What changed in this filing

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Item 1. Financial Statements

2024-08-13 compared with 2024-05-14 · 314 added, 196 removed, 833 unchanged (38% of the section changed)

3 unchanged sentences

(in thousands, except share data)

March 31, 2024

June 30, 2024

December 31, 2023

31 unchanged sentences

$ 0.0001 par value;

10,000,000 shares authorized as of March 31, 2024;

10,000,000 shares authorized as of June 30, 2024;

none issued and outstanding

1 unchanged sentence

200,000,000 shares authorized;

24,537,559 and 24,165,523 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

24,878,700 and 24,165,523 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

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 March 31, 2024 and December 31, 2023, respectively

42,046,356 and 42,046,356 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

15 unchanged sentences

Three Months Ended

March 31, 2024

March 31, 2023

Six months ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Rental revenue

5 unchanged sentences

Interest expense

Unrealized loss on warrants

Unrealized (gain) loss on warrants

Total other (income) expense

Net income (loss)

Net loss attributable to non-controlling interests

Net loss attributable to Sky Harbour Group Corporation shareholders

Loss per share

Net income (loss) attributable to Sky Harbour Group Corporation shareholders

Earnings (loss) per share

Weighted average shares

4 unchanged sentences

Three Months Ended

March 31, 2024

March 31, 2023

Other comprehensive income (loss), before related income taxes:

Unrealized gain (loss) on available-for-sale securities

Total comprehensive loss

Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Net income (loss)

Unrealized gains on available-for-sale securities

Realized gains on available-for-sale securities reclassified to the consolidated statements of operations

Total comprehensive income (loss)

See accompanying Notes to Unaudited Consolidated Financial Statements

14 unchanged sentences

Balance at March 31, 2024

Share-based compensation

Vesting of restricted stock units

Shares withheld for payment of employee taxes

Exercise of warrants

Issuance of stock through ATM Facility

Exchange of Sky Incentive Units

Other comprehensive loss

Net income (loss)

Balance at June 30, 2024

Accumulated Other

7 unchanged sentences

Balance at March 31, 2023

Share-based compensation

Vesting of restricted stock units

Exercise of warrants

Other comprehensive income (loss)

Net income (loss)

Balance at June 30, 2023

See accompanying Notes to Unaudited Consolidated Financial Statements

2 unchanged sentences

(in thousands)

Three months ended

March 31, 2024

March 31, 2023

Six months ended

June 30, 2024

June 30, 2023

Cash flows from operating activities:

4 unchanged sentences

Non-cash operating lease expense

Realized gain on available for sale investments

Unrealized loss on warrants

8 unchanged sentences

Investment in notes receivable, net

Net cash provided by acquisition of business

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 provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from exercise of warrants

Proceeds from ATM Facility

Principal payments for loans payable and finance leases

1 unchanged sentence

Payments of employee taxes related to vested equity awards

Net cash provided by financing activities

Net increase in cash and restricted cash

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and restricted cash

Cash and restricted cash, beginning of year

3 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

June 30, 2024

(in thousands, except share data)

3 unchanged sentences

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 March 31, 2024 , SHG owned approximately 36.9 % of the Sky Common Units and the prior holders of Sky Common Units (the “LLC Interests”) owned approximately 63.1 % of the Sky Common Units and control the Company through their ownership of the Company's Class B Common Stock, $ 0.0001 par value (“Class B Common Stock”).

As of June 30, 2024 , SHG owned approximately 37.2 % of the Sky Common Units and the prior holders of Sky Common Units (the “LLC Interests”) owned approximately 62.8 % of the Sky Common Units and control the Company through their ownership of the Company's Class B Common Stock, $ 0.0001 par value (“Class B Common Stock”).

Basis of Presentation and Summary of Significant Accounting Policies

56 unchanged sentences

Variable lease 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.

For the three months ended March 31, 2024, rental revenue includes $ 379 of variable lease payments.

For the three months ended March 31, 2023, rental revenue includes $ 117 of variable lease payments.

As of March 31, 2024 and December 31, 2023 , the deferred rent receivable included in prepaid expenses and other assets was $ 403 and $ 367 , respectively.

For the three and six months ended June 30, 2024 , rental revenue includes $ 673 and $ 1,053 of variable lease payments, respectively.

For the three and six months ended June 30, 2023 , rental revenue includes $ 187 and $ 304 of variable lease payments, respectively.

As of June 30, 2024 and December 31, 2023 , the deferred rent receivable included in prepaid expenses and other assets was $ 404 and $ 367 , respectively.

Rent received in advance represents tenant payments received prior to the contractual due date, and is included in accounts payable, accrued expenses, and other liabilities.

Rent received in advance consisted of $ 359 and $ 241 as of March 31, 2024 and December 31, 2023 , respectively.

For the three months ended March 31, 2024 the Company derived approximately 10 % of its revenue from one tenant.

For the three months ended March 31, 2023 the Company derived approximately 45 % of its revenue from three tenants, including 20 % from a single tenant.

Rent received in advance consisted of $ 262 and $ 241 as of June 30, 2024 and December 31, 2023 , respectively.

For the three and six months ended June 30, 2024 the Company did not derive 10 % of its revenue from any single tenant.

For the three and six months ended June 30, 2023 the Company derived approximately 29 % and 30 % of its revenue from two tenants, respectively.

SHG is classified as a corporation for Federal income tax purposes and is subject to U.S.

10 unchanged sentences

When a valuation allowance is increased or decreased, a corresponding tax expense or benefit is recorded.

The Company recorded income tax expense of $ 0 and the effective tax rate was 0.0 % for the three months ended March 31, 2024 and 2023.

The effective income tax rate for the three months ended March 31, 2024 and 2023 differs from the federal statutory rate of 21 % primarily due to a full valuation allowance against net deferred tax assets as it is more likely than not that the deferred tax assets will not be realized due to the cumulative losses sustained by the Company to date.

The Company recorded income tax expense of $ 0 and the effective tax rate was 0.0 % for the three and six months ended June 30, 2024 and 2023.

The effective income tax rate for the three and six months ended June 30, 2024 and 2023 differs from the federal statutory rate of 21 % primarily due to a full valuation allowance against net deferred tax assets as it is more likely than not that the deferred tax assets will not be realized due to the cumulative losses sustained by the Company to date.

Recently Issued Accounting Pronouncements

28 unchanged sentences

The Company accounted for the acquisition using the acquisition method of accounting, whereby the total purchase price was allocated to assets acquired and liabilities assumed based on respective estimated fair values.

The estimated fair values of the acquired assets and assume liabilities are based on preliminary calculations and subject to further refinement and may require adjustments to arrive at the final purchase price accounting.

The Company expects the final purchase price allocation to be completed in a period of time that will not exceed one year from the Option Exercise Date.

There can be no assurance that such finalization will not result in material changes from the preliminary purchase price allocation.

The following tables summarize the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the Rapidbuilt Acquisition:

The following tables summarize the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed for the Rapidbuilt Acquisition:

Restricted Cash 1,500

17 unchanged sentences

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 months ended March 31, 2024.

The held-to-maturity restricted investments are carried on the consolidated balance sheet at amortized cost.

As of March 31, 2024, 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.

As of June 30, 2024 , 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 are summaries of the amortized cost, unrealized gains, unrealized losses, and fair value by investment type as of March 31, 2024 and December 31, 2023:

March 31, 2024

The following tables set forth summaries of the amortized cost, unrealized gains, unrealized losses, and fair value by investment type as of June 30, 2024 and December 31, 2023 :

June 30, 2024

Amortized Cost

19 unchanged sentences

Total restricted investments $ 88,213 $ 105 $ ( 694 ) $ 87,624

The following table sets forth the maturity profile of the Company's investments and restricted investments as of March 31, 2024:

The following table sets forth the maturity profile of the Company's investments and restricted investments as of June 30, 2024 :

Restricted Investments

4 unchanged sentences

Cost of Construction and Constructed Assets

The Company’s portfolio as of March 31, 2024 includes the following completed and in-development projects:

The Company’s portfolio as of June 30, 2024 includes the following completed and in-development projects:

Addison Airport (“ADS”), Addison, TX (Dallas area);

9 unchanged sentences

Sugar Land Regional Airport (“SGR”), Sugar Land, TX (Houston area);

Washington Dulles International Airport (“IAD”), Dulles, VA (Washington, DC area).

Constructed assets, net, and cost of construction, consists of the following:

March 31, 2024

June 30, 2024

December 31, 2023

Constructed assets, net of accumulated depreciation:

Buildings, SGR, BNA, and OPF (Phase I)

Buildings, BNA, OPF (Phase I), and SGR

$ 81,002 $ 80,232

3 unchanged sentences

Cost of construction:

OPF (Phase II), APA (Phase I), DVT (Phase I), and ADS (Phase I & II)

ADS (Phase I & II), APA (Phase I), DVT (Phase I), OPF (Phase II), and SJC (Renovation)

$ 91,996 $ 64,212

Depreciation expense for the three months ended March 31, 2024 and 2023 totaled $ 448 and $ 392 , respectively.

Depreciation expense for the three months ended June 30, 2024 and 2023 totaled $ 450 and $ 448 , respectively.

Depreciation for the six months ended June 30, 2024 and 2023 totaled $ 898 and $ 839 , respectively.

Long-lived Assets

Long-lived assets, net, consists of the following:

March 31, 2024

June 30, 2024

December 31, 2023

8 unchanged sentences

$ 11,928 $ 11,829

Depreciation expense for the three months ended March 31, 2024 and 2023 totaled $ 181 and $ 58 , respectively.

Capitalized depreciation of long-lived assets included in cost of construction totaled $ 136 and $ 0 for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024 and December 31, 2023, long-lived assets included approximately $ 665 and $ 362 , respectively, of purchase deposits towards long-lived assets which are not being depreciated as the assets have not been placed into service.

Depreciation expense for the three months ended June 30, 2024 and 2023 totaled $ 191 and $ 83 , respectively.

Depreciation for the six months ended June 30, 2024 and 2023 $ 373 and $ 141 , respectively.

Capitalized depreciation of long-lived assets included in cost of construction totaled $ 130 and $ 119 for the three months ended June 30, 2024 and 2023, respectively.

Capitalized depreciation of long-lived assets included in cost of construction totaled $ 266 and $ 119 for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, long-lived assets included approximately $ 653 and $ 362 , respectively, of purchase deposits towards long-lived assets which are not being depreciated as the assets have not been placed into service.

Supplemental Balance Sheet and Cash Flow Information

1 unchanged sentence

Accounts payable, accrued expenses and other liabilities, consists of the following:

March 31, 2024

June 30, 2024

December 31, 2023

Costs of construction

$ 6,987 $ 7,022

Employee compensation and benefits

1 unchanged sentence

Tenant security deposits

$ 13,816 $ 16,740

Supplemental Cash Flow Information

The following table summarizes non-cash investing and financing activities:

Three months ended

March 31, 2024

March 31, 2023

Six months ended

June 30, 2024

June 30, 2023

Accrued costs of construction, including capitalized interest

$ 5,769 $ 5,542

Accrued costs of long-lived assets

Proceeds receivable from exercise of Warrants

Debt issuance costs and premium amortized to cost of construction

The following table summarizes non-cash activities associated with the Company’s operating leases:

Three months ended

March 31, 2024

March 31, 2023

Six months ended

June 30, 2024

June 30, 2023

Right-of-use assets obtained in exchange for operating lease liabilities

$ 46,422 $ 168

Net increase in right-of-use assets and operating lease liabilities due to lease remeasurement

Net increase (decrease) in right-of-use assets and operating lease liabilities due to lease remeasurement

The following table summarizes interest paid:

Three months ended

March 31, 2024

March 31, 2023

Six months ended

June 30, 2024

June 30, 2023

Interest paid

$ 3,664 $ 3,470

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:

Three months ended

March 31, 2024

March 31, 2023

Six months ended

June 30, 2024

June 30, 2023

Cash, beginning of year

$ 60,257 $ 2,174

Restricted cash, beginning of year

12,009 39,222

Cash and restricted cash, beginning of year

$ 72,266 $ 41,396

Cash, end of period

$ 2,556 $ 2,853

Restricted cash, end of period

99,453 70,303

Cash and restricted cash, end of period

$ 102,009 $ 73,156

The table below summarizes operating lease expense for the three months ended March 31, 2024 and March 31, 2023 recorded in the captions within our consolidated statement of operations:

The table below sets forth a summary of operating lease expense for the three and six months ended June 30, 2024 and 2023 recorded in the captions within our consolidated statement of operations:

Three months ended

March 31, 2024

March 31, 2023

Six months ended

June 30, 2024

June 30, 2023

June 30, 2024 June 30, 2023

Operating expenses

10 unchanged sentences

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 month periods ended March 31, 2024 and 2023 .

These variable payments were not material in amount for the three and six months ended June 30, 2024 and 2023 .

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.

4 unchanged sentences

Certain of the Company's ground leases contain options to lease additional parcels of land at the Company's option within a specified period of time.

On March 23, 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “SJC Lease”) at SJC with the City of San Jose.

In March 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “SJC Lease”) at SJC with the City of San Jose.

The SJC Lease covers approximately 7 acres of property that contains an approximately 38,000 square foot hangar, approximately 19,000 square feet of office space, and approximately 108,000 square feet of apron and ramp space.

1 unchanged sentence

The initial term of the SJC Lease will be 20 years from May 1, 2024, and contains a mutual option to extend the SJC Lease an additional 5 years following the expiration of the initial term.

On March 27, 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “ORL Lease”) at ORL with the Greater Orlando Aviation Authority (“GOAA”).

In March 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “ORL Lease”) at ORL with the Greater Orlando Aviation Authority (“GOAA”).

The ORL Lease covers a parcel containing approximately 20 acres of land at ORL.

1 unchanged sentence

The ORL Lease contains options exercisable by the Company to extend the ORL Lease an additional 20 years based on the Company's total expenditures in subsequent phases at ORL.

In May 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “IAD Lease”) at IAD with the Metropolitan Washington Airports Authority (“MWAA”).

The IAD Lease covers approximately 18 acres of property at IAD.

The initial term of the IAD Lease will be approximately 50 years and expire on March 31, 2074, and contains an option exercisable by the Company to extend the IAD Lease an additional 10 years following the expiration of the initial term.

The property covered by the IAD Lease is split between two parcels, with rent payments associated with the first parcel (“IAD Phase I”) commencing the earlier of certificate of occupancy or 36 months from the issuance of permits for IAD Phase I, and rent payments associated with the second parcel (“IAD Phase II”) commencing the earlier of issuance of permits for IAD Phase II or five years from certificate of occupancy associated with IAD Phase I.

The IAD Lease requires the Company to commence construction related to IAD Phase II within five years of the receipt of the certificate of occupancy for IAD Phase I.

Supplemental consolidated cash flow information related to the Company’s leases was as follows:

Three months ended

Six months ended

Cash paid for amounts included in measurement of lease liabilities:

Operating cash flows from operating leases

$ 1,662 $ 1,022

Operating cash flows from finance leases

Operating cash flows from operating leases as lessee

Financing cash flows from finance leases

Supplemental consolidated balance sheet information related to the Company’s leases was as follows:

Weighted Average Remaining Lease Term (in years)

March 31, 2024

June 30, 2024

December 31, 2023

Operating leases

Ground leases - Unimproved at commencement

Ground leases - Existing improvements

Equipment leases

Office leases

All operating leases

Finance leases

1 unchanged sentence

Operating leases

Ground leases - Unimproved at commencement

5.37 % 5.22 %

Ground leases - Existing improvements

4.92 % 4.00 %

Equipment leases

5.28 % 5.45 %

Office leases

4.82 % 2.46 %

All operating leases

5.28 % 5.08 %

Finance leases

4.99 % 5.00 %

The Company’s future minimum lease payments required under leases as of March 31, 2024 were as follows:

The Company’s future minimum lease payments required under leases as of June 30, 2024 were as follows:

Year Ending December 31, Operating Leases

17 unchanged sentences

The leases do not contain any restrictions or covenants to incur additional financial obligations by the lessee.

Tenant leases to which the Company is the lessor require the following non-cancelable future minimum lease payments from tenants as of March 31, 2024 :

Tenant leases to which the Company is the lessor require the following non-cancelable future minimum lease payments from tenants as of June 30, 2024 :

Year Ending December 31,

24 unchanged sentences

In connection with the election to modify the scope of the Series 2021 PABs to include the ADS Project, (i) Addison Hangars LLC (“Sky Harbour Addison”) and OPF Hangars Landlord LLC (“OPF Hangars”) joined as members of the Obligated Group, (ii) Sky Harbour Holdings LLC contributed its membership interest in OPF Hangars to SHC, (iii) SHC pledged its equity interest in each of Sky Harbour Addison and OPF Hangars to the Master Trustee as security for the obligations under the Series 2021 Bonds, (iv) Sky Harbour Addison granted to the Master Trustee a mortgage on its leasehold interest in the real property comprising the ADS Project, (v) OPF Hangars granted the Master Trustee a mortgage on its leasehold interest in the real estate comprising the project located in Opa Locka, Florida, and (vi) Sky Harbour Services LLC, a wholly-owned subsidiary of the Company, has agreed to waive all management fees and development fees during the construction period of the projects associated with the Series 2021 Bonds.

As of March 31, 2024 and December 31, 2023, the fair value of the Company’s Series 2021 - 1 Bonds was approximately $ 125.9 million and $ 116.5 million, respectively.

As of March 31, 2024 and December 31, 2023, the fair value of the Company’s bonds is estimated utilizing Level 2 inputs including prices for the bonds on inactive markets.

The following table summarizes the Company’s Bonds payable as of March 31, 2024 and December 31, 2023 :

March 31, 2024

As of June 30, 2024 and December 31, 2023 , the fair value of the Company’s Series 2021 - 1 Bonds was approximately $ 134.2 million and $ 116.5 million, respectively.

As of June 30, 2024 and December 31, 2023 , the fair value of the Company’s bonds is estimated utilizing Level 2 inputs including prices for the bonds on inactive markets.

The following table summarizes the Company’s Bonds payable as of June 30, 2024 and December 31, 2023 :

June 30, 2024

December 31, 2023

11 unchanged sentences

Loans Payable and Finance Leases

The following table summarizes the Company's loans payable and finance lease liabilities as of March 31, 2024 and December 31, 2023:

March 31, 2024

The following table summarizes the Company's loans payable and finance lease liabilities as of June 30, 2024 and December 31, 2023 :

June 30, 2024

December 31, 2023

14 unchanged sentences

Three months ended

March 31, 2024

March 31, 2023

$ 1,929 $ 1,735

Six months ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Accretion of bond premium and amortization of debt issuance costs

1 unchanged sentence

capitalized interest

( 1,786 ) ( 1,788 )

Interest expense

4 unchanged sentences

The terms of the Private Warrants are identical to those of the Public Warrants, except for that so long as the Private Warrants are held by the Sponsor or its permitted transferees, they may be exercised on a cashless basis.

In connection with the Securities Purchase Agreement (the “Private Placement Purchase Agreement”) entered into on November 1, 2023 with certain investors, the Company issued to third -party investors 1,541,600 PIPE Warrants (together with the Public Warrants and the Private Warrants, the “Warrants”).

The PIPE Warrants are similar in form and substance to the Company’s Public Warrants.

In connection with the Securities Purchase Agreement (the “Private Placement Purchase Agreement”) entered into on November 1, 2023 with certain investors, the Company issued to third -party investors 1,541,600 warrants (the “PIPE Warrants”, and together with the Public Warrants and the Private Warrants, the “Warrants”).

The PIPE Warrants are equivalent in form and substance to the Company’s Public Warrants.

The Warrants contain an exercise price of $ 11.50 per share and expire on January 25, 2027.

2 unchanged sentences

As the terms of the Private Warrants are identical to those of the Public Warrants, the Company determined the fair value of its Private Warrants based on the publicly listed trading price of the Public Warrants as of the valuation date and have classified the Private Warrants as Level 2 financial instruments.

During the three months ended March 31, 2024 , 253,703 Warrants were exercised, resulting in approximately $ 2.9 million of proceeds, of which approximately $ 1.4 million was receivable by the Company as of March 31, 2024.

As of March 31, 2024 , 15,806,640 Warrants remain outstanding.

The closing price of the Warrants was $ 1.76 and $ 0.75 per warrant on March 31, 2024 and December 31, 2023 , respectively.

The aggregate fair value of the outstanding Warrants was approximately $ 27.8 million and $ 12.0 million as of March 31, 2024 and December 31, 2023 , respectively.

During the three months ended March 31 2024 and March 31, 2023, the Company recorded unrealized losses of approximately $ 16.2 million and $ 4.2 million, respectively.

Equity and Redeemable Equity

During the three and six months ended June 30, 2024 , 3,639 and 257,342 Warrants were exercised, respectively, resulting in approximately $ 3.0 million of proceeds.

As of June 30, 2024 , 15,803,001 Warrants remain outstanding.

The closing price of the Warrants was $ 1.24 and $ 0.75 per warrant on June 30, 2024 and December 31, 2023 , respectively.

The aggregate fair value of the outstanding Warrants was approximately $ 19.6 million and $ 12.0 million as of June 30, 2024 and December 31, 2023 , respectively.

During the three months ended June 30, 2024 and 2023, the Company recorded unrealized gains associated with the change in fair value of the Warrants of approximately $ 8.2 million and $ 2.6 million, respectively.

During the six months ended June 30, 2024 and 2023, the Company recorded unrealized losses associated with the change in fair value of the Warrants of approximately $ 8.0 million and $ 1.6 million, respectively.

Common Equity

As of March 31, 2024 , there were 24,537,559 and 42,046,356 shares of Class A Common Stock and Class B Common Stock outstanding, respectively.

As of June 30, 2024 , there were 24,878,700 and 42,046,356 shares of Class A Common Stock and Class B Common Stock outstanding, respectively.

Holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters submitted to the stockholders for their vote or approval, except as required by applicable law.

13 unchanged sentences

Riley a commission of 3.0 % of the gross sales price per share sold under the ATM Agreement, subject to certain reductions.

The Company has made no sales to date under the ATM Facility.

During the three and six months ended June 30, 2024, the Company sold 7,407 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $ 12.42 .

The Company is not obligated to sell any shares under the ATM Agreement.

11 unchanged sentences

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 March 31, 2024 and represents the Sky Common Units held by holders other than SHG.

The LLC Interests’ ownership in Sky is presented as non-controlling interests within the Equity section of the consolidated balance sheet as of June 30, 2024 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 on 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 March 31, 2024 , the LLC interests owned approximately 63.1 % of the Sky Common Units outstanding.

As of June 30, 2024 , the LLC interests owned approximately 62.8 % of the Sky Common Units outstanding.

The former majority shareholder's ownership in Overflow is presented as a non-controlling interest within the Equity section of the consolidated balance sheet.

As of March 31, 2024 , the former majority shareholder owned approximately 49 % of the partnership interests in Overflow.

As of June 30, 2024 , the former majority shareholder owned approximately 49 % of the partnership interests in Overflow.

Equity Compensation

2 unchanged sentences

430,002 of time-based awards were granted at a grant date fair value of $ 12.33 , which will vest ratably over a four -year period beginning on the first anniversary of the grant date and ending on February 15, 2028.

During the three months ended March 31, 2024 , the Company recognized stock compensation expense of approximately $ 0.9 million associated with all RSU awards, which is recorded within General and Administrative Expenses within the statement of operations.

During the three months ended March 31, 2023, the Company recognized stock compensation expense of $ 0.4 million.

As of March 31 2024, there are approximately 1,189,636 non-vested RSUs outstanding with a weighted average grant date fair value of $ 9.78 .

The unrecognized compensation costs associated with all unvested RSUs at March 31, 2024 was approximately $ 9.4 million that is expected to be recognized over a weighted-average future period of 3.2 years.

During the three and six months ended June 30, 2024 , the Company recognized stock compensation expense of approximately $ 0.9 million and $ 1.9 million, respectively, associated with all RSU awards, which is recorded within General and Administrative Expenses within the statement of operations.

During the three and six months ended June 30, 2023, the Company recognized stock compensation expense of $ 0.5 million and $ 0.9 million, respectively.

As of June 30 2024, there are approximately 1,029,697 unvested RSUs outstanding with a weighted average grant date fair value of $ 9.82 .

The unrecognized compensation costs associated with all unvested RSUs at June 30, 2024 was approximately $ 8.4 million that is expected to be recognized over a weighted-average future period of 2.9 years.

Non-qualified Stock Options (“NSOs”)

2 unchanged sentences

The options were valued at $ 7.32 using a Black -Scholes pricing model.

During the three months ended March 31, 2024, the Company recognized stock compensation expense of $ 0.1 million associated with all NSO awards.

The unrecognized compensation costs associated with all unvested NSOs at March 31, 2024 was approximately $ 3.2 million that is expected to be recognized over a weighted-average future period of 8.9 years.

During the three and six months ended June 30, 2024, the Company recognized stock compensation expense of $ 0.1 million associated with all NSO awards.

The unrecognized compensation costs associated with all unvested NSOs at June 30, 2024 was approximately $ 3.1 million that is expected to be recognized over a weighted-average future period of 8.6 years.

Sky Incentive Units

The Company recognized equity-based compensation expense relating to awarded equity units of Sky (the “Sky Incentive Units”) of $ 45 and $ 85 for the three months ended March 31, 2024 , and March 31, 2023 respectively, which is recorded within General and Administrative Expenses within the statement of operations, and as a component of the non-controlling interest in the consolidated statement of changes in stockholders’ equity.

As of March 31, 2024 , there was $ 0.2 million of total unrecognized compensation expense that is expected to be recognized over a weighted-average future period of 1.2 years.

The Company recognized equity-based compensation expense relating to awarded equity units of Sky (the “Sky Incentive Units”) of $ 45 and $ 91 for the three and six months ended June 30, 2024, respectively, and $ 81 and $ 166 for the three and six months ended June 30, 2023, respectively.

Expense associated with the Sky Incentive Units is recorded within General and Administrative Expenses within the statement of operations, and as a component of the non-controlling interest in the consolidated statement of changes in stockholders’ equity.

As of June 30, 2024 , there was $ 0.2 million of total unrecognized compensation expense that is expected to be recognized over a weighted-average future period of 0.9 years.

Earnings (loss) per Share

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Three Months Ended

March 31, 2024

March 31, 2023

Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Net income (loss)

$ 4,163 $ ( 1,634 ) $ ( 17,036 ) $ ( 10,394 )

Net (loss) attributable to non-controlling interests

Basic and diluted net loss attributable to Sky Harbour Group Corporation shareholders

Based and diluted weighted average shares of Class A Common Stock outstanding

Loss per share of Class A Common Stock – Basic and diluted

Potentially dilutive shares excluded from the weighted-average shares used to calculate the diluted net loss per common share due the Company's net loss position were as follows (in thousands):

( 1,598 ) ( 2,412 ) ( 3,858 ) ( 4,978 )

Basic net income (loss) attributable to Sky Harbour Group Corporation shareholders

5,761 778 ( 13,178 ) ( 5,416 )

Net (loss) attributable to LLC Interests

( 1,462 ) ( 2,412 ) - -

Diluted net income (loss) attributable to Sky Harbour Group Corporation shareholders

$ 4,299 $ ( 1,634 ) $ ( 13,178 ) $ ( 5,416 )

Basic weighted average shares of Class A Common Stock outstanding

24,734 15,167 24,504 15,076

Effect of dilutive exchange of Class B Common Stock

42,046 42,046 - -

Effect of dilutive exchange of Sky Incentive Units

Effect of dilutive restricted stock

Diluted weighted average shares outstanding

69,534 57,213 24,504 15,076

Earnings (loss) per share of Class A Common Stock – Basic

$ 0.23 $ 0.05 $ ( 0.54 ) $ ( 0.36 )

Earnings (loss) per share of Class A Common Stock – Diluted

$ 0.06 $ ( 0.03 ) $ ( 0.54 ) $ ( 0.36 )

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

March 31, 2024

March 31, 2023

Six Months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Shares subject to unvested restricted stock units

Shares subject to unvested stock options

813 1,005 1,030 1,005

Shares issuable upon the exercise of unvested stock options 439 - 439 -

Shares issuable upon the exercise of Warrants

15,803 14,519 15,803 14,519

Shares issuable upon the exchange of Class B Common Stock

- - 42,046 42,046

Shares issuable upon the exercise and exchange of Sky Incentive Units

18 2,808 2,556 2,808

Accumulated Other Comprehensive Income

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Amounts reclassified to other (income) expense

Balance as of March 31, 2024

Balance as of June 30, 2024

Unrealized gain on

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Amounts reclassified to other (income) expense

Balance as of March 31, 2023

Balance as of June 30, 2023

Commitments and Contingencies

In addition to the lease payment commitments discussed in Note

Leases , 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.

In addition to the lease payment commitments discussed in Note 8 — Leases , 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.

The APA Lease requires the Company to improve the property in accordance with a development plan included in the lease and to complete such improvements within 24 -months of the issuance of permitting documents.

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Additionally, the Company will also incur the pro rata share of maintenance, overhead and insurance costs of the aircraft.

For the three months ended March 31, 2024 , the Company recognized $ 69 of expense within General and administrative expense under the terms of this agreement.

For the three months ended March 31, 2023, the Company recognized $ 62 of expense associated with this agreement.

The related liability is included in Accounts payable, accrued expenses and other liabilities on the consolidated balance sheet as of March 31, 2024 .

For the three months ended March 31, 2024 , the Company recognized $ 0 of expense for consulting services, to a company that employed the chief financial officer until prior to July 1, 2021.

The Company recognized $ 88 of expense during the three months ended March 31, 2023 to the same company.

For the three and six months ended June 30, 2024 , the Company recognized $ 18 and $ 87 of expense, respectively, within General and administrative expense under the terms of this agreement.

For the three and six months ended June 30, 2023, the Company recognized $ 54 and $ 116 of expense, respectively, associated with this agreement.

The related liability is included in Accounts payable, accrued expenses and other liabilities on the consolidated balance sheet as of June 30, 2024 .

For the three and six months ended June 30, 2024 , the Company recognized $ 0 of expense for consulting services, to a company that employed the chief financial officer until prior to July 1, 2021.

The Company recognized $ 8 and $ 95 of expense during the three and six months ended June 30, 2023, respectively, to the same company.

Subsequent Events

On August 8, 2024, the Company, through a wholly-owned subsidiary of the Company, entered into a ground lease agreement (the “SLC Lease”) at Salt Lake City International Airport (“SLC”) with the Salt Lake City Corporation.

The SLC Lease covers approximately 8.4 acres of property at SLC.

The initial term of the SLC Lease will be 30 years from the earlier of certificate of occupancy or 24 months from the expiration of the diligence period, as defined in the SLC Lease, with lease payments commencing contemporaneously with the term.

The SLC Lease contains two options exercisable by the Company to extend the SLC Lease for an additional 20 years following the expiration of the initial term.

Under the terms of the SLC Lease, the Company is required to make minimum capital improvements of $ 40 million.

SLC is owned and operated by the Salt Lake City Corporation and is located in Salt Lake City, Utah.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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We lease each of our properties under long-term ground leases.

The table below presents certain information with respect to our portfolio as of March 31, 2024.

The table below presents certain information with respect to our portfolio as of June 30, 2024.

Addison Airport (“ADS”), Addison, TX (Dallas area);

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Sugar Land Regional Airport (“SGR”), Sugar Land, TX (Houston area);

Washington Dulles International Airport (“IAD”), Dulles, VA (Washington, DC area).

PROPERTIES IN OPERATION

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Square Footage

March 31, 2024

June 30, 2024

December 2020

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February 2023

Existing facility

Total/Weighted Average

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Predevelopment

In Development

ORL Phase I (2)

Predevelopment

POU Phase II (2)

Predevelopment

SJC Renovation

In Development

SJC Phase II (2)

In Construction

Predevelopment

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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.

Our ground leases at SJC and ORL were executed in March 2024, and we have not yet formed preliminary estimates regarding the projected construction timeline, total construction costs, or hangar mix associated with our ORL Phase I and SJC Phase II development projects.

We have not yet formed preliminary estimates regarding the projected construction timeline, total construction costs, or hangar mix associated with our POU Phase II development project.

Recent Developments

On March 23, 2024, we entered into the SJC Lease at SJC with the City of San Jose.

The property at SJC includes additional land on which we intend to develop approximately 28,000 square feet of additional hangar space.

The initial term of the SJC Lease will be 20 years from May 1, 2024, and contains a mutual option to extend the SJC Lease an additional 5 years following the expiration of the initial term.

On March 27, 2024, we entered into the ORL Lease at ORL with GOAA.

The ORL Lease covers a parcel containing approximately 20 acres of land at ORL.

The initial term of the ORL Lease will be 30 years from expiration of the construction period, with lease payments commencing contemporaneously with the term.

The ORL Lease contains options exercisable by us to extend the ORL Lease an additional 20 years based on our total expenditures in subsequent phases at ORL.

In May 2024, we entered into the IAD Lease at IAD with MWAA.

The IAD Lease covers approximately 18 acres of property at IAD.

The initial term of the IAD Lease will be approximately 50 years and expire on March 31, 2074, and contains an option exercisable by us to extend the IAD Lease an additional 10 years following the expiration of the initial term.

The IAD Lease requires us to commence construction related to IAD Phase II within five years of the receipt of the certificate of occupancy for IAD Phase I.

In August 2024, we entered into the SLC Lease at SLC with the Salt Lake City Corporation.

The SLC Lease covers approximately 8.4 acres of property at SLC.

The SLC Lease contains two options exercisable by us to extend the SLC Lease for an additional 20 years following the expiration of the initial term.

Under the terms of the SLC Lease, we are required to make minimum capital improvements of $40 million.

Factors That May Influence Future Results of Operations

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One of our largest expenses is the lease payments under our ground leases.

For the three months ended March 31, 2024 and 2023, our operating lease expense for ground leases was $1.2 million and $0.9 million, respectively.

As we enter into new ground leases at new airport sites, our payments to airport landlords will continue to increase into the future.

For the six months ended June 30, 2024 and 2023, our operating lease expense for ground leases was $3.5 million and $1.8 million, respectively.

We elect to expense rather than capitalize ground lease expense incurred at hangar campus sites under development and will incur expense under U.S.

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 ultimately continue to increase into the future.

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.

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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 20 airport site business plan is estimated to cost approximately $1.2 billion, with approximately 65% to 75% anticipated from long-term private activity bonds and the balance with equity or equity linked financing.

The cumulative 20 airport site business plan is estimated to cost approximately $1.2 billion, with approximately 65% to 75% 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, costs of construction, delays in constructing new facilities, operating results, and other risk factors.

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Results of Operations

Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023

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

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

Rental revenue

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Total other (income) expense

Revenues for the three months ended March 31, 2024 were approximately $2.4 million, compared to approximately $1.1 million for the three months ended March 31, 2023.

The $1.3 million, or 117%, increase was primarily the result of the cumulative impact of certain additional tenant leases in place at our BNA and OPF hangar campuses as compared to the three months ended March 31, 2023.

The increase in occupancy at our OPF and BNA hangar campuses for the three months ended March 31, 2024 as compared to March 31, 2023 resulted in increased fixed rental revenues of approximately $1.1 million.

Revenue associated with our delivery of aircraft fuel increased approximately $0.2 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Net income (loss)

Revenues for the three months ended June 30, 2024 were approximately $3.6 million, compared to approximately $1.7 million for the three months ended June 30, 2023.

The $1.9 million, or 109%, increase was primarily the result of the commencement of operations at SJC during the three months ended June 30, 2024 and the impact of increased occupancy at our BNA and OPF hangar campuses.

Revenue associated with our delivery of aircraft fuel increased approximately $0.4 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

Operating Expenses

Operating expenses increased approximately $0.3 million, or 16%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

The increase in operated expense is primarily reflective of increased ground lease expense, which increased approximately $0.3 million for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

The increase in ground lease expense was driven by new ground leases signed at PWK, BDL, and POU during the three months ended December 31, 2023, and at SJC and ORL during the three months ended March 31, 2024.

Salaries, wages, and benefits associated with our campus personnel increased by approximately $0.1 million, primarily driven by a headcount increase associated with the anticipated commencement of operations at our SJC hangar campus.

Other operating expenses decreased by approximately $0.1 million, primarily driven by decreased utility expenses associated with operations at our OPF and BNA hangar campuses due to higher occupancy levels.

Operating expenses increased approximately $1.6 million, or 95%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

The increase in operated expense is primarily reflective of increased ground lease expense, which increased approximately $1.3 million for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

The increase in ground lease expense was driven primarily by a full quarter of expense associated with the ground lease signed at SJC during the three months ended March 31, 2024.

The increase in ground lease expense was also driven by the ground leases signed at PWK, BDL, and POU during the three months ended December 31, 2023, ORL during the three months ended March 31, 2024, and IAD during the three months ended June 30, 2024.

Salaries, wages, and benefits associated with our campus personnel increased by approximately $0.2 million, primarily driven by a headcount increase associated with the commencement of operations at our SJC hangar campus.

Other operating expenses increased by approximately $0.1 million, primarily driven by increased utility, insurance, and other start-up expenses associated with the commencement of operations at our SJC hangar campus.

Depreciation Expense

Depreciation increased approximately $0.2 million, or 40%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.

The increase reflects a full quarter of depreciation associated with our OPF hangar campus, which opened during the three months ended March 31, 2023.

The increase was also partially driven by the placement of additional ground support equipment into service throughout 2023 and 2024 and a quarter of depreciation related to Rapidbuilt, which was acquired during the three months ended June 30, 2023.

Depreciation increased approximately $0.1 million, or 21%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

The increase was driven by the placement of additional ground support equipment into service throughout 2023 and 2024 and a full quarter of depreciation related to Rapidbuilt, which was acquired during the three months ended June 30, 2023.

General and Administrative Expenses

For the three months ended March 31, 2024, and 2023, general and administrative expenses were approximately $4.9 million and $3.5 million, respectively.

For the three months ended June 30, 2024, and 2023, general and administrative expenses were approximately $4.6 million and $3.7 million, respectively.

The approximately $0.9 million, or 23%, increase was primarily due to an approximately $0.9 million increase in salaries, wages, and other benefits, driven by an increase in corporate headcount and expense recognized associated with our equity compensation programs.

Headcount and compensation expenses increased approximately $0.7 million, non-cash equity compensation expense increased approximately $0.6 million, and professional fees increased approximately $0.1 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

This increase in professional fees was partially attributable to the recognition of approximately $0.1 million of expense associated with the B.

Riley Termination.

Headcount and compensation expenses increased approximately $0.4 million and non-cash equity compensation expense increased approximately $0.5 million.

Other (Income) Expense

Other expense increased from approximately $4.1 million to approximately $16.0 million for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

This increase was primarily due to an approximately $12.0 million difference in the mark-to-market adjustment of the outstanding warrants at March 31, 2024 as compared to March 31, 2023.

Other income increased from approximately $2.6 million to approximately $9.1 million for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

This increase was primarily due to an approximately $5.6 million difference in the mark-to-market adjustment of the outstanding warrants at June 30, 2024 as compared to June 30, 2023.

The increase was also partially due to an approximately $1.0 million increase in other income, primarily due to interest earned on our investments in U.S.

Treasuries classified as available for sale.

Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023

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).

Six months ended

June 30, 2024

June 30, 2023

Rental revenue

Total revenue

General and administrative

Total expenses

Operating loss

Other (income) expense:

Interest expense

Unrealized loss on warrants

Total other (income) expense

Revenues for the six months ended June 30, 2024 were approximately $6.0 million, compared to approximately $2.8 million for the six months ended June 30, 2023.

The $3.2 million, or 112%, increase was primarily the result of the commencement of operations at our SJC hangar campus and the cumulative impact of certain additional tenant leases in place at our BNA and OPF hangar campuses as compared to the six months ended June 30, 2023.

The commencement of operations at our SJC hangar campus together with the increase in occupancy at our OPF and BNA hangar campuses for the six months ended June 30, 2024 as compared to June 30, 2023 resulted in increased rental revenues of approximately $2.6 million.

Revenue associated with our delivery of aircraft fuel increased approximately $0.6 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Operating Expenses

Operating expenses increased approximately $1.9 million, or 55%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

The increase in operated expense is primarily reflective of increased ground lease expense, which increased approximately $1.7 million for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

The increase in ground lease expense was driven primarily by a full quarter of expense associated with the ground lease signed at SJC during the three months ended March 31, 2024.

The increase in ground lease expense was also driven by new ground leases signed at PWK, BDL, and POU during the three months ended December 31, 2023 and at ORL and IAD during the six months ended June 30, 2024.

Depreciation Expense

Depreciation increased approximately $0.3 million, or 30%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.

The increase reflects a full six months of depreciation associated with our OPF hangar campus, which opened during the six months ended June 30, 2023.

The increase was also partially driven by the placement of additional ground support equipment into service throughout 2023 and 2024 and a full six months of depreciation related to Rapidbuilt, which was acquired during the six months ended June 30, 2023.

General and Administrative Expenses

For the six months ended June 30, 2024, and 2023, general and administrative expenses were approximately $9.5 million and $7.3 million, respectively.

The approximately $2.2 million, or 31%, increase was primarily due to an approximately $2.2 million increase in salaries, wages, and other benefits, driven by an increase in corporate headcount and expense recognized associated with our equity compensation programs.

Headcount and compensation expenses increased approximately $1.2 million, and non-cash equity compensation expense increased approximately $1.0 million.

Other (Income) Expense

Other expense increased from approximately $1.5 million to approximately $6.9 million for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

This increase was primarily due to an approximately $6.4 million difference in the mark-to-market adjustment of the outstanding warrants at June 30, 2024 as compared to June 30, 2023.

The increase was also partially due to an approximately $1.0 million increase in other income, primarily due to interest earned on our investments in U.S.

Treasuries classified as available for sale.

Liquidity and Capital Resources

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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 and other debt and the issuance of additional equity securities.

We also have the ability to utilize our $100 ATM Facility or otherwise utilize our registration statement on Form S-3 to access the capital markets.

We also have the ability to utilize our $100 million ATM Facility or otherwise utilize our registration statement on Form S-3 to access the capital markets.

However, as we have recently become a publicly-traded company, we cannot assure you that we will have access to these sources of capital or that, even if such sources of capital are available, that these sources of capital will be available on favorable terms.

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Our portfolio of investments and restricted investments is composed entirely of U.S.

Treasury securities as of March 31, 2024.

The following table summarizes our cash and cash equivalents, restricted cash, investments, and restricted investments as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024

Treasury securities as of June 30, 2024.

The following table summarizes our cash and cash equivalents, restricted cash, investments, and restricted investments as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024

December 31, 2023

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We will pay B.

Riley a commission of 3.0% of the gross sales price per share sold under the ATM Agreement.

Riley a commission of 3.0% of the gross sales price per share sold under the ATM Agreement, subject to certain reductions.

During the three and six months ended June 30, 2024, we sold 7,407 shares of Class A Common Stock under the ATM Facility at a weighted-average sales price of $12.42.

We are not obligated to sell any shares under the ATM Agreement.

1 unchanged sentence

Riley, of all of the shares subject to the ATM Agreement and (ii) termination of the ATM Agreement in accordance with its terms.

We have made no sales under the ATM Facility to date and will only do so when our stock price is at prices our board of directors deems appropriate.

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 of directors deems appropriate.

Private Activity Bonds

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The PABs 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 March 31, 2024, we were in compliance with all debt covenants.

As of June 30, 2024, we were in compliance with all debt covenants.

Lease Commitments

The table below sets forth certain information with respect to our future minimum lease payments required under leases as of March 31, 2024 (in thousands):

The table below sets forth certain information with respect to our future minimum lease payments required under leases as of June 30, 2024 (in thousands):

Year Ending December 31,

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Contractual Obligations

The following table sets forth our contractual obligations as of March 31, 2024 (in thousands):

The following table sets forth our contractual obligations as of June 30, 2024 (in thousands):

Principal payments on bonds payable

2 unchanged sentences

Lease commitments

Funds to meet interest payments for the next three years on the Series 2021 PABs are held in reserve as restricted cash and restricted investments.

Funds to meet interest payments through the first half of 2025 on the Series 2021 PABs are held in reserve as restricted cash and restricted investments.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements.

The following table summarizes our sources and uses of cash for the three months ended March 31, 2024 and 2023 (in thousands):

Three months ended

March 31, 2024

March 31, 2023

The following table summarizes our sources and uses of cash for the six months ended June 30, 2024 and 2023 (in thousands):

Six months ended

June 30, 2024

June 30, 2023

Cash and restricted cash at beginning of period

Net cash used in operating activities

Net cash provided by investing activities

Net cash provided by financing activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Cash and restricted cash at end of period

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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 $4.4 million for the three months ended March 31, 2024, as compared to cash used in operating activities of approximately $4.6 million for the same period in 2023.

Net cash used in operating activities was approximately $5.5 million for the six months ended June 30, 2024, as compared to cash used in operating activities of approximately $5.7 million for the same period in 2023.

The $0.2 million decrease in cash used in operating activities was primarily attributable to an approximately $2.1 million decrease in net loss, net of non-cash adjustments.

The decrease in net loss, net of non-cash adjustments was primarily driven by an increase in rental revenue.

The decrease in net loss, net of non-cash adjustments was primarily driven by an increase in rental revenue and the impact of increases in non-cash operating lease expense and equity-based compensation expense.

The decrease was offset by an approximately $1.9 million unfavorable change in the Company's working capital position, which was primarily driven by the timing of vendor payments and tenant receipts.

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As our business expands, we expect to continue to invest in our current and anticipated future portfolio of hangar campus development projects.

Net cash provided by investing activities was approximately $33.9 million for the three months ended March 31, 2024, as compared to cash provided by investing activities of approximately $36.3 million for the same period in 2023.

The decrease of approximately $2.4 million of cash provided by investing activities was driven primarily by an increase of approximately $95.8 million of available for sale U.S.

Treasury purchases, offset by increases of approximately $64.3 million and $27.9 million in proceeds received from the Company's available for sale and held-to-maturity investments, respectively.

The decrease was further driven by an approximately $0.1 million increase in capital expenditures.

Net cash provided by investing activities was approximately $54.4 million for the six months ended June 30, 2024, as compared to cash used in investing activities of approximately $16.4 million for the same period in 2023.

The increase of approximately $70.8 million of cash provided by investing activities was driven primarily by increases of approximately $142.3 million and $18.0 million in proceeds received from the Company's available for sale and held-to-maturity investments, respectively, and approximately $53.0 million and $6.1 million of decreases in purchase of held-to-maturity investments and capital expenditures, respectively.

The increase was offset by an increase of approximately $148.8 million of available for sale U.S.

Treasury purchases for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Financing Activities

1 unchanged sentence

We expect to raise additional equity capital and issue additional indebtedness as our business grows.

Net cash provided by financing activities was approximately $0.3 million for the three months ended March 31, 2024, as compared to net cash provided by financing activities of $0 for the same period in 2023.

The approximately $0.3 million increase in net cash provided by financing activities was primarily driven by $1.5 million of proceeds received from the exercise of Warrants during the three months ended March 31, 2024, offset by approximately $0.7 million and $0.4 million of payments associated with vested equity awards and loan principal payments, respectively.

Net cash provided by financing activities was approximately $1.0 million for the six months ended June 30, 2024, as compared to net cash used in financing activities of nearly $0 for the same period in 2023.

The approximately $1.0 million increase in net cash provided by financing activities was primarily driven by $2.9 million of proceeds received from the exercise of Warrants during the six months ended June 30, 2024, offset by increases of approximately $0.9 million and $0.9 million in payments associated with vested equity awards and loan principal payments, respectively.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements