour Group Corporation, (iii) consolidated statements of comprehensive income/(loss) of Sky Harbour Group Corporation, (iv) consolidated statements of changes in equity of Sky Harbour Group Corporation, (v) consolidated statements of cash flows of Sky Harbour Group Corporation, and (vi) notes to consolidated financial statements of Sky Harbour Group Corporation. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.           104 (#)   Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)       (*)   Indicates a management contract or compensatory plan (#)   Filed herewith.   (##)   The certifications attached as Exhibits 32.1, 32.2, and 32.3 that accompany this Report, are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Yellowstone Acquisition Company 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.   ITEM 16. FORM 10-K SUMMARY   None.   66 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 (Principal Executive Officer)           March 28, 2022                 By:  /s/ Francisco Gonzalez      Francisco Gonzalez Chief Financial Officer (Principal Financial Officer)           March 28, 2022                 By: /s/ Michael W. Schmitt      Michael W. Schmitt Chief Accounting Officer (Principal Accounting Officer)           March 28, 2022     67 Table of Contents   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:   Name   Title   Date           /s/ Tal Keinan   Chief Executive Officer, Chairman of the Board of Directors   March 28, 2022 Tal Keinan   (Principal Executive Officer)                         /s/ Francisco Gonzalez   Chief Financial Officer   March 28, 2022 Francisco Gonzalez   (Principal Financial Officer)                         /s/ Michael W. Schmitt   Chief Accounting Officer   March 28, 2022 Michael W. Schmitt   (Principal Accounting Officer)                         /s/ Walter Jackson   Director   March 28, 2022 Walter Jackson                             /s/ Lysa Leiponis   Director   March 28, 2022 Lysa Leiponis                             /s/ Alethia Nancoo   Director   March 28, 2022 Alethia Nancoo                             /s/ Robert S. Rivkin   Director   March 28, 2022 Robert S. Rivkin                             /s/ Alex B. Rozek   Director   March 28, 2022 Alex B. Rozek                             /s/ Nick Wellmon   Director   March 28, 2022 Nick Wellmon           68